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    Opinion of the Chief Expert on Energy of the Union of Entrepreneurs and Employers: EU’s Renewable Energy Directive RED III vs the possibilities of the Polish energy sector

    Posted on by Weronika Marzec

    Warsaw, 30th October 2023

     

    Opinion of the Chief Expert on Energy of the Union of Entrepreneurs and Employers:
    EU’s Renewable Energy Directive RED III vs the possibilities of the Polish energy sector

     

    • The European Renewable Energy Directive (RED III) was adopted at the beginning of October this year by the Council of the European Union.
    • The document introduces both indicative and binding targets, some of which may turn out to be unrealistic in Polish conditions.
    • Poland has 1.5 years to transpose RED III. It is worth using this time to conduct a detailed feasibility study of the document in national conditions and further possible negotiations with the EU in this regard.

    Energy transformation comes down to a systemic reconstruction that involves basing the entire energy sector in Europe on renewables. This is the target that the European Commission is pursuing: a global economic process that will revolutionise European industry. It means a metamorphosis of the lifestyle of the citizens of countries where the efficiency of energy use increases along with the progress of electrification. Of course, this mainly applies to countries that are highly developed in terms of technology and possess the ability to finance extensive modernisation and innovate in the area of consumption of energy resources, meaning energy and heat generation.

    After the outbreak of the war in Ukraine and following the observed energy problems in almost every European country, it seemed as if the European Commission would slightly revise the transformation pace to enhance the energy security of the continent. On the one hand, this could mean an increase in RES investments. On the other, it might translate into the use of European fossil fuel resources, as well as the return in some countries to nuclear energy. Such an energy mix also seems to be the most rational way to guarantee Europe’s energy security.

    Meanwhile, the recently adopted by the Council of the European Union directive known as RED III clearly defines the direction of development of the European energy sector as preferably based on renewable sources. Increasing the obligatory share of green energy in the European energy balance to 42.5% with the option to increase this level to 45% by 2030 is a realistic scenario only for some EU member states, such as Denmark. The entire Polish energy sector produces 175 terawatt hours of electricity per year – green energy accounts for less than 30 TWh, the equivalent of approx. 21% of the country’s energy balance. While we are observing a very promising share of renewable energy generation this year in Poland and the year might end with a new record in this respect, the Polish energy sector under the current regulations is unable to double its installed green capacity by 2030. And this relates to sectoral law and regulations defining general investment requirements alike. Presently, we have approx. 26 GW of renewable generation capacity installed in wind farms, photovoltaics, hydropower, and biomass installations.

    By 2030, offshore wind farms with an installed capacity of 5-6 GW can be expected to be launched, which should translate into the production of approximately 15-20 terawatt hours of green energy. With favourable legislation facilitating RES investments (onshore wind energy and large-scale photovoltaics), we can count on an additional production of approx. 10 TWh of energy from these sources by 2030.

    Thus, in 2030, with a favourable investment policy towards renewables, the Polish state can expect to produce 60-65 TWh a year. Considering the expected consumption of ca. 180-200 TWh, will constitute only 25-28% of the country’s overall energy balance. This in no way implies a lack of faith in the RED III having sense – on the contrary. Nevertheless, this does not directly impact the enforceability of its provisions within the expected time limit.

    To meet the assumptions of RED III, Poland should have roughly 60 GW of renewable generation capacity installed by 2030, which is more than the entire Polish energy sector currently. Such power, counting on average 1,500 hours of full operation (a large part of which are going to be photovoltaic sources with lower efficiency) translates into 90 TWh of energy produced. And only in such a scenario will we be able to fulfil the assumptions of the Directive.

    Assuming an average production of onshore wind farms at the level of 2,000 hours of full power (due to the anti-windfarm law, we do not have high-efficiency installations of this kind in Poland, with a capacity of over 3,000 hours of full power, and operating farms often do not even achieve 2,000 hours of full power) and a total of 10-12 GW of generating capacity, we should achieve ca. 20 TWh of production from this source by 2030. Offshore wind farms will produce 18-20 TWh by 2030 according to the 3,500-hour model, multiplied by an installed capacity of 5-6 GW. By then, photovoltaic installations should reach the level of 20-25 GW of installed power, which, with an average production of 700-800 hours of full power, will result in 17-20 TWh of energy produced. Constantly operating sources such as hydroelectric power plants, biomass or biogas power plants, even with significant investment facilitations, will not produce more than 8-10 TWh of green energy annually by 2030.

