12.02.2018

 

In the last edition of the survey on the largest barriers for doing business in Poland, entrepreneurs of the SME sector put legal instability first, followed by excessive bureaucratic obligations and high labour costs. The research was carried out by Maison&Partners on behalf of the Union of Entrepreneurs and Employers.

“For a very long time now, we have consistently been repeating that the biggest obstacle to running a company in Poland is its complicated and duplicative law. As many as 76% of respondents share this view. For us, entrepreneurs, it is not about lower tax rates, but about simplifying the law and making it more understandable. For years, the Union of Entrepreneurs and Employers has been appealing to the government in this matter and this is not about long-lasting and arduous activities, the effect of which are only further provisions and regulations. What we need is political will to make a radical change,” commented Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers.

The following obstacles to running business activity in Poland were listed:


Maison&Partners for the Union of Entrepreneurs and Employers, January 2018, N: 242, survey conducted among a representative group of the SME sector with up to 250 employees.

Entrepreneurs listed the above-mentioned barriers, indicating those which in their opinion cause the most difficulties in running a company. The list of Top 5 barriers includes the following labour costs (32%), legal instability (18%), excessive bureaucratic obligations (11%), overcomplicated economic law (10%), and high taxes (10%).

“Although the situation on the Polish labour market is as of now quite stable, which is confirmed by our latest ZPP Busometr survey, it is a fact is that high non-wage labour costs impact both employers and employees in a negative way,” says Cezary Kaźmierczak. “Let entrepreneurs themselves testify as to how big a problem high labour costs are. As many as 67% of businessmen and businesswomen indicated this factor as a barrier.”

70% of entrepreneurs in the small and medium-sized enterprises sector recognised the lack of financial resources (e.g. resulting from too high employment costs) as the most important reason for not hiring more people.

Furthermore – among the most important barriers for the development of companies in Poland – the following were named: vagueness of legal provisions (82%), unfavourable labour law (66%), and administrative duties (51%).

“The government ought to find those key factors significant that would encourage the Polish people to start their own businesses. Most respondents, as many as 61%, wish the period of preferential payment conditions to the Polish Social Insurance Institution were extended. We hope that the Act on Small Economic Activity will reduce the scale of the problem related to setting up and running your own business in our country” summarised Cezary Kaźmierczak.

02.02.2018

 

Entrepreneurs do not show a radical change in their economic sentiments – the latest results of the Busometer ZPP Index amounted to 44.67 points. This outcome is similar to the results from the second half of 2017.

“The results of the latest Busometr survey indicate that entrepreneurs from the SME sector have a rather neutral attitude towards the government’s economic policy. Moreover, compared to the previous survey, we did not notice any significant differences in the values of components that affect the Index. Although the ‘economic situation’ component is slightly lower, it is a minute difference amounting to only 6 points. The situation on the labour market has enjoyed a very decent level for a long time, and the investment rate has slightly increased,” says Cezary Kaźmierczak, President of ZPP.

The survey conducted by the Union of Entrepreneurs and Employers among a representative group of small and medium-sized enterprises in Poland shows that the greatest fluctuations in time concern the ‘economic situation’ component. Its current value amounts to 41.75 points. According to 35% of entrepreneurs, in the coming months the economic situation will not change, whereas 42% expect it to deteriorate.

Entrepreneurs in the manufacturing sector show positive attitudes regarding the economic situation in Poland in the perspective of the next six months – here the index is 52.59 points. The situation looks worse is in trade and services – approximately 38 points.

Two more components affect the Busometr ZPP Index – the ‘labour market’ and ‘investments’. Their respective values amounted to 55.14 points and 43.46 points.

“Optimistic entrepreneurial moods concerning the ‘labour market’ are demonstrated by entrepreneurs from all sectors. Similarly, if we take into account the size of the enterprise, the market experience or region. In all of these cases, the value of this component exceeds 50 points,” comments Cezary Kaźmierczak. “The reality that we now have an employee market finds proof for instance in the fact that 38% of entrepreneurs plan to raise wages in their companies over the next few months, while nearly 30% intend to increase employment,” he adds.

Since the first half of 2017, the growth of the ‘investments’ component has been slow. Currently, its value reached 43.46 points. In this field, companies from the manufacturing sector thrive best (the value of the index is close to 65 points).

