The Investing in Poland 2015 project culminated with an event held at the Warsaw Stock Exchange. Besides the annual, which has been published for the sixth straight year, Warsaw Business Journal Group organized a launch conference with discussion panels and an awards ceremony.
The first panel discussion concerned the current situation of the Polish bourse, which recently decided against merging with the Vienna-based CEESEG due to “economic calculation.” The panelists, Jacek Socha, partner at PwC consultancy and Waldemar Markiewicz, president of the Chamber of Brokerage Houses agreed that it was a good call and the transaction would be difficult for the Warsaw bourse due to technological and financial reasons. “The merger was announced too soon. Warsaw couldn’t afford it and 70 percent of merger deals do not come to fruition. There is place for only one major stock exchange in Central Europe,” Socha said, hinting that the WSE should find a major partner in Western Europe which could push the WSE into the next level.
The WSE’s vice president, Mirosław Szczepański argued, that the bourse should concentrate more on the domestic market and grow that way. “Exchanges need to increase their mass to avoid the negative aspects of competition. We decided to turn our attention towards the domestic market where we see great potential for organic growth,” he said.
Markiewicz agreed that the WSE should focus on domestic investors, but the biggest obstacle preventing the WSE from becoming a regional hub is Polish law which is complicated and very slow. This needs to be improved in order to make the Polish capital market more competitive with others.
The second panel discussed the BPO/SSC sector with focus on the outsourcing of advanced processes, such as IT, R&D and fund management.
“The outsourcing sector came to Poland relatively late, in the early 2000s. That’s why we have relatively fewer basic processes such as call centers in Poland, compared to e.g. the Czech Republic, Slovakia or Hungary. Today, we are an unquestionable leader of BPO. Out of a total of 1,100 centers located in CEE 470 are in Poland,” said Iwona Chojnowska-Haponik, Foreign Investment Department director at Polish Information and Foreign Investment Agency PAIiIZ.
“A few years ago, when an investor came to an SSC or a BPO center, you could guess with your eyes closed that they wanted to move their finance and accounting to Poland. It’s not like that anymore. The scope of processes being outsourced is expanding, with IT, purchases, HR and legal services,” said Leszek Kurycyn, Operational Processes Director at Randstad.
Advanced processes that are being outsourced to Poland will require a more qualified workforce, a challenge that Poland will have to face in a few years’ time to avoid a major talent mismatch. There are already several private initiatives that are attempting to bridge the gap between the labor market and the output of college graduates.
“The University of Łódź, after consulting several major players from the BPO sector decided to launch a new faculty – linguistics in business,” said Agnieszka Sobieszek, Investor Procurement Department of the Łódź Special Economic Zone.
“There are already at least 10 examples of businesses with direct involvement in our education system and they work great. What we should do is take these best practices and implement them everywhere and that is where we fall short,” Kurycyn said. He also added that such an initiative should go beyond the university level and also reach secondary schools.
Currently, the ITO sector seems to be growing the fastest among all advanced services. There are already 73 ITO centers employing 21,000 people and new ones come each year. However, the industry seems to be the most affected by a shortage of the right qualifications.
“There are 19,000 IT graduates each year and some 82,000 students at IT faculties. It would seem that human capital in this area is enormous. However, I’ve heard from investors that they want to develop new projects and they would very much like to expand in Poland, but they can’t find workers with the right qualifications for these projects on the job market,” Chojnowska-Haponik said.
The apparent shortage of talent in the IT industry poses a question whether investors won’t prefer to choose alternative locations, such as Romania, with its lower labor costs and a major supply of IT specialists, for their centers.
“Poland has some advantages over Romania. First, its population is twice as big as Romania’s, but more importantly, the employee turnover in Romania is at 35 percent while in Poland it is only at 15 percent. So the loyalty of Polish employees is much greater, which is very significant for IT projects,” said Michał Zgajewski, director at IT firm Atende.
Investment of the Year
The event ended with the annual Investment of the Year awards. Based on various factors, ranging from the amount invested, innovativeness, local impact, number of new jobs created and long-term effects on the Polish economy, the Warsaw Business Journal Group editorial team picked Bridgestone Europe and its expansion of its Polish factories in Poznań and Stargard Szczeciński, which created several hundred new workplaces, as the Investment of the year 2014. The honorable distinctions went to IKEA Industry for building the biggest and most modern sawmill in Poland and BASF for opening its catalyst plant in Środa Śląska.