    To sum up energy generation, with a legislative “fast track” for the necessary RES investment laws, Poland might can count on reaching the ceiling of 40-45 GW of installed capacity by 2030-2032, which may translate into energy production of approx. 60-70 TWh a year. At the same time, one must not forget that Poland has a large share of industry in its revenue structure, and Polish industry produces many goods for export, mainly to developed countries, including fellow EU member states. Therefore, with the obligatory use of green energy only in production processes (ESG goals), our industry will require over 50 TWh of green energy for its own needs. RED III assumes a 1.6% annual increase in the use of green energy, which is realistic, but would happen in our domestic conditions at the expense of other sectors of the economy.

    Challenges that electric transport as well as heat and power face

    Thus far, Poland is not a producer of green hydrogen, although in the future it may constitute a principal element of the national economy. In this context, the target of a 42% share of green hydrogen in the industry by 2030, which is assumed by RED III, seems to be completely unattainable. Moreover, the indicative target of 49% of renewable energy used in buildings provided for in RED III is unattainable for us even in 2035, due to the specificity of our energy sector. Even with a significant increase in green energy production, we must direct it first to industry and transport. Power supply for buildings and households will still be based on coal-fired energy in the longest term. Energy from natural gas will in turn be needed as a stabilising factor for the operation of weather-related renewables. And although, of course, a lot of transformational investments in the Polish heating sector are currently planned and implemented, both the financial condition of the sector and several types of administrative and legal barriers mean that for now low-emission installations are heralds of change instead of a commonplace phenomenon.

    If, through the development of the prosumer sector, it is possible to achieve to power 15% of households with green energy by 2030 as a result of self-generation and utilisation, it will be a remarkable success for the Polish economy. Let us remember, however, that from 2024 a dynamic tariff will enter into force. As a consequence, without investing in an energy storage facility, PV panels alone, or worse a heat pump, will become a project of questionable profitability. Support systems will therefore play a huge role here and for that we naturally need funding.

    In terms of transport electrification, RED III offers a choice. Either a binding target of 14.5% reduction in greenhouse gas intensity in transport (due to renewable energy use by 2030), or a binding target of at least 29% renewable energy in final energy consumption in the transport sector by 2030. In the context of the great significance of the automotive, transport, and logistics industries in Poland, it seems necessary to confirm that these sectors evaluate these “binding goals” as realistic.

    Acceleration of investments in renewable energy is indisputable, but other provisions may need to be adapted to local specificities.

    The strengthening of criteria regarding the use of biomass as a source of renewable energy in RED III should be evaluated positively. This is important for the Polish economy not only due to environmental criteria, but also due to the share of the furniture sector in exports and the country’s economy.

    The emphasis in REDIII on simplifying the process of issuing necessary investment decisions for RES also seems necessary. The concept of “overriding public interest” best suits the interests of the entire Polish economy in this respect, but also of the EU economy in the understanding of the common energy market.

    In my opinion, RED III is a positive and necessary document that indicates quite precisely the direction of development of European economies. As a guiding document, it should be adopted without undue delay by decision-makers in the Polish energy sector (Poland has 1.5 years to transpose it into national legislation). It should be subject, however, to verification of individual partial goals and then adapted them to the capabilities of the Polish economy. It seems that it should now be of key importance to reach consensus regarding local specificities in the transposition of the Directive by individual EU member states.

    For example, Belgium raised concerns about whether the sectoral partial targets assumed in RED III guarantee the implementation of climate goals in an economically justified way. Ireland recognised the importance of ambitious 2030 renewable energy targets, but stressed the need to comprehensively consider their implications – noting that impacts may be underestimated. Latvia reported the need to consider the country’s economic and social conditions, energy balance and starting point when setting renewable energy requirements. The aim here would be to ensure that the objectives of RED III are both attainable and beneficial for each EU member state. Therefore, it seems that Poland has a chance to not be alone in its observations and dilemmas regarding the assumptions of RED III, which gives hope for a constructive dialogue at the EU forum.

