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    Position of the Union of Entrepreneurs and Employers on the employment of foreigners

    Posted on by Weronika Marzec

    Warsaw, 17th November 2023

     

    Position of the Union of Entrepreneurs and Employers on the employment of foreigners

     

    • Recent years have brought a considerable increase in the number of foreigners in Poland. According to data from the Social Insurance Institution, the number of foreigners registered at the end of July 2023 for social insurance amounted to 1.097 million.
    • The Union of Entrepreneurs and Employers (ZPP) is of the opinion that it is necessary in the long term to fundamentally amend the current legal and administrative system with regard to foreigners.
    • ZPP proposes introducing new regulations into the current system that make the employment of foreigners more flexible, including but not limited to: differentiating foreigners by their current place of residence, abolition of the “starost’s information on the local labour market”, creating more appointments for obtaining a visa in embassies and consulates, eliminating excessively restrictive regulations regarding illegal employment, strengthening the role of the employer in the process of obtaining a uniform residence and work permit, as well as the exchange of information between the employer and the authorities.

    Recent years have brought a considerable increase in the number of foreigners in Poland. According to data from the Social Insurance Institution, the number of foreigners registered at the end of July 2023 for social insurance amounted 1.097 million. For reference, it was 651 thousand at the end of 2019, and merely 184 thousand in 2015. Independent analyses indicate that these values do not correspond to the total number of foreigners who worked in Poland in the years indicated. Foreign students under 26 years of age, for example, are not registered for purposes related to social security and are therefore not accounted for in these statistics. Moreover, many foreigners work illegally, also as a result of the ineffective public administration system and the law on foreigners in force. Certainly, the main motive behind illegal work may be the desire to avoid taxation and premiums related to labour, as well as the foreigners’ lack of knowledge or understanding of the Polish social security system, or the lack of faith therein. Nevertheless, overcomplicated bureaucracy and an exceedingly long waiting time for legalisation of employment are also significant factors pushing foreigners into informal economy. The current legal and administrative system devised with foreigners in mind is based on Community regulations as well as solutions that are commonplace in EU member states. However, it had not been prepared for such a massive increase in the number of foreigners in Poland. Frequent amendments to regulations, changes in the system and evolving ICT solutions in public offices only further testify to this. Already in 2019, the Polish Supreme Audit Office (Najwyższa Izba Kontroli) found that Poland was not administratively ready to provide services to foreigners. It was then shown that the period of legalisation of their residence had more than tripled over four years – from 64 to 206 days. To summarise, in spite of the absorption of an enormous number of foreigners into the labour market, we have observed countless issues, especially in the context of legalisation of labour. These problems and shortcomings resulted in a large number of foreigners being pushed into informal economy, suboptimal use of labour resources, and limited economic growth due to the failure to meet the personnel needs of Polish enterprises. Below we present a package of solutions that would enable a responsible and effective migration policy focused on maximising economic growth.

    Hitherto implemented legal and organisational changes versus the waiting time for legalisation of work

    According to our analyses, the changes that concerned work permits, residence permits, as well as declarations of entrusting work were aimed at multiplying the workload processed and boosting the efficiency of cases under consideration – a step in the right direction. Unfortunately, these changes have been insufficient. Residence cases constitute the biggest problem, as the waiting time for a case to be resolved varies greatly, depending on the voivodeship. Regrettably, this period is usually several times longer than the two months specified as the waiting time limit for resolving such a case in accordance with the Code of Administrative Procedure. In practice, it usually ranges from 6 to 12 months. As of present, in no voivodeship are residence permit cases settled within the statutory period, and officials admit off-the-record that this will never be possible under the current regulations.

    In the case of work permits, according to unofficial information, the time necessary for a decision to be issued ranges from 30 days to half a year depending, again on the voivodeship. Apart from shortening the waiting time for a case to be processed, further reforms ought to be aimed at strengthening the interests of Polish citizens and businesses, in order to maximise the benefits of immigration while limiting potential risks. As the Union of Entrepreneurs and Employers, it is our belief that the system is in need of thorough reforms.

    The target system

    The current legal and administrative system devised for foreigners is imperfect. There are sentiments that work should be done to improve it. There are also opinions it should be re-created from scratch. We support the complete reorganisation of the system, basing it on the following principles:

    1. A foreigner is a party to the proceedings for a work permit.
    2. A foreigner, who receives a work permit, receives it temporarily with a territorial scope within the borders of Poland and without assigning the permit to a specific employer.
    3. The work permit specifies neither the profession nor the remuneration, so as not to inhibit the potential employment relationship and to optimise the use of labour resources.
    4. The extension of the work permit, and therefore also residence, must be based on the foreigner’s current verifiable and quantifiable activities under the existing permit, and not on documents confirming potential future employment.

    Taking into account that the introduction of the above-mentioned principles is not possible under the current system, we support establishing a working group which, based on the above postulates, would create a coherent, rational, and fair system for foreigners and employers alike. Of course, with appropriate protection of the interests of Polish citizens – implicitly. Creating such solutions requires many months of work from experts and lawyers, as well as many months of consultations with representatives of any and all stakeholders.

    At the same time, we understand that there are a number of potential improvements to the current system that can be implemented and enforced immediately. Efficient action in this matter is essential by reason of the fact that the Polish labour market is struggling with a significant workforce shortage hampering Poland’s economic development. Therefore, work on the new system and ongoing improvements should be carried out in unison. Below we present proposals of solutions based on the existing system.

    • Differentiating foreigners by their current place of residence

    Presently, there are no procedural differences between the issuance of a work permit for a foreigner staying in Poland and a foreigner who has never been to Poland and would like to apply for a work visa. Therefore, foreigners who legally reside in Poland and are legally employed often experience problems with an efficient change of employment as their applications for work permit extensions are processed with a delay. A number of pathological situations may arise from this state of affairs, ranging from the employer’s abuse of their position to working in the informal economy while waiting for the permit to be issued. Foreigners who want to strictly adhere to the regulations often decide to spend several weeks (even up to several months) being unemployed while awaiting the new permit, which is a critical economic challenge and a waste of labour resources. At the same time, people without residence in Poland are waiting in the very same queue for a work permit. The permit itself is intended to enable them to apply for a visa, but without the guarantee of obtaining it. In practice, the number of candidates from abroad is not limited and in the case of a wave of applications, voivodeship offices that issue decisions may be paralysed by an excessive number of applications. These applicants can wait and ought not to be treated with the same priority as people who are already in Poland and in urgent need of a new permit. People with residence in Poland apply for a new permit, because the previous one has expired, the type of work performed has changed, or they want to change their job, which means that their applications should be taken under consideration urgently.

