Warsaw Business Journal June/July 2017

WARSAW

BUSINESS JOURNAL E c o n o my | Te c h

N e ws | Re a l E s t a t e

JUNE/JULY 2017 ~ No. 06/07 (39)

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For daily news visit us at wbj.pl

Is Poland’s tech industry sitting down on the job?

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INDUSTRY 4.0 | POLAND’S SILICON VALLEY | HEALTH TECH OUTLET CENTERS | LUXURY HOMES | OFFICE CHILL OUT

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JUNE/JULY INDUSTRY 4.0 26 Feature: Are we there yet? 16 Interview: Accenture’s Jacek Borek on Artificial Intelligence in business 20 Interview: Siemens’s Tomasz Heiduk on automated manufacturing

IN REVIEW News highlights from the previous month from wbj.pl

COMMENTARY Telemedicine...........................12 Data protection........................13 Cybercrime..............................14 Interview: Andrzej Rzońca.......................24

LOKALE IMMOBILIA

A BREAKTHROUGH YEAR FOR START-UPS IN CEE 18 Interview: Rafał Plutecki, Google Campus Warsaw

TOP PHOTO SHUTTERSTOCK, ALL OTHERS PRESS MATERIAL

20 Feature: Where is Poland’s Silicon Valley? 40 Interview: Tomasz Rudolf, The Heart Warsaw

Real estate news....................43 Outlet centers..........................48 Luxury residential..................52 Catella interview.....................56 Second homes.........................58 Chillout areas..........................62

LIFE + STYLE Nautical fashion......................71 Coastal resorts........................74

35 Feature: HealthTech roundup

39 Interview: Bayer – collaborating with start-ups

FutureTech Congress.............78 European Economic Congress..................................79 ReDI CEE Trade Fair...............80

MEDICAL TECHNOLOGY

EVENTS

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FROM OUR EDITOR Morten Lindholm Editor-in-Chief/Publisher mlindholm@valkea.com

Beata Socha

Managing Editor

bsocha@wbj.pl

Adam Zdrodowski

Managing Editor, Lokale Immobillia

This outing, we’ve focused on the Fourth Industrial Revolution, or Industry 4.0 as it’s now commonly regarded, and asked if Poland is even ready for widespread automation and inter-connectivity in its manufacturing sector.

azdrodowski@wbj.pl

Michael Evans Copy Editor

Kevin Demaria Art Director

Contributors

Ewa Boniecka-Bromke Magdalena Iwańska Sergiusz Prokurat Alex Webber Sales

Justyna Lund jlund@valkea.com Katarzyna Pomierna kpomierna@valkea.com A. Julita Pryzmont jpryzmont@valkea.com PR & Marketing

Agata Wolny awolny@valkea.com Magdalena Czopur Subscriptions

mczopur@valkea.com

Summer wins BY MORTEN LINDHOLM

Krzysztof Wiliński Print & Distribution

dystrybucja@valkea.com Magda Gajewska Event Director, Valkea Events

mgajewska@valkea.com

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Contact: phone: +48 22 257 75 00 fax: +48 22 257 75 99 e-mail: wbj@wbj.pl

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PORTRAIT BY KEVIN DEMARIA

IF THERE’S A FAVORITE TIME OF MINE IN WARSAW, then it’s summer: traffic halves, the city slows and people have more time to talk a little deeper about issues at work and in play. In many ways, that’s served as the inspiration behind our June/July issue. This outing, we’ve focused on the Fourth Industrial Revolution, or Industry 4.0 as it’s now commonly regarded, and asked if Poland is even ready for widespread automation and inter-connectivity in its manufacturing sector. Helping us to the bottom of that is Siemens board member Tomasz Haiduk, who talks in this issue about modern robotics: both the opportunities it offers and the dangers it carries. Further, we also sat down with Jacek Borek, a managing director at Accenture Poland, to discuss how Artificial Intelligence and automation stand to influence business processes and which jobs will disappear and which will change. Other highlights include our feature on the Polish start-up ecosystem: with more new accelerators and VC funds being formed, we’ve picked the right time to take a closer look at Poland’s own Silicon Valley. As such, we’ve spoken with the heads of Google Campus Waraw and The Heart of Warsaw to learn more about the foundations that the tech start-up scene is being built on. Continuing the futuristic angle, we’ve also conducted our own exploration of Poland’s rapidly growing HealthTech industry, finding out which technologies are the hottest right now, and why pharma giants such as Bayer are looking to partner up with Polish medical start-ups. Moving on, our Lokale Immobilia section examines the luxury residential market, as well as outlet centers: are these segments still growing, and who are the clients they are catering for? Yet for all that, this issue isn’t all work, work, work. With the rising temperatures in mind, we look at the most radical chillout areas in Poland’s office buildings, while our Life+Style pages focus on all that’s maritime: from coastal breaks to summery seaside fashion.

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NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL

This is a very important investment for Poland, this is an issue related to the improvement of energy security of Poland, but also of the entire region,” said Poland’s PM Beata Szydło upon signing a memorandum of understanding on the Baltic Pipe gas project together with her Danish counterpart Lars Lokke Rasmussen. The project will cost between €1.6-2.2 billion and could become operational by 2020. The pipe is expected to have a capacity of 10 bcm annually. It will connect Poland with gas deposits in the North Sea. - BEATA SZYDŁO

ENERGY

SHUTTERSTOCK

ENERGA to build largest hybrid storage facility in Poland WSE-listed power utility Energa with Japanese Hitachi and power grid operator PSE will build the largest hybrid battery energy storage system in Poland. The facility will have a storage capacity of approx. 27 MWh and power capacity of approx. 6 MW. “Collaboration with experienced partners and global innovation leaders will result in intelligent network management, which will improve the reliability of energy supplies. This is an innovative undertaking but very important for the country’s energy security,” Energa CEO Daniel Obajtek said. The facility is to be built on a wind farm in Bystra, owned by Energa and will be used

to manage the electricity generated there. The storage facility is set to be completed by 2019.

financing have been made so far. “It’s hard to discuss the financing if we have not made decision whether to build the plant at all,” Tchórzewski elaborated.

ENERGY

TCHÓRZEWSKI: Decision whether to build nuclear power plant this year Poland will decide on the construction of a nuclear power plant by the end of this year, Energy Minister Krzysztof Tchórzewski said, adding that Poland first needed to determine its energy mix in relation to the EU CO2 emission standards. Initially, Poland gave itself time till 2020 to make the decision. Poland wants to build a 1,000 MW capacity nuclear power bloc by 2030, with state-owned SPV PGE EJ1 spearheading the project. No decisions regarding the

ENERGY

First US LNG shipment in Poland The first ever tanker with the US LNG has arrived at LNG terminal in Świnoujście. The gas was bought back in April by state-owned PGNiG gas group from US Cheniere Energy at a spot auction. This is the first such transaction in the region, and Poland is not planning any further deals at the moment, as PGNiG said that it is not looking for a longterm contract with a US partner right now, although mid-term options might be taken into consideration.

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WBJ

In Review M&A / BANKING

BANK PEKAO buys 51% stake in asset manager Pioneer Pekao for €140 mln WSE-listed lender Bank Pekao has signed a deal to buy a 51 percent stake in asset manager Pioneer Pekao Investment Management for €140 million from Pioneer Global Asset Management. “Total consideration which will be paid to Pioneer Global Asset Management amounted to €140 million and also includes the price for a 35 percent stake in Pekao Pioneer PTE,” the bank said in a market filing. Pekao already controls 49 percent shares of the asset manager and expects the deal to have a PLN 400 million positive impact on the company’s consolidated net profit.

bourse. The WSE hopes that the first floatation on the small cap alternative market will take place next year. “We believe that the capital market can support innovative companies in the early stages of development and prepare them for future floatations on NewConnect or the main index,” acting WSE CEO Jarosław Grzywiński said. The goal of the accelerator is to enable networking, increase interest in start-up companies, and help them in acquiring clients from listed companies, facilitate contacts between start-ups and investors on the capital market. “Our dream is to get thousands of issuers, from that number, maybe a hundred of them would end up on the NewConnect market, and ten on the main index,” said Arkadiusz Regiec, president of Beesfund.

M&A / BANKING

DEUTSCHE BANK to sell its Polish units

RETAIL

Deutsche Bank will most likely divide its business and sell its PLN-denominated mortgages, consumer loans and SME loans separately keeping the FX-denominated housing loans, following the regulator’s demand that foreign lenders exiting Poland have to keep such mortgages. “The teasers have been already sent, we are at the stage of unbinding offers now,” one source told Reuters. According to analysts, the bank’s assets could go for at least $450 million. Deutsche Bank Polska is Poland’s twelfth biggest lender in terms of balance sheet assets. Banks interested in the acquisitions include, mBank, BZ WBK and Millennium.

The ruling Law and Justice (PiS) party has announced a new idea on restricting trade on Sundays. The latest proposal is to allow trade on these days, but only till 1-2 p.m. Deputy PM Mateusz Morawiecki called the idea “very interesting.” However, Alfred Bujar from the NSZZ Solidarność labor union said that his organization stands by the initial project to fully ban Sunday trade. He stated that the current project contains many exemptions, and if someone wants to make small purchases, they will be able to do so at gas stations or train or bus terminals.

New approach to the SUNDAY TRADE BAN

RETAIL/PHARMA M&A / BANKING

PZU and PFR finalize Pekao takeover State-owned insurer and state investment vehicle PFR has finalized the takeover of Pekao from UniCredit. The two entities acquired a 32.8 percent stake in Poland’s second biggest bank for PLN 10.6 billion in a deal signed in December last year. “This is a historic moment. By completing the acquisition of Bank Pekao, PZU becomes the largest financial group in the CEE region, and the leader in both the insurance and banking sectors and in asset management,” PZU CEO Paweł Surówka said. PZU has taken a more than 20 percent stake, while PFR will have a 12.8 percent stake in Pekao. FINANCE

WSE launches start-up accelerator The Warsaw Stock Exchange has launched a start-up accelerator with Beesfund crowdfunding platform. The aim of the project is to create potential IPOs for the Warsaw

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DUDA signs new pharmacy ownership law Despite protests, President Andrzej Duda has signed a law which will allow only professional pharmacists to open a pharmacy. The new regulations also impose geographic and demographic limits on the number of such facilities. Once the bill comes into force, a permit to run a pharmacy will only be granted to authorized pharmacists or companies owned by pharmacists and operating exclusively in that sector. The bill faced numerous protests from the medical community, the opposition, and even government officials. Deputy PMs Jarosław Gowin and Mariusz Morawiecki voiced their concerns, saying that the law unfairly privileges pharmacists and encroaches on free market principles. The health ministry explained that the new regulations are needed in order to curb the growing market share of pharmacy chains, which according to the ministry data, control some 50 percent of the market.

