New European Economy-Poland Has Moved from A Newly Industrialized Country to A Developed Country
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New European Economy-Poland Has Moved from A Newly Industrialized Country to A Developed Country

Central and Eastern European countries are emerging markets. Among them, Poland, which is located in the transportation hub of Western and Eastern Europe, has the most potential for the development of the manufacturing market.
Published: Aug 18, 2020
New European Economy-Poland Has Moved from A Newly Industrialized Country to A Developed Country

Since the implementation of economic liberalization policies in 1990, Poland has maintained a high economic growth rate for 27 consecutive years. According to Poland GUS statistics, its annual economic growth rate in 2018 was 5.1%, and its gross domestic product (GDP) reached US$549.5 billion, it ranks among the best in the European Union. In addition to ranking first in Eastern Europe, and leading Western European countries such as Belgium and Austria, it can be described as a European emerging market star and has also won the title of "European Economic Tiger." For now, Poland enjoys the best economic situation in history. Not only is it thriving in various industries in Poland, but also the competition among industries has become more and more fierce, resulting in the unemployment rate in Poland has remained very low. According to Eurostat statistics, Poland in 2018 The unemployment rate is 3.5%, which is in the early stage of the EU countries. Even in August 2019, the unemployment rate was only 3.3%. It shows that Poland’s strong domestic consumption, the rapid attraction of EU funds and macroeconomic policies have become it is economic rapid the main factor of growth.

Macroeconomic policies have led Poland to the road of economic development.

As the first former socialist country to implement "shock therapy" to reform its economy, Poland has indeed brought a huge impact on the Poland economy in the short term. After nearly 30 years of hard work, Poland has made tremendous progress in economic performance, creating the so-called "Poland miracle" and becoming the seventh-largest economy in the European Union.

Since the early 1990s, Poland has been pursuing an economic liberalization policy under the "Balcerowicz Plan", which not only reversed the continuous deterioration of the national economy but also developed steadily in the following years. In 1994, Poland implemented "The Strategy for Poland" and started the second phase of Poland's economic development plan, emphasizing the combination of institutional reforms and development policies, and believing that the country should create conditions for "economic growth."

After Poland formally joined the European Union in 2004, not only the economic integration has become closer, but also because of the support of European Structural and Investment Funds, the economic development opportunities for Poland have increased. According to EU data, between 2014 and 2020, Poland received 86.1 billion euros, which is the largest beneficiary of EU structure and investment funds. In 2012, the Poland government considered Poland’s socio-economic conditions and internal and external economic factors and issued "National Development Strategy 2020" hopes to create an active society, a competitive economy, and an efficient country, and improve Poland's living standards, with GDP reaching 74~79% of the EU average, making Poland an efficient and modern economic country.

After the reform and opening up, the Poland economy continues to grow steadily

Since Poland has pursued the economic liberalization policy, it has not only successfully avoided the economic turmoil caused by the global financial crisis in 2008, but its growth rate is still developing at a very high rate, which was 5.1% in 2018. It was 4.7% in the first quarter of 2019 and 4.5% in the second quarter. Although this was the weakest growth rate since the second quarter of 2017, the average annual growth rate of Poland’s GDP from 1995 to 2019 was 4.20%. So far, the Poland economy has been growing steadily in the past 30 years, setting a record high in the European Union.

The quarterly growth rate of Poland's GDP in the past three years

In 2018, Poland's GDP has reached 586.015 billion U.S. dollars, a record high. At the beginning of the 21st century, Poland's per capita GDP was only 48% of the EU's overall average. Poland has a per capita GDP of US$1,626 since 1990. As of 2018, Poland’s per capita GDP has reached US$15,431. ㄇccording to the latest data released by the IMF in 2018, if calculated by purchasing power parity (PPP), Poland's per capita GDP is close to US$32,000, which is 74% of the EU average. The IMF report also pointed out that Poland's per capita GDP may reach US$43,300 in 2024, which is equivalent to 82% of the EU average. The Poland Ministry of Entrepreneurship and Technology believes that Poland's ranking in the European Union may surpass Portugal in 2019 and will gradually approach Italy. The IMF's latest World Economic Outlook report also pointed out that Poland's economic growth rate in 2019 has been increased from the estimated 3% to 3.5%, which means that despite the turbulent external environment, the Poland economy will continue to grow steadily. According to data from the World Bank in 2018, Poland currently ranks 23rd in the world in terms of GDP and is the country with the largest economic volume in Central and Eastern Europe. Since its reform and opening up, Poland has not only succeeded in driving the expansion of its domestic consumer market, it is also the only EU country that has not fallen into recession after the 2008 financial crisis. So far, its domestic demand market has even accounted for 61% of GDP, exceeding the EU’s The average level has become the market with the most sales potential in Central and Eastern European countries. In short, Poland's economy is large, resilient, well-structured, and strong. The performance of the Poland economy is closely related to its reasonable industrial layout.