    An alternative to a work permit procedure with a division into persons with residence in Poland and staying abroad is to give all foreigners staying in Poland the possibility to perform legal work on the basis of a simplified procedure, i.e. a declaration of entrusting work. Currently, this simplified procedure applies exclusively to citizens of the Republic of Armenia, the Republic of Belarus, Georgia, the Republic of Moldova, the Russian Federation, and Ukraine. As part of the ongoing consultations, there is talk of expanding the list of countries, but it is not the nationality criterion that should be of key importance, but the foreigner’s current place of residence. The simplified procedure should be extended to other countries outside the European Union, yet it ought to apply only to those people who are currently legally residing in Poland. The enforcement of such a solution would relieve the burden on voivodship offices, which have problems with issuing documents within the statutory period. Labour offices that currently issue “declarations of entrusting work” have the necessary knowledge and experience to fulfil the entrusted task.

    • Abolition of the “starost’s information”

    When applying for a work permit (or work and residence permit), it is necessary in a number of cases to obtain a special document: “information of the starost on the local labour market”. The procedure itself takes more or less two to three weeks and constitutes unnecessary red tape. The labour market test assesses whether, in the case of plans to employ a foreigner for a specific position, there are no Polish employees with the appropriate qualifications available on the market. Labour offices are unlikely to be able to offer candidates from Poland, and at the same time they extend the period of legalisation of residence and work for a potential foreign employee.

    As of now, certain professions are exempt from the need to obtain the starost’s information on the basis of a nationwide regulation, as well as based on regulations of individual voivodes. Lamentably, the list of professions requires updating, as the nationwide list has not been expanded since 2019. Furthermore, the substantial diversity of exempt professions in individual voivodeships distorts fair competition between enterprises.

    We support the complete abolition of the so-called starost’s information, because it is an unnecessary bureaucratic procedure that in practice does not meet its purpose, i.e. it does not protect the local labour market against the excess of foreigners in a given profession. The plan to eliminate this procedure had already been included in the draft amendment to the Act on Foreigners, but the act itself was finally not voted on during the previous term of the Sejm (the lower chamber in the Polish parliament). Alternatively, complete abolition can be replaced by a suspended requirement to issue such a document for periods of low unemployment. A reasonable solution would be to set an acceptable level of unemployment, e.g. up to 6%. In this case, the starost’s information would not be required as long as unemployment locally or nation-wide does not exceed 6%.

    • Creating more appointments for obtaining a visa in embassies and consulates

    A major problem in terms of obtaining a visa for work by a foreigner is the lack of available appointments to submit a visa application. There have been cases where, despite obtaining a work permit in Poland, a foreigner could not submit a visa application within a year, which resulted in work permit expiration, making it impossible to further apply for the visa. This also directly gave rise to corruption situations related to attempts to illegally obtain an appointment. Therefore, the process of creating more appointments requires a thorough change, and it is also necessary to increase the pool of dates available in key embassies and consulates.

    • The right to work while waiting for a residence and work permit, as well as after receiving the right to stay

    The lengthy waiting time for a uniform decision regarding residence and work is a problem for both foreigners and their employers. As a rule, a foreigner’s stay is considered legal while waiting for an official decision. At the same time, foreigners can take up legal work if they have a work permit or another document enabling employment. In certain cases, legal work may be continued after obtaining a stamp in the passport confirming the submission of an application for a residence permit, but this only applies to selected scenarios. We propose that all work performed from the moment of obtaining the stamp in the passport until the moment a decision is issued be recognised if the foreigner was performing legal work at the time of receiving the stamp. In such a situation, the stamp should contain an annotation “access to the labour market”. Similarly, in the case a residence permit has already been granted. In most cases, if a foreigner wants to change employment, they must also change their residence and work permit. The procedures for changing employers after obtaining a residence and work permit should be simplified so as not to duplicate the entire process of granting the right to stay with each change of employer.

    • Elimination of excessively restrictive regulations regarding illegal employment

    Part of the regulations regarding the work of foreigners seems to be excessively restrictive. For example, Art. 2 sec. 1 point 22a of the Act “on employment promotion and labour market institutions” considers a foreigners work illegal if they “(…) perform work under different conditions or in a different position than those specified in the relevant work permit (…)”. Provided, by mutual consent of the employee and the employer, certain changes were made to the terms of the contract, the work should not be treated as if the work permit had never been granted. This should also apply to downtime at work at the employer’s fault or failure to complete working hours at the employee’s fault. Currently, in such situations, the employer should pay the full remuneration regardless of the reason why the number of working hours deviated from the contract, in order to maintain the conditions of the permit. Therefore, violating the terms of a work permit should not be tantamount to illegal employment but should constitute a separate offense.

    • Strengthening the role of the employer in the process of obtaining a uniform residence and work permit, as well as the exchange of information between the employer and the authorities

    Currently, when a foreigner is applying for a work permit, their future employer is a party to this procedure. A completely different scenario takes place in the case of uniform work and residence permits – the foreigner is a party to the procedure, while the employer only presents documents regarding employment at the foreigner’s request. Having provided the documents to the foreigner, the employer has no further insight into the process of obtaining the permit. Unless the foreigner informs the employer, they will not know whether the decision has already been issued or not, nor what is the result of the proceedings. This is grotesque considering that the decision affects the legality of employment. In the event of a negative decision which becomes final, the employer will be liable for illegal employment, even if they had no knowledge of the outcome of the proceedings. We postulate that the employer, as an auxiliary party to the procedure, should have full insight into the administrative process regarding residence and work, and therefore be informed about the date and contents of the decision.

