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Polish Businesses Fall Behind in Digitalization

BUSINESSPolish Businesses Fall Behind in Digitalization

Poland’s business digitalisation results are below the EU average, indicating a significant amount of progress needed to achieve the targets of the EU policy “digital decade”. “There are differences in the digitalisation of Polish business that are primarily due to company size. Larger companies are doing well, but small and micro enterprises often do not even use the most basic solutions,” points out Ignacy Niemczycki, Deputy Minister of Development and Technology. He believes that EU funds are significant support in the digitalisation of Polish businesses and that the EU digital decade policy will provide Poland with opportunities to attract new investments, including in semiconductor production.

“There are differences in the digitalisation of Polish businesses, which result primarily from the size of the companies. Larger businesses manage well, using cloud services and artificial intelligence. However, small businesses, especially micro ones, often do not use even the most basic solutions. They have everything saved on USB drives, they do not use the cloud, which makes it difficult for them to implement more advanced solutions. There is a significant gap and certainly a lot to do,” states Ignacy Niemczycki, Deputy Minister of Development and Technology. “This situation is similar in many EU member countries, digitalisation in Poland does not dramatically differ from other countries in our region, and everywhere we see this difference between large and small businesses, so this is a challenge at the level of the entire Union.”

The EU’s roadmap towards the digital decade policy came into effect at the beginning of 2023, setting out directions for the digital transformation of the European Union. One of these relates to the digital transformation of EU enterprises – the EU wants 75% of enterprises to use cloud, AI, or big data by 2030, and over 90% of EU SMEs to reach at least a basic level of digital technology use.

The first report by the European Commission on the state of the “digital decade” published in September last year shows that Poland has a lot to catch up on to achieve these goals. Our country’s current results in business digitalisation are still below the EU average – 19% of native companies use cloud computing services (EU average is 34%), and electronic information exchange is used by 32% (EU average is 38%). Additionally, only 18% of Polish businesses actively use social media, and 3% incorporate AI technologies into their activities. Electronic invoices and large data sets are not yet widely used. Polish companies also engage in online trade to a relatively small extent – 14% of SMEs conduct online sales, and cross-border sales to other EU member countries are conducted by only 5%.

“Digitalisation of business is absolutely crucial for the development of modern sectors of the economy in Poland,” emphasises the Deputy Minister of Development and Technology. “The government can, of course, encourage businesses to digitise by applying specific financial mechanisms and such solutions already exist. We use European funds for this purpose, and we also have the Polish Agency for Enterprise Development. But the key is not only money but also education. That’s why our ministry tries to work directly with entrepreneurs and platforms that, in turn, cooperate with smaller businesses. In this way, we can communicate effectively with the smallest businesses and build knowledge about how to conduct this digitalisation process.”

The Deputy Minister stresses that EU funds are significant support in the digitalisation of Polish businesses. In the National Recovery Plan – unblocked by Brussels at the end of February this year – initiatives contributing to digital transformation account for 21.3% (over 7.5 billion euros) of the total allocation, with an expected contribution of approximately 6.8 billion euros towards achieving the goals of the “digital decade.”

“We have European Funds for the Modern Economy, and it is a crucial programme from the perspective of developing digital capabilities for entrepreneurs. They have a wide range of available options. There is money for solutions ranging from the simplest to the most advanced. So, if an entrepreneur is willing – the funds are there. The real challenge, however, is convincing the entrepreneur, especially the small ones, to take steps and see the value in investing time and money. In the long term, even within two years, such digital automated solutions will likely prove cost-effective,” says Ignacy Niemczycki.

In addition to digitising businesses, the “Digital Decade” program, adopted at the beginning of the last year, also sets goals for digital skills of EU citizens, digitalisation of public administration, and evolution of digital infrastructure. One of these objectives is to double the current EU’s global share of semiconductor production, referred to as the “gold of the 21st century”, to 20% by the end of the decade. The Deputy Minister assesses that this is an opportunity for Poland to attract investments in this segment.

“We have adopted the so-called Chips Act at the EU forum, plus there is an investment planned by Intel in Poland, which Deputy Prime Minister Krzysztof Gawkowski has already spoken about, so there is room to create conditions for semiconductor manufacturers to invest in our country. We certainly have a base to utilise. I certainly see great chances for Poland to participate in this process. Most of all, we need to ensure Europe to be competitive vis-à-vis Asian and the United States. Once we increase this European piece of the pie, I am convinced that Poland will also be able to make significant use of it,” says the Deputy Minister of Development and Technology.

US-based Intel, a technology giant and one of the world’s largest semiconductor manufacturers, announced in mid-last year that it plans to invest 4.6 billion dollars in the construction of a semiconductor integration and testing plant in the municipality of Miękinia, near Wroclaw. The investment in the Legnica Special Economic Zone is expected to deliver about 2,000 new jobs. In early February this year, the Ministry of Digital Affairs, headed by Krzysztof Gawkowski, sent a pre-notification to the Office of Competition and Consumer Protection (UOKiK) regarding its intention to grant Intel public aid in connection with its planned investment. This support will be provided upon receiving the European Commission’s approval. At the end of February this year, Minister Krzysztof Gawkowski discussed with the Vice President of the EC Margrethe Vestager and Commissioner for Home Affairs Ylva Johansson in Brussels about speeding up the pre-notification procedure regarding public aid for Intel. The investment planned by the company near Wroclaw is expected to be one of the largest in the Polish market in the last 30 years and significantly contribute to ensuring the economic security of the country.

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