Improving Business Friendliness in Poland

Existing agencies, EU funds and the Economic Forum are key to sustainable economic growth and fostering social capital – both in Małopolska and across Poland in 2011.

There is cause for celebration and caution in Poland. On one hand, it is the only country in the EU that witnessed positive growth during the financial crises. Moreover, 2010 brought 4% growth, up from a 1.5% low in the previous year, and this quarter is likely to reflect this trend. Conversely, Poland is still placed 151st out of 183 countries in terms of ‘business friendliness.’ This statistic is drawn from a number of indicators including levels of corruption, transparency and the ease of penetrating the market. Solutions to attract foreign capital are legion, but some are more prescient than others. For example, structural and cohesion funds are available to help develop social and technological infrastructure to benefit the business environment. These funds aim to narrow the gap between market states in the EU in order to stimulate growth. They offer job creators an incentive to invest.

Why are these funds in particular so important this year?

Between 2007 and 2013, Poland, the largest recipient of the fund, is entitled to 67 billion euro. However, Stanley Pignal of the Financial Times points out that the finance is not being used quick enough, and ‘the EU only finances projects that can find financing locally’. Consequently, regional governments are becoming reluctant, fearing that projects may be left unfinished. This highlights the need to streamline bureaucracy for suppliers. The Małopolska Regional Development Agency (MARR) is one example of an organisation that facilitates this. MARR is a potential business partner in Krakow that “provides information and finance” through subsidies and training. It acts as a conduit for EU capital. Agencies like MARR may be the key to more projects. They may lay the groundwork for developing sectors, which would benefit provinces throughout Poland, and not least Małopolska, given its tactical edge.

How can Małopolska attract more foreign finance in the future?

Part of the answer may lie in the small town of Krynica. It hosts the largest Economic Forum in Eastern Europe and is considered the Davos of the East. Unfortunately, the social, geographical and infrastructural shortcomings of Krynica have angered visitors year after year. It has been criticised by a consortium of speakers, and even writers from the Economist magazine. Catering and accommodation fall short, considering the scale and prestige of guests. I have heard complaints on an annual basis from entrepreneurs, diplomats, writers and employees of the World Bank about the conditions that greeted them on arrival. This must change for the sake of Małopolska, and offers one example of an area where these funds could lead to future investment.

What is the bottom line for 2011?

Long term well-being for the region, in terms of employment, competitiveness and attracting foreign businesses, are primarily contingent on business friendliness. Utilising EU funds will potentially yield a sustainable return in economic health across Poland, and Małopolska.

2 thoughts on “Improving Business Friendliness in Poland

  • July 2, 2012 at 3:28 pm

    Hello Matthew.
    Very useful article. Have you kept in touch of how events unfolded in 2012? If so, can I get your details so we can have a call together? My company is looking to expand into Poland and I’d like to get a feel for where the support is right now. I entered my email address in a field above this post. Let me know if you can see that or not.
    All the best, Nick.


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