     

    Find out more: 17.11.2023 Position of the Union of Entrepreneurs and Employers on the employment of foreigners

    Commentary of the Union of Entrepreneurs and Employers on the amendment to the EU pharmaceutical law

    Posted on by Weronika Marzec

    Warsaw, 16th November 2023

     

    Commentary of the Union of Entrepreneurs and Employers on the amendment to the
    EU pharmaceutical law

     

    • On 26th April 2023, the European Commission presented draft regulations with the intention to reform EU pharmaceutical law.
    • At the EU level, this is the most significant amendment to pharmaceutical law in 20 years.
    • The European Commission sets major goals for the regulations in question, among others:
      • creating a common market and ensuring universal and equal access to cheap and effective medicinal products for patients living in all European Union countries;
      • offering an attractive and innovation-friendly system for research, development, and production of medicines in Europe;
      • reducing administrative burdens and substantially speeding up procedures for granting marketing authorisations for medicinal products so that they can reach patients as quickly as possible;
      • increasing the availability and ensuring a constant supply of medicinal products to patients, regardless of their place of residence within the EU;
      • addressing antimicrobial resistance as part of the EU’s “One Health” approach;
      • reducing the impact of the production and consumption of medicinal products on the natural environment.
    • On 19th October 2023, during the meeting of the European Union Affairs Committee, Maciej Miłkowski, Undersecretary of State at the Ministry of Health, presented the Polish government’s position on the proposed changes, in which:
      • the direction of amendments adopted by the European Commission is approved and the challenges related to the lack of availability of medicines and antibiotic resistance are recognised;
      • it is indicated that individual solutions of the proposed package require clarification – so that the goals assumed by the European Commission can be achieved;
      • there is a clash in the interests of producers of innovative and generic drugs;
      • it is emphasised that the purpose of the provisions under discussion is to increase the availability of medicines for patients, and not to support a given group of entrepreneurs.
    • On 17th November 2023, the Ministry of Health planned a meeting of the Group for the revision of EU drug regulations, which – together with industry representatives and social stakeholders – is to discuss the proposed solutions.

    Limited availability of medicinal products has become noticeable not only on the Polish, but on the entire European market. All EU member states face the challenge of a shortage of raw materials, increased production costs, logistic problems, and competition from Asian markets.

    Therefore, it is vital that action be undertaken to adapt the current pharmaceutical regulations – which have not undergone significant changes over the last 20 years – to the reality of today, present needs and challenges. It is necessary to increase the attractiveness of the European market for producers and distributors in order to encourage them to transfer production to the European Union.

    Nevertheless, in spite of noble slogans justifying the implementation of the planned solutions, they appear insufficient. They focus on several areas (primarily on changes in the registration process and to the period of market exclusivity for newly registered products), shifting onto producers the obligation to ensure availability. The incentives offered are virtual (e.g. formal shortening of the product registration process down to 180 days; extending in theory the market exclusivity period) and do not contain any substantial support package or investment incentives for entrepreneurs operating in a market of key importance to the economy.

    Concurrently, the planned regulations ignore issues that the industry has been struggling with for years and which would require harmonisation at the European level (e.g. the problem of prompt access to therapy, implementation of a modern distribution chain, medicine deliveries straight to patients’ homes, price pressure from the public payer).

    In view of the above, it is necessary to conduct a detailed analysis of the planned regulations in terms of addressing the needs of not only the regulator but, above all else, of patients and the industry, as well as to discuss these needs first with the local regulator and then its European counterpart in order to address them in the proposed regulations.

    On 26th April 2023, the European Commission presented draft regulations with the intention to reform EU pharmaceutical law.

    Following the adoption of the package of changes to the European pharmaceutical law on 26th April 2023 by the European Commission and the simultaneous commencement of the legislative process in the Council and the European Parliament, we present a position on the project, especially in light of the fact that arguments have arisen in the public opinion that the amendments in question will hinder Europe’s innovation potential compared to other regions around the globe. We kindly inform that we disagree with the claim that the reform of EU pharmaceutical law will weaken the competitiveness of the pharmaceutical industry of the European Union. This is particularly important considering that the deadline for submitting changes to the ENVI Committee of the European Parliament expired in mid-November 2023.

    The decline in the global competitiveness of the European pharmaceutical sector in terms of R&D is not related to the erosion of intellectual property, because the EU has consistently increased regulatory incentives and monopolies in intellectual property since the 1990s. Each new intellectual property protection or regulatory protection (TRIPS patents, SPCs, the world’s longest regulatory and market exclusivities, orphan product exclusivity, paediatric exclusivity, and SPC extensions) have been introduced with the specific aim of making Europe a global leader in the field of R&D and innovation.

    However, this strengthening of monopoly protections directly corresponds to the relative decline in R&D in Europe compared to China and the US. This proves that the claim that “more monopoly leads to more research and development” is false. To make matters worse, these monopolistic measures have directly contributed to the relocation of medicine production outside Europe, although we applaud the EU’s efforts to remedy this situation through reforms.

    On the other hand, policy measures that stimulated competition in the sector of generic medicines have fully lived up to their expectations. Legislation on generic medicines has triggered much-needed competition, doubled access to medicines in Europe, and reduced pressure on healthcare budgets. The regulations for equivalent biological medicines have made Europe a global leader in this technology and contributed to significant investments in the production of biological medicines in the EU.

    It is therefore imperative that the “Pharmaceutical Strategy for Europe” continues to aid the generic and biosimilar medicines sector to ensure Europe’s safety in terms of medicines.

    In the impact assessment of pharmaceutical legislation, it is highlighted (p. 43) that:

    “A direct link between EU incentives and EU competitiveness is hard to establish because while the incentives make the EU markets more attractive, they are agnostic to the medicines’ geographical origin. Around 20% of new medicines authorised in the EU are from the EU, the others are mainly from US, UK, Switzerland and Japan that are equally eligible to all EU incentives. Equally EU based innovative companies can benefit from incentives elsewhere, if they sell their products there.

    In June 2016, the Council requested the Commission to conduct an evidence-based analysis of the impact of incentive mechanisms, notably SPCs. Two studies have been commissioned. One from Max Planck Institute questions whether the availability of patent or SPC protection affects companies’ decisions to locate research facilities in one jurisdiction or another, emphasising that other factors are likely of greater importance. The Copenhagen Economics study argued that SPCs could play a role in attracting innovation to Europe, pointing out that taxation, education, and other factors are probably more significant in that respect.”

    Regulatory exclusivity and exclusivity voucher periods

    The pharmaceutical package changes the rules for granting companies the so-called regulatory exclusivity, i.e. temporary protection of entities that introduced a given drug first against market competition. The result of these changes is to extend the maximum protection – which is already longer than, for example, in the United States – from the current 11 years to 13 years.

    Regardless, there is no evidence of any correlation between the extension of exclusivity protection and the level of innovation. Data on the directions of import of innovative medicines to the European Union (USA, Switzerland, Great Britain, Japan) prove the opposite.

    Moreover, the proposed new rules for granting protection are so unclear that they introduce uncertainty as to when it might be possible to sell a competitive drug in a specific case. One must not forget that the preparation of a generic product requires R&D efforts and clinical trials (bioequivalence studies) and the preparation of registration documentation. The manufacturer of generic products must know several years in advance when they will be able to apply for a marketing authorisation in order to thoughtfully plan the works.