TRENDING STATS

7.1%

unemployment in April (GUS)

3.6%

Poland’s 2017 GDP forecast, raised from the previous 3.2% (OECD)

4.9%

retail sales growth in April (y/y, Eurostat)

52.7

Poland’s PMI in May, a drop from 54.1 in April (Markit)

Poland’s Q1 GDP growth (y/y, GUS)

1.9%

Poland’s inflation rate in May (y/y, GUS)

8.1%

Retail sales growth in April (y/y, GUS)

4.1%

Wage increase in April (y/y, GUS)

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WBJ

In Review TELECOMS

POLISH TELECOMS to lose PLN 55 mln on average due to roaming-free regulations According to the consultancy EY, the average Polish telecom company will lose PLN 55 million EBITDA and PLN 180 million in revenue following the “roam like at home” regulations which will eliminate roaming fees within the EU starting on June 15. “Decreasing revenue and other burdens, including the most expensive auction in Europe for 800MHz frequencies, mean that the roam like at home regulation is challenging for Polish telecoms. It’s clear that for free roaming both the operators as well as their customers will pay the price,” the study said. According to the report, since 2007, when the first EU regulations on roaming fees were introduced, prices have dropped by 92 percent, but only for calls, as data fees vary greatly on different markets. IT

CD PROJEKT Q1 net profits on the rise WSE-listed video games producer CD Projekt had PLN 45.26 million consolidated net profit in Q1, representing a 39 percent increase y/y. Operating profit amounted

JUNE/JULY 2017 W B J

to PLN 53.84 million (39.5 percent y/y growth), while revenues stood at PLN 99.3 million (14.2 percent y/y growth). The firm plans to launch its latest online free-to-play game Gwent, based in the popular Witcher universe, in China. The company is close to securing certification there, and wants to enter the local market by the end of the year, the company’s CEO Adam Kiciński said. IT

1,000 Polish computers affected by WANNACRY RANSOMWARE According to Polish CERT, some 1,235 unique Polish IP domains were affected by the WannaCry ransomware. That number represents 0.65 percent of all infected IPs. “The Internal Security Agency, the Polish Computer Emergency Response Team, as well as institutions connected to the Ministry of Digital Affairs are monitoring the situation all the time,” secret service coordinator Stanisław Żaryn said. The malware, which affected some 200,000 IPs across the globe, encrypted users’ files, demanding $300 to restore them. According to the White House, under $70,000 had been paid in total by those affected.

SAVE THE DATE

EFNI 2017: Globalism, bilateralism, economic patriotism? Challenges for society and business September 27-29, 2017 in Sopot This fall Sopot will become the center of an exceptional international debate for the seventh time. The most influential leaders from business, politics and academia will discuss whether globalization reached its peak. Will international business cooperate to overcome disintegration trends? Is the truth still relevant? What is the impact of social media and fake news on democracy, politics, and society? Will GDP give way to the happiness index? Can we live a life without owning anything? Register at efni.pl

BY THE NUMBERS

To add a lighter tone to its reports, WBJ is launching a cycle portraying interesting statistics about Poland. Some of them are well known, some can be surprising. All of them are impressive. They can serve as interesting conversation starters or maybe even prompt a new business endeavor. Enjoy learning about what Poles do well, or at least on a large scale

No. 1 MUSHROOM exporter in the world

SHUTTERSTOCK

Over the past five years, mushroom exports have increased by 25 percent. The UK and Germany are the biggest importers of Polish mushrooms and together account for some 90 percent of Poland’s total mushroom exports. It doesn’t mean that there is no competition out there. The UK market is reportedly a battleground for Dutch, Irish and Polish mushroom producers. Poles seem to be winning, mainly on price-to-quality ratio.

The value of CARDBOARD and GLASS packaging manufactured in 2016 in Poland stood at €9 billion Package manufacturing is considered a good barometer for the economy: for every percentage point of GDP growth, the packaging market increases by 2 percent, according to the head of industry association PIO, Wacław Wasiak. He also claims that the 500+ family subsidy program is spinning the wheel of the industry: out of the PLN 23 billion earmarked to be transferred to Polish families this year, PLN 10 billion will go to the FMCG market, which – more often than not – requires a lot of packaging.

99% of the SILVER produced by Poland’s mining giant KGHM is exported

Every third piece of FURNITURE manufactured in Poland is exported to Germany

KGHM’s silver is shipped mostly to the US, the UK and Australia. Churning out 41 million ounces of the metal, the firm is the largest silver producer in the world. It also ranks sixth in copper production. If you own something made of silver, there’s a good chance it was made from silver produced by the Polish mining conglomerate.

Poland is the sixth largest producer and the fourth largest exporter of furniture in the world, with a 6.3 percent market share. In 2016 it managed to overtake Japan, Canada and France – all furniture magnates – in furniture production value. It is no secret that a third of Poland’s exports is readyto-assemble furniture manufactured in IKEA’s production plants in Poland.

Top BLACKBERRY producer in Europe No, it’s not about the phones – it’s about the juicy little round fruit that is excellent for desserts, particularly pancakes and ice cream. Poland has over 7,000 hectares of blackberry plantations and supplies its produce to 20 countries on four continents. The reason the fruit remains fresh is because it is cooled down within 30 minutes of being picked, according to the Polish Berry Cooperative. July 1 has been named the Polish Blackberry holiday. It is the date when the blackberry picking season begins.

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Commentary EXPERT VIEWS ON CURRENT BUSINESS AND SOCIAL TRENDS

Virtual agents, customer service, smart cities – we asked Jacek Borek, managing director at Accenture about the changes that Artificial Intelligence will bring in the coming years

ALL PORTRAITS COURTESY OF PARTNERS EXCEPT TOP LEFT; SHUTTERSTOCK

Entrepreneur Rafał Plutecki, head of Google Campus Warsaw, discusses Poland’s start-up ecosystem

How is automation transforming the manufacturing industry and sports – interview with Tomasz Haiduk, board member and director at Siemens

Chief economic adviser to Civic Platform Andrzej Rzońca shares his views on budget deficit, social support programs, fostering development and innovation

12-14

Find out lawyers’ views on telemedicine, data protection and cybercrime

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WBJ COMMENTARY | OPINION

Paweł Hincz

Juliusz Krzyżanowski

Legal counsel, partner WKB Wierciński, Kwieciński, Baehr

Advocate WKB Wierciński, Kwieciński, Baehr

Telemedicine – the future of healthcare services

As e-health is a very broad term, it also pertains to a wide range of products e.g. mobile applications, for selfdiagnosis, diagnostics applications or even treatment. Such products are often offered by start-up companies. It seems that healthcare is one of the fastest growing sectors in which start-ups operate. Consequently, we strongly believe that companies offering innovative POLAND IS STILL CATCHING UP TO OTHER EUROPEAN COUNTRIES WHEN IT products within telemedicine/e-health/m-health have COMES TO PROVIDING E-HEALTH SERVICES, BUT THE POTENTIAL OF HEALTH a bright future, and Poland is one of the best markets in the European Union in which to start. Many potential TECH START-UPS BODES WELL FOR THE FUTURE OF TELEMEDICINE investors are much more interested in newly established companies with an innovative idea than traditional healthcare providers. ince late 2015 it has been legal to provide Considering the above, it seems clear that Poland will healthcare services in Poland via data commu- be a great place for telemedicine and e-health product nication systems. In other words, there are no development in the very near future and, simultanedirect restrictions to developing telemedicine ously, an attractive opportunity for investors. We believe solutions for patients. that sooner or later, we will catch up with the leaders Unfortunately, Poland is still one of the and this will have a positive influence on the quality of lowest ranked places in Europe in terms of healthcare services in Poland. the level of e-health development. A primary cause is that Poland needs to catch up due to its previous longterm neglect of such solutions. All the legislation that has been aimed at developing e-health tools is behind schedule due to deficiencies in conducting projects, a lack of readiness in public healthcare entities and certain legal issues. It is assumed that by 2020 patients in Poland will be using their Internet Patient Accounts allowing access to, inter alia, medical documentation and e-prescriptions. One issue concerns the legal aspects of the security and confidentiality of patients’ sensitive personal data. Another issue is the lack of unified regulations at EU level. Today, in general, only private healthcare service providers offer certain services to their clients. Telemedicine is considered a tool for cutting patients’ treatment costs and enhancing the functioning of the healthcare system. In practical terms telemedicine will, on the one hand, make medical advice less time-consuming and more comfortable and, on the other hand, diminish queues, which are a severe problem in Poland. The more services that can be provided remotely or even by patients on their own, the more time doctors will have for the severely ill. And the time needed to see a doctor will be significantly reduced.

“We believe that sooner or later, we will catch up with the leaders and this will have a positive influence on the quality of healthcare services in Poland

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COMMENTARY | OPINION

Why GDPR is an opportunity for digital transformation Paweł Gruszecki Legal Counsellor, Partner, Head of New Technologies & Telecommunications Practice Kochański Zięba & Partners

BUSINESSES WILL FACE A NUMBER OF CHANGES IN RELATION TO GDPR. HOW WILL IT AFFECT THE PROCESSES OF DIGITAL TRANSFORMATION THAT HAS JUST BEGUN?

tudies show that the implementation of certain technological solutions within one’s business has a direct impact on increases in revenue. Such technologies may include cloud computing services (e.g. bank accounts that enable clients to use accounting services), mobile solutions, data analysis (e.g. solutions used by banks to collect and analyze the behavior of mobile application clients) and voice biometrics. Nevertheless, in Poland less than half of businesses intend to implement digital transformation this year. One of the events that may have a direct impact on accelerating this process and increasing the number of interested entities is the obligation to align the processes and infrastructure of the business to the requirements of the General Data Protection Regulation (GDPR), which will enter into force in less than 12 months, i.e. on May 25, 2018. One of the obligations under the GDPR will be to respect the privacy rule at the design stage, whereby a company should take personal data protection into account as early as at the stage of designing, developing and compiling a service, product or process (e.g. transaction service, mobile application, new sales channel or client communication channel). For this purpose, according to the European Union Agency for Network and Information Security (ENISA), new products, services or processes should be designed to: (i) minimize the amount of personal data collected from users; (ii) prevent one’s employees from having access to such data if it is not necessary; (iii) hide connections between data when it is not necessary, and (iv) process personal data at the highest aggregation level (at which such data is still useful). More information can be found in the ENISA report: “Privacy and Data Protection by Design – from policy to engineering.” Importantly, the obligation in question should already be taken into account by those companies that are in the process of, or are just starting projects in the field of digital transformation. In many cases the designed products or services will be made available to clients after May 2018. The above should be of particular interest to those involved in the implementation of such projects as they are generally liable to their clients for the compliance of the designed and implemented products, services or processes with the applicable law. Furthermore, it should be kept in mind that the implementation and then the need to ensure continued compliance with GDPR rules will require the active involvement of certain company departments, with

particular emphasis on the role of the IT department. In this respect, the nature of their work will be reshaped from maintenance tasks to active monitoring of the risks related to personal data processing by companies. Consequently, digital transformation, i.e. the implementation of new technologies, can be part of day-to-day risk management rather than a separate process, resulting in a continuous and dynamic change.