Poland established special economic zones and successfully attracted foreign investment.

In the 2019 World Investment Report, it was pointed out that foreign direct investment (FDI) inflows into Poland in 2018 rose sharply from US$9.2 billion in 2017 to US$11.5 billion, making it the seventh-largest foreign investment destination after Sweden. However, the flow of funds is still well below the 2016 record high of US$15.7 billion. The country's total investment stock was USD 231.8 billion in 2018, which is equivalent to 44.2% of Poland's GDP. Among them, Germany, the United States, France, and the Netherlands are the main investment countries, and their investment is mainly for manufacturing (31%), financial and insurance activities (20.5%), and wholesale and retail (13.9%). This shows that under the promotion of the Poland government’s sound economic policies, it has successfully promoted rapid economic growth. The strong domestic consumption, the rapid attraction of foreign investment, and macroeconomic policies, coupled with the superior geographical location, high-quality human resources, and EU funds, have led to development. The attention has made Poland one of the most attractive countries in Europe.

Distribution of Poland Special Economic Zones

To attract foreign investment, Poland has successively established 14 special economic zones (SEZs) throughout the country, aiming to adjust the industrial structure, increase employment, and accelerate the economic development of backward areas. To this end, the Poland government also provides incentives, including income tax exemption, real estate tax exemption, competitive land prices, and close ties with high-quality local suppliers to attract foreign capital to develop manufacturing.

However, according to EU and Poland domestic regulations, the preferential policies of Poland Special Economic Zones will expire in 2026. For this reason, the Poland government especially amended the law in 2018 to extend the preferential measures of special economic zones to the entire territory of Poland, which means that the whole country is the concept of special economic zones. In addition to retaining tax-free concessions, rules on the designation of land, the bill also lifts foregoing territorial restrictions. The new law stipulates that permits for tax reliefs are valid for 10 to 15 years. Where the local government obtains more state subsidies that comply with EU regulations, the longer the tax relief period will be. The implementation of the new law not only changes the previous investment preferences for enterprises in the special economic zone but also successfully promotes investment in medium-sized cities where the social and economic development is less favorable. This will help small and medium-sized enterprises stay in their hometowns instead of migrating to the special economic zones. Balance the effects of development.

According to Poland data, since the establishment of the special economic zone to the end of 2018, Poland's special economic zone has absorbed about 27.9 billion euros in investment, an increase of 11.9% over 2017, about 303 billion euros, and about 23.3% of investment capital came from Poland, 19.4% are from Germany, 7.65% is from the Netherlands, 5.9% are from Luxembourg, and 5.7% are from the United States. As of the end of 2018, the special economic zone created 379,000 job opportunities. Compared with 2017, its number has increased by 26,000, or 7.4%. From the perspective of investment industries, more than 24% are from the automobile industry, 9.7% from the rubber and plastics industry, and 7.7% from the metal processing industry. Most of them are "strategic industries" officially designated by the Poland government. The establishment of special economic zones has not only formed a certain scale of industry Settlements, for example, but the automobile industry is also mostly concentrated in the Katowice and Legnica Special Economic Zones, the aviation industry is more concentrated in the EURO-PARK MIELEC Special Economic Zone, and the home appliance and electronic industries are concentrated in the Pomeranian, Tarnobrzeg and Warmia-Mazury Special Economic Zones. It can be seen that these special economic zones not only successfully solved the problem of rising unemployment but also promoted regional economic development and formed industrial clusters, which in turn promoted Poland to become the manufacturing center of the European Union.

The prospects for Poland industrial development, Industry 4.0 is an important key to the sustained development of the Poland economy.

