Taking the initiative
The Economy Ministry has received the European Commission's approval to start supporting seed and start-up venture capital funds financing innovation initiatives for SMEs. The Polish Agency for Enterprise Development (PARP) will distribute the EUR 18 (zł.73) million still available within the Operational Program - Growth of Enterprise Competitiveness (PO WKP) from the 2004-2006 period. The Economy Ministry assumes that between three to five funds will initially benefit from the program.
Andrzej Kaczmarek, Deputy Economy Minister, says that despite the instrument being small in terms of the volume of the whole Polish economy, it will still have a crucial influence on the development of the economy, because financial institutions are reluctant to finance venture activities. "This is a pilot instrument preparing us for a wider use of the funds available in the next financing period," Kaczmarek adds.
According to PARP, application forms are to be submitted in September and the contracts will be signed by the end of the year. In the meantime, the Ministry is working on similar documents for the 2007-2013 period, when supporting seed and start-up venture capital funds will be included in the National Capital Fund (KFK). The regulations should be completed in 2006 and the amount of funds available within KFK is being discussed.
In general, in the 2007-2013 financing period, Poland will have a packet of programs within the National Development Strategy. The Innovative Economy Program will provide EUR 8.2 (zł.33.2) million, but the Ministry of Regional Development will direct other resources to entrepreneurship and innovativeness, including the Regional Operational Programs for the 16 regions, and initiatives such as Human Capital and "Eastern Poland".
Poland needs to act now if it is to make headway in innovation. According to a recent report by PARP, Poland is ranked 27th among 33 countries in Europe and 21st in the EU, in terms of innovation. The indicator of innovation used in the report considers such aspects as the number of graduates, spending on innovation and R&D, the number of patents and the level of entrepreneurship. The latter is one area in which Poland does well.
But the generally bad situation is the result of economic shortcomings (50-80 percent of companies say they have no funds for R&D), market conditions (insecure demand and a market overwhelmed by a larger company), and a lack of proper partners or qualified personnel (cited by 22 percent and 15 percent of SMEs respectively).
