In the 1990s FDI in Poland meant capital injection and creating new jobs. Nowadays, FDI means access to the latest technology and know-how. Then and now FDI is one of the sources of Poland’s economic development.
The Polish Investment and Trade Agency (previously the Polish Information and Foreign Investment Agency), with the support of the HSBC Bank and the consulting firm Grant Thornton, has conducted the 11th survey entitled “Investment climate in Poland” among the representatives of companies with foreign capital, in which executives were asked about their assessment of the conditions for investing capital and conducting economic activity in Poland.
“Poland has an amazing talent pool, and therefore we note with satisfaction that foreign investors are increasingly choosing this country because of the knowledge, experience and commitment of its qualified workers,” wrote in the introduction to the survey report Tomasz Pisula, the President of the Management Board of the Polish Investment and Trade Agency (PAIiH).
The general assessment of the investment climate in Poland has remained at one of the highest levels in the history of the survey, and as many as 92 per cent of the surveyed companies declared that they would choose Poland again if they were to decide once more about the location of their business (it should be assumed that any dissatisfied investors may have already left the country).
Although the percentage of satisfied investors has decreased slightly compared with the two previous editions of the survey, when it reached 98 and 97 per cent, respectively, according to the report, “this is not yet a fluctuation strong enough to claim that Poland’s investment attractiveness has noticeably deteriorated.” However, the authors of the survey add: “If the decline deepened in the coming years, this would be a signal that the assumptions or tools of economic policy in the area of FDIs must be adjusted.”
The general assessment of the investment climate in Poland has remained at a level very similar to the one recorded in the previous year: 3.70 points (compared with 3.72 points a year ago). It is worth noticing that last year’s result was the highest ever recorded in the history of the survey. We should note, however, that the investors’ assessment still remains at a high level.
It appears that the factors which could potentially hinder the implementation of investments in Poland, such as growing problems with the recruitment of workers or additional reporting obligations associated with the elimination of loopholes in the tax system, have been compensated by positive factors, such as the good economic outlook.
Poland is assessed most favorably by investors from France, who gave it an average assessment of 4.1 points out of 5. They are followed by Germans, the Japanese and Swedes. The Swiss and the Dutch investors are more skeptical (3.5 points).
Poland tempts investors with a stable economic situation (4.01 points out of 5), while the biggest obstacle is the quality of legislation (2.75 points) and low efficiency of Poland’s commercial courts (2.84 points). Despite the slowdown in the Q3, according to data from Grant Thorton, in 2017 about 30,000 pages of new regulations entered into force.
“The strongest factor attracting foreign capital to Poland is definitely its specific ‘self-sufficiency’. The domestic economy offers investors a combination of robust economic growth, strong internal demand and a thriving business environment created by local suppliers and contractors, and all this within the EU, in close proximity to the largest European markets,” write the authors of the survey.
Some 70 per cent of companies expect an increase in revenues this year, while more than half (56 per cent) of the surveyed entities plan to increase their employment (3 per cent expect job cuts).
“For the first time labor shortages have become the biggest problem for entrepreneurs, surpassing, among others, barriers related to bureaucratic obligations.”
The lack of workforce is becoming one of the barriers to investing in Poland. It is the availability of qualified personnel that recorded the greatest fall in assessment among the various individual elements of the investment climate. Although the overall assessment of this factor is still not bad (3.45 points), it clearly declined compared with 2016 – by 0.23 points. This is the result of the lowest unemployment rate in the Polish labor market in the last 26 years.
The authors of the study also emphasize that if Poland wants to attract larger investments more consistently and on a greater scale, it must reach out to new groups of investors, but this requires a clear vision along with consistent, long-term efforts at promoting and showcasing its advantages.