Rising Wages Could Accelerate Robot Adoption in Poland

BUSINESSRising Wages Could Accelerate Robot Adoption in Poland

Human labor costs are still low and the benefit from installing a robot on the production line is not yet high. This is – according to the report of the Polish Economic Institute – one of the main barriers in the process of robotization in Poland. However, dynamically increasing average and minimum wages, as well as a deepening shortage of workers may slowly change this trend in favor of robots. Besides the cost issue, the disadvantages seen by representatives of industrial firms are, among others, dependency on stable energy supply and foreign technology providers. However, concerns about the impact of robots on the labor market are not a problem.

“Cost issues are barriers in the process of robotization in Poland. A company compares the costs of such a machine and its maintenance with the cost of workers who currently perform this work. In Poland, labor costs are still very low, so the benefit from installing a robot is not yet high. With the increase in wages, which we currently observe in Poland, it will certainly be easier for companies to make this step, because it will simply result from their simple economic calculation,” Ignacy Święcicki, Head of the Digital Economy Team at the Polish Economic Institute, told Newseria Biznes information agency.

A study conducted by PIE in December 2023 shows that entrepreneurs’ awareness of the benefits of robotization is increasing. 77% of small and medium-sized companies, 100% of companies with profit estimated at over 10 million PLN and 94% of companies with exclusively foreign capital answered that robotization and automation of enterprises will increasingly determine the competitive advantage of companies in the market. The most often mentioned benefits of such an investment were efficiency, repeatability, reliability, improved ergonomics at work, as well as resilience of production in the context of the COVID-19 pandemic or the high quality of products made by robots. The disadvantages included high installation costs and potential replacement of components, dependence on stable energy supply or the importance of efficient fault removal and quick repair service to maintain production continuity.

“We also see another barrier – mental. In many companies, the awareness of how important digitization is, especially robotization and automation of processes, is not high. Managers are afraid to enter new areas, they are afraid of investment risk, which is changing the production process and introducing robots”, adds Ignacy Święcicki.

The survey conducted among a sample of a thousand companies indicates that there is no fear of the negative impact of robotization and automation on the labor market.

Those surveyed stressed that with the introduction of a robot they have to educate employees for new tasks, not fire them. Robotization promotes the maintenance of employment and often also increases employment, because a company that robotizes may gain market share, its production increases and it thereby needs to hire additional workers, even if they have industrial robots,” claims the expert from the Polish Economic Institute.

Especially, labor market issues may become additional motivation for investment in this area. The industry struggles with increasingly serious staffing shortages, which, moreover, are not resolved by the professionally evaluated education system.

The surveyed companies point to another problem in the process of industry automation – technological dependence on foreign companies from Japan or Western European countries. This dependence not only applies to industrial robots, but often also to sensors, cameras or software used with robots.

“We have to import machines, robots from abroad and it is a certain form of technological dependence. This dependence occurs at various levels, although it must also be remembered that the Polish market of integration companies that allows the company to implement a robot with software in the work environment is dynamically developing. I think that while dependence at the level of creating robots and building machines is difficult to overcome, because these are large international corporations that specialize in it, it is worth focusing on and developing Polish specializations”, says Ignacy Święcicki.

According to data published by the Polish Economic Institute, Poland ranks sixth in the European Union in terms of the number of robots installed in the industrial processing sector. The situation is slightly worse in the ranking that takes into account the number of robots per 10,000 employees – the so-called robotization density coefficient places us only 16th in the Community. We are significantly overtaken by smaller countries in our region. The first indicator reflects the size of our economy, while the second one shows the potential for further penetration of the economy by this technology.

“In Poland, there is no separate strategy for the robotization of Polish industry. It seems that it is worth concentrating and looking more at the strategic side as to how to help companies overcome barriers, whether financial or mental, so that they can implement more modern production methods and thus create better, more competitive products. This is particularly important if we want to develop our exports and competition in international markets where this kind of automated production dominates and this is the only way to compete”, says the head of the Digital Economy Team at the Polish Economic Institute.

The tool supporting such investments is a tax relief for robotization that has been in force since 2022, under which companies can include part of the cost of purchasing a robot in their costs and deduct it from their revenues.

“The first data from the Ministry of Finance shows that this relief is not very popular. The question is whether this is a matter of the construction of the relief or the information about it. However, it is definitely worth looking at it and considering how to do it in a more effective way”, suggests Ignacy Święcicki.

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