Driving Economic Development

The modern business services sector consists of business process outsourcing (BPO), shared services (SSC/GBS), IT and research and development (R&D) centers. Although the sector is one of the largest in the Polish economy, employing nearly 350,000 people, it has adapted to operating in crisis mode. Research conducted by the Association of Business Services Leaders (ABSL) just after the first lockdown showed that over one-third (35 percent) of the companies represented by ABSL switched to remote working the day after schools were closed, and 85 percent changed their mode of operation in the following five days. That was possible thanks to the experience from various markets where the coronavirus had appeared earlier, as well as the extensive information and communication technologies infrastructure. The vast majority of companies representing the sector were prepared for crisis actions and for the implementation of recovery and business continuity plans.

CARPE MOMENTUM

Services provided by centers operating in Poland systematically lead to an increase in value-added, making it an important exporter with a contribution reaching $19.80 billion, which has a significant impact on the Polish economy. The ABSL report about the sector from 2020 indicates that over 1,500 business service centers create 2,550 new jobs each month. This places the sector’s share in GDP at an estimated 3-3.5 percent. The latest ABSL data also shows its increasingly strong position on the global market, as well as its maturity in Poland. This trend is supported by more organic growth and a gradual shift from back-office to more comprehensive and advanced functions. With more advanced services attracting a highly skilled workforce and a strongly shaping trend of nearshoring, Poland is becoming an attractive location for a number of business ventures presently located in other parts of the world. ABSL members quickly identified emerging trends, translating them into the operational level and implementing effective solutions. This allowed them to effectively use the emerging opportunities and create additional openings for companies located in Poland.

ATTRACTING INVESTORS

Services are international by nature – 71 percent of entities belong to foreign companies and the majority of business service centers provide services to customers from all over the world. It is worth emphasizing that currently, nearly every fifth company from the Fortune Global 500 list has invested in Poland. The Polish Investment and Trade Agency (PAIH) data from 2020 shows that 58 new investment decisions were finalized and located in Poland, 44 of which were related to business services. The favorable location, the convenient time zone allowing to serve other regions, business infrastructure both office-based and IT, along with the potential of the market, the remote work habits and the substantially-educated workforce in relation to the economies of Central and Eastern Europe (CEE), are among the most appealing assets of the Polish economy. Organic growth and the inflow of new investments have resulted in an increase in the number of jobs in knowledge-intensive business services, which depend to a large extent on highly professional knowledge.

OPEN TALENT ECONOMY

Global changes have dismantled the known models of work, with talent and employers now seeking each other out on new terms based on remote working from anywhere, thereby creating additional opportunities for Poland. An open talent economy means people and work in a borderless economy. ABSL members are among the first to identify and take advantage of this approach. However, new regulations covering remote work in the post-Covid reality are needed. The possibility to work from anywhere is a critical factor for investors. Even though the growth rate of new jobs in the sector has slightly fallen, the number of jobs requiring higher qualifications has risen. While mainly administrative work was performed for multinational corporations initially, today they expect increasingly complex business processes, IT services as well as R&D. As specialization grows, so do wages. As the talent pool is the biggest challenge for investors, this is the very last moment to strengthen the education system in Poland toward digital competencies, a problem-solving approach as well as effectively implement the reskilling and upskilling system.

STRATEGIC GOVERNMENT PLANS

Bearing in mind the “Polish New Deal,” the “National Reconstruction Plan” and the “New Industrial Policy,” it is worth emphasizing that Poland is a beneficiary of the nearshoring trend and bringing business processes closer to production or decision-making centers. Almost half (45 percent) of the companies surveyed by ABSL expect part of their services to be transferred to Poland. In addition, the tendency to shorten supply chains in the global economy may cause centers in Poland to take over orders that currently flow as far away as Asia. Regardless of the industry, various types of business processes must be ensured, making it necessary to think about business services at the same time. There is no industry without business services. Investors responsible for the location of service centers make investment decisions while taking a variety of factors into consideration. Those supporting the industry give smaller cities a chance to attract new investments and create additional opportunities for local talents.