Warsaw calls out across the world
Opened by President Aleksander Kwaśniewski, the three-day event was aimed at addressing the problems facing small and medium-sized (SME) operations and providing information about business solutions.
"You are the most innovative group of businesses, the ones that decide the new trends," said the President during the opening session. Kwaśniewski emphasied that the Polish economy has experienced a 50 percent growth since 1990 and is now protected from temporary fluctuations by independent institutions such as the National Bank of Poland. "We must do everything we can to create conditions for development in our country," he added.
Sessions included discussions on financing of SMEs and their relation to national economies. One of the main themes of the meeting was the effect of globalization on enterprises. "Increased market integration has surely been positive for SMEs everywhere," claimed the Congress's chair Catherine Swift. "A very promising outcome that has been widely demonstrated by events to date is the ability for the poorest countries to dramatically improve their prospects by participating in international trade," she told AFP.
Gurbiel says 'we are working for you'
One of the key speakers at the event was the Undersecretary of State of the Ministry of Economy and Labor, Krystyna Gurbiel. The WBJ's John Todd spoke with her.
How friendly is Poland to small business?
We try to be as friendly as possible and we are hoping to become more friendly still. Although, of course, businesses certainly still complain about things like administration barriers, red tape and changes in legislation that are quite often frequent in Poland.
But what I think is most important this year is the introduction [of the law on] the freedom of entrepreneurship, and freedom of economic activity, which was signed by the President in July. The main aim of this law is to reduce the barriers for start-ups and for those conducting business and to increase the feeling of security when dealing with administration.
For example, the new provision in this law says that the interpretation of the fiscal regulations given by the Minister of Finance is binding for the tax offices. This is a big step forward for our small businesses because, of course, dealing with tax administration is something that is very painful for everybody-but especially so for those who are running a business.
How else is the government helping small business?
Generally, legislation is most important because this concerns all business-big, small and medium. So creating good legislation is something that works for everybody. So this law is important. We reduced the company tax level last year, which is also a step that encourages people to operate businesses in Poland, and there are certainly other pieces of legislation we could name.
Other examples of the assistance available are the support programs. The main teachers involved in these programs are largely funded by European money, although they operate under the government program. The crucial element of this policy is called 'Capital for Entrepreneurs', which consists of the creation of a system of small loan funds and guarantee funds. This is the most important financial instrument for us in this. Then we have investment grants [and] investment subsidies funded by the EU.
In addition to these financial instruments we have a network of business support institutions that have their headquarters in the Polish Agency for Enterprise Development. These are institutions that provide different types of assistance such as information, counseling and advisory services. The major financial institutions are cooperating with the agency to provide support to the institutions in the form of running costs, training and networking services. There are something like 150 of these non-government organizations. They are no part of the state agency but they cooperate with the state agency. Linked to this we have a program providing grants to SMEs when using consulting services.
What are the benefits of doing business in Poland?
Poland is a big market and this is very important. We have a population almost 40 million strong and we have a rapidly growing economy. The GDP growth is more than six percent, which means the economy is growing but it also means the incomes of the people are growing-so the consumers are there.
On the one hand there is the market that is growing; on the other hand we have a skilled and relatively cheap labor force. Of course the wages are growing a bit so this comparative advantage of cheap labor will be reduced with time. But still, unfortunately for us, the level of salaries in Poland is much lower than the level of salaries in the neighboring old EU members. Therefore labor is relatively cheap and the skill level is quite high.
We have a very high percentage now of young people going to universities, so you can see the importance of education is appreciated. People are interested in learning and they understand the importance of education. This was not the case 20 years ago when people didn't realize that education was the way to make a career, was the way to cope with the modern world. You can see the young population is ready to learn and ready to invest in education, which I think is a good sign for potential employers. I think these are the main advantages of Poland.
Being a neighbor of Russia, Ukraine and Belarus is something that is an advantage for those who are looking to go further east, because of our proximity. There are traditional links, cultural links with our neighbors, and when a Pole does business with these neighbors it might be easier than if, say, the business contact was British or American.
What message do you have for readers of the Warsaw Business Journal?
What is really important is that the Polish economy is growing regardless of all those difficulties and political turmoil that we have, and unemployment is going down.
What has been driving the Polish economy for a few years are exports. To a large extent these are made by companies with foreign investment participation. And in fact more than half of these are SMEs and a lot of them have foreign partners. So this area is very important for the Polish economy because it brings in this investment and it is important for the investors because it gives them a chance to export.
