Good things come in small- to medium-sized packages
To kick off the year on a rather positive note, the Business Journal this week takes a look at one of the country's biggest economic assets: its 3 million-strong small- and medium-sized business (SME) community (see cover story).
The bread and butter of Poland's economy, these entrepreneurs account for two-thirds of total employment and half of gross domestic product (GDP) and exports. But that's only part of the story. SMEs - defined by the European Union (EU) as employing fewer than 250 workers - could be doing far more to develop their businesses, kick start this country's sputtering economy and prepare themselves for competition once Poland joins the EU in a few years. But what's holding them back? A disengaged government.
According to Jerzy Kwiecinski, an official with the European Commission who oversees development programs here, setting up and running a business is far more complicated here than in the EU. No surprise there. Anyone who has tried to set up shop in Poland has run into the same cast of unsavory characters: limited access to credit, crippling interest rates, bureaucracy, excessive taxes and social-security payments, and a profit-chiseling labor law left over from communism.
What should the government do? Begin by demonstrating that the private sector is valued here. Want job creation and growth? Prove it by mapping out a plan that will encourage investment. It's a frightening prospect indeed when leading business figures such as Henryka Bochniarz of the Polish Confederation of Private Employers (PKPP) say that the three-month-old government is decidedly not pro-business, as she did at a WBJ Business Breakfast last month. According to her, even though the coalition government appears serious about getting Poland into the EU, it has not yet provided any evidence that it is a partner for businesses. Entrepreneurs are heading in the right direction, but the government isn't doing much to help them get there. Apart from making sure their taxes are collected, it's ignoring those whom it needs most. Go figure.
What to do? Bochniarz isn't all doom and gloom. Like many she believes Poland will get there, though it will take time. But how much time do most businesses have? And how long can the out-of-work Jan Kowalskis and their families wait to find employment again?
This government is still too new to be written off, but unless it begins to take seriously the importance of SMEs to the economy and makes moves that will encourage the development of their businesses, this country will continue to underperform for years to come.