“Importantly, the obligation in question should already be taken into account by those companies that are in the process of, or are just starting projects in the field of digital transformation

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WBJ COMMENTARY | OPINION

Cybercrime – will the bank return our money and when? Katarzyna KosickaPolak Partner, legal counsel MKZ Partnerzy

ENSURING SECURITY IN BANK TRANSFERS IS THE RESPONSIBILITY OF THE BANK. HOWEVER, WHEN A CLIENT IS DECEIVED INTO REVEALING THEIR DATA TO CYBERCRIMINALS, THE SITUATION BECOMES SOMEWHAT GREY

lmost everyone uses an internet bank account nowadays. Only a small percentage of society either decides not to open a bank account of this kind or intentionally avoids accessing their account through a website or mobile application. Technical developments allow for more elaborate methods of data theft, which translates into stealing funds from bank accounts among others. Cybercriminals frequently focus directly on bank clients instead of breaking banks’ complicated security systems. The most typical forms of criminal activity in this respect are: sending viruses in email attachments, links to infected bank websites, false information containing requests to provide client data in order to confirm the ownership of the bank account, or using so-called “overlays” on websites. The purpose of these activities is to drive the client into providing their login data and then the authorization code for validating a wire transfer. Clients who fall victim to such activity are convinced that they are using their bank website. They go through several failed login attempts. Then the system presents a pretext for the client to provide an authorization code. The surprised client usually fulfils this request, but they fail to log in again. Meanwhile, after receiving the authorization code, the hacker transfers money through the legitimate website to an anonymous foreign bank account, from which the money is impossible to recover. This technique of obtaining data illegally is called phishing. It’s a more sophisticated form is pharming, where even after entering the correct address of the website of the bank, the client is directed to an infected website. The fake website is almost identical to the original one and is often equipped with the so-called “padlock.” Will the client’s funds be returned in such a situation? Where an unauthorized payment transaction occurs, the bank is obliged to immediately return the amount of the unauthorized payment transaction to the client or restore the debited payment account to a state that would have existed if the unauthorized payment transaction had not occurred. The provision is clear and on those grounds we can assume that no affected person needs to worry and can wait for a favorable resolution. However, the reality is different. The “authorization” of the transaction or the “lack thereof ” is crucial. A payment transaction is deemed authorized if the client consented to perform the payment transaction in a manner provided for in the agreement with the bank.

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Can providing the login data and authorization code to the criminal be treated as consent to perform the transaction? Unfortunately, it happens. A lot of banks take the stance that if a client provides the transaction authorization code in order to log into their bank account or confirm their data, knowing that the authorization code is used almost exclusively to validate wire transfers, then the client assents to the funds being stolen. As a representative of clients in such cases, I do not agree with this stance. Using a payment instrument and the consent to its use are two different things. The consent, thus the authorization, must be intentional. The obligation to prove that the transaction was authorized lies with the bank. Furthermore, it is the obligation of the bank to prove other circumstances indicating the authorization of the payment transaction by the client or circumstances indicating the fact that the client intentionally caused the unauthorized payment transaction, or intentionally or due to gross negligence violated at least one of their duties. It means that unless a victim of a cyberattack intentionally provides their login data to third parties, sends their data in non-encrypted messages, or leaves the data in a public place on an external carrier, they should be able to recover the lost amount. Nevertheless, the situation in which a client falls victim to a hacker attack is not always gross negligence. If the client aborts further login attempts, informs the bank or files a complaint, and notifies law enforcement agencies, it may be assumed that the client did not intend to authorize the payment transaction that was performed. Thus, the client cannot be encumbered with the consequences of the crime they fell victim to, since it is the duty of the bank as a professional body to constantly develop its security systems and carry out informational and instructional actions for their clients in order to properly execute the duties imposed by Banking Law. One such law provides that banks are obliged to make every effort to ensure the security of the financial resources kept. Therefore, in such a situation the client should exhaust all the available measures leading to recovering their funds, bearing in mind that seeking such claims is also limited in time.

SHUTTERSTOCK

WBJ COMMENTARY | AUTOMATION

The time for AI is now

AUTOMATION IS TAKING THE BUSINESS WORLD BY STORM. THE USE OF ARTIFICIAL INTELLIGENCE IN BUSINESS IS NO LONGER CONSIDERED A CUTTING-EDGE INNOVATION, IT IS BECOMING A NECESSITY. WHICH INDUSTRIES WILL AI AFFECT FIRST, WHICH JOBS WILL DISAPPEAR AND WHERE IS THE REVOLUTION HEADED? â&#x20AC;&#x201C; WBJ ASKED JACEK BOREK, MANAGING DIRECTOR AT ACCENTURE 16

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INTERVIEW BY BEATA SOCHA

WBJ: Artificial Intelligence is not a new concept: neural

such as call centers, HR, accounting etc. Will they disappear? networks have been studied since When we begin automating a prothe 1970s. Why is it changing the cess, it is necessary to understand it business world now? What has well. And this is where our advantage changed to make it possible? lies: we have a thorough understandJacek Borek: Indeed, the mathing of these processes, since we’ve ematical foundations for AI have been doing them here for years. We existed for decades. What changed deliver such services and we are now was the computing power and a new automating these processes that are way of building solutions. Compabeing outsourced to us by our clients. nies are moving away from giant Therefore, it is a very good time to monoliths that would encompass start automating and a very good way all the processes within a company. of using our resources. Now almost all modern applications Automation will affect a lot of are cloud-based, which makes them markets and businesses, but rather more autonomous and much more than talking about jobs disappearflexible. This allows systems creators ing, we should be talking about how to use outside solutions in their jobs will be changing. We have over software, like IBM’s Watson. It’s a 200,000 people employed in BPOs cloud-based tool and you can use it in and the number is increasing. It can your own applications, e.g. for image easily grow by another 100,000. Aurecognition, for analyzing unstructomation will change the business for tured data on the internet etc. the better: it will offer people more interesting and less repetitive jobs. How will widespread automation affect the job market in Poland? How will AI solutions develop Given that we have an employees’ over the next 5-10 years? Which market now, it is an ideal moment businesses and industries will for implementing more automation. adopt it next? What worries me is whether we, as Firstly, we will see even more soan economy, are ready to make the phisticated virtual agents: in banks, change from price competition to insurance, call centers and medical competition based on knowledge centers. Further down the line, we and technology. It is a big challenge, will see autonomous cars. We can and not only for Poland. already see the first driverless trains: rail transport is easier to automate Which jobs will be the first to and it is already happening. A subway go when automation based on train could easily do without a driver. Artificial Intelligence becomes We will see this automation in comcommonplace? mon use over the next decade. It will be the simple business processAnother area that will embrace es: call centers, temp work, customer automation is city-wide transport: services such as making appointsystems managing city transit and ments etc. Some of them are already road transport. We call this trend being replaced by applications, but smart cities. We are still building they are still somewhat limited. By roads in Poland, but at some point we introducing so-called virtual agents, will run out of space to build them. we can expand the portfolio of our What we’ll have to do is use them clients to the whole of society. more efficiently. One such example is There are also attempts to replace dynamic pricing to encourage people translators and interpreters, and even who don’t have to travel in rush hours journalists. For instance, in the US to do it at another time, thus relievthere are algorithms that use police ing public transport and the road reports and statistics to produce system. The same could be done in simple news pieces. the energy industry to make energy consumption more efficient. For Poland has plenty of BPO/SCC example: if you turn on your washing centers with simple processes, machine at 3 a.m. you could pay half

of what you’d pay at 9 p.m. Which other industries could benefit the most from implementing AI solutions in their business? There are two industries that should embrace AI: telecoms and banking. Telecoms is a big business but with increasingly declining margins. Banks, on the other hand, have been operating at low interest rates for years now and this is not going to change any time soon. Both these industries have a huge number of loyal customers. They know a lot about them and are in a good position to offer them entirely new services. Technology can build a lot of loyalty, much more than a person from a call center. Companies that understand that and provide the best experience to their clients will be the winners. Read more about Industry 4.0 on p. 26.

“What worries me is whether we, as an economy, are ready to make the change from price competition to competition based on knowledge and technology W B J JUNE/JULY 2017

WBJ COMMENTARY | START-UPS

WBJ: We keep hearing that Poland has great potential as a

tech start-up scene but the market is still in its infancy. What is necessary for Poland to have its own Silicon Valley? Rafał Plutecki: Silicon Valley is the world’s largest ecosystem supporting tech start-ups. The number of VCs, accelerators, mentors, entrepreneurs and exits from these companies make it the largest ecosystem in the world. It is also present in the largest market in the world, so no other country, maybe with the exception of China, will be able to catch up to it. However, Poland has a lot of strengths that can help put it on the map of the world’s tech start-up scene. First of all, you need engineers to launch a tech start-up. Poland has excellent technological universities and the number and quality of our engineers is more than sufficient. That is in fact the most difficult element to get, because you can’t just change your demographics and education overnight. What about the brain drain? It’s non-existent. It’s only a handful of cases, because IT people have great salaries in Poland. Considering purchasing power, their disposable income is even higher than in many European countries.

A breakthrough year

WBJ TALKED TO RAFAŁ PLUTECKI, HEAD OF GOOGLE CAMPUS WARSAW, ABOUT THE BUDDING TECH START-UP ECOSYSTEM

JUNE/JULY 2017 W B J

Why are the salaries in IT so high? We have a lot of large corporations, start-ups and IT outsourcing companies. All of them hire IT engineers and the high salaries are the product of that. There are virtually no unemployed software engineers in Poland. How eager are these engineers to leave their cozy corporations to launch their own start-ups? Indeed, working in a corporation offers some kind of personal comfort. In order to encourage engineers to give it up, there need to be some success stories in the market. Also, they need the entire ecosystem for people with a brilliant idea but without business knowledge of how to turn that idea into a success. That’s what accelerators, early-stage funds, and mentor networks are for.

INTERVIEW BY BEATA SOCHA

It takes at least 10 years to build the entire ecosystem. We’re on a very good trajectory to do that. This year, 2017, is a breakthrough year. The amount of co-working space is ten times of what it was a few years ago. Two years ago we barely had one functioning accelerator, now there are a dozen or so. Recently, the Polish Development Fund (PFR) organized a competition and selected 10 accelerators that it will finance. Thanks to them, there is a wide-scale training program for engineers and young entrepreneurs that will make it possible to show them how to build their own companies. Another necessary element for a functioning ecosystem is investment funds. In the early stages of a growing ecosystem, the capital must come from the state. It’s not only Poland’s problem, it’s a pan-European issue. That’s why the European Investment Fund, the fund of funds, has supported the development of the VC market in France, in Germany and now, together with PFR it will do the same in Poland. This is very important. We have the engineers, we have the accelerators and mentors to teach them how to build their business and now we also have the third component: the money. We have all the necessary ingredients for a working ecosystem. Now all we have to do is watch it grow.

ments are enormous. A Polish VC fund that invests in a start-up here has a much smaller market and we can’t expect stories such as Allegro to occur all the time. This creates a serious problem of how to match the investment risk to the potential returns. The size of the potential market and – in turn – profits affect the valuation, which makes the risk calculations more difficult. Talking to Polish start-ups you don’t see many that aim at the Polish market alone. They seem to be aware that a market of 40 million people is just too small. That’s right. We also encourage companies to go beyond the Polish market. With the right technology, you can get to any customer anywhere in the world.

