Today, I want to share an exciting chapter of my journey: transitioning from retail to the ambitious goal of promoting Poland as a global IT powerhouse. Poland, with its dynamic economy and rich talent pool, is rapidly becoming a prime destination for IT sourcing. With a strategic location and a growing reputation in technology, Poland is not just a place to produce but to innovate and create.
Let’s dive into why Poland stands out in the global IT landscape.
NEW FAVORITE PLACE TO IT SOURCING
Poland: THE POWER TO DELIVER
With a population of 38 million, the country is located at the intersection of important transportation routes in Europe. The sixth largest economy in the European Union attracting billions of dollars of investment in various industries, including the IT sector. Top of the list of preferred countries as a place for outsourcing technical support. High productivity rates, easy access to skilled experts in new technologies and nearly 600,000 people employed in the IT sector. It’s not just about “assemble, connect, and produce,” but also “think and create.” Welcome to Poland!
“Once a land of mass emigration, Poland is now experiencing a reverse brain drain, attracting educated individuals to work in its rapidly expanding technology sector,” notes Euronews. However, this is an outcome of the country’s overall economic development, earning it the rightful title of the economic tiger of Europe. This leap of the tiger looks truly impressive.
GERMANY – POLAND – CHINA
Let’s go back in time for a moment. Twenty years ago, in May 2004, the largest enlargement of the European Union in history took place. The Community was then joined by 10 new countries. But in the corridors of the EU, there was a whispered understanding: the key player in this process is Poland.
By admitting Poland into the club of developed European nations, the Union gained at once a highly populous member state, situated at the intersection of important transportation routes in Europe. This is where a strategic hub for connections between Western Europe, Eastern Europe, and Scandinavia lies. This is where a huge sales market is located and where a dynamically developing and enriching society with European aspirations is thriving. Undoubtedly, joining the EU was also a true game changer for Poland itself. Inclusion in the EU single market and in the global supply chain proved to be a real developmental boost for Poland. Time has shown that Poland has made excellent use of its opportunity, becoming, alongside Ireland, one of the leaders of European economic growth. In 2004, unemployment in Poland peaked at an unprecedented 20 percent. After 20 years, it stands at 2.7 percent – the absolute European top – and is at one of the lowest unemployment levels among highly developed countries in the world. Over two decades, income per capita in Poland has tripled. No other country in Europe can boast of such dynamism.
The most compelling example of the Polish success story, however, is its relationship with its closest Western neighbor. In recent years, Poland has become one of the most important trading partners of Germany – the most powerful economy in the EU – surpassing France, Italy, Spain, and many other countries. Poland has simply taken over this market and is currently competing for the top spot with – attention! – China. Moreover, according to current data, Poland may, for the first time, replace the Middle Kingdom as Germany’s most important trading partner. Such information was provided at the end of March 2024 by the German newspaper “Der Tagesspiegel,” citing an analysis conducted by Investitionsbank Berlin (IBB).
Both economies – Polish and German – operate in a close symbiosis. This includes not only trade but also investments, the flow of technologi- cal ideas, capital, human resources, patents, as well as standards and quality. Geographical proximity also implies mental and cultural affinity. Poland still offers a more favorable quality-to-price ratio and leverages the reputation of being a country of good specialists for a reasonable price. And in many respects, such as the level of digitalization of public services, it is surpassing its Western neighbor today.
MADE IN POLAND CUISINE
Comparisons to the Asian tigers appear surprisingly often in reference to Poland.
Center of modern business services In June 2023, modern business services centers were located in 87 cities. The total number of jobs in the sector exceeded 1,000 in 18 cities, and 10,000 in 8 cities. Kraków remains the leader in terms of the number of employees. Currently, Kraków centers employ nearly 98,000 people, accounting for 22.5% of the sector’s employees in Poland. Warsaw (95,300) and Wrocław (63,400) rank next in terms of the number of employees. The largest increase in employment in the past year was recorded in Poznań (19%), Warsaw (13.6%) and the Tri-City (12.6%).
A year ago, the German business newspaper “Handelsblatt” wrote in big letters on its front page that the country on the Vistula River was emerging as a new economic power: The thesis of the article was: “Poland, serving as a bridge to the East, is writing its own economic success story.”
The country with 38 million inhabitants, the sixth-largest economy in the EU, is rapidly closing the gap with the wealthiest and most advanced states of the EU Community, and in the IT sector, it is already one of the leaders and a global player. However, the strength of the Polish economy lies in its diversification, diversity, and increasing technological advancement
Traditionally, Polish food enjoys an excellent reputation. In recent years, however, the country on the Vistula River has also become a true manufacturing hub of Europe. It is here that such industrial giants as Volkswagen, ArcelorMittal, Procter & Gamble, Siemens, Whirlpool, Daimler, Bosch and LG have located their plants.
In several industries, Poland has emerged as the absolute European leader in the production and export of goods. No other country produces and sells such a large quantity of home appliances and furniture. Windows and doors made in Poland are now exported to 75 countries globally, while Polish lithium-ion batteries power all of Europe. In these fields, the only competition for Poles comes from the Chinese.