    Włodzimierz Ehrenhalt
    Chief Energy Expert of the Union of Entrepreneurs and Employers

     

    See more: 30.10.2023 Opinion of the Chief Expert on Energy of the Union of Entrepreneurs and Employers: EU’s Renewable Energy Directive RED III vs the possibilities of the Polish energy sector

    Memorandum of the Union of Entrepreneurs and Employers: Making use of the potential of Ukrainian and Polish digitalisation in the healthcare sector

    Posted on by Weronika Marzec

    Warsaw, 9th October 2023

     

    Memorandum of the Union of Entrepreneurs and Employers:
    Making use of the potential of Ukrainian and Polish digitalisation in the healthcare sector

     

    • Cooperation between Poland and Ukraine can bring mutual benefits in the field of healthcare digitalisation.
    • Regarding this cooperation, there are opportunities and threats alike. Both countries can exchange knowledge and experience, which will contribute to an increased healthcare efficiency and quality.
    • Varying degrees of advancement and differences in infrastructure may create challenges for a harmonious partnership. It is essential to focus on overcoming these obstacles and making use of both countries’ potential in the field of health digitalisation.
    • Advanced public-private partnerships guarantee the development of digital services in Ukraine.
    • Lack of sufficient know-how may become an obstacle to further development of the digitalisation of the Ukrainian state.

    Objectives of a Polish-Ukrainian healthcare cooperation

    One of the most important objectives of Polish-Ukrainian cooperation should be, above all, a partnership at the educational level in order to support future entrepreneurs from Ukraine by equipping them with adequate knowledge. In the face of the ongoing armed conflict, prewar conditions for development do not exist any longer. The pace of progress in creating innovative solutions related to data transmission technology along with the knowledge that there is no possibility of returning to the pre-war world conceive the potential in Ukraine to build a modern healthcare system based largely or completely on digitalisation. Ukraine can and may become a country of experiments in the field of digitalisation of the health sector, and Poland is able to aid Ukraine in endeavour.

    Where does Ukraine presently stand in terms of its healthcare system?

    Ukrainian healthcare is a system that for many years had suffered from inadequate financing. To make matters worse, current budgets do not allow its restoration. We are dealing with a quite significant outflow of citizens – medical staff, the youth, and wealthy people in particular. This situation affects in turn not only the condition of medical care, but also the country’s economic potential. Ukraine’s population is aging and access to healthcare varies greatly, especially in scattered rural areas. Private health insurance has low penetration. The ongoing war leads to economic instability yet attracts at the same time new patients with health problems, both of a physical and mental nature. We are observing a lacking transparency in certain aspects of the health system. Although apparently there are no fees for anything, there are reports of cases in which patients must provide their own surgical tools or wound dressings. Citizens are very open to adopting digital solutions. We also see that the war, although a tragic event, contributed to the acceleration of services’ digitisation. Healthcare in Ukraine, while slightly lagging, is gradually following other industries. It is important to understand that those industries shape consumer habits, for example modern digital banks that offer different payment channels and systems. Worthy of a mention is the Ukrainian online bank Monobank, which is more modern and advanced than many banks in Poland. This is an institution considering expansion to Western Europe. Furthermore, during the war in Ukraine, applications emerged to make life easier in other areas, for example the Ukrainian Railways app, which offers not only ticket sales, but also access to various information. Due to the numerous events surrounding the war, citizens find this information extremely useful. Interestingly, if we look at the scope of functionality of the Ukrainian equivalent of the Polish mObywatel app, we will notice that the Ukrainian state portal offers at least the same, and sometimes even greater possibilities than its Polish counterpart. There is also a mobile app on the private market that integrates medical care with access to pharmacies. Such a modern solution is on par with certain European innovations, and ahead of others. All this shows that Ukraine has the potential to further digitally develop its healthcare and can draw inspiration from other sectors of the economy as well as from foreign solutions. As for the public healthcare market, the level of digitalisation in Ukraine is still relatively low. However, if we look at the private market, we will observe the creation of applications that come close to the standards offered by companies such as LUX MED, Medicover or Enel-Med. In spite of this fact, the share of private medical care in Ukraine comes up to only about 5%, which is a relatively small value. If we compare certain indicators, for example teleconsultations, in Poland they constitute over 30% of the share, while in Ukraine a mere 10%, albeit growing. Now, when it comes to opportunities to improve the situation in Ukraine and to make better use of existing apps, it all boils down to data and digital standards of information exchange in medical environments, as well as standards of working with patients. Currently, there are no uniform standards, which leads to the lack of standardisation, within Ukraine and in international exchange alike. Ukrainians saw the benefits of standardisation during the COVID-19 pandemic, as Ukrainian certificates were recognised in the European Union and vice versa. Therefore, Ukraine should strive to adopt standards applicable in other countries, as this creates the potential for various forms of cross-border healthcare. We can envision a policy that would allow treatment both in Poland and Ukraine. There is a large community of Ukrainians living in Poland, who are professionally active and travel frequently. Having a service that would work not only in Ukraine but also in Poland and other countries would be incredibly attractive. However, the key issue is collecting consistent medical data. From the point of view of Ukrainian society, but also of societies in which Ukrainians live, this would be highly beneficial as it would affect the effectiveness of treatment and patient safety.

