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POLISH INFORMATION AND FOREIGN INVESTMENT AGENCY Business opportunities in Poland Sławomir Majman President Polish Information and Foreign Investment Agency (PAIiIZ) Rome, 6th April 2011 Poland - Key Facts Area: 312 700 sq km – 6th in European Union Population: 38,12 million – 6th in European Union Currency: Polish Zloty (EUR 1 ~ 4.00 PLN) GDP total: ca. EUR 494 billion (PPP, 2009) GDP growth: 4.8% (2008), 1.7% (2009), 3.8% (2010) Membership: EU, NATO, OECD, WTO, Schengen Zone GDP changes in 2010 FI NO SE 0,4% 5,5% 3,1% EE 3,1% LV -0,3% DK LT 1,3% 2,1% IR -1,0% UK PL 1,3% NL 1,8% BE 2,1% DE +3,8% 3,6% CZ 2,4% SK 4,0% FR AT 2,0% 1,6% HU 1,2% RO -1,3% IT 1,3% BG 0,2% ES PT -0,1% TR 1,4% GR -4,5% Źródło: Eurostat 7,5% 4,5 4 3,5 3 2,5 Poland UK Source: European Commission, Interim Forecast, March 2011. 2,4 Germany 1,8 EU 27 1,1 1,6 Euro zone 0,8 1,5 2 The Netherlands 4,1 Italy 2 1,5 1 0,5 0 Spain Percentage change y/y The future seems to be bright GDP forecasts for 2011 are very favorable Competitive Advantages Location & economic fundamentals strategic location in continental Europe part of trans-European transportation corridor the only country of the EU with positive GDP growth in 2009 38 million consumers young, well-educated work force ca 11% of university students in the EU increasing labour productivity Investment incentives 14 Special Economic Zones grants co financed from the EU (EUR 90 bn) Poland is much less affected by the crisis than neighbouring countries 1. Stricter banks’ credit policies before crisis compared to other countries 2. No dynamic growth of foreign debt as in other countries 3. Financial instruments far less sophisticated as in the other countries 4. Smaller influence of stock market on the economy than in the other countries 5. Falling natural resources’ prices 6. Huge internal market Leverages: Size of the market Markets served: • Internal market of 38 mn people 1000 km radius 250 mn people • Unlimited access to the EU market • Strong relations with CIS and Balkan states Stable economy: • GDP growth in Poland 1.7% vs -4.2% in the EU in 2009 • Current GDP: 3.8% in 2010, 4% in 2011 • Main growth factors: domestic demand and foreign trade 2000 km radius 550 mn people Leverages: Human resources (I) Main academic centers Students in CEE Tricity Sl ov en ia ul ga ria B un ga ry C Wroclaw ze ch .R ep . R Lodz H Poznan 2500 2000 1500 1000 500 0 om an ia Warsaw Po la nd Szczecin Krakow • 20 M enterprising and multilingual young people • about 2 M students, over 400 K graduates each year • 87% of students can communicate in a foreign language • 50% of the population is less than 35 years old, 35% under 25 (every 3rd has higher education in the 20 – 29 age group) a nationwide network of 448 universities and technical universities • Source: EIU, Eurostat Leverages: Human resources (II) Foreign language capability by age groups 50% Language proficiency is one of the strongest points for Poland as a BPO center 40% 30% 20% Children learn foreign languages from the age of 6 10% 0% 18-24 25-34 English German 35-44 45-54 Russian Source: CBOS Survey Foreign language capability among students 100% English is the most popular foreign language in Poland 80% 60% 40% Learning of foreign languages is obligatory in the Polish education system 20% 0% English German Russian Source: Randstad, October 2008 French Spanish Leverages: Perception (I) Poland’s main strengths against global competitors: • Growth of the market • Size of the local market • Access to regional markets • Cooperation with suppliers and business partners • Investment incentives system • Stable investment environment Poland is 11th most attractive investment location in the world Source:UNCTAD, World Investment Prospects Survey 2009-2011 Leverages: Perception (II) • Poland – the biggest rise in comparison to the previous edition (2007); 2. place in Europe, 6. place in the world. • 50% companies postpone investment projects due to the crisis. 16 15 top 15 differences 11 5 4 2 2 1 0 0 0 -15 Source: AT Kearney, 2010 France Vietnam China USA Other Persian Brazil Australia Canada Germany -10 Mexico -5 Poland 0 -1 -3 -6 -9 Hong Kong 5 UK 5 UEA 10 India 20 Country 2010 rank 2007 rank Differen ce China 1 1 0 USA 2 3 1 India 3 2 -1 Brazil 4 6 2 Germany 5 10 5 Poland 6 22 16 Australia 7 11 4 Mexico 8 19 11 Canada 9 14 5 UK 10 4 -6 UEA 11 8 -3 Vietnam 12 12 0 France 13 13 0 Hong Kong 14 5 -9 Other Persian Gulf countries 15 17 2 Leverages: Perception (III) Poland is in a group of the most attractive countries for investments – having the most favorable economic and polical environment Forecasted GDP changes in 2011 (%) 0 Major strengths of Poland: - Controlled inflation/CPI - Competitive CIT levels - Significant internal demand 4 2 Chile Mexico 8 3 USA Germany 6 3,5 Australia Poland Source: Harvard Business Review Polska. 2 6 3,7 4,2 Leverages: State aid I. CIT exemption in Special Economic Zone only available in Special Economic Zone (SEZ) II. Government grants through individual negotiations individually approved and granted by the Ministry of the Economy based on the Council of Ministers’ Resolution III. Real estate tax exemption subject to negotiation with the local authorities only in case if the investor is the owner of the building (provided by the Commune Council) IV. Cash grants available through EU Funds subject to negotiation with different managing institutions depending on the investment project key parameters All above presented instruments can be combined together however the total amount of state aid cannot exceed the maximum aid intensity Leverages: EU funds EU support for 2007-2013 Structural instruments (EUR 67,3 bln) Rural Development Programme (EUR 13,2 bln) European Fisheries Fund(EUR 0,6 bln) 6 national operational programmes and 16 regional – ESF, ERDF, CF Investment in food processing, wholesale, training for farmers and foresters Investment in fish processing and marketing 7.5 10.0 1.4 4.1 6.4 6.8 4.4 4.3 2009 2 2.8 4 1.6 6 3.6 8 5.7 10 10.1 12 10.2 10.3 14 8.3 16 2008 18 17.2 15.7 20 EU accession Long term upward trend. In 2008 and 2009 FDI flow at the same level. 2010: estimates (will be changed). Source: NBP. I 2011 2010 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 0 1994 EUR billions FDI Flow to Poland – a long term view PAIiIZ projects in 2010 • Number of completed projects: 58 • Estimated value: EUR 973,2 mn • New jobs: 10 711 • Key sectors: • BPO • machinery • electronics • Main source countries: • USA • Sweden • France In April 2011 PAIiIZ cooperates with 154 investors willing to invest EUR 6.4 bn and to employ 38 000 people Source: PAIiIZ, 2011 Services and Manufacturing Hub in Poland Automotive White R&D BPO Electronics goods Aviation Why Poland? Recap Strategic location – gateway to the EU Economic and political stability Availability of skilled human resources Effective incentives system including EU-Funds Thank you for your attention 00-585 Warszawa, ul. Bagatela 12 tel. (+48 22) 334 98 00, fax (+48 22) 334 99 99 e-mail: [email protected]