Can Poles make money money on high-tech

Poles have had major successes in some high-tech industries like 3D printing or drone manufacturing. But despite their oftentimes brilliant ideas, they seem to lack marketing skills and often fail to take their business to the next level By Beata Socha After the transformation, Polish companies had a lot of catching up to do in most major fields of technology. In many areas, including energy generation, the technology applied by Polish producers is still decades behind its western competitors. However, Poles are considered to be an entrepreneurial nation and seem to have a knack for jumping on opportunities as soon as they arise. They also have strong IT skills at their disposal, which has helped them gain a cutting edge in some of the most technologically advanced industries. Two of the high-tech fields where Polish companies have a strong foothold are drones and 3D printers. [caption id="attachment_78264" align="alignleft" width="300"] Image: Shutterstock[/caption] “Last year, Polish manufacturers accounted for some 10 percent of 3D printers sold worldwide. Polish 3D printers are used by BMW, Audi, Stihl as well as Dell. They are available in 16 countries,” said Agnieszka Zielińska, director at Financial Consulting and TMT expert at Deloitte. She also added that Polish producers are optimistic about maintaining their strong market position in the coming years. The outlook for the 3D printing industry looks quite promising. According to Deloitte, some 220,000 3D printers will be sold throughout 2015, for a total of $1.6 billion. 3D printing will no longer be the privilege enjoyed by large institutions and blue chip companies. It is in fact becoming increasingly popular among consumers and small and medium-sized enterprises. By the end of 2017, some 70 percent of all 3D printers will be sold to private consumers. Still, these will be cheaper units with limited functionality. Large companies will still account for almost 90 percent of the total value of the market and as much as 95 percent of all 3D-printed items (99 percent in terms of value). “The barrier for individual consumers is cost. Home 3D printers currently cost some $1,000 and can only print small objects with limited functionality. A kilogram of printing material costs on average $50,” Deloitte experts said. 3D for everyone Indeed, making 3D print affordable is where Polish manufacturers found their opportunity. The top  two Polish producers of 3D printers, Zortrax and Poznań-based Omni3D, are already household names, with another contender, a start-up dubbed Pirx, recently joining the fray. The M200 printer, manufactured by the Olsztyn-based Zortrax, has recently topped the desktop device ranking published by 3DHubs.com. It was selected as the best device from among 399 printers made by producers from all over the world. The firm is targeting mainly the SME segment of the market, particularly with its latest Inventure 3D printer. “Inventure stands out thanks to its price/quality ratio and its ease of use. It’s our hope that Inventure’s plug and print ability will allow more professionals to access and regularly use 3D printing technology,” said Rafał Tomasik, CEO of Zortrax. The company, founded in 2013, boasts 76 percent revenue growth quarter-on-quarter (PLN 12.5 million in revenue for 2014 and PLN 2.8 million in net profits) and is preparing for an IPO in 2016. Its main Polish competitor, Omni3D, received international recognition after it sold its printer to Japanese Sharp. Last year, it became even more popular thanks to its AirEnergy 3D – a 3D-printed turbine the size of a big floor lamp capable of generating 300 watts of energy. The firm has recently signed a deal with Amazon worth $100,000. “Most of the printers are purchased by architects. Creating an architectural model is a tedious and rather costly process. … Another common use is prototyping in a variety of fields: packaging, mechanical parts or even some prototypes of trophies and statuettes,” Omni3D said. A budding industry Apart from being a major player in 3D printing, Poland is also one of the leading producers of drones, alongside the US, Israel and France. Apart from being an established supplier of unmanned military equipment, Poles have also successfully penetrated the civilian drone market, with WB Electronics, Poland’s largest private arms manufacturer, leading the charge. There is still a lot of ground to gain, as the market is expanding quite rapidly. In 2015, some 300,000 such devices will be sold for a total of $200-400 million, according to Deloitte, putting the total number of civilian drones in use above the one million mark. “Some market estimates claim that drones will account for 10 percent of the aviation market within the next 10 years,” Deloitte analysts said. They are already used in the film and entertainment industry, telecommunications as well as crime prevention. But will Poles take advantage of the opportunity? “I believe that Polish drone manufacturers have an edge, with a good tech education base and universities’ commitment to developing technologies that can be used for the