    Due to favourable legislation, Ukraine is becoming a leader in international IT

    Ukraine has the potential necessary to become a leading force in digital transformation of healthcare, as everything is being built virtually from scratch. The market for IT and digital services in Ukraine is large and growing, accounting for approximately 5% of the country’s GDP. Moreover, services sector exports constitute about 50% of the country’s total exports. This is a dynamically developing sector that includes over 2,300 companies that employ over 360,000 specialists. It is an important part of the Ukrainian economy making it an important player on the international market. Importantly, the current legislation in Ukraine favours IT sector development. However, to achieve its full potential, it is important that the private sector operates both domestically and abroad. Public-private cooperation (between private companies and state institutions) is also important. The partnership between Poland and Ukraine in the field of digitalisation can bring mutual benefits, especially if both sides use their experience and potential in the field of digital technologies and jointly face the challenges related to the development of the sector. The role of the Ministry of Digitisation in managing the digitisation process is crucial, and its coordinated approach to various areas of government activities can bring positive results. What is important is that this Ministry can help other ministries in developing digital competences and creating favourable conditions for innovation. When it comes to cooperation between Poland and Ukraine in the area of digitalisation, such relations can bring many benefits. Both sides can learn from each other and jointly solve problems related to the development of the digital sector. It is also worth paying attention to how many Polish companies operate in Ukraine and cooperate with Ukrainian companies. This can be an important source of exchange of both knowledge and experience. The important thing is that the digitisation process can be implemented in diverse ways, and each country can choose the solutions that best suit its own needs and conditions. It is also worth remembering that digitisation is a dynamic process that is constantly evolving. There are many areas with room for improvement to achieve better results. Regarding cybersecurity, this is a globally key area that requires constant attention. International cybersec-cooperation is critical, because threats are often of an international character and require a common approach to properly address them. Poland and Ukraine can also use technological solutions in the area of cybersecurity, such as platforms for attack detection and prevention. Indeed, developing digital technologies in the military area can also find numerous applications in civilian areas. Ukraine, due to the vastness of its territory and particular challenges, has the potential to give birth to solutions that can be adapted to various civilian needs. Companies that identify and monitor threats in military situations can transform their technologies for the needs of the post-war civilian market. Mental health and psychological support are also pivotal, in particular for those suffering from war-related PTSD. Companies offering psychological support can develop their services and help not only veterans, but also others who experience mental difficulties. AI-powered technologies have wide applications in civil fields such as healthcare and industry too. Their development may contribute to improving the efficiency and quality of medical care along with other aspects of life. Developing technologies related to prostheses and support for injured people are another example of how technologies developed for the military can be used in civilian areas, such as healthcare or rehabilitation.

    Digitalisation as a way to combat logistics problems and communication exclusion

    The availability of medical services, especially in large countries with dispersed populations, is an important aspect. Using medical data to better diagnose and refer patients to the right specialists can improve the healthcare quality. Moreover, an aging population and deficiencies in the health system are challenges that can be solved through digitalisation. However, the key is to ensure that patients experience the benefits of these changes, such as better access to medical care and a more personalised approach to treatment. Clinical trials, health data analysis, and tracking health trends in the population are areas that can also be beneficially used in the process of digitalising healthcare. It is important to use these tools effectively to prevent diseases and improve patients’ quality of life. Another issue to take into consideration is what should be done after diagnosing patients and identifying problems at the population level. We focus on delivering medicines and services, which in turn brings challenges related to logistics and ensuring availability. In Europe, including Ukraine, there are major problems in this area. Digital tools allow for a more effective management of these processes, which is extremely important. The problem is the lack of coherence in health systems. Patients use different healthcare facilities and medical devices, which makes data scattered and inconsistent. Our goal is to enable data to move with the patient, but communication between different devices and systems can be problematic. An example of this is the individual patient account, which has worked well for vaccinations, but we still have many challenges to face in terms of data access and processing. Another important aspect includes data analysis and subsequent conclusions from this data. Having diagnosed patients, it is necessary to adjust appropriate therapies, exclude ineffective solutions, and implement self-help.