    If it suddenly comes to light in the course of these works that data exclusivity has been extended, it may turn out that some of the research carried out or documents prepared (which met the requirements provided for by law on the date on which the six-year data exclusivity period expired) will no longer meet requirement on the date on which the extended data exclusivity period expired. Moreover, during the period of data exclusivity in the EU, generic producers may register medicinal products abroad and sell them there. However, in many countries, the condition for obtaining marketing authorisation is to have a marketing authorisation in the manufacturer’s country. Thus, extending data exclusivity will reduce the competitiveness of producers from the European Union compared to producers from India, China or the USA. In those countries, data exclusivity periods are not as long as they are in the European Union. Therefore, any further additional protection periods should only be granted in the scope of market exclusivity and not data exclusivity.

    On top of that, the pharmaceutical package provides for the institution of a Transferrable Exclusivity Voucher (TEV). A company introducing a new antibacterial drug to the market will receive a 12-month-long exclusivity right, which it can use for another drug or sell it to a third party. The proposed structure, although intended to encourage R&D with new antibiotics in mind, may in fact give rise to abuse and anti-competitive behaviour. It is worth considering other methods of supporting the development of antibiotics that have been proposed, for example, in Sweden or the United Kingdom, i.e. an annual revenue guarantee program seems to be an effective tool that can encourage antibiotic developers to invest in research and development by means of ensuring guaranteed revenues. The Swedish and British models show that implementing an income guarantee is a practical and feasible solution that has been tested and has produced positive results.

    Even the European Federation of Pharmaceutical Industries and Associations (EFPIA) does not identify intellectual property (IP) issues as necessary for relocation of production.

    Each year of competition delay means measurable losses for patients and national payers, and one year means a loss of at least hundreds of millions of euros.

    In light of the arguments above, we appeal for:

    • establishing a maximum uniform period of data exclusivity of 6 years and a basic period of market exclusivity of 2 years, though market exclusivity might be extended by additional periods constituting incentives currently provided for in the draft directive, however, the total duration of registration protection should not be longer than currently applicable periods, i.e. maximum 11 years;
    • a clear indication in the regulations, in the event that the extension of data exclusivity or market exclusivity would be dependent on ensuring the availability of the medicinal product on the market for patients, that such availability means not only launching the medicinal product onto the market and ensuring supplies covering patient demand, but also obtaining reimbursement for this medicinal product or supplying the medicinal product to the EU market, or else the withdrawal of the application for reimbursement in any of the Member States should result in the withdrawal of the granted exclusivity;
    • abandoning the TEV and replacing it with the Annual Revenue Guarantee Scheme – developed by the EU-Joint Action on Antimicrobial Resistance and Healthcare-Associated Infections (EU-JAMRAI), thus rewarding innovation while promoting responsible consumption of antibiotics.

    Changes in the field of environmental protection

    While supporting all actions aimed at improving the state of the natural environment, one should emphasise that the European pharmaceutical industry is already obliged to meet the highest environmental standards. Due to changes in the pharmaceutical package, advanced legislative work is currently underway in the European Parliament and the Council in the field of, for example, municipal sewage, which will significantly affect the European pharmaceutical industry producing equivalent drugs (generic and bioequivalent), which will translate into an increase in the costs of producing these drugs.

    With this in mind, one should take into account the balance between objectives and assumptions so that they do not become a competitive barrier and do not lead to the elimination of this branch of the pharmaceutical industry from Europe. This is particularly important due to the shortage of essential medicines in Europe and Asian competition which, on the one hand, is financially subsidised by their governments, and on the other hand is not subject to such stringent regulations.

    Impact on competitiveness and SMEs

    On small and medium-sized enterprises, the impact assessment states:

    • In terms of effect on competitiveness, the proposed incentives do not make a geographic distinction, they equally offer regulatory protection for products developed in the EU, or anywhere in the world which ensures a level playing field between EU-based and third country-based companies. While the EU regulatory framework is attractive for developers, competitiveness also depends on many other factors e.g. tax system and incentives; available grants, loans and other funding (e.g. the European Innovation Council Accelerator); pool of talents; proximity of top academia; clinical trials infrastructures; market size; security of supply chains; favourable reimbursement decisions (p. 60);
    • Similarly, incentives for UMN would benefit SMEs, which are generally willing to make early-stage investments in areas of high risk, by giving more value to their assets even if they are acquired by big pharma in late-stage development. SMEs already enjoy fee exemptions and reductions for regulatory procedures and through the new horizontal measures SMEs will benefit from optimised scientific support with a greater likelihood of success for authorisation. Overall, with the increasing investment in biopharmaceutical R&D and the increasing share of SMEs among developers, biopharma SMEs in the EU and elsewhere would have excellent prospects for the future (p. 61).

    On the one hand, the European Commission is talking about shortening drug exclusivity periods, but on the other, the proposed regulations do in fact open up a whole range of possibilities for extending them. The maximum period of market exclusivity for a drug – of course, apart from the 20-year-long patent protection – according to the new proposed directive and regulation is to be 13 years, while it presently is 11 years.

    In addition, the European Commission also proposed the so-called IP package – concurrently processed in the Council and the European Parliament, in which monopoly companies gain the opportunity to introduce one European procedure, SPC, in all EU countries. Today they have to apply member state by member state. And even though the pharmaceutical package introduces regulations shortening registration procedures, enforced in the early 1990s, the SPC intended to compensate for the length of the registration process is not shortened.

    To boot, there are numerous projects dedicated to the development of research on new drugs, such as support from EU funds – IPCEI mechanisms or the largest public-private initiatives in the world – Innovative Medicines Initiative, and now the Innovative Health Initiative, in which half of the funds come from all EU citizens and half from monopoly companies represented by COCIR, EFPIA and Vaccines Europe (a specialised vaccines group within EFPIA), EuropaBio, MedTech Europe – and the total budget of IHI for 2021–2027 amounts to EUR 2.4 billion.

    All this – critical voices from monopoly companies aside – indicates the EU’s openness and support in this area. It is worth supporting the industry manufacturing drugs that compete on the market with price, because they are the ones that are is short supply in pharmacies. And in this area, EU funds are no longer so generous.

    The monopoly period should certainly not be extended, because European patients will have to wait longer for price competition to appear on the drug market, and national payers, including Polish NFZ (National Health Fund), will be forced to bear higher reimbursement costs. Every day that the competition is delayed means a multi-million loss for healthcare budgets.