purposes of unmanned systems,” Jakub Wróbel, a Deloitte TMT expert, told polska.pl, a portal run by the Foreign Affairs Ministry aimed at promoting Poland. “At this stage, Poland enjoys a strong position in drone-related research and development. It is highly likely that this will translate into a favorable market position for Polish producers,” he added. Are Poles innovative? The string of successes of Polish firms in some of the most cutting-edge industries seems somewhat [caption id="attachment_78265" align="alignright" width="300"] Image: Shutterstock[/caption] difficult to reconcile with the country’s continuously low innovation rating: Poland ranked 24th among 28 EU member states in the recently published Innovation Union Scoreboard 2015. Still, Poland has seen consistent, albeit slow, progress in the European ranking over the past years. Back in 2013, it was still classified as a Modest Innovator (the bottom of the four groups of countries) together with Bulgaria, Latvia and Romania. In 2014, it moved into the Moderate Innovator group. This year, it managed to overtake Lithuania and gain slightly on Hungary and Slovakia. One of the reasons why Poland has managed to stay on top of the tech world’s most current trends, and even help shape a few of them, could be that, unlike in many traditional industries like consumer electronics, there had been no technological gap. “Poland’s strong position in the 3D printing market stems from the fact that several Polish companies started working on that technology fairly early on and are thus well poised among the sector’s other manufacturers,” Wróbel explained. Beware of the blue laser fiasco But a head-start is not everything. What comes after the original breakthrough and the initial hype is what really matters. Polish scientists had previously come up with several major inventions which revolutionized the tech world but in the end brought them little, save a modest Wikipedia entry and a footnote in science journals. Such was the example with the blue laser technology, widely known these days as Blue-ray. It was in fact a Polish team of scientists, led by Sylwester Porowski, PhD, who developed technology to create gallium nitride crystals with high structural quality and fewer than 100 defects per square centimeter, back in early 1990s. Later, Japanese scientist Shuji Nakamura used the Polish invention to improve his own technology and in the end it was Sony who brought it to market and made billions off of it. Another major Polish breakthrough, graphene, may also be facing a similar fate. Pioneered by Russian-born scientists Andre Geim and Konstantin Novoselov, it was first made commercially viable by a Polish science team under the leadership of Włodzimierz Strupiński, PhD, from the Institute of Electronic Materials Technology. Polish scientists were the first to produce entire layers of graphene back in 2011. And recently, they came up with another major advancement that will allow for the mass production of the wondrous material. Thus far, it has only been produced in small quantities, but the much quicker and cheaper method invented by Strupiński’s team will enable companies to produce large graphene sheets. The scientists have started cooperation with Seco/Warwick, a company specializing in heat processing equipment, which has already set up a reactor capable of churning out a 500 mm x 500 mm graphene sheet every four hours. However, even the leaders in the Polish graphene industry seem skeptical. “I would be cautious with creating a myth that Poland is a graphene powerhouse. Racing against world giants such as Samsung and Toshiba takes billions, and we don’t have the necessary money in Poland,” said Zbigniew Mularzuk, CEO of NanoCarbon, a Polish graphene manufacturer, in an interview with biztok.pl. Still, not all hope is lost. Even though the Polish graphene industry is facing a “David vs. Goliath” rivalry with global firms, it will likely continue to matter. “There is a risk that Poland will not make money on commercializing graphene that is made in Poland. But there is no way that our achievements will simply vanish. We cooperate with the entire world, we are a part of European program where we are the main supplier. Even if graphene doesn’t find applications in Poland, or they never come to fruition, we will continue to be a supplier of graphene or of graphene production technology,” said Strupiński. Know how to sell The most obvious conclusion that comes to mind after looking at Poland’s high-tech industry is that Poles know how to make things work, and they can compete even with world giants, at least technologically. What they often seem to lack is sales and marketing skills to turn their innovations into profit-making businesses. “Rarely anybody talks about how badly we need marketing experts who know their way around technology and how to sell online. Creating a product in itself is becoming less and less of a problem,” Marcin Szeląg, a venture capitalist, wrote on tech.eu. Perhaps Poles should shift some of their focus from trying to make things better towards making money on those that are already good enough