    Visions of a Polish-Ukrainian cooperation

    It is important to understand the processes and systems on both the Polish and Ukrainian side – and to educate about them. Each side has tried different solutions, and the mistakes of others can become valuable lessons. Education at the level of relations between countries is crucial. Furthermore, there are issues related to regulations and standards. Poland can learn from Ukraine in terms of implementation and operationality, while Ukraine has much to gain from Poland’s experience in dealing with different standards and regulations, especially in the context of Ukraine’s aspirations to join the EU. It is worth emphasising that both sides can also benefit from the exchange of know-how in the field of cybersecurity and adapting regulations to European standards, while ensuring flexibility of the country’s development. One must remember that adaptation to new regulatory standards as well as introduction of systemic changes are operational challenges. Poland and Ukraine can exchange experiences and best practices in these areas to achieve consistency with European standards while maintaining flexibility in the development process. Poland and Ukraine can benefit from mutual support, especially since they are each other’s closest neighbours. Apart from education, regulation, and knowledge exchange, there is also potential for medical and other services. Both countries can provide services in both mental health and other medical areas. Cooperation and opening the market can both benefit patients and stimulate competition. Qualified medical and IT staff are vital, because both parties have different competences in these areas. Creating joint projects and working groups at various levels, including government, business, health system participants, physicians, and app users, can accelerate the implementation of digital solutions. Successful examples of cooperation and the effectiveness of the implemented solutions should also be actively promoted. As we continue to do this, there is a huge opportunity to help rebuild the healthcare system and transform it into a moderner and more effective version of itself that meets future challenges.

     

    See more: 09.10.2023 Memorandum of the Union of Entrepreneurs and Employers: Making use of the potential of Ukrainian and Polish digitalisation in the healthcare sector

    Open letter from the President of the Union of Entrepreneurs and Employers to political leaders

    Posted on by Weronika Marzec

    Warsaw, 17th October 2023

     

    Open letter from the President of the Union of Entrepreneurs and Employers to political leaders

     

    Krzysztof Bosak
    Włodzimierz Czarzasty
    Szymon Hołownia
    Jarosław Kaczyński
    Władysław Kosiniak-Kamysz
    Sławomir Mentzen
    Donald Tusk
    Adrian Zandberg
    Zbigniew Ziobro

     

    Gentlemen,

    If I may, I would like to interest you in the discriminatory challenges that small Polish companies have been facing in their very own country for the past 30 years.

    Micro-enterprises, unlike large companies, cannot afford lawyers, accountants, lobbyists or PR specialists. No foreign ambassador will call the prime minister or any of the cabinet ministers when provisions of the law or administrative decisions limit the opportunities for microbusinesses to thrive. Regulations that for a large company may only mean hiring another lawyer or accountant, for smaller companies may mean their end. Small companies cannot afford yearlong battles in courts of law against civil servants. They do not a team of lobbyists and PR companies at their disposal to defend their image or gain direct access to decision-makers.

    At the same time, micro-enterprises constitute a significant share of the Polish economy and play an essential social role. They generate more GDP and create more jobs than large companies do! Alas, both in state policies and the reality shaped by scientists and the media, micro-entrepreneurs are placed in a secondary position and are presented as obstacles on the road to growth. Micro- and small enterprises have played, do play, and will continue to play a considerable role in the development of Poland. The Polish people should be made aware of this role, and decision-makers ought to appreciate it.

    In 2019 (the last year for which there is data available as of October 2023), the share of micro-entrepreneurs (companies employing no more than 10 people) in GDP was 30.6%, while for large enterprises (employing 250 people or more) the share in GDP generation was much lower: 22.7%. Microbusinesses are also the place where most jobs are in Poland! At the end of 2020, nearly 10 million people worked in the enterprise sector, including as many as 4.2 million in micro-enterprises. And only 3.2 million people worked in large companies.

    There is insufficient data available on micro-companies in public statistics. And available data is published with a significant delay. The paucity of data suggests that state decision-makers are not invested in micro-entrepreneurs’ condition or potential for growth, which means that politicians and public authorities make decisions about microbusiness without necessary knowledge. When a body of key data on microcompanies describes the state of affairs from two years ago, and state policies often need up to two years to work in full effect, the period between the authorities’ decision and the assessment of that decision’s impact on micro-entrepreneurship lasts up to 4-5 years!!!