     

    Find out more: 16.11.2023 Commentary of the Union of Entrepreneurs and Employers on the amendment to the EU pharmaceutical law

    Position Paper on Wind Energy Action Plan

    Posted on by Weronika Marzec

    Warsaw, 30th  November 2023 

     

    Position Paper on Wind Energy Action Plan

     

    The European Enterprise Alliance and the Union of Entrepreneurs and Employers (ZPP) present our strong endorsement of the Wind Energy Action Plan, an ambitious and transformative strategy poised to shape the future of Europe’s energy landscape. Rooted in our commitment to sustainable development and economic prosperity, we support this initiative, recognizing its pivotal role in actualizing the European Union’s lofty goals for wind energy deployment.

    Background

    The European Commission published the European Wind Power Action Plan on October 24, 2023.  At its core, the plan is a response to the pressing need for a comprehensive strategy to meet the EU’s renewable energy targets. It encapsulates a series of actions within six different categories, commitments, and measures designed to accelerate the deployment of wind energy, foster innovation, and ensure the industry’s global competitiveness.

    Acceleration of Deployment Through Increased Predictability and Faster Permitting

    The Wind Energy Action Plan’s pivotal focus is on accelerating deployment through heightened predictability and streamlined permitting processes. The commitment to frontload the transposition and implementation of the Renewable Energy Directive[1], coupled with the digitalization of national permitting processes, resonates with our vision for a regulatory environment that is both agile and supportive. The proposal for a dedicated online tool, slated for launch by the end of 2023, demonstrates a commitment to cutting-edge solutions that facilitate efficient permitting. The explicit integration of wind deployment pledges in Member States’ 10-year plans underscores a strategic approach toward long-term and sustainable growth. There is a commitment to upgrading the informal expert group on permitting into a dedicated forum, fostering collaboration and sharing best practices. The potential extension of the EU emergency permitting rules, pending the review of their effectiveness, shows a nuanced and adaptive approach to regulatory frameworks. We stand firmly behind the idea that visibility on auction schedules and establishing a digital platform for Member States’ auction planning enhances transparency, aiding in the formulation of comprehensive wind deployment strategies. Starting November 2023, there will be a Prolongation of the Emergency Regulation on permitting, The Commission and Member States should collaborate closely to expedite the process, facilitating quicker approval, transposition, and implementation of the updated RED provisions related to permitting, as outlined in “Accele-RE.” which then will be followed by the Member States increasing the visibility of the wind projects pipeline through wind pledges, publication of mid-term auction schedules, and long-term plans for renewables deployment and lastly, the Commission will adopt an action plan to facilitate grid build-out in before the end of 2023.

    Improved Auction Design

    The commitment to improving auction design is a welcome stride toward creating a competitive and sustainable market for wind energy. We strongly advocate for the proposed qualitative criteria in auctioning, such as cybersecurity and sustainability, which reflect a comprehensive understanding of the sector’s multifaceted challenges. On the other hand, the aforementioned criteria should be transparent and comparable to avoid any unethical practices. The integration of non-price award criteria rewarding sustainability and innovation aligns with our vision for a forward-looking and socially responsible wind energy sector. There is a clear emphasis on the consequences assessment of negative bidding on offshore wind farm development signals a proactive approach to risk management. The linkage between the European Commission’s work on qualitative criteria and the ongoing negotiations for the Net Zero Industry Act ensures that these criteria are embedded in a broader legislative context. The commitment to evaluating cybersecurity risks for critical infrastructure underlines a commitment to securing the integrity of the wind energy sector. Member States are advised to incorporate specific qualitative design criteria and measures in their auctions for the first quarter of 2024, aiming to optimize the project execution rate, the cybersecurity risks and dealing with the initiation of data protection aspect will be addressed accordingly, followed by the commission upgrading the use of strategic procurement in the as of the context of the Global Gateway. However, there is a possibility that the innovative use of qualitative criteria in auctions might face scrutiny due to perceived subjectivity and a lack of standardization; improving the credibility of the auction design could be achieved by offering clearer guidelines and methodologies for evaluating these criteria. As in the context of Poland, the auctions for renewable energy in the year 2023, have declined, scoring even poorer than the year before[2]. Therefore, We address the urgency of a well-designed auction framework that will foster innovation and sustainability in member countries. 

    Access to Finance

    Ensuring access to finance is a linchpin in the successful implementation of the Wind Energy Action Plan. We commend the European Commission’s commitment to doubling the EU Innovation Fund budget for clean technologies, with a specific focus on wind energy projects. The prioritization of wind energy projects in the November 2023 Innovation Fund call reflects a strategic allocation of resources to sectors that are pivotal in achieving the EU’s renewable energy goals. The exclusion of other energy projects in the November 2023 Innovation Fund call signifies a selective distribution of resources away from sectors deemed crucial for attaining the EU’s renewable energy objectives. Thus, We advocate for technological neutrality and endorse environmentally sustainable solutions; the unequal funding access for example for nuclear power highlights the imperative for reform. Collaboration with the European Investment Bank (EIB) to provide de-risking tools and guarantees for EU wind companies demonstrates a comprehensive understanding of the financial barriers faced by the wind energy sector. Access to finance by the end of 2023, will take four steps:

    • Commission to facilitate access to EU financing (Under Innovation Fund, budget allocation for clean energy manufacturing projects the amount of EUR 1.4 billion)
    • European Investment Bank (EIB) to provide de-risking tools and guarantees for EU wind companies
    • Member States to make full use of the flexibility provided under State aid rules for the EU wind value chain
    • Commission to strengthen the dialogue with investors to foster the attractiveness of investment in the EU’s wind sector

    Although, the outlined steps might be perceived as too ambitious, and not be feasible within a given limited time period. To avoid the risk, detailed plans, risk assessments, and contingency measures could address concerns about the practicality and effectiveness of the proposed financial initiatives.

    We support the call for Member States to leverage the flexibility provided under State aid rules for the EU wind value chain, recognizing the need for a coordinated and supportive financial ecosystem, it is evident that robust financial support is indispensable for unlocking the full potential of the wind energy sector.

    Ensuring a Fair and Competitive International Environment

    The Wind Energy Action Plan’s emphasis on ensuring a fair and competitive international environment is a testament to Europe’s commitment to global leadership in the wind energy sector. We strongly support the active use of trade defense instruments, facilitating market access for EU manufacturers, and enhancing standardization in the wind energy sector.

