Poland is not the same country it was 20 years ago.
It is the 8th largest economy in the European Union and the largest among the central European members.
Last week, C-level members of top Polish companies met at Bloomberg’s European Headquarters. Together, they laid out the future landscape of the Polish economy, highlighting shared hopes and challenges. Polish PM Mateusz Morawiecki delivered the opening address at the event.
One of the executives present was Maciej Dziergwa, CEO of STX Next, who discussed Poland’s new status as part of the “View from the C-Suite” panel.
He was joined by:
- Anna Rulkiewicz, CEO of LUX MED, the largest network of private medical clinics in Poland;
- Paweł Przewięźlikowski, CEO of Selvita, a global drug discovery company for the pharmaceutical and biotechnology industries;
- Martin Balawajder, CFO of 11 bit studios, the game development company behind such titles as Frostpunk and This War of Mine.
If you’re interested in a full recap of the discussion, look no further than Bloomberg’s recording of the panel:
But the panel is only part of the story, and of the lessons we’ve learned.
Here are some of our key takeaways about Poland’s future after the Bloomberg event.
About the event
Charting Poland’s Future: Spotlight on Growth & Innovation took place on September 25 at Bloomberg’s new European headquarters in London.
The main driving force behind the event was Poland’s recent reclassification from Emerging to Developed Market by a leading index provider, FTSE Russell.
Charting Poland’s Future served to illustrate the impressions of Polish C-level executives following the reclassification, and discuss its impact on the economic future of Poland.
What we learned from Charting Poland’s Future
Among the many takeaways from the Bloomberg event, here are a few that have made the strongest impression on us.
Reclassification is a double-edged sword
Poland’s new status as a Developed Market brings with it a flurry of direct and indirect consequences.
A large part of the discussion at Charting Poland’s Future was centered around the advantages and disadvantages of the change.
One reason for this initial scepticism are the cases of Turkey and Korea, whose stock exchange indices declined for 10 years following a similar reclassification.
Poland is facing tremendous opportunities
Developed Market status influences investors and their risk perception. To many, Poland will now be the next market to invest in.
As a result, Polish entrepreneurs can look forward to a greater interest from foreign funds and potentially greater capital inflows.
.@STXNext "Now #Poland has the #reclassification there is more capital and the chance to grow fast with the developed market status. We need to work out how to we create the framework for better regulation and investors" #ChartingPolandsFuture #Poland #PolandEconomicGrowth pic.twitter.com/u5ApQYZvPo— Bloomberg Live (@BloombergLive) September 25, 2018
Moving from a familiar pond into uncharted waters
A new position on the European market brings more challenging competition with it.
Matthew Harris, our Director of Business Development, summarized the change with a metaphor:
“Poland will move from being a big fish in a small pond on the FTSE Emerging All Cap Index to competing with a group of heavyweights that form the world’s most developed markets” - Matthew Harris
To put the scale of the change into perspective:
- Poland’s weight on its previous FTSE Emerging All Cap Index was 1.33%;
- now on the FTSE Developed All Cap Index, it will be only 0.154%.
The Polish C-Suite agrees on 3 main challenges
During the “View from the C-Suite” panel at the Bloomberg event, CEOs and representatives of top Polish companies pointed out a few shared pain points:
1. Rapidly changing regulations are a headache
One issue that Maciej Dziergwa pointed out were the volatile Polish tax regulations that made it difficult to reliably process financials.
Paweł Przewięźlikowski, CEO of Selvita, agreed:
"We need a more stable tax regime in #Poland" when asked by @marketsmarkus about challenges of the #reclassification @przewiezlikowsk @SelvitaKrakow #ChartingPolandsFuture #Poland #reclassification #PolandEconomy #EconomyInPoland #PolandEconomicGrowth pic.twitter.com/A2tCRZmVWN— Bloomberg Live (@BloombergLive) September 25, 2018
2. Poland needs to create more global brands—and become one itself
Many Polish companies still lack a global presence, and may become outpaced by international competition.
Although outliers like Allegro and CD Projekt Red exist (and have been mentioned by the panelists), more will be needed to secure Poland’s spot on the international market.
Moreover, the panelists agreed that Poland needs to build a global brand for itself to become associated with desirable industries and technologies.
3. Lack of workforce is slowing growth
Unemployment in Poland is at a record low, but that’s not exactly good news for business.
Maciej Dziergwa commented that, “You simply don’t see unemployed people in Poland,” and called for a new model to both invite immigrants and entice nationals back.
Martin Balawajder, CFO of 11 bit studios, commented on this issue as well:
.@11bitstudios "we need to attract people back and retain the youngsters" #Poland #reclassification #ChartingPolandsFuture #PolandEconomy #EconomyInPoland #PolandEconomicGrowth pic.twitter.com/kqfqa4CkIs— Bloomberg Live (@BloombergLive) September 25, 2018
The Bloomberg venue was spectacular
Charting Poland’s Future took place in Bloomberg’s new European headquarters in London, and our attendants report that it was amazing. In fact, Maciej Dziergwa described the new building as “breathtaking.”
Not only that, but the event itself was very well organized, with Catherine Collinge staying on top of communication and Markus Karlsson tying things together as the panel moderator.
There’s much to be proud of
Asked for his final thoughts, Maciej Dziergwa summarized his takeaways from the conference in the following way:
“I’m proud to have been among the finest C-level executives representing our country. Poland has made huge progress over the last 20 years from the economic point of view. Right now, I see us as a country that combines the low risk of a developed market with the high growth potential of an emerging market.”
Maciej Dziergwa, CEO of STX Next
We couldn’t agree more.
What’s next for Poland?
With its new status, Poland is a better destination than ever for nearshoring services such as software development, offering a perfect blend of quality and cost-effectiveness. You can read all about getting started on scaling your team in the C-level Guide to Software Development Nearshoring.
Charting Poland’s Future was only one of many events where STX Nexters have made an appearance. To stay up to date on where we’re going next, follow us on Twitter.