    The Ministry of Finance has tools in the form of Uniform Control Files, which demonstrate the financial flows of enterprises. Based on this, one can create analyses, determine the economic situation in individual industries, exclude IT specialists from statistics (who are most often B2B contractors), and also recognise the real effects of the enforced economic changes and regulations. However, they are not made use of, and we basically have no idea why this is the case.

    Polish scientists, politicians, and media frequently suggest that too many micro- and small enterprises hinder Poland’s development. In the media and social media alike, small business owners are usually portrayed as stupid, simpletons, exploiters, and fraudsters. Political leaders claim that if micro-entrepreneurs are unable to run a business in the conditions created by politicians, they are not suitable for business and should do something else!

    What has been created is a business-unfriendly state where chaos rules supreme. Its main features include the lack of legal stability and economic mismanagement of assets owned. Businesses are up to their necks in chaos and regulatory roulette. One can never say what any given minister will come up with out of the blue or how a law will be enforced.

    The legislator can wreck an entire industry with one legal act. And then the political class is surprised that micro- and small entrepreneurs are afraid to invest. There is no other way to increase domestic investment than legal stability and a sense of security of economic transactions.

    It indeed is true that smaller companies are on average less efficient than larger ones – both in Poland and globally. According to Eurostat, in the case of entrepreneurs employing 0 to 9 people, the average annual turnover per employee amounted EUR 74,000. While in companies employing 250 people or more, the average turnover per employee came up to EUR 181,000. So yes, larger companies are more efficient. But if all florists in Poland merged into one corporation, their turnover per employee would not increase like that!

    A kind of socio-economic experiment is underway, which involves forcing micro- and small companies to consolidate through significantly rising labour costs, eccentric games related to raising the minimum wage disproportionately to the average salary or tightening the tax screws in the form of the inability to deduct health insurance contributions. The political class openly despises micro- and small companies, and economists from the Ministry of Finance want to force them to merge with the use of brutal fiscal incentives.

    Moreover, we have in Poland slightly more smaller entrepreneurs than is the EU average, and these smaller entrepreneurs employ on average slightly more people than they do in the EU. At the end of 2020, entrepreneurs employing less than 10 people constituted 94.6% of all entrepreneurs in the EU, while in Poland they constituted 95.2%. However, individual European economies vary significantly in terms of the share of small entrepreneurs in the total number of entrepreneurs. And there is no general pattern here. For example, in Germany in 2020, the share of entrepreneurs employing less than 10 people in the total number of entrepreneurs was 87.4% – that’s less than in Poland. But the same share in Italy was higher than in Poland and amounted to 95.4%.

    Same goes for the share of smaller entrepreneurs in employment. In Poland, smaller entrepreneurs employ a larger proportion of people than on average in the EU. But EU member states differ greatly. At the end of 2020, the share of entrepreneurs employing fewer than 10 people in total employment in the EU was 32.9%, while in Poland – 34.5%. In Germany, smaller entrepreneurs employed a significantly smaller proportion of employees than in Poland, only 20.1%. But in Italy, smaller entrepreneurs employed a much larger share of employees than in Poland, as much as 44.1%.

    Therefore, the frequently repeated conclusion that there are too many small companies in Poland compared to the most developed economies, and that this high share inhibits our country’s development is simply untrue. The relatively high number of micro-entrepreneurs is an adaptation to Poland’s economic conditions.

    The large number of microbusinesses in Poland is probably an adaptation of Poles to, among other things:

    • a significant dispersion of the population on the territory of Poland,
    • decades necessary to accumulate the capital needed for development,
    • underdevelopment of the financial sector in Poland,
    • lack of large domestic companies based in Poland.

    Compared to developed countries, Poland has a disproportionate number of people living in small towns and villages. The degree of urbanisation in Poland amounts to is 60% and 75% in the EU. We also have fewer multinationals with large resources of capital, machinery, patents and organisational knowhow. And there are many more similar factors that may cause Polish entrepreneurs to be more dispersed and smaller.

    But what actually is dangerous for Poland’s development is the conviction that there will be more investment, higher efficiency, and better growth when the number of smaller companies is curbed. Limiting the number of small businesses will not lead to more growth! Micro-enterprises are a necessary complement to large companies, foreign and domestic alike. They provide work in smaller towns to people who do not plan to move to large cities. They provide work to people whose careers began all the way back in the Polish People’s Republic prior to economic transformation, and who cannot or do not want to acquire the knowledge and skills necessary to be employed in highly paid positions in large enterprises.

