EEC: Shedding light on the business climate in Poland
In the midst of economic turmoil and political uncertainty, experts and representatives from Poland and abroad came together in CEE at the ninth European Economic Congress.
Thousands of participants from a wide range of sectors – real estate, business, infrastructure, energy, health and many others – gathered in Katowice for the three-day event. The programme included over 100 sessions on themes from various aspects of the economy. A common focus across the discussions was the question: ‘What is the business climate in Poland?’
To kick-off the congress, panelists discussed a ‘new capitalism’ and the role of the private sector in the development of the market and the economy. Throughout the discussion, the experts talked about the importance of not only focusing on profits.
Zbigniew Jakubas, owner of Multico Capital Group, said capitalism is defective. Private ownership is close to humanity – people want to have their own home, car, things. Humans haven’t created a better system than capitalism but people are turning away from the capitalism that exists today. Thankfully in Poland, he said, we have more of a human face of capitalism than in many countries. “As a capitalist, I have a problem with the notion that only profits matter,” said Jakubas, adding that family businesses have more of a human face.
“People who start a business only think about making profits to pay for the loans,” said Jakubas.
“Once they make good money, they think about what is most important in life. Money is not the most important thing. I’ve tried to live morally toward myself and others,” said Jakubas. Family businesses, especially in Poland who were founded after 1989, didn’t achieve success until the next generation took over. He said family business owners need to decide who will take care of the businesses in the future and allow them to grow with the company.
Four elements determine if a country develops – democracy, capitalism, state of law and citizenship society, according to Przemyslaw Krych, Chairman of the Board at Griffin Real Estate. Capitalism is only one element for nations to develop. In addition, he talked about how Polish administrations should inform industries about policy changes and formalities well ahead of time to avoid unforeseeable delays and problems.
Mateusz Morawiecki, Deputy Prime Minister, Minister of Economic Development and Finance in Poland, started off the session on investments by outlining what Poland is doing to help foster the economy and the rising level in private, governmental and foreign investments. For one, strengthening higher education and rebuilding vocational training is a priority to ensure people are prepared for the workforce. Furthermore, he said there needs to be a better relationship between professors and innovators and entrepreneurs. As the nation moves toward automation, there needs to be implementations of R&D centres and cooperation with corporations and investors. “What is contributing to the economic growth in Poland? Creativity and innovation,” said Morawiecki. He addressed the entrepreneurs in the full lecture hall when he said they can look for support from government programmes such as Special Economic Zones, de minimis guarantees, the largest start-up programme in CEE, and reconstructed investments.
Invest in Poland
After Morawiecki’s speech, experts participated in a panel discussion about investments. Elina Kamenitzer, Head of Division Operations at European Investment Bank said the macro-economic trend in Poland is looking positive. “Poland has a robust market and is at the heart of Europe. I would say there’s a highly skilled labour force and these are all positives for Poland,” said Kamenitzer. She also said there is a need in Europe to promote structural reform to create a positive environment for investors, to give them better visibility and return for their investments. Additionally, she said Europe needs to be more friendly toward entrepreneurs and not shy away from taking risks. There’s a lack of risk capital in Europe even though there’s capital available.
Sanjay Samaddar, Chairman of the Board of ArcelorMittal Poland and CEO of FCE Business Division East, also talked about taking risks. “When we decide to invest, we need sufficient confidence that the risk is worth taking,” he said. “When we came to Poland in the early days [post communism], we made a set of commitments but we’re far outperforming those commitments because Poland is growing. Then the crisis hit and we had to restructure our investment, but even afterwards we had stable growth which is ideal for investment.”
The Economic Congress attracted top professionals from various markets who have their own views on the business climate in Poland. Rajmund Martyniuk, Director of Commercial Development at Polpharma, said the business climate can always be better, but considering Polpharma is a Polish company with over 60 years of tradition, the company knows the market and believes Poland is a good place for development. The pharmaceutical company distributes generic products to over 18 countries, mostly in Central-Eastern Europe, and its factories and R&D centers are located in Poland. Martyniuk said he hopes Polish and European regulations will support Polish pharmaceutical innovations, rather than opening the market to products from other countries with lower standards of quality, minimizing Polish companies’ competitive advantage.
From an investor’s perspective, Pawel Tynel, Partner at EY, said that based on what he sees on the market, a lot of investors are deciding to invest in Poland. Many countries are facing problems with stability, access to workplaces, talented workforce and geopolitical problems such as Brazil and Mexico, so Poland is taking advantage of the situation by attracting investors here. “We have better predictability, it’s more familiar, and many companies are already relocating and developing here. This climate, looking from an investor’s perspective, is really hot,” said Tynel.
Przemysław Krych, founder and CEO of Griffin Real Estate, had a similar thought. After attending EEC, he said the outcome was quite optimistic. “We’ve heard some warnings and complaints regarding political instability, but we can say that about many other countries as well. In this context, Poland is a very stable country, with a very resilient economy that keeps expanding regardless of political turbulences. Business and investors may complain, but at the end of the day, the bottom line wins and they keep investing in Poland.” After attending this year’s EEC, which has been the key economic congress in the region, he said the panels were “top class, and informal meetings were very inspiring – everything any participant could ask for.”
Katarzyna Zawodna, President at Skanska Commercial Development Europe, said the CEE region is “an attractive location for FDIs, particularly from business services sector, when compared to more mature Western European destinations. For the first time in the history of Poland, we have become globally recognized for being specialized in BPO/SSC area.” She added that there is a “significant appetite” from investors in Western Europe and US, and capital flow from Asia, Middle East and South Africa.
Zawodna said she noticed a shift at this year’s EEC in how people perceive capitalism and globalization and how the topics were discussed with a focus on sustainable development and individual human needs. “Having returned from this year’s EEC, I am optimistic about the future of Poland and the region,” said Zawodna. “Perhaps this optimism should be a bit moderate, Europe faces some challenges that it must overcome, but still – let’s stay positive.”