31.07.2020Przemysław ProlejkoPoland is a country with a unique culture, history and geography. Thanks to the transformation that has taken place there and its continuous economic growth, Poland is currently attracting more and more companies from all over the world. Its accession to NATO in 1999 and the European Union in May 2004 opened a Polish market for foreign investors and provided the country with huge opportunities for development.
How can your business benefit from manufacturing in Poland?
Looking for the reasons to invest in Poland, one should analyse the growth of its economy and stories of thousands of companies that have been successfully operating on the market in this country for over 30 years.
Today Poland is the sixth largest economy in the European Union and it can take pride in its continuous growth that has lasted for over three decades. Since 1989, i.e. since the moment of its economic transformation, a Polish GDP indicator has increased about 826,96%, which is the best result in Europe. In this time the GDP per capita has increased from 32% to 74% regarding a European Union average. It means that the difference between the Polish and the inhabitants of other European Union countries has decreased on average about 50%. Yearly increase of the GDP indicator in years 1991-2019 reached stable 3,7%. Moreover, Poland was the only country in the European Union which avoided recession during the financial crisis in 2008.
As a result, the country, which not so long ago was a marginal economy, stands a real chance to become a new engine of growth in Europe. The development of Poland is based mostly on dynamic export, strong internal demand, growth of efficiency, international investment and inflow of EU funds. It is also supported by the baby boom generation of the 80s. and a stable banking system.
What are the benefits of manufacturing in Poland?
According to foreign companies operating in Poland surveyed by the German Chamber of Industry and Commerce, main factors influencing the investment attractiveness of Poland are employees’ professional qualifications, efficiency and motivation as well as the quality of higher education in the country.
Educated and available workforce
Poland can offer a pool of perfectly educated employees and engineers, measured by the number of graduates of high schools. About 22% of Polish population have university education. What is more, the number of people in Poland speaking fluently a foreign language has been increasing – the country has reached the sixth position in the world regarding the knowledge of English.
Another fact is that although employees in Poland are well-educated, they earn much less than employees in Western Europe. The total costs of work born by an employer per employee in German amount to 48,80 USD per hour while the costs in Poland are one-fifth of this amount.
The advantage regarding the low costs of work and, consequently, the costs of services offered by, for example, contract EMS providers will be valid for next few years because salaries in Poland are risen according to the pace that is 1% higher than the price indicator of consumer goods and services.
And although Poland is facing competition from countries that offer cheap manufacturing such as China, India, Philippines and Vietnam, its position remains unchallenged as the problems resulting from distance, logistics and locating production of goods dedicated to a European market outside Europe reduce significantly the benefits from low costs offered by these states.
That is why a lot of global companies establish their service centres responsible for, among other things, outsourcing of business processes, shared services centres, IT services and R&D operations in Poland. Such powers as Opel, Volkswagen or Toyota, which manufactures new generation engines, have also decided to place their productions in Poland.
These decisions and moves result from the availability of well-educated, efficiently working employees who speak many foreign languages fluently.
The greatest success in the European Union
Poland has received one of the biggest pools of EU funds for development and infrastructure, which have supported the increase of public investments. As the biggest beneficiary of structural EU politics, every year Poland receives and perfectly uses the increasing number of European Union transfers.
Moreover, Polish entrepreneurs have had access in years 2014-2020 to almost 10 times higher support for innovations and research than earlier. It means that over 20 billion PLN have been allocated for development of innovativeness and advanced technologies under the Smart Growth Operational Programme.
These donations have allowed Polish companies (e.g. contract EMS providers such as Assel) to create new machine parks and train employees. As a result, they have gained a considerable competitive advantage on the market.
Poland is worth it!
Poland has a perfect, strategic location in the heart of Europe, between Western Europe (ending with the border with Germany) and Russia. This facilitates its access to attractive consumer markets in the European Union, Russia, Ukraine, Turkey and the Middle East.
The accelerated development of transport infrastructure (roads, seaports and air links) in recent years has resulted in Polish companies being currently able to efficiently service neighbouring markets. Also, due to the fact that within the range of 1000 kilometres from Polish borders live over 200 million EU citizens, Polish companies can mount, manufacture and provide their goods to many rich markets.
The geographical location of Poland provides the country with another cost advantage because business services can be offered in the EU time zone, according to similar legal solutions and in convenient locations ensuring easy access.
It is worth producing in Poland!
A huge advantage of Polish companies is their great flexibility. Constant reforms and changing environment in which Polish economic entities have been operating for last 30 years resulted in their being more resistant to changes and, simultaneously, more flexible. In fact, this facilitates their effective competing on the local markets, as well as markets of other countries. Beside, Polish managers have learnt to make quick decisions, perfectly react to changing business conditions and also adjust to customers’ needs (e.g. properly develop their machine park).
Moreover, Poland offers stable macroeconomics and business-friendly environment thanks to institutions that have been established to stabilise its economy (e.g. financial institutions as NBP, KNF, BFG or economic chambers), membership in international organisations and constant improvement of law regulations. According to the ranking regarding the easiness of running a business created by the World Bank, Poland has advanced from the 76th place in the world in 2009 to the 33rd place in 2019.
Next sign of a business-friendly economic climate in the country is the fact that Poland reached the top position in the ninth economic survey including all countries from Central and Eastern Europe conducted by the German Chamber of Industry and Commerce with regards to country’s attractiveness for investment.
To conclude, the situation in Poland is different from conditions in other countries in this region. Consequently, it has a competitive position and high attractiveness as a place for manufacturing. Polish companies have unlimited access to the whole European market as well as qualified workforce whose cost of work account for only a minor fraction of costs in Western Europe. Polish employees are also highly appreciated by foreign and external customers. For this reason, cooperation with them is currently of interest for investors from Europe and all over the world.