    Socialist modernisers viewed small private farms as inefficient and believed that Poland would develop by limiting the number and ultimately getting rid of family farms. But large farms that were truly efficient only began to be established in Poland when favourable economic conditions appeared with the introduction of the free market and democracy after 1989.

    Many politicians and scientists as well as the media share nowadays similar views when it comes to the role of micro-entrepreneurs. Yes, the size structure of enterprises in Poland differs from that in the most developed countries. We have a little more micro-enterprises than is the average in developed economies. However, the relatively large number of microbusinesses is not the source of the backwardness of our economy. It is the optimal adaptation to the operating conditions in Poland.

    By interfering in the size structure of enterprises in Poland through administrative means, taxes, labour law etc., Polish authorities will achieve any more development potential. On the contrary, they will limit the growth we can have. Further subsidies for large foreign investors and increasing regulatory burdens on small entrepreneurs will slow down Poland’s development – not accelerate it!

    Poland’s development is dependent on the creation of optimal conditions for earning, saving, and investing for all entrepreneurs. To achieve this, it is necessary to adhere to the following rules and fulfil the following requirements in particular:

    • The public statistics system should provide more information about micro-entrepreneurs, and much faster. With the current digitisation of life and economic transactions, greater availability and timeliness of information does not require imposing further reporting obligations on microbusinesses. In fact, more information about microcompanies can and should be made available with reduced reporting obligations.
    • When analysing existing and creating new regulations, one should consider the asymmetry in costs incurred to meet said regulations by large companies and micro-enterprises. The same regulations are often much more burdensome for smaller entities.
    • When creating and enforcing socially beneficial regulations, their broad costs should be taken into account, including whether further enforcement of certain regulations will result in such a widespread agony of micro-entrepreneurship that we will incur new and significant economic, social, and budgetary costs.

    For over 20 years, we have been conducting actions with the aim to advocate and promote knowledge about the Polish “economic anthill” and its significance for the socio-economic development of Poland. We will continue to do so. Our fight is not against corporations – we need them too. We wage war against discrimination of small Polish companies, whose importance for the economy I have tried to describe above.

    Kindest regards,

    Cezary Kaźmierczak
    President of the Union of Entrepreneurs and Employers

    The Union of Entrepreneurs and Employers presented the 2023 Economic Awards!

    Posted on by Weronika Marzec

    Warsaw, September 27, 2023

     

    The Union of Entrepreneurs and Employers presented the 2023 Economic Awards!

     

    The 2023 Economic Awards of the Union of Entrepreneurs and Employers were awarded at a gala evening on Wednesday, 27th September this year. During the ceremony, the Union honoured businesspeople and companies that achieved considerable successes in the field of entrepreneurship or actively supported Polish entrepreneurs. Awards were presented to the best journalist, economist, an organisation for a project, as well as to selected companies.

    Among the invited guests, there were representatives of the media, the business world, central government and local authorities. Friends and members of the Union of Entrepreneurs and Employers also attended the gala.

    During this event, the Union presented special awards to outstanding public figures. The winners included:

    • Public Sector Manager of the year 2023: Beata Daszyńska-Muzyczka. She received the award for effectively managing an institution that supports and finances a significant number of major development projects in Poland. She heads the bank that played an important role in Poland’s battle with the crisis related to the COVID-19 pandemic – Bank Gospodarstwa Krajowego.
    • Journalist of the year 2023: Krzysztof Jedlak. Prize PLN 25,000. For years, “Dziennik Gazeta Prawna” has remained a key opinion-forming specialist media title for people interested in law, economics and current political events. The laureate runs a newspaper providing data and knowledge to decision-makers, opinion leaders, and business representatives.
    • Organisation for a Project of the year 2023: Fundacja Forum Konsumentów (Consumer Forum Foundation) – for the project “Żyj oryginalnie” (“Live originally”). Prize PLN 25,000. Protection of intellectual property rights is one of the key elements of a market economy. The laureate’s project disseminates knowledge about risks arising from purchasing counterfeit products and provides information how to distinguish fakes from original items.
    • Economist of the year 2023: Professor Marcin Piątkowski. Prize PLN 25,000. This year’s laureate in the category was recognised for his constant and substantive advocacy of Polish economic success stories worldwide.

