Competitive Edge

Agnieszka Rynkowska, Image: Microsoft

WBJ Observer talked with Agnieszka Rynkowska, marketing and operations director at Microsoft Poland about innovations and how Poland can catch up with the West

Interview by Jacek Ciesnowski

WBJ Observer: Microsoft Poland invested PLN 500 million in Poland last year, where exactly did you spend your money?
Agnieszka Rynkowska: As a high-tech company, our main interest is in education and entrepreneurship, two sectors where IT can bring a lot of value added in the long term, and that’s where we invest in. Last year, we spent PLN 300 million in software grants for education alone.
We also invest heavily in start-up businesses and NGOs. Being an IT giant, we endeavor to help individual entrepreneurs by educating them, equipping them with IT tools (software, etc.) so they can contribute more, in a smart way, to the country’s economy.

How come, Polish IT specialists are so highly regarded in the world, yet in Poland, most sector giants, instead of opening up R&D centers, concentrate on BPO facilities which do not require highly skilled engineers.
It seems that there is quite a lot of legacy of the past concerned with the issue you have raised. For the last 25 years, Polish competitive advantage in many sectors was built mainly around low labor costs. Now it’s high time we used our know-how skills and competence better to boost the added value of what we do in the country. And this is already happening. Many companies, both Polish and foreign, do have R&D centers in Poland.
We also had such plans, although they have changed. You need to remember, that Microsoft develops its strategic focus globally and regionally. In our case, this means that Poland falls into the Central and Eastern Europe cluster and makes up part of the regional strategy. Even though Microsoft did not develop a stand-alone R&D center in Poland, the company has been strongly engaged in supporting e-skills development and growth of IT potential in Poland. Microsoft cooperates actively with 49 technical universities in Poland supporting IT science clubs offering technology training to students and tools to develop their potential. Three Polish universities are regularly visited by Microsoft’s recruiters who meet candidates for internships in our corporate headquarters in Redmond in the US. Many Polish IT engineers work there.
While talking about potential and highly skilled IT professionals, let me also draw your attention to two Polish technical universities – the Silesian University of Technology and the Warsaw University of Technology. Both universities have been awarded by Microsoft Azure for Research with an annual access to Azure cloud computing power worth $40,000 each.
Our company has always been alert and on the lookout for the biggest talents, that’s why we organize the Imagine Cup where students present their ideas and IT solutions. The winners of its past editions have been offered a job at Microsoft. In Poland, we support start-ups, NGOs and local governments to create a better environment for the IT sector for one, simple reason: Poles are creative creatures and they do know how to anticipate the future. But very often they do it abroad. We simply want to reverse this trend.

Do you also support start-ups financially?
Microsoft is not a venture capital firm. We don’t commit ourselves financially in start-up businesses. However, we do help by granting them software or training their employees. Last year, we spent PLN 105 million on those activities. More than that, we also encourage others to invest in Polish start-ups. For the Imagine Cup competition organized by Microsoft, we invite venture capital funds and business angels. We introduce them to the most promising participants and encourage to explore financial investment opportunities. We have created a Business Acceleration program for top Imagine Cup teams, building the platform for connecting bright ideas with real business decision makers. They work on introducing their products to the market and on commercializing their solutions. The holding company ZernikeMeta Ventures has offered PLN 1 million for investment in ventures.

Still, when it comes to innovation, Poland is always way behind in various rankings
Innovation is a complicated phenomena and cannot be measured only in terms of the number of new patents. It has to do with both process and the product, it is vital to the same extent for the private as well as the public sector. It is not only about input but also about output. It’s about modernizing traditional sectors of economy as well as the most advanced ones. And because of that it is crucial for public services and, for example, for telecommunications. I’m really impressed with Rafał Brzoska (founder of InPost), who has revolutionized such an established business as postal services. We, at Microsoft, have discussed, why Poland lags so much behind other countries when it comes to innovation.
Take South Korea for example, a country which produces the biggest number of patents per million citizens. Are we lagging behind, because we are part of a developed continent, which has stagnated and is struggling to make another breakthrough? Or is it lack of capital that makes innovation difficult? Or maybe the educational system is not conducive to innovation? Do we really promote creativity? Do we really give a free hand to our students, to encourage innovation? Without an innovative public sector and services, smart regulations, we will always struggle to have innovative companies. So, even though there are many talented individuals and highly-skilled specialists, we don’t have the whole support system behind it that is badly needed.

Image: Microsoft

Image: Microsoft

Do you think it will change in the near future?
Most forecasts are optimistic, especially when it comes to productivity growth and fixed asset investment. These are the key factors that should influence the economy and make it more innovative. If you look throughout European history, after World War II, the economic growth was driven by innovation. In the 1970s and 80s, the continent slowed down economically and bounced back in the 90s and 2000s due to the growth of the ICT sector and its positive impact on the entire economy as a, so called, “general purpose technology.” For example, thanks to the business solutions implemented then, for example improved communication systems amongst business entities, entire economies achieved sizable incentives. Now, Poland needs the same kind of boost that can push the country into an innovative era.
We also have to work on making smarter regulations that reflect better the rapidly changing environment of new technologies and new business models. That’s why we support NGOs, because they stimulate our intellectual and political elites and encourage better policy-making and smarter regulations that are instrumental for growth of our economy.

It looks that on the micro scale (start-ups), there isn’t much of a problem, if you have a good idea, you’ll get financing from all over the world. Difficulties start on the SME level, where companies very often do not want to spend money on innovative processes. Huge corporations, on the other side, don’t really make innovative products. If we use South Korea as an example again, we can see that they’re designing and inventing new types of TVs, while assembly is done in Poland. That does not make our country in the least bit innovative.
For us, the most important part of the economy are SMEs, as they employ almost 80 percent of the workforce and generate 60 percent of the GDP. Such companies can benefit most from new technologies. Using the newest solutions, such as cloud and mobility, they can save resources needed to build their own infrastructure. It brings significant cost efficiency and lowers market entry barriers. As scalable solutions they provide flexibility in adapting to the current needs of business. The most precious benefit is however the ability to respond to customer needs quickly and more effectively. By being more competitive they put the pressure on bigger companies to implement new solutions as well. That’s why, when it comes to innovation in Polish companies, I’m rather confident it will steadily grow in the years to come. We will probably see more new business solutions and modernization of established business models and processes than new product innovation. Cloud, mobility and big data will become instrumental environments and technologies for big companies as well.
We believe that every small company, can contribute to the entire economy in such a way that it will make Poland more competitive not because of cheap labor, but thanks to know-how of people working in this country and added value they can bring about.

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