POLISH ENTERPRENEURS ARE ESCAPING ABROAD
ANDRZEJ KAŹMIERCZAK
The wave of enterprises bankruptcy returned to Poland. Last September 71 more companies went bankrupt than in the analogue month last in the previous year. Not only was the number of bankruptcy bigger – there were also bigger economic losses. Bankrupt companies had employed 2.5 thousand people and their financial turnover was 1.2 milliard zlotys. These two numbers were higher than in July this year, so nearly a month earlier.
Balance of losses
One can, certainly, argue that bankruptcy of enterprises is a natural phenomenon inscribed in the market economy. After all, the risk of failure is an inseparable element of economic activity. A success or failure are an expression of rationality of made decisions. Mechanism of creative destruction rewards individuals who are entrepreneurial and eliminates individuals who are inept. With limited productive resources of the country, the process of creative destruction redirects capital from ineffective sectors to modern and profitable spheres. Creative destruction, enforcing innovation of individuals, brings fruits in technological progress. Supply of produced goods is adjusted to demand, so to realistic social needs. As a result, limited resources of the country are divided in an optimal way.
Foreign exodus
The growing number of bankruptcies in Poland, however, raises anxiety. It proves a worsening economic situation. Would the spirit of entrepreneurship of Poles be slowly disappearing? Nothing more wrong. In a situation of uncertain developmental perspectives in homeland, Poles set up companies abroad. Among emigrants living in Germany, most companies are set up by those of Polish roots. Poles run already 97 thousand companies there. What is more, their companies do not deal with a simple business at all, like cleaning or care of elderly people. Many businesses use advanced knowledge which requires employing qualified employees, for example: engineers or architects.
Poles are more and more courageous to set up companies also in Great Britain. How a significant example of resourcefulness of our compatriots was creating Polish Credit Union in London this year. This para-bank is to collect savings of Polish emigrants working in Great Britain, and also crediting them on more beneficial conditions, than it is done by commercial British banks. It is created to the image of national Cooperative Saving Credit Cash unions. It reminds of the famous self-help cash unions set up in XIX century by poor Poles in the Prussian annexation under the management of Fr. Piotr Wawrzyniak.
Polish entrepreneurs who entered foreign markets with their businesses, are planning further expansion. According to surveys of Kronenberg Foundation at the City Commercial Bank, 39 per cent Polish companies set up abroad are going to broaden their activity in new countries. Their main motivation is searching for new sources of income and gaining new sales markets. But their international success also encourages entrepreneurs from Poland. The same survey shows that 12 per cent of native micro-enterprises want to debut on foreign markets within the nearest two years. So, another decade should take place under the sign of more participation of Poland in the global business.
Losses will be covered by tax-payers
Private companies succeed abroad, however, it cannot be said about powerful state companies. That is so because they are to generate losses in their economic adventures abroad. Maybe it is so because nobody takes the risk of responsibility for these losses. There is still ‘law’, that state ownership is nobody’s property. A private entrepreneur, in case of a failure of an enterprise, takes a risk in losing his whole property. Whereas presidents of state giants, nominated from political appointment, maintain their posts despite wrong decisions of investment outside Poland. There is a rule of negative staff selection, that is, poor, passive, but one’s own. Looses will be covered by national tax-payers. For, who will be aware of confusions of foreign transactions? However, what would be interesting is knowledge about subjects which take advantages from losses of the Polish party. For, if in a particular business everybody would lose, then it would simply stop existing, but it is not so.
A new wave of emigration
More and more compatriots are going abroad in search of work in the EU countries. We are observing a new wave of emigration from Poland. In 2012 2.13 million Poles were abroad. At present already 2.27 million of our compatriots are looking for employment abroad. According to surveys of independent consulting companies, about 8 per 10 Poles would like to leave for work abroad. However, many young qualified people could set up their own businesses in homeland if only the authorities created conditions beneficial for it. Whereas their valuable energy and skills are used by our economic competitors. Our authorities are helpless towards the loss of the most valuable capital so painful for Poland. Probably it would be worth trying to imitate countries which succeeded in the development of private business, such as South Korea, Taiwan or Singapore.
Capital has nationality
Our country is generous for foreign countries running their business in Poland. The Fiat Auto Poland Factory in Tychy is going to invest 2.35 milliard zlotys in Poland in order to start production of a new car model within the nearest three years. Certainly, it will bring a valuable increase in employment. But the condition of starting the investment is releasing the Fiat company from 40 percent of income tax CIT till the year 2026. In addition the country is going to give special grants to this enterprise. It is clearly seen that the success of investment depends on financial help from the Polish party. However, echoes of drastic dismissals of workers in the factory in Tychy have not disappeared. Whereas the Heinz company is applying for governmental support in order to improve the factory of ketchup ‘Pudliszki’. The company wants to receive 200 million zlotys from the state for this purpose. The inter-departmental committee for foreign investments is to make a positive decision in this issue. Is the production of ketchup so complicated that it requires help from the Polish party? It is very possible that foreign companies generating benefits from activity in Poland, will bring them to the countries of their origin. International law allows them to do it. However, capital has got nationality. So, it is worth reflecting on whether it would not be better to spend financial means – in the form of tax releases, grants and infrastructural facilities granted to foreign companies – on support of young native entrepreneurs. After all, they will also create work places. What is more, one can hope that their benefits will not be implemented abroad. However, such policy requires the spirit of economic patriotism, not only hope for salutary effects of activity of foreign companies in our country.
AA
„Niedziela” 45/2014