    The commitment to negotiating international trade agreements and developing a rulebook on subsidies within the World Trade Organization (WTO) reflects a proactive approach to establishing a level playing field. Leveraging the EU Foreign Subsidy Regulation and foreign direct investment screening to counter unfair trade practices demonstrates a commitment to safeguarding the EU internal market. The encouragement for the European wind industry to submit evidence of unfair practices is a commendable step toward fostering a transparent and accountable global marketplace. As soon as the plan is adopted, Active use of trade defence instruments will take place, the Commission will facilitate EU manufacturers’ access to foreign markets and by the end of 2023, the standardisation in the wind energy sector will be enhanced. However, Trade tension may rise due to the reliance on trade defence instruments and foreign subsidy regulations and to mitigate concerns about protectionism, a revision of how these measures align with international trade norms and promoting diplomatic solutions can be a viable option.

    Our support is underpinned by the belief that a fair and competitive international environment is not only beneficial for European manufacturers but also essential for fostering global collaboration on climate goals.

    Skills

    Addressing the skills gap in the wind energy sector is a cornerstone of our endorsement of the Wind Energy Action Plan. We applaud the commitment of the Commission and Member States to design projects that support skills development under the EU Large Scale Skills Partnerships for Renewable Energy.

    The establishment of Net Zero Academies under the Net Zero Industry Act is a strategic move toward ensuring a skilled and adaptive workforce. By mid-2024, The aim is to large Scale Skills Partnerships for Renewable Energy to design projects that support skills development for the renewable energy sector, including wind.

    We believe that investing in skills development is not merely an ancillary consideration but a foundational pillar for the long-term success and resilience of the wind energy sector.

    Industry Engagement and Member States Commitments

    We emphasize the pivotal role of industry engagement and voluntary commitments through the EU Wind Charter. The collaborative approach outlined in the action plan, where Member States and industry commitments align with policy goals, is crucial for realizing the full potential of this strategic initiative. By the end of 2023, the EU Wind Charter should be in place. EU Wind Charter provides a framework for meaningful collaboration, fostering an environment conducive to the growth and competitiveness of the European wind industry. Yet, scepticism may arise regarding the enforceability and effectiveness of voluntary commitments outlined in the EU Wind Charter; thus, enhancing the commitment’s impact necessitates the implementation of mechanisms for accountability, regular reporting, and consequences for non-compliance.

    European Enterprise Alliance and Union of Entrepreneurs and Employers (ZPP) support the Wind Energy Action Plan. Our endorsement is not merely a symbolic gesture but a resolute stance in favour of a transformative strategy that aligns with our vision for a sustainable, low-carbon future. We call for swift and resolute implementation, urging collaboration between policymakers, industries, and civil society to ensure a robust and energy future for Europe.

     

    References:

    European Commission. European Wind Power Action Plan. 24 Oct. 2023. https://energy.ec.europa.eu/system/files/2023-10/COM_2023_669_1_EN_ACT_part1_v8.pdf

    Klęska tegorocznych aukcji OZE. (n.d.). Rzeczpospolita. Retrieved November 30, 2023, from https://energia.rp.pl/oze/art39477521-kleska-tegorocznych-aukcji-oze

    European Commission. (2022). Renewable energy directive. Energy.ec.europa.eu. https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-directive_en

     

    See more: 30.11.2023 Position paper on Wind Energy Action Plan

    Joint Association Letter on Artificial Intelligence Act

    Posted on by Weronika Marzec

    Warsaw, 27th December 2023

    Joint Association Letter on Artificial Intelligence Act

    We, the undersigned organizations, appreciate the opportunity to share our perspective on the upcoming crucial negotiations during the fifth round of trilogues on the Artificial Intelligence Act (AIA). We would also like to express our gratitude to EU policymakers for their work on AIA regulation – our community supports its overarching goals of increasing Europeans’ trust in artificial intelligence and advancing innovations created within EU Member States. However, as the negotiations are nearing their end, we remain concerned about the new proposals that undermine the original risk-based approach by introducing a multi-tiered approach.

    We strongly encourage trilogue negotiators to avoid asymmetric regulations and a multi-tier framework towards foundation models (FM) and general-purpose AI (GPAI). Asymmetric obligations inappropriately target only selected vendors and certain FM and GPAI models, irrespective of actual risk or use case of a given AI application. As the Computer & Communications Industry Associations (CCIA Europe) points out, arbitrary classification based on size criteria, such as the number of FM and GPAI users and the amount of computing data used to train them, can effectively stop companies from further expanding and scaling their services.[1] Furthermore, attempts to add new copyright requirements in the AI Act despite the existing comprehensive EU copyright framework will only create additional complexity and should not be addressed in the AI Act, which is part of EU product safety legislation. These changes would run counter to AIA’s original risk-based approach, which has been a result of a comprehensive consultation process and struck a fine balance between enabling innovation and protecting users.

    Furthermore, we are also concerned about proposals to expand the list of high-risk system use cases in Annex III and the list of prohibitions in Article 5. We strongly encourage negotiators to clarify that the latest Article 6 and Annex III compromise text does not not label all profiling systems as high-risk, but only limits the scope of the exemption from the high-risk classification. Without such a clarification, the existing language could potentially result in an excessively wide high-risk classification in Annex III. Associating profiling with a broad negative impact on fundamental rights would also contradict the GDPR. As a result, positive use cases that benefit users – such as increasing accessibility or identifying biased data sets – could be banned.

    GDPR. As a result, positive use cases that benefit users – such as increasing accessibility or identifying biased data sets – could be banned.

    In brief, while we support the overarching goals of the AIA, the current form of the legislation may hinder the emergence of innovation and impede the development of artificial intelligence in the EU, leading to decreasing competitiveness of Europe in times of rising global instabilities.

    ***

    1 CCIA Europe letter on AI Asymmetric Regulation – CCIA (ccianet.org)

    Signatories:

    o Center for Data Innovation
    o Computer & Communications Industry Association Europe
    o Danish Entrepreneurs
    o Digital Poland
    o European Enterprise Alliance
    o European Union and International Relations of Infobalt
    o NL Digital
    o SAPIE
    o Union of Entrepreneurs and Employers Poland

     

    See more: Joint Association Letter on Artificial Intelligence Act

    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

    Report by the Union of Entrepreneurs and Employers and Symfonia 
on the 2023 SME digitisation level “Digitisation of the SME sector in Poland”

    Posted on by Weronika Marzec

    Warsaw, 2nd November 2023

     

    Report by the Union of Entrepreneurs and Employers and Symfonia
    on the 2023 SME digitisation level “Digitisation of the SME sector in Poland”

     

    According to a study conducted by Union of Entrepreneurs and Employers, 10 months before the obligation to use the National e-Invoice System KSeF enters into force, only 60% of Polish companies see the need for deeper digitisation, while 38% of them use only basic tools in business. The group that declares the lowest level of digitisation are micro-entrepreneurs, almost 40% of whom claim that they do not use any digital tools.