48% of respondents declare that they will invest in the next six months. Entrepreneurs from the sector of medium and large enterprises show the greatest propensity to invest (53.7 points), however, there is less optimism among microentrepreneurs.

***

Busometr ZPP – the Index of Economic Mood in SME Sector is an economic barometer illustrating the level of optimism in small and medium enterprises, and their plans for the coming six months.

Three components affect the index: (1) the economic situation, (2) labour market (remunerations and employment) and (3) investments.

A value within the range of 0-100 is assigned to each component.

The Union of Entrepreneurs and Employers along with Maison Research House conduct the research among a representative group of small and medium enterprises (up to 250 employees). Busometr ZPP is published every six months.

Small and medium enterprises constitute in Poland 99.8% of all the companies in the country. They create three quarters of the work places and generate 67% of GDP.

Busometr ZPP. Prognosis for the first half of 2018_pdf

5.02.2018

 

Another trade organisation joined the Union of Entrepreneurs and Employers lately – the Union of Railway Employers.

The organization established in 2001 has been operating since 2001 and currently has 30 members – companies belonging to the URE employ as of now approximately 90 thousand people.

The URE is a self-governing organization independent in its statutory activity from bodies of the state administration or the territorial government as well as from political, social and professional organisations.

The main goal of the Union is to protect the rights and represent the interests of the associated members in talks with trade unions, state institutions and administration as well as bodies of the territorial government.

The Union is an active participant in social dialogue within the Tripartite Team for the Railway. It influences the shaping of legislation concerning the interests of employers associated in the Union, through participation in the committee sessions of Sejm and Senate (lower and upper chambers of the Polish Parliament, respectively). It also participates in the creation of social mechanisms for resolving collective disputes with employers associated in the Union and represents employers in negotiations with the social side and in mediation proceedings.

It supports employers by organising legal, economic, and organisational consultations. Recognising the needs of its members, it takes care of the development of the competencies of the managerial staff, including through the organisation and financial support of life-long learning (post-graduate studies). The Union initiates and supports cultural and social activities, as well as undertakes charity in the area related to the activity of its members. It also pays particular attention to nurturing the rich railway traditions

2.02.2018

 

21^st in the region and 45^th in the world – Poland improved its rank in this year’s Index of Economic Freedom published by The Heritage Foundation and The Wall Street Journal.

The index of economic freedom in Poland amounted to 68.5 points, which places our country in the 45^th place in the world and 21^st in the regional breakdown. This is how much Poland scored in the Index of Economic Freedom 2018 prepared by The Heritage Foundation and The Wall Street Journal and presented by the Warsaw Enterprise Institute Foundation on Friday February 2^nd, the exclusive Polish partner of the global report. The aim of the Index is to rank countries and evaluate their governments’ policies in terms of economic freedom. According to this year’s edition, Poland remains in the group of “moderately free” countries.

In case of Poland, the index slightly improved compared to the previous year – by 0.2 points. This small increase results mainly from an improvement in the level of fiscalism (+5,4) and a higher score for the labor market (+2,4), which balanced and outweighed the decline in the following categories: reliability of the state “Government Integrity” (-4,6) and judicial effectiveness (-1.4).

It is noteworthy that Poland’s rating is slightly lower than the regional average (68.8 points), yet definitely above the global average (61.1 points).

In this year’s edition of the index, higher scores for public spending (+0.9) and property rights (+1) deserve attention. However, we score worse in the category of business freedom (-0.6), which is affected by high non-wage labor costs. In the market openness category, we noted only one change – in trade (-0.1). The authors of the report emphasize that an open market and monetary stability are Poland’s fortes. Nevertheless, the most important systemic challenges facing our economy are a rigid labor code, inefficient economic judiciary system, bureaucracy, an onerous tax system and deficiencies in road and rail infrastructure. Substantial reforms are necessary to strengthen the judicial system, which remains inefficient, poorly administered, and understaffed.

In the medium term since 2013, Poland can in general still boast an impressive increase in economic freedom by 2.5 points.

