A new chapter for entrepreneurs

WBJ: The system of special economic zones in Poland has recently been overhauled to include the entire territory of Poland. How will the new structure work?
Jadwiga Emilewicz: Like before, an entrepreneur planning to invest in an economic zone has to turn to the body governing the chosen territory. Then, the investment project will be analyzed, considering firstly the amount of funds being invested. And in the new structure that amount will be evaluated differently, depending on the size of investment and the level of development of the region. The investor will receive assistance from the body governing the zone.

The new system of economic zones allows for more flexibility. Small and  medium-sized businesses investing in less developed regions can count on more support. For instance, in the case of micro entrepreneurships and the regions where unemployment is high, over 25 percent of the national average, support will be delivered amounting to PLN 200,000. Thanks to these changes, we expect the flow of investments to be more evenly spread across the country.

Another important criterion will be linked to Poland’s national economic policy. According to the Strategy for Responsible Development, the most important task in investment policy is stimulating high-quality investments and innovations, and creating stable, well-paid jobs.
Granting tax relief in economic zones efficiently and quickly, within a period of a month, will further facilitate investment. And abolishing territorial limits will finally solve the problem of having to expand the areas of economic zones.

How is the structure of Polish and foreign investments changing?
In the first stage of economic transformation foreign capital played a very significant role. Thanks to its influx, Poland was able to make up for the lack of its own capital. The level of capital influx was particularly high in the latter part of the 1990s, and then again once Poland joined the European Union in 2004.

Poland is open to foreign investment, which bring positive results: technology transfer, improving competition, creating new jobs. But we also want to increase investments of our own firms and it is being done. At the same time, the number of foreign investments is growing and in the past year the total value was $14.8 billion, which puts Poland in the third place in Europe. The year 2017 was the best in a decade as far as the flow of foreign investments is concerned, particularly greenfield projects and in the automotive sector, which involve a lot of technology transfer. The 335 direct foreign investments carried out will create over 86,000 jobs, which is the best result in the European Union.

Poland also reached second place in the ranking in terms of attracting investments from European countries and 90 percent of investors declare they will invest in Poland in the future. Our assets include a stable economic situation, our central location and well-educated workers.

Challenges within the EU are growing. How important is Poland’s cooperation with the EU for Poland’s further development?
Poland and the European Union have strong trade ties. In 2017, 80 percent of our exports went to EU markets and EU countries account for 60 percent of our total imports. As far as general economic policy is concerned, the latest economic crisis showed that the EU needs mechanisms for protecting and coordinating its markets. There are no doubts about it. This function is fulfilled by the European Semester, established in 2010, which is responsible for coordinating economic and social policies in the EU. Over the past few years, we’ve observed improvement in dialogue. There are more meetings on various levels. Important matters in that process are being discussed, but there is still a lot of work to be done.

What steps taken by the government do you consider to be the most vital for developing innovation in Poland’s economy?
I think that innovation requires a proper economic ecosystem; one that promotes solutions and interconnections that respond to current challenges and problems. Cooperation in the form of public-private partnerships (PPP) is one way of promoting innovation, as is establishing a spokesperson for small and medium-sized businesses, fighting the VAT gap and developing foreign direct investment. They are all complimentary parts of a pro-innovation system. Each element has its place in the Strategy for Responsible Development, which sees development as a process of integrating actions for building macroeconomic stability, an efficient state and a pro-investment policy.

How do you view the Strategy for Responsible Development? Is it one of the Government’s current priorities that will see some effects now, or is it a long-term strategy that will take years to realize?
The goal of the Strategy for Responsible Development is to achieve long-term effects and a lasting improvement of the development model for Poland. It is inherently connected with action spread over many years. Previous tactics for economic development have been supplemented with an increased role of knowledge and technology, development and greater expansion of Polish companies, the construction of a savings system and improving the functioning of institutions and their relations with society.

We pay greater attention to including all social groups and all regions in the development process. The document combines a strategic dimension with an operational approach and outlines means of how to achieve it. This includes, among others, 185 flagship projects. Some of them have already been implemented, e.g. the Business Constitution, the Start in Poland program, a program for medium-sized cities. The other part is at a very advanced stage.

How do you plan to link economic innovation with scientific research?
We’ve created a special body – the Council for Innovation – that spans across all ministries. Its goal is to increase funds and encourage entrepreneurs to invest in innovation. This involves legal changes, including the Business Constitution. We are creating an entrepreneur-friendly tax system. Through the “small” and “big” bills on innovation, we are introducing new tax reliefs for research and development. We have built a stable system of financing to bring scientific research and development into the market. We are also working on the innovation box, a package of tax incentives which will lower CIT on income gained from commercializing scientific and development research.

What does the Start in Poland program mean in practice?
Start in Poland is the biggest program of its kind in Central and Eastern Europe, with a budget of PLN 3 billion. Thanks to Start in Poland, a total of 1,500 companies will be given a chance to create high-quality innovative technology. In many areas, this program already has its achievements, for example the Acceleration Program, a network of “schools for entrepreneurs” of sorts.

We bear in mind that creative activity is linked with cultural diversity. That is why we launched the pilot program Poland Prize. We want to help entrepreneurs who introduce new technology under the conditions of big market uncertainty. To help them do that we have prepared a project called a Simple Joint Stock Company (Prosta Spółka Akcyjna), a new type of company which will be better suited for innovative companies. Its basic feature will be the flexibility of owners in shaping relations in the company, its property and organizational structure.

What will the Business Constitution change?
The Business Constitution brings a qualitative change in conducting economic activity in Poland. First of all, it is the first complex reform of economic law in nearly 30 years; the goal is to adjust it to the realities of economic life.

Poland successfully went through economic transformation, but it is now at a different stage of development. The Business Constitution was created in response to what entrepreneurs were asking for. It focuses on two aspects: reforming the legal environment for doing business in Poland and removing the bureaucratic obstacles to development. The Business Constitution ensures that law is understood and interpreted in the same way everywhere. It also means less bureaucracy and fewer formalities. It guarantees that all business activity not explicitly prohibited by law is allowed and all doubts in procedures should be resolved for the benefit of entrepreneurs. The Business Constitution launches a new stage in conducting economic activity in Poland.