    ECONOMIC AWARDS

    During the gala, awards in the following categories were also presented to leading representatives of the Polish business community:

    • Dynamic Development of the year 2023: Symfonia Sp. z o. o. Digitising a company is one of the best ways to boost efficiency. Symfonia has been offering modern ERP systems for years, consistently maintaining a double-digit annual revenue growth rate.
    • Innovative Company of the year 2023: Uber Polska. The emergence of innovative applications enabling passengers to order a ride revolutionised the market and introduced real competition. Being a pioneer, the company remains the market leader and continues to develop its portfolio of services.
    • Employer of the year 2023: EWL. The laureate in this category is the EU’s largest global mobility platform specialising in hiring employees from abroad, present on the market for over 16 years. Over the years, the company has supported more than 1,600 employers in Europe connecting them with over 150,000 employees. It actively participates in labour market research in cooperation with the University of Warsaw – thus far, the partnership bore fruit in the form of 16 reports on European labour markets and employee mobility.
    • SME of the year 2023: Zakłady Mięsne Karol. The meat-processing company is a family-owned business striving for perfection and looking for novel solutions. Their unique approach to employees and ability to innovate sets an example for other companies to follow, inspiring them to create products and services of the highest quality.
    • Socially Responsible Company of the year 2023: Totalizator Sportowy Foundation. The Foundation runs a number of programmes that address crucial social challenges, such as “Polska dziś i jutro” (“Poland Today and Tomorrow”) aimed at supporting Polish national culture, or “Odpowiedzialni społecznie” (“Socially Responsible”) focused on providing humanitarian support. The Foundation is also one of the partners of the Union of Entrepreneurs and Employers in the “Business for Ukraine Center” programme supporting Ukrainian companies planning to develop their operations within the EU as well as Polish companies looking for business partners from Ukraine.
    • Startup Company of the year 2023: Infermedica. This startup introduces AI-powered solutions in healthcare to improve efficiency and address certain systemic problems.
    • Exporter of the year 2023: Kompania Piwowarska S.A. Even though the domestic beer market has been going through a difficult period for the past several years, Polish beer is still a valued export product, and Polish brands enjoy recognition and popularity in many European countries. The company is one of the largest beer producers in Poland and a leader in beer exports.

    Furthermore, we awarded two Special Prizes this year. The first one was awarded to Ogólnopolski Związek Pracodawców Transportu Drogowego (OZPTD – National Association of Road Transport Employers) on the occasion of their jubilee: 25th anniversary of the association’s establishment. Polish road transport has the largest share in the European Union market and has a high share in Poland’s trade in the area of services. It is responsible for PLN 10 billion out of the PLN 30 billion surplus in the services balance.

    The second Special Prize was awarded to Servier Polska Sp. z o. o., which has been present for over 30 years on the Poland market. Nearly 100% of drug packaging intended for the Polish market is produced at their Production Plant in Warsaw which is of paramount importance in today’s geopolitical situation.

    ***

    The ZPP Economic Awards 2023 were organised by the Union of Entrepreneurs and Employers (ZPP). The Union is the fastest growing and one of the most active employers’ organisations in Poland. ZPP was founded in 2010 and brings together 17 regional and 19 industry organisations. Apart from publishing official positions on all key issues present in the Polish public debate, the Union conducts a number of special activities as part of the Digital, Work, Energy and Climate, Agricultural and Health Forums. ZPP organizes approximately 40 original events a year.

    ZPP is an apolitical organisation that supports the free market, fair competition, legal stability and transparency, beyond political divisions.

    It is a representative organisation of employers and a member of the Social Dialogue Council in Poland. Moreover, ZPP is present in Brussels through its Representative Office, participates in the European Enterprise Alliance, and is a member of SME Connect. The Union also has two representatives on the European Economic and Social Committee. In July 2022, ZPP opened an office in Kyiv actively supporting the development of economic cooperation between Poland and Ukraine.

     

    Main partners of the event: Agencja Rozwoju Przemysłu SA, Edenred, Google Polska, ORLEN SA, PKO Bank Polski

    Supporting partners of the event: Browary Polskie, Polska Federacja Producentów Żywności Związek Pracodawców, Stowarzyszenie Dystrybutorów i Producentów Części Motoryzacyjnych, Związek Cyfrowa Polska

    Content partner: InfoCredit

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