6th July 2019
Speech by Cezary Kaźmierczak, the President of the Union of Entrepreneurs and Employers, at a panel during the Program Congress of the United Right in Katowice, 5-7 July 2019
The Polish economy is at a crossroads. The hitherto forces behind our country’s development were, in simplified terms, (1) low costs, mainly low labour costs and (2) operational intelligence and motivation of Polish entrepreneurs. Low labour costs are already a thing of the past – Poles earn more than the Greeks and Portuguese, we are soon to surpass other countries too. The remaining attributes, however, we can still consider our competitive advantages.
How are we then to compete? My entire professional career has taught me that in order to win, one has to do something better, different or cheaper. The same goes for international competition. “Cheaper” belongs to the past. Can we do it “better”? I doubt it, as the 50-year-long break in the continuity of Poland’s development does not allow it. When the West was accumulating capital, perfecting technologies and management systems, and acquiring know-how – we were perfecting the art of hunting for toilet paper. We are not capable of competing with the West in terms of capital or technologies, because we simply do not have them. We must choose other areas in which we can realistically gain an advantage.
In my view, these ought to be the tools we can use to compete successfully:
Legal and institutional competitiveness – Creation of the best possible institutions for the business ecosystem in the world, including those of the judiciary, and the best and simplest economic and tax law in the world. Creation of legal acts addressing new areas (e.g. autonomous cars) as the first country in the world. If we are one of the best places in the world to run a business, entrepreneurs and innovators from around the world will flock to us. This will also release the full potential of operational intelligence of Polish entrepreneurs. It is within our reach, but first we need political will.
Workforce – In the 19th century, workers were relocating from all over to where factories were located. In the 21st century, factories move to places where there is available workforce. Poland should adopt a very aggressive policy in terms of demographics, so that Polish women would like to give birth to a second and third child. We should strive for a 2+3 family model in Poland. What has been done so far – despite it being praiseworthy – is not sufficiently tough. It has to be much bolder. If you ask me, I’m willing to support switching the lights off at 6 pm on a Saturday. However, this activity will only bear fruit in a quarter of a century. What has to be done now is taking real steps to attract Poles from Western Europe, North America and even Brazil. If we successfully implement the first point I made and become a global business paradise, maybe even up to a million of them return to their native land. Another tool we can make use of is a smart sovereign immigration policy and the welcoming and subsequent assimilation of economic migrants from proven directions, i.e. Vietnam, Belarus or Ukraine, in precise quantities required by our economy. The goal of our demographic policy ought to be 50 million Polish citizens by the year 2050.
Government – We need a more proactive and deliberate policies and activity by the government. Above all, at the forum of the European Union. We must firmly and assertively proceed with the complete implementation of the Services Directive. Polish companies are discriminated against, mainly in France, using a number of various methods, both legal and illegal. A company’s closure based on an anonymous denunciation for the period of six months is nothing out of the ordinary. Poland’s efforts of more than a decade on the EU forum have not brought any measurable results. One must apply adequate retaliatory measures to countries that are running a policy that is harming us, and communicate to them clearly that their companies will only be able to operate in Poland without any obstacles provided ours can do the same abroad. I will stop right here, but we should stop playing around and letting others treat us this way. If we do not react, it will only get worse. Our government must act decisively.
Public aid for business – We haven’t got a lot of money. Therefore, the money we do have should be spent sensibly. In the meantime, we spend them all over the map. It’s hard to detect any strategy or thought in it. And a significant part of these funds goes to… multinational corporations!!! We’re acting as if we wanted everything at once. When Israel was being created, its founders decided to focus on four areas: hydrology, optics, the arms industry and agriculture, and on these sectors they concentrated all their money and efforts. Today, they sells 1 kg of tomato seeds that can grow in the desert for USD 100,000 and all Arab armies must use their optics. We must give up on our megalomania and delusions of grandeur, we have to choose several areas and invest there what we have. These should be new fields of science or industry – I doubt we have any chances competing e.g. with Germany in Diesel engines’ manufacturing. What these areas should be is a topic for a complete different discussion, but there should definitely be no more than 5 of them.
Of course, I can hear this laughter, this cackle, people saying “it’s impossible, it won’t work, it will fail” etc. I’m used to it – all through the 1980s, I would hear that communism could not be overthrown, and the sheer idea of the Soviet troops leaving Poland would make some people roll on the floor laughing uncontrollably.
Every nation has what it deserves. So do we. We have to break away from this tradition of mediocrity. Thus far, we are mediocre at everything. And everything in our hands.
Speech at a panel during the Program Congress of the United Right in Katowice, 6th July 2019.