Geographies in Depth

Three ways Poland can boost its digital growth

Rafał Trzaskowski
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The Digital Economy

Poland is an economy in transition, going from being efficiency-driven to innovation-driven, where the role of the information and communications technologies (ICT) sector is critical. As take-up of ICT technology becomes increasingly common among Polish citizens and entrepreneurs, we anticipate that the role of this sector will increase. As it does, we will need to learn how to take full advantage of new technologies while creating conditions for growth.

The past decade in Poland could be described as the digital decade. In 2004 only 26% of households had an internet connection; that figure is now at 72%. During the past 10 years, the proportion of social media users surged. Over the same period, the number of sites with Polish domains (.pl) has increased tenfold (from about 250,000 to almost 2.5 million); the Polish version of Wikipedia is now one of the world’s largest non-English editions.

This success demonstrates how open Poland has been to new technologies. The value of the internet economy has doubled in the past six years, reaching PLN 93 billion (€22.5 billion), or 5.8% of GDP.

We expect the sector will continue to grow in importance; its potential for growth is extraordinary. This potential relies on three factors:

  1. Building human capital
  2. Identifying opportunities given by technology
  3. Preparing conditions for the development of a strong and secure ICT European market

To achieve these, there is still a lot to work to do. In Poland, IT skills are below the European average – nearly 60% of the population can’t use a computer or can perform only one or two tasks – and only 18% have comprehensive computer skills. Moreover, Poland is among countries where few (8.2%) small-to-medium enterprises sell through the internet. Currently only 27% of Polish SMEs are using the internet as a channel to attract sales. The reason for this may be a low level of digital skills among entrepreneurs who do not recognize the potential benefits of ICT. That is why digital literacy and an awareness of digital possibilities are so important.

The richness of the digital world gives us several options. One example, something that might be crucial for entrepreneurs and the economy, is e-commerce. Online trading offers us the chance to be a global player from the moment a company opens, without having to develop costly sales structures and endure a slow pace of expansion. Smaller companies, especially, stand to benefit. One example is a small company from Olsztyn, which produces and sells 3D printers. It raised its initial capital through crowdfunding – this year 5,000 printers were bought by Dell.

This illustrates the sort of opportunities Polish entrepreneurs should be searching for in the digital sector. But politicians have their job to do, too. The challenge is to build a single market that can be both prosperous and secure.

The single market for digital is still under construction. We have already adopted the directive on consumer rights and are working, with others, on the Payment Services Directive II, which will facilitate mobile and card payments. But there is still more to do.

In this context, I find data protection provisions particularly important. The lack of proper regulation, at an EU level, impedes digital development and growth. Work on the general regulation on data protection is vital in at least three ways:

  1. It will increase trust among citizens and consumers, which is necessary for e-business to flourish. The digital economy can’t function without the trust of the people who use it. (Online shoppers, however, are still not convinced about the safety of their transactions. Around 42% of shoppers in Poland consider internet shopping to be more risky than traditional forms.)
  1. Implementing provisions for data protection will end costly market fragmentation. Administrative burdens associated with this fragmentation already cost businesses about €2.3 billion a year.
  1. It will send a clear message to the outside world as to Europe’s stance on internet freedom. Privacy and security on the internet are key values and solid foundations for a sound digital society.

The role of digitalization for the Polish economy is profound, and continues to increase in importance. We are on the road to digital growth. We just need to find ways to use our potential – something that needs the support of Polish citizens and coordinated action by the European authorities. Working together, we can provide the best possible conditions for the growth of a prosperous and secure ICT single market.

Author: Rafał Trzaskowski is Poland’s minister of Administration and Digitization

Image: A man types on a computer keyboard in this illustration picture taken in Warsaw February 28, 2013. REUTERS/Kacper Pempel 

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Related topics:
Geographies in DepthFinancial and Monetary SystemsEconomic GrowthBusiness
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