    Mere moments before the introduction of the mandatory use of the National e-Invoice System (Krajowy System e-Faktur – KSeF), the Union of Entrepreneurs and Employers, in cooperation with Symfonia, published a report “Digitisation of the SME sector in Poland”. The aim of the study was to investigate both the awareness and level of digitisation of economic entities in 2023.

    Piotr Ciski, President of the Board at Symfonia: “We focused on SMEs in our study, because they are the backbone of the Polish economy. The upcoming mandatory full digitisation of invoices will also cover other market segments. We are the sole EU member state to introduce KSeF for all fiscal documents, without any limits on amounts or settlement areas. This is a massive challenge for Polish entrepreneurs, which impacts not only IT systems, but also internal processes related to, among others, the circulation and acceptance of cost invoices. We at Symfonia have many years of experience in the field of electronic invoicing. It was us who introduced the first structured invoice on the Polish market, which is why we share our knowledge. We have been conducting an extensive educational campaign in cooperation with the Accountants Association in Poland and the Union of Entrepreneurs and Employers. We have launched a free KSeF hotline and implemented a series of training courses as part of the Symfonia Academy, which are used on a daily basis by our clients as well as people who work on our competitors’ systems.”

    The introduction of KSeF will allow public administration to have real-time insight into each economic transaction, because they will be processed in a central e-invoicing system. This requires entrepreneurs to change processes and adapt tools to new requirements. The National e-Invoice System is a fully cloud-based solution, which means that the entire market will naturally transfer some of its business processes to the cloud.

    Meanwhile, as the new report shows, only 14% of surveyed SMEs declare the use of cloud computing, and 13% use of process management systems, including ERP (enterprise resource planning) – in neither category, does the share of micro-enterprises exceed 10%. Only 3% of respondents declare the use of AI-powered solutions in everyday business operations.

    The study shows that 44% of respondents indicate increased work efficiency as the main benefit of digitisation. As many as 33% have observed a reduction of the harmful impact on the environment. Only 19% of respondents perceive digitisation as a tool with potential to increase company revenues.

    Nevertheless, almost half of respondents (46%) are afraid of the costs related to digitisation. Moreover, there are also concerns of a purely human nature: 16% of employees declare reluctance to change.

     

    Full version of the report available for download right HERE.

    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

    Memorandum of the Union of Entrepreneurs and Employers: pro-demographic policy should not be abandoned, but without economic immigration, Poland will not maintain the pace of development

    Posted on by Weronika Marzec

    Warsaw, 25th August 2023

     

    Memorandum of the Union of Entrepreneurs and Employers: pro-demographic policy should not be abandoned, but without economic immigration, Poland will not maintain the pace of development

     

    • Poland is one of the countries with the lowest fertility rate not only in Europe but also in the world. Demographic problems lead to problems on the labour market and with the social security system.
    • Currently, migrants from Ukraine are helping Poland in its fight against labour market problems. However, many of them choose other Western European countries and Canada. Moreover, one should be aware that after the end of the war in Ukraine, many of them will return to their homes.
    • Poland must pursue a prudent migration policy, open to foreigners from various parts of the world, especially from areas that are culturally close to us.
    • It is also necessary to ensure safety. Foreigners who commit crimes and people who entered our country illegally should be deprived of the right to reside in Poland.

    Introduction

    Poland is currently facing one of the greatest challenges in terms of society, the labour market, social security, and the economy as a whole. This problem concerns the country’s constantly and significantly worsening demographic prospects. The fertility rate among Polish women in 2022, according to the latest Statistics Poland report “Poland in numbers 2023”, amounted to 1,261. To achieve simple generation replacement, this ratio would have to come up to 2.1. This report indicates that the Polish birthrate last year was already -3.8 per 1,000 inhabitants[1]. This is the worst result in the post-war history of our country and puts us not only among the countries with the greatest demographic problems in Europe, but also in the entire world.

    Demography directly affects the labour market. As the ManpowerGroup report “Talent Shortage 2023” shows, as many as 72% of organisations in Poland have problems with filling job positions with new employees with required skills and competences[2]. In practice, this translates into hundreds of thousands of job vacancies that could contribute to economic growth in our country. Staff shortages therefore translate into lost benefits for all of us.

    So how shall we counteract demographic problems? A reasonable pro-family policy is certainly necessary, which will provide real support and encouragement for Polish families in decision-making with regard to children. However, even with a particularly good policy in this field, its effects will be noticeable on the labour market in 20 years at the earliest. Another way is to use one’s own resources, i.e. increasing the professional activity of, for example, women who often stay off the labour market for a long time due to caring for children and the elderly. Finally, labour shortages on the market can be filled very quickly and effectively thanks to migration policy. As indicated by the Polish Economic Institute, the total impact of labour migration in 2022 contributed to a one percentage point growth of the Polish GDP[3], and the labour market was able to handle migrants from Ukraine very well. According to the Ministry of Labour and Social Policy, there are approximately 1.4 million of them in total in our country (mainly women and children)[4].

    Migration today

    Current unemployment in Poland is at a record low. According to Eurostat, it amounted to 2.7% in April 2023 and was the lowest in the entire European Union (the Czech Republic achieved the same level of unemployment). It may seem that this is great news, because usually only high unemployment is associated with problems. Unfortunately, such a low level of unemployment means for the economy that there are problems with unfilled positions. This is what is happening in Poland.

    More than 30 years have passed since the Polish transformation. Our country has put those three decades to effective use and has become one of the largest economies in the European Union. Just as Poles once emigrated en masse to Western European countries, today our country has become a place where foreigners come to look for work. In many industries (such as transportation or construction), foreigners make up a significant share of employees, and they form the vast majority of staff in many companies. Moreover, despite the influx of migrants, the unemployment rate has not been increasing for a long time and remains relatively stable and very low. This means that our labour market is still very receptive, and migrants are usually employed in positions that cannot be filled by employees from Poland.

    The Russian invasion of Ukraine was certainly an opportunity to supply our labour market with refugees who are culturally close to us and want to integrate with our society. Unfortunately, they are increasingly choosing other Western European countries, mainly Germany and Canada. These countries accepted hundreds of thousands of migrants, offering them very favourable social programs, training and language courses. Furthermore, they largely attract specialists, people with the highest competences, who are very much in demand on the labour market of these countries.