Now, since Poland has become part of the single market, all those old barriers that existed have gone and Polish businesses are really interested in internationalizing and going abroad. So I think this means there are very good opportunities to find partners in Poland.
"You are the most innovative group of businesses, the ones that decide the new trends," said the President during the opening session. Kwaśniewski emphasied that the Polish economy has experienced a 50 percent growth since 1990 and is now protected from temporary fluctuations by independent institutions such as the National Bank of Poland. "We must do everything we can to create conditions for development in our country," he added.
Sessions included discussions on financing of SMEs and their relation to national economies. One of the main themes of the meeting was the effect of globalization on enterprises. "Increased market integration has surely been positive for SMEs everywhere," claimed the Congress's chair Catherine Swift. "A very promising outcome that has been widely demonstrated by events to date is the ability for the poorest countries to dramatically improve their prospects by participating in international trade," she told AFP.
Gurbiel says 'we are working for you'
One of the key speakers at the event was the Undersecretary of State of the Ministry of Economy and Labor, Krystyna Gurbiel. The WBJ's John Todd spoke with her.
How friendly is Poland to small business?
We try to be as friendly as possible and we are hoping to become more friendly still. Although, of course, businesses certainly still complain about things like administration barriers, red tape and changes in legislation that are quite often frequent in Poland.
But what I think is most important this year is the introduction [of the law on] the freedom of entrepreneurship, and freedom of economic activity, which was signed by the President in July. The main aim of this law is to reduce the barriers for start-ups and for those conducting business and to increase the feeling of security when dealing with administration.
For example, the new provision in this law says that the interpretation of the fiscal regulations given by the Minister of Finance is binding for the tax offices. This is a big step forward for our small businesses because, of course, dealing with tax administration is something that is very painful for everybody-but especially so for those who are running a business.
How else is the government helping small business?
Generally, legislation is most important because this concerns all business-big, small and medium. So creating good legislation is something that works for everybody. So this law is important. We reduced the company tax level last year, which is also a step that encourages people to operate businesses in Poland, and there are certainly other pieces of legislation we could name.
Other examples of the assistance available are the support programs. The main teachers involved in these programs are largely funded by European money, although they operate under the government program. The crucial element of this policy is called 'Capital for Entrepreneurs', which consists of the creation of a system of small loan funds and guarantee funds. This is the most important financial instrument for us in this. Then we have investment grants [and] investment subsidies funded by the EU.
In addition to these financial instruments we have a network of business support institutions that have their headquarters in the Polish Agency for Enterprise Development. These are institutions that provide different types of assistance such as information, counseling and advisory services. The major financial institutions are cooperating with the agency to provide support to the institutions in the form of running costs, training and networking services. There are something like 150 of these non-government organizations. They are no part of the state agency but they cooperate with the state agency. Linked to this we have a program providing grants to SMEs when using consulting services.
What are the benefits of doing business in Poland?
Poland is a big market and this is very important. We have a population almost 40 million strong and we have a rapidly growing economy. The GDP growth is more than six percent, which means the economy is growing but it also means the incomes of the people are growing-so the consumers are there.
On the one hand there is the market that is growing; on the other hand we have a skilled and relatively cheap labor force. Of course the wages are growing a bit so this comparative advantage of cheap labor will be reduced with time. But still, unfortunately for us, the level of salaries in Poland is much lower than the level of salaries in the neighboring old EU members. Therefore labor is relatively cheap and the skill level is quite high.
We have a very high percentage now of young people going to universities, so you can see the importance of education is appreciated. People are interested in learning and they understand the importance of education. This was not the case 20 years ago when people didn't realize that education was the way to make a career, was the way to cope with the modern world. You can see the young population is ready to learn and ready to invest in education, which I think is a good sign for potential employers. I think these are the main advantages of Poland.
Being a neighbor of Russia, Ukraine and Belarus is something that is an advantage for those who are looking to go further east, because of our proximity. There are traditional links, cultural links with our neighbors, and when a Pole does business with these neighbors it might be easier than if, say, the business contact was British or American.
What message do you have for readers of the Warsaw Business Journal?
What is really important is that the Polish economy is growing regardless of all those difficulties and political turmoil that we have, and unemployment is going down.
What has been driving the Polish economy for a few years are exports. To a large extent these are made by companies with foreign investment participation. And in fact more than half of these are SMEs and a lot of them have foreign partners. So this area is very important for the Polish economy because it brings in this investment and it is important for the investors because it gives them a chance to export.
Now, since Poland has become part of the single market, all those old barriers that existed have gone and Polish businesses are really interested in internationalizing and going abroad. So I think this means there are very good opportunities to find partners in Poland.