However, it’s not just about “assemble, connect, and produce,” but also “think and create.” In the near future, one of the largest technological projects worth $4.6 billion will be implemented in Poland: near Wrocław, the American company Intel is establishing a plant specializing in semiconductor integration and testing, which is one of the most important sectors of the economy today. The Silicon Valley giant already has a large research and development (R&D) department in Poland, where microprocessors are designed. Soon, Volvo Cars will open its research and development center in Krakow. It will focus on developing software for Volvo’s electric models. A technology and manufacturing hub is also being established by Visa, one of the world leaders in digital commerce and payments.
The previously mentioned “Handelsblatt” notes that Poland, as a European investment destination, is currently on an upward trajectory. It cites data from the European Investment Monitor (EIM), indicating that in 2022 alone, foreign direct investment (FDI) in Poland increased by 23 percent.
“No other country in the EU leverages changes in global supply chains as much as Germany’s eastern neighbor,” concludes the newspaper, adding that nearly every fourth European company today chooses Poland when planning production relocation.
The influx of FDI into Poland last year was over six times higher than a decade ago. According to estimates from the Polish Economic Institute, in 2023, the level of foreign investment in Poland reached 3.9 percent of GDP.
Poland has also excelled in three stress tests: the global financial crisis of 2008-2012 (being the only country in Europe to avoid recession), the pandemic, and the war in Ukraine. It is supported by favorable economic trends. According to a Reuters/Maersk analysis, the global business landscape is now inclined towards building shortened supply chains so that sources of supply are located close to the client and target markets. This is a response to the turbulent experiences of recent years. And this is where Poland distinguishes itself with its central location, wealth of skilled employees, social and legal stability, and significant internal consumption. It is safe, stable and friendly on the Vistula River today.
WORLD CHAMPIONS IN INFORMATION TECHNOLOGY
The success of the Polish economy relies on an army of over a dozen million employees continuously acquiring new skills. According to Eurostat and OECD data, Poles are at the forefront of European societies in terms of the number of hours worked.
The vanguard of this army and its elite consists of the employees of the Polish information technology sector. Today, it is primarily based on expertise and advanced IT services. This is impressive, considering that in the 1990s Poland started out as a reservoir of “pianists,” i.e. employees who “typed in” invoices and handled simple processes in the first emerging shared service centers. The training ground for Polish programmers and IT consultants also included hundreds of multinational corporations, where they honed their skills in building and developing IT systems in various technologies.
Today, alongside Estonia and Lithuania, Poland stands as one of the top three most competitive markets for the IT industry in Central and Eastern Europe. This is data from the Emerging Europe (Future of IT 2022) study, in which Poland also triumphed in the category of education and preparation of employees. The London-based center pays particular attention to the personnel potential, education and experience of Polish specialists.
Today, about 590,000 people work in the IT sector in Poland. Each year, this number increases by 6%, fueled by a growing number of IT students and graduates. Suffice it to say that in the 2022/2023 academic year alone, 44 thousand people began studying IT! Poland currently has a very favorable university enrollment rate, with as many as 42 percent of individuals aged 25-43 holding a university degree, and there are more than 1.2 million students awaiting their diploma at the moment.
The level of English language proficiency is also high. According to the EF EPI 2023 index, Poland is among the countries included in the category with high English proficiency, which ranks our country in the 13th position out of 113 assessed countries.
All these figures translate into tangible gains: the value of the IT market in Poland is growing all the time. The IT sector currently accounts for 8 percent of Poland ’s GDP, with the software development market estimated at €8.8 billion.
PLAY POLAND
In another report titled “Poland IT Sector 2023/2024” ISI Emerging Markets Group experts point out that “Poland’s IT sector is booming thanks to the development of innovative technologies such as cloud computing, artificial intelligence and the Internet of Things.” The upward curve is particularly visible in the area of IT services and outsourcing, as well as in the gaming industry. The latter is a true gem in the crown of the Polish IT sector. About 530 games are produced in Poland each year.
The most famous is The Witcher, a cult game created by the Polish company CD Projekt, discounted by a Netflix series. This world-famous pop culture phenomenon was created thanks to the talent of Polish programmers. New gaming companies, like those involved in 3D digital animation, are mushrooming. According to the report by the Polish Agency for Enterprise Development titled “The Game Industry of Poland – report 2023,” the revenues of the Polish game development industry amounted to €1.286 billion in 2022. It also states that in May 2023, there were around 494 game producers and publishers operating in Poland, employing over 15,000 people. And finally, the true litmus test confirming the condition of the Information Technology sector in Poland: Over the past few years, billion-dollar investments in the Polish IT industry have been announced by tech giants such as Microsoft, Google, and Intel. “Poland stands out for having excellent programmers. The ratio of quality to the cost of our resources is often much better than in Western Europe,” concludes Baker Tilly TPA, a consulting firm, in its 2023 report.
However, Poland also has something that other countries in Central and Eastern Europe do not: the right size. On one hand, this refers to the size of the IT sector, and on the other, to a large and receptive domestic market with significant demand, surpassing competitors in the region.