According to data from the European Union Eurostat in 2018, Poland is the sixth largest manufacturing country in the EU, with manufacturing contributing 26.3% of GDP, and Poland is becoming a highly industrialized country. Its leading manufacturing industries include food and beverages; automobiles, metal products; rubber and plastics; coke and refined petroleum products; chemical and chemical products; electronic equipment; non-metallic mineral products; basic metal products; miscellaneous mechanical equipment and furniture. Compared with 5.1% of the overall GDP, the manufacturing industry in 2018 grew by 5.8%. The main factor that stimulated the growth of Poland manufacturing was that the industrial conditions in the euro area countries were very good, and the euro area countries were the most Polanded products and semi-finished products. An important recipient country, which means that European demand for production parts provided by Poland companies has increased, which in turn promotes industrial sales and exports. In September 2019, the Poland Industrial Production Index grew by 5.6% year-on-year, indicating that industrial production including manufacturing has gradually rebounded. The automobile industry has always been the core industry of the Poland economy. It is the main foreign manufacturing base of famous European automobile companies such as Germany, France, and Italy. It is also a concentrated place for the production of spare parts and complete vehicle assembly of major automobile manufacturers in the world. Form a highly integrated industrial supply chain. As for another advantageous aviation industry, it is characterized by a high degree of agglomeration. Almost 90% of its production is concentrated in Dolina Lotnicza in southeastern Poland. This area is not only a production base for the aviation industry but also has research and development and research in the aviation industry. Educational institutions have formed an aerospace industry cluster, also known as Aviation Valley, which has been favored by multinational aviation companies. This means that Poland is becoming the center of capital-intensive and technology-intensive manufacturing in Europe, such as automobiles and aviation, and more than 90% of the automobile and aviation components manufactured are exported to EU countries. Poland is also committed to the development of labor-intensive manufacturing industries such as electronics, home appliances, and food processing. Also, Poland has incorporated high-tech manufacturing such as green energy and information technology into strategic industries. R&D and process outsourcing are related to manufacturing. The closely related information service industry has also become a strategic focus of Poland, to make Poland an advanced manufacturing center in Europe.

To this end, the Poland government, like highly developed EU countries, actively promotes Industry 4.0, to improve the R&D and innovation capabilities of Poland companies to assist the Poland industry is moving towards higher-level manufacturing capabilities. Its main measures include the establishment of a Poland Industry 4.0 platform. , And the establishment of the National Institute of Technology (NIT), and the organization of the Industry 4.0 Vertical Industry Competence Center, to establish a competitive advantage based on innovation, thereby enhancing the industry value chain. The Poland government hopes to demonstrate deeper value creation through innovation, R&D, and design content, rather than just providing simple manufacturing and service capabilities.

As early as 2016, there were signs that Poland manufacturers began to embrace automation. This is a necessary process for Poland to move towards Industry 4.0. Only by completing the construction of a solid infrastructure in the field of automation and digitalization, can it gradually introduce the foundations of Industry 4.0. Breakthrough technology. However, the degree of automation and Industry 4.0 in Poland has not yet been fully universalized, and it is even far below the average level of the European Union and Central Europe. Currently, only 6% of manufacturers say they are moving towards Industry 4.0, while only about 15% of manufacturers have fully automated production, while 76% of manufacturers have not completed the automated process, while 14% of manufacturing in Poland is still Completely manual. However, with the currently increasing problems of labor shortages and rising labor costs, entrepreneurs may be more inclined to invest in advanced automation systems, through the use of automation and robotic solutions to maintain their industrial competitiveness. According to IFR data, the average number of robots installed in Europe is 106 (about 332 in Germany and 240 in Sweden), and the value of Poland is 36, far behind Slovakia and the Czech Republic. The only industry in Poland that may be on par with many EU countries is the automotive industry, with 165 robots per 10,000 employees. This means that under the leadership of Poland’s core industries, more and more companies will choose to use robotics and automation solutions, mainly because these two industries are dominated by large multinational companies. Under their leadership and requirements, Poland local suppliers must meet their technical needs. Therefore, relevant companies must invest resources to develop automated process products to meet customers' needs to obtain orders.

In response, the Poland government provided a budget of US$200 million through incentives such as tax incentives and financial subsidies, led by the National Centre for Research and Development (NCBiR) and Industrial Development Agency (ARP) to promote advanced manufacturing and industrial upgrading Transformation. Because this is the only way for Poland manufacturers to remain competitive in the domestic and international markets. Nevertheless, Poland does have to overcome some obstacles that hinder the development of the Poland industry. The lack of specific regulations and technical standards, the lack of experts in this field, the limitations of existing digital technology and the reluctance to adopt new solutions, and the need to introduce relevant ethical and legal standards for artificial intelligence and robot use discussed at the EU level. More importantly, one of the key elements of the automated production line is CNC machines. Poland only produces a few hundred units per year, which can only meet a small part of the Poland market demand. Obviously, in the future, the Poland industrial automation market will be a major export country for machine tool manufacturing. Only a team that can provide high-efficiency, high-precision, high-customization, intelligence, and application services for the entire plant can stand out. After all, re-industrialization is the top priority of the Poland government. Only better preparations for Industry 4.0 can prevent the marginalization of the Poland industry.

