Boosting the Potential of Polish Companies

ING's report identifies a critical junction for Polish firms as demographic shifts and Chinese competition necessitate a move from low-cost labor to technology-driven scaling and higher leverage.

Key Takeaways

• 1.Poland's potential GDP growth is slowing due to adverse demographics and intensifying global competition from China, projected to fall below 3% in the late 2020s.
• 2.The Polish corporate sector shows a 'K-shaped' divergence: one group is aggressively investing and scaling, while another relies on low labor costs and preserving the status quo.
• 3.Polish companies are extremely cautious regarding external financing; bank credit for non-financial enterprises is only 12% of GDP, significantly lower than European peers.

Table of Contents

• Potential GDP growth in Poland is slowing as real convergence advances
• Ten Takeaways from Business Leaders
• 1. Two unfavourable, long-term structural factors – demographics and uneven global competition
• 2. Creative response of companies to demographic trends and limited labour supply
• 3. However, the key method for increasing productivity is investment in technology
• 4. Unequal competition with China and demands for support from the EU and national policies
• 5. EU's and national policies discourage scaling of operations, including internationalization, by mainly supporting SMEs
• 6. Seeking the golden mean: balancing profit and risk in using external financing for company growth
• 7. Demand problem: deficit of knowledge and trust in reaching to external financing
• 8. Supply side: more price rather than access issue
• 9. How to find the golden mean between growth and risk
• 10. Resilience to shocks and flexibility in adaptation to changing conditions

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