Are Polish start-ups technologically on a par with the rest of the world? Technology alone does not make a start-up. What start-ups need to think about is the Product-Market Fit. They need to meet customer needs. If the revenue growth reaches 1,000 percent, then the ProductMarket Fit has been successful. We do have very good engineers and very good tech. But it is the job of the business co-founder to come in at some point and say: “We’re changing the tech to attract these customers.” It has to be businessdriven. And we need more business In Silicon Valley it’s said that if one co-founders who think globally. out of a hundred start-ups is successful, it can offset the cost of all What are the most common misthe other investments. In Poland, takes that Polish start-ups make? on the other hand, VCs tend to They often lack business skills in expect a higher success rate from their team. They can have the best their investments. Are Polish VCs product out there but without sales willing to take the risk that invest- and marketing on their team it siming in start-ups carries? ply won’t work. US investors that invest in American Each start-up needs a full skillset. start-ups know that if the company First, they need the tech co-founder manages to successfully market its and the business co-founder. Once product, it immediately gains access the Product-Market Fit has been to the entire population of the US, defined, managerial talent and team in fact of the entire English-speaking members’ complementary skillsets world and more. The success of such are crucial. The start-up needs somea start-up immediately returns all one who will go out to meet clients costs with a huge profit. Therefore, and sell the product, someone who the returns on successful investwill handle the finances. Some engi-

“Two years ago we barely had one functioning accelerator, now there are a dozen or so neers have a natural business knack but most need support. Have we had any exits in the market already? They are beginning to appear. We’ve had two companies, so called “unicorns” valued above $1 billion: Allegro and CD Projekt. The exit of home.pl was above of $100 million. The listed Amrest has recently acquired Pizza Portal. There have already been a few major exits and their number will continue to grow. A growing number of companies have revenues of dozens of millions of dollars and these companies will likely have exits over the next five years. The success stories will continue to grow and the entrepreneurs who made money on them will go back to the ecosystem as mentors and investors. The cycle will start to repeat and new entrepreneurs will have an easier time finding support. Who’s buying these companies? Are Polish IT powerhouses interested in buying out tech start-ups? Big Polish corporations are learning how to work with start-ups and we’ve seen some transactions. [Poland’s biggest bank] PKO BP has recently acquired Zencard and has confirmed its intentions to support Zencard’s expansion to other markets. Which technologies are considered the hottest right now? Artificial Intelligence, Machine Learning, Industrial Internet of Things, Cybersecurity and Cloud already have markets ready for tech. These companies are growing the fastest. Read more about Poland’s start-up ecosystem on p. 30.

W B J JUNE/JULY 2017

WBJ COMMENTARY | AUTOMATION

No time for downtime WBJ SAT DOWN WITH TOMASZ HAIDUK, BOARD MEMBER AND DIGITAL FACTORY, PROCESS INDUSTRIES AND DRIVES DIRECTOR AT SIEMENS, TO TALK ABOUT AUTOMATION IN INDUSTRY, MODERN ROBOTICS, INDUSTRY 4.0 AND THE INTERNET OF THINGS

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INTERVIEW BY SERGIUSZ PROKURAT

“There is a certain difference WBJ: What does a modern Industry 4.0 production plant look like from the inside? Tomasz Haiduk: One example of such a factory is the manufacturing plant in Września where the Volkswagen Crafter is produced. It is a huge factory – the most modern car factory in Europe. The assembly line alone is 1.5 km long. There are 170 assembly stations along conveyor lines which allow each car off the line to be different. An interesting fact is the way of controlling the factory, as the components for every model must be delivered by smart conveying robots. At a particular point in time they provide every workstation with the components required to be assembled exactly at that very moment. This is an example of how a modern factory meets customer needs. Industry 4.0 promises that every car can be different. Although it is only a vision of the future, modern factories offer huge opportunities to customize the end product. What about those companies which are not necessarily large international corporations? I believe these small businesses are on the verge of a revolution, provided they take advantage of future technologies, understand the power of digitalization and notice that the time between an idea and its commercialization is becoming increasingly shorter. In fact, there is a certain difference between an innovation and an invention. It is not only about having an idea. This idea needs to be implemented and applied. And it has always been one of the issues humanity has had to face. Starting production always went along with having large amounts of capital. Currently, if one has an idea, it can be created individually with a 3D printer, even on a small scale, which will later facilitate raising the necessary capital – so commercialization of that idea can be arranged very swiftly. What technologies should Polish SMEs adopt in the first place? An example of innovation awaiting

between an innovation and an invention. It is not only about having an idea. This idea needs to be implemented and applied

implementation is data analytics in a digital factory operating in the framework of Industry 4.0. According to our research, most Polish entrepreneurs understand innovation as buying a new machine or creating a new automation line enhanced with robotics. Less attention is paid to the improvement of the actual management system. This creates huge opportunities, because you do not have to apply rocket science, but only improve the management and understand the capabilities of collecting data. Now the question is where can you learn it. Universities teach it to some extent; however, it is not commonly available knowledge. There is a lack of practitioners when it comes to modern methods of management. It is particularly relevant because many Polish companies, especially small and medium-sized ones, are family businesses. They were established at the turn of the economic transition in Poland. Some of them are experiencing rational growth, breaking the barrier of 80 employees and are capable of implementing modern management organization. On the other hand, there are companies that have remained at the level of 20-30 employees, where the owner wants to do everything on their own. What can data analytics do for companies? A few IT professionals can set up an IT infrastructure allowing the collection of data which could be

analyzed and would resemble a small-scale Big Data system. For example, we cooperate with a manufacturer that produces furnaces for the electrical industry. Their products are sold in different places. The thing is that such a company, after selling a furnace, loses track of the product, as only the user knows what is happening to the product. The application of the IoT and service signal transmission to a service center could prevent failures, because the product itself would tell the manufacturer when a certain problem may occur, especially when the temperature increases or vibrations appear. There are even more benefits – the analysis of such data allows us to predict when a problem may appear and react early enough – thus, in the event of furnace failure, the time of decreased production capacity drops. The assembly line can run without breaks allowing for no downtime. The machine will tell us when it needs help. Just like a printer that can notify us when it needs to be repaired. A printer is also a key device. For example, a printer that puts the manufacturing date and serial number on juice cartons. If that information is not printed on the juice carton, the entire lot must be discarded, as such goods cannot be sold. One of the sales requirements is providing the above-mentioned information. Once such a complex printer stops, the whole line halts as well. And downtime costs money. We provide

W B J JUNE/JULY 2017

WBJ COMMENTARY | AUTOMATION

“Entrepreneurs are wary of cloud solutions, as they believe that data kept outside the company can pose a certain risk

service support to the FCA engine factory in Bielsko-Biala. Even one minute of downtime means fewer manufactured products, which can be very expensive. Such downtime cannot be allowed and a situation in which production stops on Friday and the service team only takes care of the failure on Monday is definitely not acceptable. Everything must be done automatically.

make our data public, e.g. transmit the data to the cloud, i.e. outside the company, a substantial problem appears. Such data is sensitive to the company. Not for the persons working there, but for the company itself. This data gives away information about the manufactured products, the methods of their production and produced quantities. Losing such data can mean losing a competitive advantage. Upon the analysis of this There are obviously many advan- data, one can easily see through the tages of implementing modern entire company. And this is why technologies in industry. Howentrepreneurs are wary of cloud ever, what are the dangers or risks solutions, as they believe that data that accompany them? Could the kept outside the company can pose question of who the collected data a certain risk. belongs to constitute an additional barrier to the advancement How are digital technologies aptowards Industry 4.0? plied in fields other than manuThere are substantial differences facturing? between American and European Let’s take sports as an example. legislation. If we are talking about Formula 1 is a form of competition storing personal data, there has in which technology plays a crucial been a lot of discussion about data role. For example, team Red Bull, collected on Facebook, Google and which was successful in 2009–2010 physical storage locations. Data has not because they had a better a particular location, although it is engine, as it used a standard Renault difficult to understand that as the engine (Renault did not propose internet does not have a clear-cut better engines to competitors), location, because it is everywhere. but the key feature was bolide’s However, lawyers have a lot to say aerodynamics, and the possibility to in this respect (laughs). Eventually, perform virtual tests. The design and data from the above-mentioned optimization of the car’s bodywork organizations is collected in the US, were performed on Siemens’ softbut Europeans would like Google ware. Red Bull drivers could drive to store the data in Europe... and so in a virtual space, even before they the dispute continues. There are, of went on the racetrack, and all adjustcourse, instances of hacking somements were possible before the race, one’s Facebook account, which may while the other teams had to build cause individual losses. In industrial the bolide, test it on the track and plants, on the other hand, the situonly then analyze its behavior and ation is even worse. If we were to apply changes. So, they were auto-

JUNE/JULY 2017 W B J

matically three or four weeks behind Red Bull. It is an interesting example, particularly because the dominance of Red Bull did not last long. Later on, the competition started to use similar software, so the distance between rival teams decreased. Sailing is another interesting example showing the role of technology in sports. This subject is close to my heart as I am an avid sailor. Some 18 months ago I took part in the regatta across the Atlantic on a 4 Oceans Dream sailing vessel. And although in the regatta all boats seemingly look the same, the sailors also take part in a technological race. The America’s Cup is a good example. In large yachts, the very latest solutions (applied in space technology) are used, as the vessels need to be very light and durable. In fact, catamarans glide over the surface of the water, so the challenges concerning their strength, aerodynamics and airflow are absolutely crucial. The two last editions of the America’s Cup featured the rivalry of Oracle Team USA and Team a Royal New Zealand. Now it seems we have another contender, Land Rover BAR, which uses Siemens’ software at the vessel construction stage. It not only allows us to design a catamaran model in 3D but also control it in the virtual space – across virtual sea and with virtual wind. Then the data is collected and the aerodynamics and strength of the boat are tested. Land Rover BAR’s budget is at least 50 percent smaller than that of other leading teams, but we will see what happens. The final is scheduled for June 27, 2017. Are we on the verge of a bright future of new technology? The future is always bright and interesting... as it always brings something new. Just as in the regatta, there is always something awaiting us beyond the horizon. That is why people strive to get there. Curiosity of the world and willingness to change pushes us into action. Read more about Industry 4.0 on p. 26.