“The Ministry of Entrepreneurship and Technology is a ministry created for entrepreneurs and with their needs in mind. From the very beginning, we focused on three main pillars in our work. These are the following: a law that should be clear, unambiguous, and transparent, less bureaucracy, as well as more money in the pockets of Polish entrepreneurs. We hope that Polish companies will feel the improvement of business conditions in Poland,” said Jadwiga Emilewicz, Minister of Entrepreneurship and Technology. “In this year’s ranking, there is much to be happy about. Public debt has improved radically. Income is also definitely higher than estimated. This is the best argument for the great shape that the Polish economy is in. We believe that the Constitution for Business adopted by the Sejm (Lower chamber of the Polish Parliament) will bring us tangible results and will contribute to an even better position of Poland in next year’s ranking. Our goal is to make the best conditions for running business in Poland,” she added.

In the commentary to this year’s scores, the authors draw attention to the still excessive burdens resulting from the structure of the tax system.

“The Warsaw Enterprise Institute appreciates the government’s efforts to curb fraud and improve tax collection, but our tax system is still one of the most unfriendly systems in the world. Hence, our endless appeal for a deep reconstruction of the entire tax system in line with the proposals of the coalition for simpler taxes, ‘Płaca Plus, Podatki Minus’ (‘Salary Plus, Taxes Minus’),” said Tomasz Wróblewski, President of the Warsaw Enterprise Institute.

Among European countries, Switzerland, Ireland, Estonia, the United Kingdom, Iceland, Denmark, and Luxembourg are at the top of the ranking. Altogether, 44 European countries were compared in the Index, the vast majority of which are at least “moderately free”.

There are currently 5 economies in Europe with very limited economic freedom (ranked as “mostly unfree”). Unlike last year, the index makers did not distinguish economies where freedom is suppressed (“repressed”) – in the previous ranking, both Ukraine and Belarus fell into this category. Analyzed as a whole, Europe is still struggling with administrative barriers that distort trade, high labor costs, high tax-related burdens and problems in public finance management.

“A higher position in the Index of Economic Freedom and Poland’s competitiveness are confirmed by the GDP growth in 2017 by as much as 4.6%. From the point of view of a natural gas supplier that PGNiG is, economic growth and market competitiveness find confirmation in the rapidly growing demand for gas supplies in 2017 as well, mainly to industrial recipients who are dynamically developing their businesses. PGNiG is changing the direction of gas imports for supplies from the East to the North Sea and LNG supplies, because the free market rules guarantee market prices of gas purchases. Unlike gas supplies from the East where prices are encumbered with geopolitical factors,” said Maciej Woźniak, Vice President for Trade of the Management Board at PGNiG SA.

Globally at the very top of the ranking, the following countries, fully free in terms of economics, are invariably to be found: Hong Kong, Singapore, New Zealand, Switzerland, and Australia, which places them at the forefront of the richest countries in the world. In total, 180 countries were considered in the study.

“This is yet another report that leaves no doubt as to the fact that the level of prosperity and quality of life of citizens depend on the level of economic freedom,” believes professor Robert Gwiazdowski, President of the Warsaw Enterprise Institute Council. “We would like politicians to familiarize themselves with this data and take it deeply into their hearts whenever they consider adopting new laws or regulations,” he added.

The Index of Economic Freedom – prepared by The Heritage Foundation and The Wall Street Journal for over 20 years – has become the most popular ranking in the world. The objective of the Index of Economic Freedom, from the very beginning in 1995, has been to rank countries according to their systemic solutions, policies implemented to increase economic freedom, and thus promote the development and multiplication of national prosperity. The Index of Economic Freedom analyzes the following aspects: the rule of law (property rights, level of corruption) size of the public sector (fiscalism, public expenditure) regulatory efficiency (business conditions, monetary policy, labor market), and market openness (trade, investments, finances).

The presentation of the Report for the whole region, including a comparison of the Czech Republic, Estonia, Georgia, Lithuania, Latvia, Germany, Poland, Slovakia, Ukraine, and Hungary, was carried out by the Warsaw Enterprise Institute, the foundation of the Union of Entrepreneurs and Employers, the report’s strategic partner in Poland.

In the debate that accompanied the presentation of the Report the following invited experts participated: Jadwiga Emilewicz, Minister of Entrepreneurship and Technology, and Maciej Woźniak, Vice President for Trade of the Management Board at PGNiG. The Warsaw Enterprise Institute was represented by Tomasz Wróblewski, WEI President, and professor Robert Gwiazdowski.

The full and unabridged version of the Index of Economic Freedom 2018 is available at www.wei.org.pl.

Photo David McKelvey/ Creative Commons licence / flickr.com