What is the current status of Polish innovation and business preparedness for the digital world? Let me illustrate it by describing my morning. First, before 8 a.m., I get a text message from InPost: “Your package is being delivered. Delivery date – this afternoon”, so according to plan since I placed the order the day before. During breakfast, four clicks in the Allegro application – the dog food I’ve ordered will be delivered no later than the day after tomorrow. At 8:30 a.m., I have a telemedicine appointment, and even before it is over, I receive an e-prescription code on my phone. At 10:00 – a virtual coffee with one of my clients, to discuss how their digital transformation is going.
Nowadays, this is not science fiction, it’s just business as usual. It only took two years of the pandemic for the digital transformation to transform both our expectations and our behaviour: no one is surprised by remote working anymore and fast online shopping has become standard, as have virtual visits to offices or banks.
Polish companies rushed to address these new habits and expectations; they had to demonstrate their ability to implement innovation and new technologies. Now “being innovative” or “digital” is not one of the many possible strategies that companies should consider, but a requirement. These days, every company must, in some way or another, be both “innovative” and “digital” if it has any intention of not only developing its business but also, and perhaps most importantly, remaining competitive.
In 2018, McKinsey & Company experts identified Poland and other countries in the CEE region as “digital challengers” – that is, countries that are in a unique position and which, thanks to special competitive advantages, could position new technologies as driving forces for their economies, thus entering the top league of the digital world successfully.
The advantages mentioned above include not having outdated technologies and infrastructure that would make companies cling to non-innovative solutions, a high level of entrepreneurship, and access to a skilled, well-educated workforce. All these advantages are factors that at the same time facilitate innovation.
Polish companies seem to be leveraging these advantages more and more. Even before the outbreak of the pandemic, one in three companies in the country was active in the field of innovation. Even then, Polish companies stated that by implementing innovations they were improving the quality of customer service and adapting to their requirements better, improving the quality of production, increasing labour productivity, as well as winning new customers, and increasing turnover.
This drive for innovation is observable in the economy, especially the digital economy. In the three pre-pandemic years, digital economy in Poland was growing at 7.2%, faster than in the countries of the European “big five” – France, Germany, Italy, Spain, and the UK.
Today, McKinsey experts – observing the acceleration of digital transformation experienced by Polish companies – can confidently say “we told you so”. In the first few months of the pandemic, the growth rate of Polish digital economy was already over 18%. This is 2.5 times faster than the average growth in 2017-2019.
One might say that Polish companies obviously had no other choice and had to adapt. Of course, the pandemic facilitated this acceleration, but domestic companies simply ran faster than others in this race. Hence, Euromonitor estimates that by 2025 the e-commerce sector in Poland will already account for 19% of total trade (5 p.p. more than in 2020), compared to 17% in Germany (3 p.p. more) and only 12% in Italy (up by 4 p.p).
This situation has also demonstrated the advantages of innovative thinking and readiness for constant change. During the pandemic, at least 3.6 million of new “digital” clients have emerged in Poland. And Polish companies responded to this shift – the number of economic sectors where digital services are regularly used has grown by more than 60%. This is a good foundation that showcases the mobilisation of Polish companies to race against the best in the digital world. All this despite the crisis driven by the war in Ukraine, rising inflation, and supply chain disruption. Thanks to digital transformation, we will weather this crisis and similar ones with greater ease.
Tomorrow, skills will be needed
“I’m looking for people to join the Data Science team, can you recommend anyone?” I know that this question, or a similar one, will be asked during the virtual coffee with my client. I cannot recommend anyone. I am myself looking for a person with such skills to join my team. In Poland, not only Google recruits analysts and engineers. All Polish companies that are trying to keep up with the pace of digital change are recruiting.
But the market is looking for digital skills in a broad sense. The demand for specialists in various areas of “digital stuff” is only going to grow. Meanwhile, according to the European Commission’s DESI study, only 18% of Polish companies provide their employees with ICT training; this is almost on par with EU averages. I was made aware of the huge demand for education in the field of digital skills by the fact that in just three weeks, over 19,000 people signed up for the training programme organised jointly by Google and the Warsaw School of Economics, entitled ‘Skills for Tomorrow’, even though we initially planned only 8,000 participants. People are an essential component of innovation.
Readiness for change and innovation requires suitable tools as well. Polish companies are increasingly willing to implement advanced digital technologies that allow them to quickly adapt to external events and changes expected by their customers and business partners.
According to various studies, between 15 and 24% of companies in Poland use cloud computing services, and the European Commission estimates that 18% employ artificial intelligence in their operations. And although these numbers indicate a potential that has yet to be tapped, trends are important – every year these indicators go up significantly. Outstanding examples of innovators using advanced technologies in Poland include such market leaders as the clothing company LPP or the global start-up success story Booksy (an application for making appointments with, e.g. beauticians or hairdressers) – they utilise cloud technologies to continually respond to the need for change and innovation.
Innovation Should Serve Everybody
The virtual coffee with my client ends with an exchange of observations about how innovations should encompass not just business interests, but also the well-being of our planet. “The bubble wrap the goods are packaged in was made with recycled materials.” “Want to return products from several different orders? Now you can send them back to us in a single return parcel to reduce your carbon footprint.” These are just a few examples that have caught my eye in recent weeks.
All companies in Poland that introduce friendlier solutions for our planet deserve thanks. At the same time, they demonstrate their innovativeness through best practice. Since Polish companies have proven that they can both adapt to changing conditions and seize opportunities to succeed in the digital world, why shouldn’t they also set the standard in the field of sustainable business development?
Poland has unquestionable potential and unique competitive advantages, and our companies have the exceptional courage to take bold and sound decisions. All entrepreneurs should therefore take to heart the call to focus on innovation not only in words, but also in actions; not in some sectors of the economy, but in all of them; not occasionally, but every day. The digital world is running forward, and we should run faster than everyone else. ©℗