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WBJ COMMENTARY | ECONOMY

Ensuring stability

WBJ TALKED TO ANDRZEJ RZOŃCA, PROFESSOR AT THE WARSAW SCHOOL OF ECONOMICS AND THE CHIEF ECONOMIC ADVISER TO CIVIC PLATFORM (PO), ABOUT THE GOVERNMENT’S ECONOMIC POLICIES AND PO’S SOLUTIONS FOR THE MUCH DEBATED SOCIAL POLICY AND BUDGET DEFICIT

WBJ: In this era of globalization and increasing isolationist tendencies, many countries are adopting a new approach to the market economy. The classic formula of a free market is being questioned in many countries, and in Poland this formula is sharply criticized by the ruling Law and Justice party (PiS). The plan implemented by Deputy Prime Minister Mateusz Morawiecki envisages significant state intervention. What economic policy are you proposing to PO?

Andrzej Rzońca: Morawiecki’s plan has been widely tested in Latin

JUNE/JULY 2017 W B J

American and African countries since the 1950s and everywhere the results were disastrous. Only in two cases have modern growth theories confirmed the suitability of political and administrative support in private investment, which is a central element of Morawiecki’s plan. Firstly, this support must come in the early phase of development. And Poland is long past this stage. Secondly, support is admitted if it consists of copying solutions from abroad. But the PiS government is reluctant to transfer technology from abroad, as it wants Poland to have its own “national” technologies. But even if we assume that our country is still poor and that PiS is

willing to use taxpayers’ money to support the transfer of technologies from abroad, a much safer national strategy would be to strengthen competition, which is what PO is advocating. Such a strategy would guarantee joining the group of the richest countries, whereas political and administrative meddling in investment, once started, carries the risk that it will never be replaced by strengthening competition, and as such a change of policy would be blocked by both those countries that provide support and by their beneficiaries. That would be enough to strip our country of any chance of joining the club of the richest economies.

INTERVIEW BY EWA BONIECKA-BROMKE

Each government promises to strengthen development, modernize and foster innovation. How would you achieve that? The economic policy framework that would serve to achieve these goals is set out in the so-called “Economic Decalogue.” Adherence to this decalogue will strengthen each of the systemic growth factors – investment, innovation and employment. Limiting the budget deficit means that it will not consume private savings. It will be possible to use these savings to safely finance increased investment, and there will be no need for the economy to indebt itself abroad. It is very important to lower investment risk in order to prompt enterprises to invest again. To achieve this, it will be necessary to stop overregulation, especially in the area of economic activity, and to ensure the highest quality of legal regulations. We shall also address the challenges connected with the rapid aging of Polish society. It is possible to offset its negative influence on employment by increasing the percentage of the actively employed among the working age population and by convincing Poles to be professionally active for longer.

social policy would be to do away with the drastic cutting of benefits in favor of their gradual phasing out on a par with income increases. Today, people undertaking work either stop receiving benefits altogether or their benefits are reduced by a sum corresponding to their income increase due to starting work. For this reason, the average taxation of the income of people making the transition from unemployment to employment is almost 82 percent in Poland, which makes it the 7th highest taxation in the UE. We must make work profitable, and one way to do this is to lower the taxation of low income, as I have already mentioned.

What are the most important steps to be taken in order to limit the budget deficit? This is a very difficult problem. Despite a positive global economic outlook, PiS is maintaining a high level of public finance deficit, which is making public debt grow – at the fastest pace in Europe. Last year, public debt growth equaled 3 percent of GDP, whereas in the rest of the UE it dropped on average by almost 1.5 percent of GDP, and in countries with solid economies such as the Netherlands, Germany or Sweden by almost 3 percent of What changes would you propose GDP. PiS is indebting Poland to a to the current social policy, includ- greater extent than it announced ing the 500+ subsidy program, to in April 2016, when it informed achieve that goal? the European Commission that it In the “Economic Decalogue” PO was abandoning the path of debt has announced its plan to restructure reduction undertaken by the PO social expenses to ensure that state government. In April 2017, PiS again aid first of all reaches those who are delayed the moment when Poland unable to work, e.g. due to age or was to return to the debt limitation disability. If a person is capable of path. It even announced that in 2017 working, he/she should be getting public debt will exceed 55 percent of significant help on condition that GDP, thus dangerously approaching they are looking for work. PO will the constitutional limit of 60 percent also make this a condition for receiv- of GDP. ing the 500+ payment so that this program benefits only those families The period of PO’s rule has been in which the parents are working strongly criticized by the current or looking for work, rather than administration. Some refer to it as demotivating people. By doing so, a period of economic stagnation. the program will cease to strengthen How do you respond to these acstructural poverty, which in Poland cusations? is linked to unemployment, just as in I would point out that between other countries. 2008-2015, when the world sufAnother important change in fered two important crises: a global

financial crisis and the eurozone debt crisis, the number of jobs in Poland increased by over 1 million (by almost 8 percent). Per capita income rose by one third and income disparities shrank. A particular improvement was noted in the material situation of the poorest, as well as of the middle class. Only the earnings of the wealthiest households (one-fifth of all households) rose at a slower-than-average pace. This labor market improvement, rapid economic growth and reduction of income disparities was achieved without impairing the economic balance. The złoty was one of the most stable currencies in the world, which prompted some countries to locate part of their foreign currency reserves in Poland. Prices were stable and in the last two years of PO’s rule they even dropped, which increased the population’s purchasing power. Exports increased more quickly than imports, and credit rates rose at a pace similar to that of income, thus making repayment possible. In its “Report on the state of balance of Poland’s economy” dated April 2016, the National Bank of Poland summed up the period when PO was in power in the following way: “For the last couple of years Poland’s economy has pursued a path of sustainable growth, as manifested by the economy’s internal … and external sustainability.”

“It is very important to lower investment risk in order to prompt enterprises to invest again W B J JUNE/JULY 2017

Industry 4.0 Are we there yet?

BY SERGIUSZ PROKURAT

THREE INDUSTRIAL REVOLUTIONS have created the world we live in now and we are about to witness yet another major leap. The Fourth Industrial Revolution is sweeping the developed world: constant data exchange between machines and continuous data analysis are creating a world where ultra-fast, virtually fault-proof and highly customized production is a given. But is Poland ready to reap the benefits of this shift? How many practical applications of data analytics and IoT solutions will we actually see in the coming years and how many will end up in PowerPoint presentations with no follow-through whatsoever?

JUNE/JULY 2017 W B J

SHUTTERSTOCK

he term Industry 4.0 – used for the first time during Hannover fair in 2011 – has for several years been very popular in the media and is used as a synonym for the collection of new technologies that are expected to initiate another significant change in the industry, called the Fourth Industrial Revolution. It is fueled by interoperability and connection between devices, systems, employees and products, which leads to huge savings and productivity growth. Looking back, it is possible to follow successive stages of the development of the processes associated with industrialization. The first revolution was about coal and steam. The next one concerned electricity, which led to mass production. The third revolution, on the other hand, was accompanied by computers and automation. At the beginning of the 21st century, we have seen further digitalization in manufacturing plants, taking advantage of machine-collected data, the application of cloud computing and Big Data for data analysis, or the Internet of Things which allows identifiable objects to directly or indirectly collect, process or share data. Most solutions that are necessary to implement Industry 4.0 already exist but we are still teetering on the brink of change, hesitating to make the next step forward. Robert J. Shiller from Yale University and the 2013 Nobel laureate in economics once said: “You cannot wait until a house burns down to buy fire insurance on it. We cannot wait until there are massive dislocations in our society to prepare for the Fourth Industrial Revolution.”

CLIENT-FOCUSED MARKET

Why all this? Because there is a need to adjust production methods to market trends dictated by customers. They want a broad and diversified offer, enabling free, individual choices. We are dealing with an increasingly shorter product lifecycle, so the goal is to replace mass production with mass customization. Factory 4.0 is to enable that. Access to increased levels of data will be possible due to numerous sensors settled in the Industrial Internet of Things. They will serve, among other things, to communicate between manufactured elements and autonomous robots engaged in their production, and consequently to manipulate production processes. Data from sensors that monitor the operation of individual parts, components and machines in real time will ensure better utilization of production equipment. The possibility to anticipate potential failures or damage will contribute to the reduction of downtime across production lines. Apart from that, the set of technologies enabling product personalization includes 3D printing, advanced simulations plus virtual and augmented reality.

STRUGGLERS BEWARE

The results of the study on the level of automation in Polish manufacturing plants show that managers of Polish factories are still mostly focused on the challenges of the Third Industrial Revolution. This is confirmed by the “Smart Industry 2017” study conducted by Siemens and the Ministry of Development, which collected feedback from micro, small and mediumsized enterprises on the adoption of innovations with particular emphasis on technological solutions and modern management-supporting concepts and indicated the most important barriers to adoption of such innovations. As it turns out, Polish companies have yet to fully embrace the opportunities of the use of mature solutions, such as automated production with individual machines. Production automation remains in the plans for one in ten Polish companies, which goes to show the extent of technological backwardness in the entire economy. Only a small percentage of production plants use IT systems for operational management and production control. Most manufacturing companies covered by the survey still do not use any

If you had extra funds, what would you invest in? Purchasing manufacturing equipment

52.6%

New business goals

43.8%

Purchasing new technologies

17.1%

Hiring new employees

5.2%

Training employees

4.4%

Software purchases

1.2%

Purchasing licenses / trademarks / industrial designs

0.8%

Hardware purchases

0.8%

Patent / copyright acquisition

0.4%

Don’t know

6.8%

Source: “Smart Industry 2017”

basic ERP management systems, not to mention more advanced planning tools. At the same time, in 2016, less than 60 percent of small enterprises with 10 to 49 employees introduced some kind of innovation, and only a small part of medium-sized enterprises recognize the benefits of Industry 4.0, which could give the impression that the time for a revolution has not yet come. Thus it seems that Polish industry has to master a certain scope of technologies associated with the previous wave of changes in the organization of production to be able to make a confident step ahead. >>>

W B J JUNE/JULY 2017

FEATURE / INDUSTRY 4.0

What kind of innovations did you implement in 2016? Product innovation

37.8% Process innovation

32.7%

Marketing innovation

15.5%

Organizational innovation

TIME IS RUNNING OUT

It undoubtedly takes time to adapt to the new reality. The optimistic message is that there is awareness of the need and a certain pressure. Polish manufacturers are currently forced to compete on an international scale, where the level of process automation and the reduction of manufacturing costs is becoming increasingly high, and the requirements of customers in global supply chains – referring to the speed and quality of supplies – are becoming increasingly steep. Similarly, labor costs in Poland are increasing and access to employees is more and more difficult. Therefore, in order to compete with manufacturers in China, Polish companies simply have to introduce solutions that will speed up manufacturing processes and minimize costs.

The Industry 4.0 concept is boldly becoming a reality, where people, machines and processes are more and more integrated with one another. Nevertheless, we will be able to talk about the initiation of the Fourth Industrial Revolution only when a human hand is not needed for production. Everything will be created automatically and the role of humans will focus on the analysis of data and drawing conclusions. This will be the true revolution, equal to its predecessors. The Industry 4.0 train has already moved and is accelerating continuously. If we want to be noticed as an economy and bring Polish companies into the global market, it is time to get on the train.

