Poland has established itself as a regional FDI leader since transforming to a free-market economy in the 1990s. The country has not only been a top performer in central and eastern Europe when it comes to greenfield FDI projects between 2003 and 2014, ranking second only to Russia, it is also ranked fifth for the whole of Europe. During those 11 years, Poland attracted on average 280 projects per year, according to data from greenfield investment monitor fDi Markets.
But while these figures spell good news for Poland’s economy, they may point to the opposite for investors. Big inflows of FDI into some sectors can translate into increased investment costs and difficulties in finding talent.
However, according to Arkadiusz Bak, an undersecretary of state at Poland’s ministry of economy, there are still regions in the country that are far from saturated. Swietokrzyskie, Mr Bak’s home region, is one of them.
Inhabited by 1.3 million people and located between the cities of Warsaw and Krakow, Swietokrzyskie is not a “go to” place for investors, says Mr Bak, despite its proximity to the two biggest cities in Poland. “Like an express train between Warsaw and Krakow that whizzes past Swietokrzyskie, investors often just whizz past it,” says Mr Bak. “Meanwhile, the region has great human capital with many people eager to stay and work here, rather than migrate to look for jobs.” He adds that the region is of particular interest to producers of transport equipment and automotive components, given the availability of skilled labour in this field.
Indeed, eastern Poland is also often overlooked by investors despite its potential, especially in the logistics and business process outsourcing (BPO) sectors, says Mr Bak, who believes that logistics-oriented companies should take note of Bialystok, for example, a city of 295,000 people located 50 kilometres west of Poland's border with Belarus, and Suwalki, a city of 69,000 people located 25 kilometres south of Lithuania.
He adds that Lublin, a city with one-fifth of its 340,000 inhabitants enrolled at local universities, could be an interesting alternative to established BPO clusters such as Wroclaw and Krakow. “Lublin is the best city in eastern Poland [for BPO]. It is a university city and, importantly, it also has real estate developments catering for BPO sector needs,” says Mr Bak.
Kudos by association
Regions popular with investors also have certain pockets that might not be so well known, but often have a compelling offer, says Mr Bak. For example, in close proximity to FDI hotspot Krakow lie alternatives such as Niepolomice, Skawina and Bochnia, all of which have special economic zones managed by Krakow Technological Park. “The park has a good strategy for its economic zone and already has success in attracting high-tech investments,” says Mr Bak.
Although FDI has been evading these lesser known towns, that situation could be about to change, according to Mr Bak. “There is no magical switch that decides where investments go. It is all about being proactive and understanding what investors need,” he says.