A New Export: Style

The region's design shops are starting to gain international attention

As finalists in a design competition go, you don't get more varied than the snazzy Apple (AAPL ) iPod and an unassuming water-purifying bottle from a tiny Croatian design studio called Parabureau. The odd pair were lauded by judges in the international design show INDEX 2005, which took place in October in Copenhagen. Thanks to an ingenious filtering process that purifies water with a squeeze of a small blue bottle, the Personal Water Cleaner won accolades for its two-man design team. "The market economy has opened up much more space for design [in Croatia]," says Igor Stanisljevic, one of Parabureau's founders. "We now have a vibrant design community."

Forget stoic, sexless Soviet-era shoes, furniture, and cars. From Latvia and Estonia to the Czech Republic and Poland, design is taking off in Central Europe. Thanks to trade links with the European Union and motivated by ever-cheaper competition from China, the region is embracing creativity as its ticket to moving up the global economic food chain. According to the Bureau of European Design Assns., Poland, Hungary, and the Czech Republic alone have 8,700 professional designers, compared with barely a handful only 15 years ago.

The region's design shops are beginning to garner international attention. In Slovenia, appliance maker Gorenje Group won Germany's Red Dot Design Award this year for its futuristic Premium Touch washing machine. The curvaceous appliance boasts a sleek, easy-to-use touch screen for laundry settings. The company says its emphasis on style has helped it boost global sales by 16% since 2004, to $859 million. Gorenje not only employs 10 in-house designers but is also recruiting top international names. For instance, it tapped Paolo Pininfarina, whose family is famous for its Ferrari car designs, to develop a kitchen range.

Another company that's high on design is Croatia's SMS. The Mediterranean foods company launched a triangle-shaped olive oil bottle in 2003 by Croatian designer Boris Ljubicic, which features finger ridges for easy pouring. This year the bottle won Japan's G-Mark Good Design Award. For SMS, design has become a key differentiator, says marketing manager Marina Jakovcic: "People go to supermarkets and recognize our triangular packaging."

Still, many Central European companies are struggling to integrate design into their everyday work. "Unlike in the U.S., engineers here don't know how to work with designers," says Tatjana Jallard, who heads the Croatian Design Center. Take Latvia's wood industry: It has exports of $1.2 billion a year, but only 11% are in the form of finished furniture. To change that, Latvian officials are fostering links between design associations and industry leaders.

Central and Eastern European design may achieve a wider following this spring. That's when an exhibit of prototypes for furniture, appliances, and other products from the region is set to open simultaneously in several cities across Europe. The goal is to help the region's budding talent move from winning awards to winning contracts. "Design is not just an aesthetic thing but a crucial value added to the national product," says the show's Berlin-based organizer, Ake Rudolf. Sooner or later, other Central European businesses are sure to catch on.

By Esha Bhandari in Paris

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