None

41.4%

SHUTTERSTOCK

Source: “Smart Industry 2017”

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MAN AND MACHINE Just as manufacturing companies need to be increasingly flexible, their staff also have to be pre-

pared for changes. It is due to, among other things, market instability and changing demand. In recent years, companies have faced a huge challenge – demographic changes and the corresponding lack of skilled workforce. Labor shortages have forced them to automate at least some of the most repetitive jobs. However, there are occupations that seem to be impervious to automation, at least for now. According to mamstartup.pl, there are jobs that machines won’t be encroaching upon any time soon. Here are some of them.

Chef Cooking is an art – there’s no doubt about it. And although modern cooking requires an increasing amount

of technology, particularly when you think of molecular cuisine, the best chefs are not famous for their ability to replicate sophisticated recipes, but for their innovativeness: both in creating new and unexpected combinations, as well as for extravagant garnishing. Until machines develop taste buds, restaurateurs and their employees are safe.

Marketing and communications expert Anyone who has ever worked in or around a creative agency knows that this is no place for people who like stability and order. There is no room for repetition: every campaign has to be fresh, surprising, sometimes outright shocking. Machines have yet to surprise us with their originality, so if you’re in marketing – you can sleep well (provided your job allows for any sleep at all).

Nurse People like to be taken care of by other people. Think about the time when you were left alone in an X-

Ray or MRI lab: just you and the giant machine. Most people automatically feel uneasy and their stress levels rise. The job of a nurse is as much about applying bandages and dosing meds, as it is about keeping patients calm and helping them relax in stressful situations. Think about that the next time you have a meaningless chat with a nurse before a minor procedure.

Teacher and trainer

Yes, there are plenty of teaching apps out there. Who hasn’t tried to learn a new language with the help of a virtual tutor? It’s exciting at first but sooner or later your enthusiasm fizzles out and somehow you never manage to finish the course. And you’re not really sure why: modern teaching apps seem to have it all figured out: they give you the right amount of homework, they quiz you regularly, they even cheer you on and send you polite reminders when you’ve spaced out for too long. Perhaps learning is not only about repetition and memorizing. Perhaps the need to impress and earn the respect of your teacher and other students also factors in somehow.

Cybersecurity expert The time when a computer program will be able to protect itself from malware, discover its own vulnerabilities and patch them up is still way ahead of us. But even if it was possible to make all software 100 percent secure, the majority of security breaches happen because of human mistakes: we click where we’re not supposed to, we believe bogus messages, we make up ridiculously easy passwords. Cybersecurity experts probably already spend more time educating people than improving their software. And that will not change any time soon.

HR expert

When you are choosing your potential employee from a pile of resumes, do you only base your decision on reason? Don’t bother saying yes, as numerous studies have already demonstrated how biased and subjective the hiring process can be. Maybe it would be a fairer and more transparent process if it were machines that did the recruitment based on qualifications and tests alone. But if the chemistry is wrong, it’s just wrong. And machines have yet to learn how to make people get along.

Big Data expert

Algorithms searching for answers in Big Data sets are undoubtedly becoming more intelligent. But being a Big Data scientist is not only about creating ever smarter algorithms to search through vast amounts of data (in fact, the latest trend in the business is about teaching algorithms – neural networks to be exact – how to choose the optimal neural network for a given Big Data task). But no matter how sophisticated the software gets, it’s always people who are at the end of the line: it’s their needs and problems that Big Data solutions are trying to solve. Even the smartest machines cannot solve a problem that we haven’t come up with yet.

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WHERE IS POLANDâ&#x20AC;&#x2122;S SILICON VALLEY? BY BEATA SOCHA

A software engineer comes up with a tech idea and develops it into a business. He/she makes a proof of concept, assembles a team with the necessary skillset and together they work towards monetizing the idea. They find a VC willing to provide them with financing, validate their prototype and then go to market. Once they grow their business enough, fueled with further rounds of financing, they come up against an inevitable dilemma: grow or sell. At least thatâ&#x20AC;&#x2122;s how it goes in Silicon Valley, as well as other start-up scenes across Europe, including Stockholm, Berlin and London. What about Poland? Does it have a complete and functioning tech start-up ecosystem? If not, is there a chance of developing one and what components are necessary to do so?

SHUTTERSTOCK

o be clear, Poland has had a number of IT success stories. When you look at it, Polish IT giants seem to be doing rather well. Three out of the 20 top Polish exporters (in the Wprost ranking published recently) are from the IT industry. Positions 7, 15 and 20 are taken up by: Asseco (the largest software powerhouse in Poland), CD Projekt (the leading games designer and distributor, recently valued by Fortune Magazine at over $1 billion) and Comarch (Asseco’s top rival) respectively. Asseco is in fact the sixth largest software producer in Europe. Every month or so a new acquisition made by these giants makes headlines. There is no shortage of start-ups, either. According to Startup Poland, there are 2,700 small and microfirms in Poland that meet the criteria of a start-up at various stages of development. Some 12 percent are currently at the earliest “ProblemSolution Fit” stage, while as much as 39 percent of the entire start-up population have moved onto the product development phase (“Solution-Product Fit”). Another 34 percent are even more advanced on their path to becoming a fully-fledged firm: they are testing the marketability of their products (the so-called “ProductMarket Fit”). However, only 15 percent have progressed to the final start-up stage: scaling-up. This is where the problem lies: coming up with ideas and tech solutions seems relatively easy. Even bringing the product to market is not that hard when you’ve got rudimentary business skills and a sound product. It is the growing of the business and increasing its revenue that is proving hard for Polish start-ups. Why could that be? According to Rafał Plutecki, CEO of Google Campus Warsaw, the three elements that are necessary for a successful start-up ecosystem are: people, mentors

Google Campus Warsaw

4 STAGES OF GROWING A START-UP PROBLEM-SOLUTION FIT The stage where a start-up verifies that there is a group of potential customers who would be interested in using the solution they want to offer. SOLUTION-PRODUCT FIT When a start-up develops a product that solves the problem in question. PRODUCT-MARKET FIT When a start-up manages to find clients willing to pay for the product offered. SCALE-UP When the start-up has a validated product and is ready to grow its sales and revenues.

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FEATURE / POLAND’S SILICON VALLEY

and capital. Luckily, Poland has brain power in spades. Out of the 1 million software developers in CEE, almost a quarter (24 percent) reside in Poland. Ukraine comes second with 166,000 professional software developers, while Romania third with 118,000, according to a recent survey by Stackoverflow.com. In Poland, there are 1.4 developers for every 100 people in the labor force. Unsurprisingly, Warsaw has the largest start-up scene, with over a quarter (27 percent) of all firms originating there. The other major hubs include Kraków (11 percent of the country’s start-up pool), the Tri-City and Poznań (9 percent each) and Wrocław (7 percent). The minor start-up scenes include Szczecin (3 percent), Łódź, Katowice, Lublin and Białystok (2 percent each). SCALE IT UP So if it is not the human capital Poland’s been missing to build its own Silicon Valley, it must be the other two components. It takes time to build a working start-up ecosystem. At least 10 years, according to Plutecki. He claims that the element that had until recently been missing in the Polish start-up ecosystem was accelerators – companies that provide start-ups with mentorship, business contacts and capital for growth. This is changing now. “This year, 2017, is a breakthrough year. … Two years ago we barely had one functioning accelerator, now there are a dozen or so,” he said. “Recently, the Polish Development Fund (PFR) organized a competition and selected 10 accelerators that it will finance. Thanks to them, a wide-scale training program for engineers and young entrepreneurs will be possible to show them how to build their own companies,” Plutecki added. Google Campus Warsaw, a co-working office dedicated to tech start-ups at various stages of development, has just announced the list of firms that are going to reside in it over the next six months within the Campus Residency program. Also, four laterstage start-ups have been selected for the so-called Launchpad Accelerator. They will start their six-month stint at Google with a two-week trip to the actual Silicon Valley where they’ll be able to see how it’s done in the big boys’ club. The four scale-ups include: DrOmnibus (a Polish multimedia education platform), Gamee (a Czech social platform for gamers), Spendee (a Czech app for managing your finances online) and PublishDrive (a Hungarian online book publishing platform). “We’re currently focusing on three pillars: first, direct support for start-ups through programs such as Campus Residency. Secondly, acting as an ambassador for the entire CEE, which is evidenced by the CEE All Stars event. Finally, the third pillar is supporting the global growth of companies by closer collaboration with outside partners,” said Plutecki. The Campus already has 12,000 members and has recently moved to a new, larger building. THINK BIG Once the knowledge and business acumen are there, the final piece of the puzzle is money. The Polish start-up scene is definitely in need of a capital injection. According to Startup Poland, as much as 50 percent of Polish start-ups use no outside sources of funding but rather bootstrap their endeavors with their own savings. The problem with finding an investor is largely connected with the size of the market. If you’re an investor in the US, you can choose a hundred of small endeavors in the hopes that one of them turns into a good goose laying golden eggs. Given the

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potential of the US market, a single successful start-up can bring in enough profit to offset the cost of the other 99 failed attempts. In Poland, however, the market is somewhat smaller, and thus the returns of a single successful start-up are not as high as in the US. Therefore, VCs expect a higher percentage of their investments to be successful. Ergo, they are much more careful when screening their potential investment. “The size of the potential market and – in turn – profits affect the valuation which makes the risk calculations more difficult,” explained Plutecki. Luckily, this problem is not unsolvable. You just have to think globally. Polish tech start-ups are becoming increasingly aware that limiting themselves to the local market (albeit almost 40 million strong) is not enough. Most accelerators make the decision on whether or not to grant support to a start-up based on the market viability and market potential. Going global is a must, and from the get-go, not at an unspecified point in the future. In fact, almost 47 percent of Polish start-ups already sell products and services to customers abroad, according to the Startup Poland report.

INCREDIBLE POTENTIAL

Perhaps money is not lying in the streets, but access to financing is definitely getting easier. Sebastian Kulczyk, the son of the late Polish billionaire Jan Kulczyk, and current head of Kulczyk Investments, has recently announced he will allocate $60 million to a VC fund/ accelerator called InCredibles. It is one of very few entirely private funding programs for start-ups in Poland. “As the fund is entirely privately financed, the fund offers us a certain amount of flexibility and also leeway in the investment process. We opt for minimum formalities and an informal trust between the investor and the start-up,” Kulczyk told daily Puls Biznesu. The InCredibles program will focus on early-stage ventures and will cooperate with Campus Warsaw and Startup Poland (two accelerator programs). “The ceiling for one firm in the first round is PLN 2 million, but it could happen that we remain the main financing partner with a company for the next 10 years, if our goals align,” Kulczyk added. The deadline for start-ups to sign up for the fund is July 15 and the selection process of the top 3-5 contenders will be finalized by the end of August.

