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© lavitreiu-dreamstime.com Analysis | June 26, 2013

Do IT with Poland - IT sector as a powerhouse of Polish economy

A strong Polish representation at this year's E3 Expo in Los Angeles is a good reason to take a closer look at the dynamically growing Polish sector of new information and communication technologies.
It was not without a reason, that during his last visit to Poland in 2011, President Obama received a collector's edition of a cult video game Witcher 2, as a memorial gift from Polish Prime Minister Donald Tusk. The Poles are proving to be extremely talented IT specialists, programmers and video game creators and the IT/ICT sector is becoming their national pride.

According to the Global Competitiveness Report 2012-2013, published by the World Economic Forum, Poland is to be found among 21 countries in the process of transition from the economy based on the efficiency of the production system to the economy based on innovation. As a crucial part of this process Poland focuses on the development of IT/ICT sector, which has recently grown to be its national specialty. International campaign “Do IT with Poland” is aimed at making the world acquainted with the intellectual and investment potential of the Polish IT as well as presenting the strongest Polish ICT companies.

The economists are pointing out that Poland has entered phase III of its development after the political and economic transition in 1989. In the 90ties the dynamic economic growth was powered by fundamental pro market reforms (economic freedom, opening to the world, currency stabilization), whereas in the next decade the accession to European Union gave significant support. Nowadays the country stands a chance of retaining GDP thanks to active participation in the international market of new technologies.

Although Polish economy appeared to be unusually immune to the global financial crisis of the last few years, its future development is threatened by the middle income trap (the dynamics of GDP growth slows down once the level of 60% of GDP per capita of the well-developed countries is reached). In developing countries the rapid growth of average income per person is possible by copying technical and organizational solutions sourced from better- developed countries. However such imitational model fails to work at the point of reaching the level of several thousand dollars a year, due to the rise of salaries and reduction in the number of work positions to the less affluent countries, as well as high investment saturation and radical growth of the cost of technology importation, which is necessary to increase productiveness.

The pressing demand of the Polish economy for the innovation and development of new technologies is fulfilled by the entrepreneurs from the ICT sector, which has recorded double-digit growth rates in recent years. In the years 1996-2008 Polish ICT export grew at a rate of 28% per year, and Poland has specialized in consumer electronics segment, the production of custom software, electronic games and mobile solutions. In 2010 the revenues in the Polish ICT sector net sales amounted to 113.5 billion PLN and in comparison with 2007 increased by 26%. In the production sector of ICT revenues increased by 48%. The research activity expenses grew over three times and reached the level of 758,6 million PLN.

The Polish government has not ignored the chance of a stroke of civilization resulting from this situation, and over the past few years it has been creating a conscious policy of development of the competent information society, which is the statutory purpose of the established in 2011 Ministry of Administration and Digitalisation. Prime Minister Donald Tusk wishes to give Poland the "digital momentum" and intends to grant 2.5 billion euros on that purpose, sourced from the new budget of the European Union. One of the elements of this process will be launching the central Digital Poland Operational Programme, announced by the Minister of Administration and Digitalisation during the International Forum on the Competitiveness of Central and Eastern Europe held in Warsaw.

The Poles already make use of social media more often than average Europeans and indicators of the use of e-government services exceed the European average. Mark Zuckerberg, the founder of social networking site Facebook, admitted during a recent meeting with the Minister of Administration and Digitalisation in Warsaw that Poland is the most important country in the region for his company, and that among programmers recruited by Facebook, the Poles are second largest group, right after Indian people.

The Polish have proved to be a nation of talented IT specialists and programmers. The workforce regularly grows every year by 15 thousand graduates and a career in IT/ICT guarantees steady employment and relatively high income. Under those conditions it is understood that according to several forecasts by 2020 the number of IT specialist in all the EU countries will be steadily growing in Poland and Germany only. Polish students are regular winners of international programming competitions, both individual and team. They are in the narrow group of winners of prestigious competitions such as Top Coder, Microsoft Imagine Group, Google Code Jam or Inter Challenge.

It was a sign of the times and the result of years of efforts of the Polish Government, that Poland was appointed a partner country in this year's Hannover Technology Fair CeBIT - one of the largest high-tech fair in the world. During the opening ceremony Chancellor Angela Merkel thanked the organizers for providing the possibility to show Polish amazing development and how it is used to create new jobs and employment opportunities. She was accompanied by Prime Minister Donald Tusk, who said that "strong Polish participation in fairs is without doubt an opportunity not only for the Poles, but for all the partners concerned. An opportunity to further familiarize themselves with our telecommunications market and the opportunities it offers. Polish ICT remains, to some extent, a treasure still undiscovered by Europe and the world". He added that he is convinced that those who were the first to discover this treasure, meaning investors, service providers, customers and business partners, will gain most. “From the depth of my heart I wish such great reflex to all our partners” – he added.

Last year Polish IT companies planning to expand abroad gained an ally in the form of April – commenced Trade Promotion Programme for the IT/ICT Industry "Do IT with Poland", developed and implemented by the request of the Ministry of Economy. The schedules of programme participants are filled with events focused on intensive promotion of Polish IT/ICT industry in the world. The companies participating in the scheme had a chance to promote themselves on a variety of trade fairs - Futurecom in Rio de Janeiro, the largest IT fair in South America in October 2012, in February 2013 at Mobile World Congress in Barcelona and in March 2013 at the CeBIT in Hanover. Last months also featured economic missions and trips to Oslo, Washington, New York, Barcelona and Hannover, meetings with experts familiar with the specifics of local markets, new business contacts and participation in the matchmaking meetings with potential partners. In April 2013 participants took part in Lodz Intertelecom Fair and at the beginning of May they visited Tokyo Japan IT Week combined with an economic mission to Tokyo. The programme is co-financed by the European Regional Development Fund under the Operational Programme Innovative Economy.

"Polish IT/ICT companies create products and services that can easily compete on foreign markets, but we must bear in mind that the costs of participation in a foreign mission are at the level of several thousand PLN, while the presence of two representatives of the company at the CeBIT or Mobile World Congress is the cost of 70-110 thousand PLN. The possibility of obtaining reimbursement of 75 percent of the spendings on this kind of promotional activities will be for many companies in the IT/ICT sector the impulse to take action outside Poland "says Michał Sobański, President of the M Promotion Agency, the programme executive.

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