Is Poland already on the road to a developed country?

As early as September 2018, FTSE Russell officially announced that Poland has become the first country in the former Soviet bloc to achieve developed market status. So far, the competitiveness of the Poland economy mainly depends on low-cost and flexible exchange rates. This helped Poland survive the global financial crisis without a recession and ensure continued economic growth. In recent years, the Poland economy will slowly decline from its peak of growth. Although Poland’s economic growth in the past few quarters has been extraordinary, it has increased the wealth of the people, and there is no danger of an economic crisis. But in the long run, Poland’s main challenge is the reduction of EU funding after 2020 and the aging population in the next few decades, which will affect labor production. Even under the influence of factors such as industrial automation or robot adoption, Poland’s a large investment in digital technology is inevitable because it is the only way to keep Poland manufacturers competitive in the domestic and international markets. In short, only by continuously investing in R&D and innovation, and developing innovative economic models, can Poland remain competitive and ensure its long-term economic development. Only in this way can Poland truly move towards a developed country.

The industrial center of gravity in Europe is mainly centered in southern Germany and extends to Poland, Hungary, Czech Republic, Slovakia, Austria, and Romania. Among them, the Poland government encourages foreign investment in its domestic manufacturing and service industries, and many well-known companies in auto parts, household appliances, electronic products, aerospace, business services, and R&D have settled in and formed industrial clusters. Therefore, Poland Become the EU manufacturing/service industry base, and more than 90% of the automobile and aviation components manufactured by this country are exported to EU countries.

Focus on Central Europe, Poland, and Taiwan Machinery Export

Taiwan’s smart machinery is mainly exported. In addition to assisting manufacturers to expand their sales in important target markets such as Europe, America, and Japan, the International Trade Bureau also handles the deployment of machinery in the niche market in Central Europe and assists Taiwan and other manufacturers in holding Taiwan smart machinery presentations. , And visited several local auto parts manufacturers after the meeting to develop new kinetic energy for export.

Poland is the future star of China and Europe, and through exchange activities, we have a deep understanding of local procurement needs and future trends.

With the rise of electric vehicles in Europe and the ban on the sale of gasoline and diesel vehicles and other related regulations, the local client station purchases have become conservative. In recent years, they have actively developed automated production lines in the Poland market, hoping to provide real-time service, time-saving, and efficiency improvement through product online. Qualities to assist Poland customers in their industrial 4.0 upgrade goals.

Poland is an important automobile manufacturer in Central Europe, with an annual output of nearly 660,000 vehicles in 2018. At present, automobile manufacturing is the second largest industry in Poland. In 2018, the industrial revenue of the automobile industry exceeded 153.4 billion Poland dollars (about 1.2 trillion Taiwan dollars). 700 supply chain manufacturers have attracted various manufacturers to set up factories in Poland. The Poland auto parts industry is also booming, and it has become one of the main European auto parts producers. Many famous brands of engines, gearboxes, and other parts are produced in Poland. The recent Poland Machinery Show emphasizes automation and robotic arm integration. This is a market demand that Taiwanese brands with smart manufacturing capabilities can enter.

According to Global Trade Atlas data, the overall imports of Poland machine tools from January to August 2019 fell by about 12% compared to the same period in 2018. Germany, the largest importer, fell 9%, and Italy, the second-largest importer, fell 32%. However, since Taiwan Imports increased by 15%, rising to the country's seventh-largest source of imports. Japan, China, and South Korea in other Asian regions are the only countries in Poland's top ten importing countries showing positive growth. Europe is the main export market for Poland auto parts. Affected by the shrinking auto market, Poland machinery procurement will pay more attention to price and cost. Most of the original machine purchases come from Germany and Italy. Recently, more manufacturers have begun to pay attention to Asia with competitive prices. The brand is an opportunity for Taiwan machinery.

Published by Aug 18, 2020 Source :maonline, Source :trademag

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