FOLLOW THE MONEY Software engineers in Poland can’t complain. They are even better

paid (considering the purchasing power parity) than their colleagues in the UK, Germany and the US. The average monthly salary in IT stood at PLN 8,259 in April, according to the latest GUS data. It is by far the best-paying industry in the country, outstripping even the energy sector, where the average salary reached PLN 7,017. It is also nearly double the national average salary of PLN 4489. To draw comparisons, let’s look at the UK market, where a senior software engineer earns an annual salary of some £49,224 (glassdoor. com data), which is not bad in itself. A senior accountant makes similar money of £43,000. In Poland, the IT guy would make on average PLN 116,000 a year, while the number cruncher almost 40 percent less (PLN 70-75,000). This goes to show how valued the “IT caste” is in Poland. The fact that IT people are so well paid is the product of several factors, including the ever-growing outsourcing of IT services and processes to Poland as well as the demand for skilled engineers from domestic corporations. The cozy salaries that large IT powerhouses offer probably make the decision to launch a start-up firm that much harder.

AVERAGE MONTHLY SALARY BY INDUSTRY

IT/ICT 8,295.48

ENERGY 7,017.41

SCIENTISTS AND ENGINEERS 6,545.02

MINING 5,942.69

REAL ESTATE MANAGEMENT 4,793.71

NATIONAL AVERAGE 4,489.71

CONSTRUCTION 4,454.08

GO PUBLIC? Another recent development in the start-up ecosystem is the creation of Akcelerator GPW – an accelerator program created by the Warsaw Stock Exchange in cooperation with Poland’s largest equity crowdfunding platform Beesfund. The accelerator will work together with other accelerators, VC funds and foundations supporting the start-up market. Its goal is to build a link between start-ups and listed companies and to offer growing firms alternative access to money via the capital market. “We believe the capital market can support innovative companies in the early development stages and prepare them for a later IPO on the NewConnect or the main WSE market,” said Jarosław Grzywiński, acting CEO of the Warsaw bourse. The WSE accelerator will be accessible to all Central European companies, including those that have previously used the Beesfund platform to acquire funding. The first batch of companies is already being recruited.

RETAIL AND CAR REPAIR 4,320.45

INDUSTRIAL MANUFACTURING 4,261.82

UTILITIES AND WASTE MANAGEMENT 4,179.19

TRANSPORT AND WAREHOUSING 3,987.51

ADMINISTRATION AND BACK OFFICE 3,170.79

HOTEL INDUSTRY AND GASTRONOMY 3,164.92

SOURCE: GUS (APRIL 2017, BEFORE INCOME TAX)

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DIGITAL We design a complex brand presence on the internet. We specialize both in creative and technological solutions. We know how to realize web design so that it is impressive and effective. We create and optimize product sites, both for brand image and e-commerce purposes, as well as complex internet services. See our projects at www.valkea.com/projekty/digital

TECH i n s i g h t s

Written By

BEATA SOCHA

SHUTTERSTOCK

HEALTH TECH ROUNDUP

Many Polish medical tech firms have already made a name for themselves. Recently, WSE-listed Infoscan filed with the Food and Drug Administration to have their sleep apnea monitors certified for sale in the US market. Another listed company, Medicalgorithmics, the producer of portable ECG devices, has announced Q1 profit of PLN 2 million and Q1 revenue of PLN 41.4 million (a 280 percent increase y/y). Following in the footsteps of Polish HealthTech success stories, an astounding number of new start-ups are being formed every year. Hereâ&#x20AC;&#x2122;s a lineup of some of the most innovative and promising start-ups WBJ talked to at the InfoShare conference in May. They all made it to the final shortlist in the 2017 Digital Healthcare Hackathon organized by InfoShare and Interizon and some of them are already gaining traction. >>> W B J JUNE/JULY 2017

TECH

FindAir The Kraków-based start-up emerged victorious in both start-up competitions and scooped the top prize at the Digital Healthcare competition (€17,500) as well as another €20,000 in the main start-up competition. Launched by Jacek Mikosz, Tomasz Mikosz and Michał Czyż, the start-up created a smart inhaler top for asthma patients called FindAir ONE. It is put on a regular asthma inhaler and linked by Bluetooth to a smartphone. The app on the smartphone records each application of the meds and correlates the data with the location, weather, allergens and air quality at the moment of application to be able to later warn the user if he finds himself in a place that could potentially be dangerous. Also, the inhaler informs the patient when they’re running low on meds or if they’ve forgotten to take their inhaler or their back-up inhaler with them. Now the team is working on an even more complex system of implementing cognitive data. It will be able to look for similarities between patients and make predictions based on shared features: for instance if patient A with allergies to certain types of pollen and similar intensity of attacks has problems in a given place at a given time, chances are that patient B with similar issues could also be more susceptible to an asthma attack under the same conditions. Thanks to the data compiled by the system, it will be able to warn them and prevent potentially life-threatening attacks.

StethoMe The runner-up and the recipient of a €12,500 prize at the Digital Healthcare Hackathon hails from Poznań. The firm has developed an electronic stethoscope integrated with a thermometer, intended for home use. It can record heart and lung sounds as well as measure temperature and then send the data via Bluetooth to a phone. “Pediatricians say that 90 percent of visits are unnecessary or consultations could be done over the phone, with healthy children being brought to a clinic and unnecessarily exposed to contagions. Our device allows parents to stay at home and still get the doctor consultation they need,” said Wojciech Radomski, CEO and co-founder of StethoMe. The start-up already has a validated prototype and is working on developing more functionalities, including AI algorithms that will analyze the data to make diagnosis of illnesses such as pneumonia more accurate. The cutting-edge device will be controlled with hand gestures rather than traditional buttons.

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H E A LT H T E C H

MST After years of research, a group of medical specialists and engineers from Kraków formed a company that has created a range of medical simulators for training doctors specializing in cardiology. MST already holds an European patent for the technology they developed of CT-backed imagery and has managed to enter the US market with its tech. “There are three companies in the world doing what we do, but our competition ‘draws’ the heart by using computer graphics (synthetic heart model), which is far from real. We use a 3D dataset obtained from computed tomography (CT) scanning of a real patient to make the simulation as lifelike as possible,” said Kamil Kipiel from MST. The simulator helps teach doctors how to perform invasive heart exams quickly and safely for the patient. The firm took 3rd spot in the competition with a €6,000 prize, is filing for another patent soon and is working on their simulators for micro invasive heart surgery of the mitral valve. Moreover, MST was selected as a one of the finalists of MIT Enterprise Forum Poland and will attend the boot camp at MIT in Boston.

Laparo This Wrocław-based company produces simulators for laparoscopic surgery. They help doctors develop their manual skills and technique, which are very difficult in laparoscopic surgery. “The first objective that we set ourselves was to create a low-price laparoscopic trainer/simulator, so that students and surgeons could train in their homes on professional equipment,” said Mateusz Juszczak, CEO and president of Laparo. The firm has been selling its products for only six months now and has already found clients in 22 countries, including Chile, Ecuador and Oman. It has developed a range of devices: Laparo Analytic, Laparo Aspire and Laparo Advance. The smallest simulators are priced PLN1,500-2,700 and are intended primarily for medical students. The largest ones, introduced a couple of months ago, cost around €10,000 and are designed for hospitals.

Qolware The company was created by Polish entrepreneurs at Munich University of Technology. It uses smartwatches as health monitors. The algorithms developed by Qolware (where Qol stands for Quality of Life) collect data from the watch’s sensors, including a mic and gyroscope etc. to detect and even predict medical emergencies, e.g. in cases of an epileptic episode. “When a person wearing the smartwatch with our app passes out or falls, they do not need to press any buttons to call for help. Our app will automatically recognize the danger the person is in and alert medical services or a caregiver,” said Aleksandra Patz from Qolware. The firm collaborates with the Epilepsy Center in Munich, as well as with hardware suppliers, such as LG, Samsung and Huawei. The app also has functions that help elderly and Alzheimer patients, e.g. by reminding them to take meds at specific times and alerting their caregivers when the person has left the so-called “safe zone.”

DeepDoc Warsaw start-up DeepDoc uses image recognition algorithms to detect mood disorders. The app targets the young generation, who use Instagram to post their everyday photos. It analyzes the posted photos to predict possible cases of depression and then the built-in chatbox offers Cognitive-Behavioral Therapy exercises to help the person deal with mood disorders. Naturally, the user has to give their consent to be analyzed. “Research shows that there is a higher penetration of mood disorders among young people, even by 6 percentage points: about 10 percent of the entire population is affected by a mood disorder, while as much as 16-20 percent of young people will at some point in their life experience a depressive episode,” said Piotr Podlaś, CEO of DeepDoc. Poland spends app. PLN 2 billion on dealing with depression, while only PLN 700 million is the cost of treatment. The rest is the loss caused by lower productivity, Podlaś added.

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TECH

10.

CTA The company, located in the Tri-City area, uses Deep Learning to analyze images recorded by a camera locked inside a small pill that, after being swallowed, travels through the entire digestive tract recording images. Capsule endoscopy is much less invasive than regular endoscopy. However, the downside is the long time it takes to analyze the material and thus the cost of the diagnosis is much higher. CTA’s goal is to cut the cost of the analysis and replace traditonal invasive methods. “Currently, these films are analyzed by doctors over a course of many hours, with significant portions of the material often being skipped. We automated the process to take less than an hour,” said Mateusz Marmołowski, founder and CEO of CTA. The start-up has already found its first clients in the US market.

Aurora Project Aurora was developed by another Tri-City company called Break Box Lab. It’s basically a lab in a box. It allows doctors to test the susceptibility of the bacteria to antibiotics to select the most appropriate drug for the infection. “Doctors prescribe antibiotics based on their intuition and experience. If you want to be 100 percent sure that you’re taking the right antibiotic, you need to go to a hospital or a specialist clinic and do a rather expensive test. We’re cutting the cost of such a test from PLN 50 to PLN 8,” said Jakub Wysocki, business project manager at Break Box Lab. You just take a swab and put the stick into the vial and pour it into the machine. The results are ready in six hours rather than several days as is the case with traditional lab tests.

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CardioCube The Katowice-based CardioCube is building a device and system that allows doctors to monitor post-op cardiac patients to avoid complications. “Up to 30 percent of heart failure patients go back to the hospital within a month of leaving,” said Oskar Kiwic, CEO of CardioCube. The firm devised a cube that is used to record patient responses to a series of follow-up questions. “In the US, this was normally done over the phone back in the 1990s and later with tables,” explains Kiwic. Based on the responses, the cube uses AI to make predictions and alert the patient and the doctor of any potential complications before they even occur. “The goal behind the project is as much to help patients avoid lengthy hospital stays, as it is to cut heart failure re-admission costs by 25 percent.”

