High-Employment-Growth Firms Determinants and policies in Poland Determinants and policies Ministry of Regional Development - 19 September 2018

Ministry of Regional Development - 19 September 2018 Key points High-growth firms in Poland Local determinants – operation conditions, expectations, competitiveness and innovations National and local policies Policies vs. determinants Ministry of Regional Development - 19 September 2018

High-growth firms in Poland Statistical definitions: firms which achieved average annual increase in the revenues of 20% or more in the period of 3 years (CSO) enterprises with average annualised growth greater than 20% per annum, over a three year period  growth can be measured by the number of employees or by turnover (EUROSTAT) % share in total number of firms Source: own work based on CSO 2011 Definitions do not fully embrace the employment aspect and innovativeness Too rigid to provide more detailed data or to analyse the determinants for their creation and operation Ministry of Regional Development - 19 September 2018

Ministry of Regional Development - 19 September 2018 Local operation conditions for enterprises Encountered difficulties (enterprises functioning between 2005-2010) Demand difficulties (% of enterprises) DETERMINANTS Supply difficulties (% of enterprises) Factors to be influenced by local public policy Source: own work based on: Creation and operation conditions, development prospects of Polish enterprises established in the years 2005–2009, CSO 2011 Ministry of Regional Development - 19 September 2018

Ministry of Regional Development - 19 September 2018 Companies’ expectations towards public policy Types of services which the companies need (survey) DETERMINANTS A study of services and clients of Consulting Centers, PARP, 2010 Ministry of Regional Development - 19 September 2018

Local determinants in PL Challenges to policy makers Spatial variations in SMEs, entrepreneurship activity, business climates and business performance among 16 regions in PL (not to mention the local level) Some factors not embedded in local context Need to adjust local policies to diverse and varying needs Finding the proper balance in national-regional-local delivery of entrepreneurship/ SMEs development policies Urban-rural contrasts pertaining – rural area 90% of the country with 40% of population, 16% employed in agriculture Crucial role of foreign direct investments at local level DETERMINANTS Ministry of Regional Development - 19 September 2018

Innovative enterprises – barriers or determinants Economic Insufficient own financial resources (industry: 31,8%; services: 24,1%) Insufficient external financial resources (industry: 26,9%; services: 21,3%) Innovation costs perceived as too high (industry: 34,2%; services: 27,4%) Knowledge-related Lack of qualified HR (industry: 14,6%; services: 13,2%) Insufficient information on technology (industry: 12,4%; services: 12,3%) Lack of information on the markets (industry: 11,8%; services: 11,4%) Difficulties in finding partners for innovative cooperation (I: 16,7%; S: 14,5%) Market-related Market controlled by dominating companies (industry: 21,1%; services: 19%) Unsure demand for innovative products (industry: 21,7%; services: 18,4%) Other Innovation implemented in previous years (industry: 14,4%; services: 14%) Lack of demand on innovation (industry: 14,8%; services: 15,1%) DETERMINANTS Source: Innovation activities of enterprises, CSO, 2011 Ministry of Regional Development - 19 September 2018

Innovative and competitive enterprises Social determinants Personnel policy and HR management in the company Expectations from employees – stereotypes, attitudes Organizational culture – flexicurity, pro-family policy, external expertise, talent and competence management Leadership Motivating for ideas and innovations Attitudes - conditions, possibility to develop, remuneration, free flow of information, appreciation Employees’ qualifications and skills – qualified managers, approach to training, (low) participation in E&T, empowerment DETERMINANTS CONCLUSION: significant part of these social determinants might be (and are) shaped by public policies – e.g. ESF measures Social determinants of the innovative character of the enterprises, Pentor Reasearch Intl, 2008 Ministry of Regional Development - 19 September 2018

Innovative and competitive enterprises Employees’ qualifications Competitive advantage on the local market and competences of employees (results of the survey) DETERMINANTS Education of employees and the competitive position of enterprises, PSDB, 2010 Ministry of Regional Development - 19 September 2018

Polycentric development model – policy approach Polycentric urban framework – metropolies being the driving force of national, regional and local development PL strategic approach to regional/ local development - defined in the National Strategy of Regional Development – ‘new paradigm of regional policy’ The best use of development potential (esp. endogenous) of the cities as sub-regional centres Intervention accompanied by with measures consisting in the dissemination / diffusion of development process to the less developed centres and establishment of absorption potential Establishing competitive advantage of less developed areas NATIONAL AND LOCAL POLICIES Ministry of Regional Development - 19 September 2018

National and local policies supporting HGF Ministry of Regional Development - 19 September 2018

Challenges for national and local policies in PL Effective coordination essential if policies are to be efficient in achieving given objectives and addressing the right target groups Providing coordination mechanisms for: National and regional OPs KSU network National and regional innovation policies Loan funds and loan guarantee funds Cluster policy Social enterprises Need for a more active role of business support institutions and a more coordinated partnership of public, private and third sector organisations supporting the enterprises (learning ecosystem) NATIONAL AND LOCAL POLICIES Source: Poland Key issues and policies, SMEs and entrepreneurship in PL, 2010, OECD Ministry of Regional Development - 19 September 2018

Developing innovation potential and competitiveness Determinants influenced at local level by instruments provided by national authorities financed by national or EU funds NATIONAL AND LOCAL POLICIES Ministry of Regional Development - 19 September 2018

POLICIES vs. DETERMINANTS Local determinants The role of foreign capital and business environment in PL economy PL regions and cities economically attractive, esp. in the period of economic slowdown and financial crisis Poland indicated as top potential investment destination for FDI projects in Europe (2010 Ernst & Young European Attractiveness Survey) Financial resources having crucial impact on companies’ growth – the main determinant and barrier in launching economic activity Local authorities focussed on attracting and embedding foreign investments and supporting entrepreneurship FDI perceived in local societies as the key to improving the situation of local labour markets and economic development POLICIES vs. DETERMINANTS Ministry of Regional Development - 19 September 2018

POLICIES vs. DETERMINANTS Local determinants – case study The role of foreign capital and business environment in PL economy Entrepreneurship Distribution of foreign investments POLICIES vs. DETERMINANTS Economic growth Ministry of Regional Development - 19 September 2018

Local determinants – case study The role of foreign capital and business environment in PL economy Niepołomice – strategic approach to entrepreneurship POLICIES vs. DETERMINANTS Ministry of Regional Development - 19 September 2018

Niepołomice Investment Area (NIA) POLICIES vs. DETERMINANTS Local determinants – case study High importance of foreign capital in PL economy - example Niepołomice Investment Area (NIA) NIA attracting the highest volume of foreign investments in PL and in Malopolska – 2,3% of all Polish investments in 2009-2010 USD 283 mio invested in 1989-2010, incl. USD 45,8 mio in 2009-2010 Investors: Coca-Cola, Woodward Governor, Kreisler, Staco, Silgan White Cap, Royal Canin, MAN, Nidec Investors from the USA, Japan, Netherlands, Germany from different sectors High impact of FDI on local economy - employment rate (45% increase in the no. of job places), unenployment (decreased by 19%) and local entrepreneurship (33% increase of the no. of enterprises) POLICIES vs. DETERMINANTS Ministry of Regional Development - 19 September 2018

Thank you for your attention! Ministry of Regional Development Department for ESF Management Ministry of Regional Development - 19 September 2018