    Poland certainly benefits from the good image we have managed to create in connection with helping refugees since the beginning of the war in Ukraine. Cultural and geographical proximity and similarity of languages also work to our advantage. However, in the long term, this is not enough.

    Migration tomorrow

    If there are no migrants on our market, who currently constitute a huge added value for our economy, Poland will have to consider profoundly grave consequences. Already two years ago, the Statistics Poland did forecast that with current demographic trends, the population in Poland will decrease by 4.4 million[5]. Unfortunately, the latest data shows that it may be even worse. In April 2023, only 21,000 children were born in Poland[6]. This is an inglorious record in the history of the central statistical office’s measurements. Today, such a difficult demographic situation translates not only into problems on the labour market, but also in the entire social security system. The migration of Ukrainian citizens has been a kind of lifeline.

    Nevertheless, one should be aware that when the war in Ukraine is over, many of the country’s citizens will return to their homes. Moreover, many countries have already noticed an opportunity to attract Ukrainians to their labour market and offer them much better conditions than Poland (Germany and Canada mentioned earlier). To prevent the very serious consequences of the depopulation of our country and the aging of our society, we must act today to introduce a long-term and systematised migration policy.

    Sensible migration policy

    Today, the main sources of migration to Poland are our closest eastern neighbours – Ukraine and Belarus. These are people who are culturally close to us, perfectly assimilate into society, and are willing to work. That is why other countries tempt them with increasingly attractive offers. Taking into account the risk of a decrease in the number of migrants from beyond our eastern border, we should look for other directions today. We cannot view every migrant as a potential threat. However, we should focus on attracting people who will add value to our economy and society. People who want to work, learn, integrate and start families. People who see going to Poland as a chance for a better life.

    Poland should be open to migrants from various parts of the world, although of course it should not forget about security. Therefore, illegal migration should be firmly prevented, as it could result in people arriving in our country whose activation on the labour market would be extremely difficult and who could constitute a significant burden on the social system.

    Certainly, with refugees from Ukraine increasingly choosing Western Europe or other Western countries such as Canada, Poland must focus on attracting citizens of other countries that are culturally closest to us. Therefore, greater openness to Belarusian citizens seems to be a logical solution. Many of them have Polish roots, and a significant part of society is against the policy of the Belarusian authorities and is looking for a chance for a better life. Migration to Poland, a culturally close country with a similar language, but a lot better economically developed, may certainly be such an opportunity. Belarusian citizens currently do not have the freedom to move within the European Union and take up employment like Ukrainians, so it may be easier for Poland to keep such migrants on the market and encourage them to settle permanently. Poland should therefore consider introducing mechanisms to ease obtaining the right of residence and work permits, similar to those introduced for Ukrainian citizens. The simplified method of reporting the employment of a Ukrainian citizen works particularly well in practice and can be successfully used in the case of Belarusian citizens. Of course, we must take into account matters related to security arising from the fact that the Belarusian authorities are not favourably disposed towards our country. Therefore, certain security considerations must be kept regarding migration from this country.

    These issues should be reflected in migration regulations, which should provide a chance for foreigners to start working easily, without many of the existing complicated procedures. Although it should be emphasised that Poland has made noteworthy progress in this area in recent years, many entrepreneurs and foreign workers still stress the fact that obtaining a work permit is excessively burdensome.

    It should be highlighted that migrants who are culturally close to us are certainly of the greatest value to our society and the labour market. The experience Poland has had in recent years clearly shows that people from Ukraine and Belarus find their place in our society and on the labour market very well. Taking them in does not add significant social costs, and at the same time allows us to effectively combat labour market and demographic problems.

    Nevertheless, as shown in the earlier point, it is necessary to be open to other directions of migration. However, this may create certain social and security risks that must be counteracted. Certainly, every person wishing to move to Poland should undergo a thorough verification, including their criminal record. Moreover, if such a person, while already in Poland, breaks the law (commits either a crime or a misdemeanour in accordance with the provisions of the Penal Code), in particular any crime against life and health or a crime of a hooligan nature and as part of recidivism, they should be deported without any possibility of return to Poland.

    Another issue is allowing only legal migrants into our society. Any person who crosses our border illegally should be at once turned back and deprived of the opportunity to return to Poland, also legally.

    Many countries currently offer very extensive social programmes for migrants, which are intended to encourage foreigners to settle in this country. This approach makes it possible to attract both people who want to work and settle in a given country, but it also encourages people who only care about obtaining social benefits. Therefore, any social incentives should focus on providing a chance for development on the market and quick assimilation, and not on offering an extensive social system – according to the principle of giving a fishing rod instead of a fish.

    It is also important that migrants have easy access to language courses and vocational training. For the vast majority of them, their first job involves performing so-called “simple jobs”, but in order for them to be motivated to stay in Poland, they should have the opportunity to develop professional competences to have a chance for a better job in the future.

    Finally, it is important to focus on attracting and keeping highly skilled professionals. For this to happen, it is necessary to ensure their qualifications obtained in their country of origin are easily recognized in Poland. Many industries in Poland urgently need to fill staff shortages with such specialists. Health care is but one example of an industry that has been struggling with personnel shortages: doctors, nurses, paramedics etc. for years.

    Summary

    The demographic problems of our country translate into many aspects of life of our society, especially the labour market and the social security system. One of the ways to counteract the effects of depopulation is to shape a prudent and effective migration policy. A policy that, on the one hand, will be open to migrants and give them a chance for professional development, and on the other hand, will ensure the security of our borders and citizens.

     

    [1] https://stat.gov.pl/obszary-tematyczne/inne-opracowania/inne-opracowania-zbiorcze/polska-w-liczbach-2023,14,16.html

    [2] https://raportyhr.manpowergroup.pl/niedobor-talentow-2023

    [3] https://pie.net.pl/wp-content/uploads/2022/08/Miesiecznik-Makro_8-22.pdf

    [4] https://www.gov.pl/web/udsc/obywatele-ukrainy-w-polsce–aktualne-dane-migracyjne

    [5] https://stat.gov.pl/obszary-tematyczne/ludnosc/ludnosc/sytuacja-demograficzna-polski-do-roku-2021,40,2.html

    [6] https://stat.gov.pl/obszary-tematyczne/inne-opracowania/informacje-o-sytuacji-spoleczno-gospodarczej/biuletyn-statystyczny-nr-52023,4,138.html

     

    Find out more: 2023.08.25 Memorandum of the Union of Entrepreneurs and Employers: pro-demographic policy should not be abandoned, but without economic immigration, Poland will not maintain the pace of development

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