WITHIN AN HOUR IN PARIS
Today, a Polish export commodity in the IT industry is the aforementioned outsourcing of IT services and support for modern business services. A report by the London-based ISI Emerging Markets Group indicates that Poland’s IT industry is supported by steadily growing investment in automation and optimization of business processes.
During the COVID-19 pandemic, Polish companies with years of specialization in these fields, received an extra stimulus for development. Lockdowns, extended supply chains, and the crisis of “analog” business thinking accelerated or even forced the digital transformation and digitalization of entire economies. Polish companies were among the first to switch to digital mode. Technological advancement and earlier investments by companies in digital transformation, flexibility, experience in adapting to changing market conditions, but above all, easy access to the Polish army of on-site specialists – all this contributed to this transition. Shortly after, major Western corporations came knocking at their doors.
In the GBS World Ranking 2022, Poland was ranked as the second most attractive location in the world for outsourcing IT services, just behind India, which has long been present in this segment. Noteworthy, this is not just a theoretical ranking but a practical compilation based on interviews with managers from over 380 global companies that use such services. In the same ranking, Poland also topped the list of preferred countries as a place for outsourcing technical support, and was named among the first three locations in the general IT services and data analytics categories.
Poland and all of Central and Eastern Europe are rapidly catching up with the Asia-Pacific countries that have dominated the IT services segment for years.
This is because in addition to such important factors for foreign investors as knowledge, skills, lower costs and access to cheaper IT specialists, the location has also begun key. Nearshoring and reshoring have become trendy again. This is evident in the placement of new investments in highly specialized knowledge-based processes. And it is Poland that has become one of the key players in the European IT sector thanks to its skilled workforce.
On top of that, it has been integrated into the EU single market and common political system. Furthermore, thanks to the expansion of airports, an increasingly dense network of connections, and the absence of logistical and formal issues (including visa matters), Polish specialists with technological competencies of the future can reach any part of Europe within the time it takes to travel from Poznan to Warsaw or Krakow. And within just a few, or a dozen hours, they can reach most destinations worldwide.
THE SKY IS THE LIMIT
The Polish IT sector is following new trends at lightning speed. Today, technology-driven digitalization and transformation are on the lips of the entire business world. These are the areas in which Polish employees in this industry specialize, handling advanced, knowledge-based processes. “The sky is the limit,” they seem to say.
In the background, we see the development of artificial intelligence, machine learning, intelligent process automation (IPA), robotization, and big data – new challenges, new specializations.
The result? Despite pandemics, the energy crisis, trade wars and the conflict in Ukraine, Poland remains one of the world’s most attractive markets for the modern business services sector. Since 2019, there has been a rise of nearly 100,000 jobs in this sector in Poland. Year-on-year, the number of employees in the sector is growing by 8 percent. These are the figures from a report prepared by the Association of Business Service Leaders ABSL titled “The modern business services sector in Poland 2023.”
The largest slice of this pie consists of highly specialized services. “The modern business services sector in Poland includes a total of more than 1,800 business process outsourcing (BPO), shared services (SSC/GBS), IT and research and development (R&D) centers. The share of IT centers in the sector is now more than 45 percent. At the same time, IT services account for 50 percent of new investments, which significantly translates into the growth of highly specialized services,” according to a report by ABSL, an organization that brings together more than 240 of the world’s largest companies.
The value of Polish imports of knowledge-intensive business services was $2 billion in 2005, compared to $17.5 billion in 2022. Even more impressive is the increase in exports from $1.5 billion (2005) to $30.3 billion (2022). Let’s also take a look at another report from the consulting firm Deloitte titled “Global Shared Services & Outsourcing Survey 2023.” It analyzed the most popular Shared Service Center locations in 57 countries around the world. The top three positions were taken by India, Poland, and Mexico, respectively. Poland is also mentioned in the report among the group of countries with the highest percentage increase in customer preferences for the location of Shared Services Centers since 2021.
Among the recommendations for Poland as a GBS and SSC location, the same arguments are reiterated in the Deloitte report: access to qualified experts, positive customer experiences, Poland’s membership in the European Union and its integration into the EU market, legal stability, cybersecurity plus high productivity rates and excellent quality at a reasonable price. And these are pillars that won’t be shaken by any pandemic.
Welcome to Poland
38 million inhabitants
6th largest EU economy
3.9% GDP – level of foreign investment in Poland (2023)
8% GDP – value of the IT sector
EUR 8.8 bln – value of the software development market
over 1,800 business process outsourcing (BPO), shared services (SSC/GBS), IT and research and development (R&D) centers
590,000 employees working in the IT sector
1.2 million university students
42% people aged 25-43 have higher education
494 game producers and publishers employing over 15,000 people
USD 17.5 bln – value of import of knowledge-intensive business services (2022)
USD 30.3 bln – value of exports of knowledge-intensive business services (2022)
This article was inspired by insights from All for One Poland, a leading IT and consulting service provider. The views expressed are my own, and I am proud to share the achievements and capabilities of Polish IT through my association with this esteemed company. For more information, visit All for One Poland.