UniDoseOne represents the city of Łódź in the lineup. The firm has built a robotic pharmacy that consists of two machines: one which unpacks meds and uses image recognition to sort them. The other one prepares single doses of the right type of meds on request. It not only lowers the costs of running hospital pharmacies, but also eliminates mistakes. “One out of ten patients receives the wrong meds, the wrong dosage or at the wrong time,” said Jakub Musiałek, CEO of UnitDoseOne. The number of US hospitals that employ robotic pharmacies is estimated at 7 percent, while 98 percent prepare single doses for their patients. The company employs 12 engineers, specializing in software, robot design and mechanics. It took second place in the main InfoShare Start-up Contest.

H E A LT H T E C H

What do you offer start-ups who qualify for Grants4Apps? Bogusław Tobiasz: We offer them a framework – free-of-charge office space for 100 days and mentoring, which is absolutely crucial at the early stage. We show them how to make a product they’re working on successful and make it ready to roll out on the global market. They also receive €50,000 seed funding.

Future of HealthTech WBJ TALKED TO DR. ZSUZSANNA VARGA, GLOBAL PROGRAM MANAGER GRANTS4APPS AT BAYER AND BOGUSŁAW TOBIASZ, HEAD OF IT FOR CEE AT BAYER ABOUT THE POTENTIAL OF HEALTHTECH START-UPS IN CEE AND EUROPE

WBJ: What possibilities does digital patient support create?

BAYER IMAGE SHUTTERSTOCK

Dr. Zsuzsanna Varga: Firstly, we can see a lot of underserved patients in developing countries get access to healthcare thanks to telemedicine. For instance, in some countries the ratio of physician to patient is highly suboptimal, like 1:10,000 or worse. This is a very important aspect of our innovation: apart from research, biotech and digital health, we also support social innovation. What is the current state of digital healthcare in Europe? How common are health wearables and what can you do with the data they collect? Z.V.: The use of devices such as wearables for tracking activity data is very widespread. The collected data can be used to provide important insights, for example input for a more accurate diagnosis. In particular, the usage of machine learning and artificial intelligence technologies can help by accurately discerning symptoms. So the focus shifts from the “How” in collecting data to the “Why”: Which insights can we generate and for which purpose? At the end of the day, however, the final diagnosis lies with the physician. Data ana-

lytics tools can support, but not replace a physician and clinicians. Which technologies are developing most quickly in healthcare right now? Z.V.: We’re already passed the stage of collecting data – we do it on a mass scale. What is developing right now is the insights we can get from the data, so data analytics: AI and machine learning. How important are start-ups in this ecosystem? Z.V.: They’re a crucial player in the innovation system. We as a company cannot access patients directly due to regulations. Start-ups, on the other hand, are founded by patients and physicians, who have firsthand knowledge of what the patients need and what the limitations and challenges of the doctor-patient interaction are. Are Polish HealthTech start-ups competitive in Europe? Z.V.: Last year we had over 400 applications for our Grants4Apps start-up Accelerator from all over the world. Poland was fourth out of 66 countries. Based on this alone we can see that Poland is a big innovation and tech hub for healthcare.

How do you select the companies for the program? B.T.: It’s a global initiative so we get applications from all over the world. We’re focusing on pharma and healthcare solutions. Z.V.: We’re interested both in early stage start-ups – the ones that have a working prototype at least – for the accelerator as well as in mature start-ups, which are already on the market and have gained some traction. We introduced a new element this year, called “Dealmaker,” which is intended for the more mature start-ups specifically, ready to enter a collaboration with Bayer. What kind of technologies are your applicants working on? Z.V.: There are a lot of applications in the areas of telemedicine. Solutions for pharmacy also seem to be a big trend as well as solutions for the elderly. This patient sector is growing, as the population is aging, and there is an increasing public notion that elderly should have a better quality of life and access to medical care. What technologies in healthcare do you think will come in five years’ time? Z.V.: There are already some technologies being developed that may help improve and shorten the research and development process in Pharma. Currently, it takes about 10 years from discovery to bringing a product to market and accessible to patients. There is a lot of room for improvement and there are start-ups developing technologies that introduce more computer-based simulations that can accelerate drug research and development. We had a start-up from Hungary called Turbine that created a simulation of cancer cells to test different combinations of drugs that could be more effective in killing cancer cells. Other technologies like organs-on-chip have the potential to revolutionize how we find effective drugs for patients faster.

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TECH

WBJ: Why did you pick HealthTech as the third area for

The Heart program? What is the perspective for the sector in Poland and beyond? Tomasz Rudolf: Digitalization affects almost every industry around us – media, retail or banking. The healthcare sector also has huge potential to create new experiences for patients and doctors powered by artificial intelligence and connected devices. Caring for our health can be cheaper, faster and more accessible thanks to those technologies. We believe it will be easier to make it happen if established organizations work hand in hand with innovative, smaller companies. That’s why, together with AbbVie, we have initiated this program, connecting the best start-ups in telemedicine, healthcare analytics and IoT with experienced industry players. What is the status of other programs launched at The Heart? How many companies have already joined? The FinTech program was our first, connecting leading financial institutions with European start-ups. The program has already attracted eight corporate partners, including Citibank Handlowy, Alior Bank and PKO BP. We have already finished a round focused on cybersecurity, and we are keeping our fingers crossed for the success of the first deals. Our scouting continues, this time looking at solutions related to the PSD2 regulation. Our second program is focused on omnichannel solutions, helping corporate marketers reinvent retail. Together with companies like Mastercard and Philips, we are looking at customer intelligence space, collecting and leveraging customer data from many sources. This first

Scaling up with The Heart

THE HEART OF WARSAW, A HUB THAT BRINGS TOGETHER YOUNG TECH FIRMS WITH LARGE CORPORATIONS, HAS ALREADY LAUNCHED ITS THIRD THEMED PROGRAM. AFTER FINTECH AND OMICHANNEL, IT’S NOW TIME TO LOOK AT THE HEALTHTECH BUSINESS. WBJ TALKED TO TOMASZ RUDOLF, CEO OF THE HEART WARSAW, ABOUT HOW THE HEART CAN HELP START-UPS AND SCALE-UPS SUCCEED IN BIG BUSINESS INTERVIEW BY BEATA SOCHA

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S T A R T- U P S

round will be summarized in June, when a dozen of the best start-ups, selected by our corporate partners, will come to Warsaw to discuss pilot implementations.

and programs. We also provide our foreign visitors a soft landing in the regional ecosystem – by providing the space and connections. Creating such a great space, thanks to our collaboration with Ghelamco, has been How are the start-ups selected? a big milestone for our developOur goal is to increase the likelihood ment, and we are looking forward of deals. Each program is based on to bringing that concept to other analysis of corporate priority areas. countries. The common needs define our focus in scouting and screening potenWhat can start-ups get from you? tial candidates. Our international We have one goal: to enable startscouting team looks at hundreds of ups to grow faster by helping them start-ups in Europe and Israel to find get deals with big corporations. We those whose solutions are most like- believe corporations can provide ly to address the issues raised by the great value to start-ups as customcorporations. Requirements include ers or distribution partners, and we proof of concept, clear value added, try to facilitate such collaborations. Start-ups that are invited to present scalable technology and team. We are not an early stage accelerator, so within our programs get free access we expect more developed projects to a pre-selected group of corporate executives interested in their soluthat already generate revenue and are just looking for big corporate tions. clients and partners that could How do you assess the Polish ecohelp them scale faster. Corporate system of incubators and accelerapartners are then involved in the final selection of companies invited tors? The Polish ecosystem is growing to our matching days. rapidly, mostly thanks to our entrepreneurs. Government support also How is The Heart different from plays a role. Until recently, start-ups start-up incubators and accelerahad to go abroad to get support from tors? experienced mentors. In compariIncubators and accelerators are son, a start-up that set up in Israel a much needed element of the or Germany could count on the ecosystem because they help with support of 200+ accelerators. The the beginning – getting the first situation is changing rapidly, with investors and customers. We come in at the next stage, when a start-up a number of acceleration programs has already come up with a business that have been launched recently model that generates revenue and is with the support of major corporations (Tauron, Amplus and Kross preparing for international expanin Pilotmaker, Alior Bank in Huge sion. We focus on scaling these Thing, KGHM and PKO BP in MIT businesses, helping them to use Enterprise Forum). One thing we corporations as doors to internaare still missing is a large crowd of tional markets. As a corporate hub, we expect some level of maturity in experienced serial entrepreneurs that can support young ventures not the projects. only with money, but personal netWhat is the role of The Heart’s space works and experience. EU money in Warsaw Spire? can’t buy that – our ecosystem will Space is the meeting point for our have to become more mature to be corporate community, investors and able to provide it. scale-ups. Just like a big airport hub, it makes connections easier. We are What financing options do young not tied to one corporation or inves- tech firms have at their disposal in Poland? tor, but we have created a marketplace that is open to all. We attract Most start-ups are pragmatic – they different people through events finance their operations from sales.

It’s great as it builds more stable businesses initially. Yet, if you do not want to remain local, you need to accept the fact that global competition favors start-ups with better access to funding – they can just acquire the competition and spend more on customer acquisition. The Venture Capital market in Poland is maturing yet is still quite dependent on public money. The smartest money comes from experienced entrepreneurs and investors. We have not had enough “exits” yet to be able to provide that. That’s why probably, at least for some time, we will do best by combining local resources with the networks and expertise of foreign investors.

About The Heart Warsaw

The Heart Warsaw is a European start-up/corporation collaboration center. Located on the 38th floor of the Warsaw Spire office building, the center links young technology companies with the biggest Polish, regional and global companies. The center focuses on thematic programs related to FinTech, Omnichannel, HealthTech, and soon also Internet of Things and Smart City. The Heart Warsaw supports large-size organizations in the implementation of innovations created by the selected start-ups from across Europe. Thanks to that, the best young entrepreneurs from the whole CEE region can scale their businesses faster and expand internationally. www.theheart.tech

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Latest news in the office, retail and logisitics sectors

Prospects for the outlet center sector in Poland

Growth of the Polish luxury residential property market

Interview with Xavier Jongen of Catella Real Estate

Mixed Use

Poland's luxury second homes

VIRAKO secures building permit for Monopolis project in Łódź Developer Virako has obtained a building permit for its planned Monopolis mixed-use project in downtown Łódź, which will involve the revitalization and redevelopment of a historic post-industrial site that previously housed a vodka distillery. The scheme, which the company officially presented last month, will comprise a total of almost 24,000 sqm of office space, as well as retail, cultural and recreational areas with JLL acting as the exclusive leasing agent. Construction work on the first phase of the development, involving the revitalization of the existing buildings of the former distillery and the development of 7,000 sqm of office space, is scheduled for the second half of this year and due to finish in H2 2018. Two new buildings, comprising 8,770 sqm and 8,150 sqm of office space, are to be completed in 2019 and 2020. The project was designed by Grupa5 Architekci in cooperation with a local architectural studio. Virako has been active since 2001 and is known in Łódź for its Centrum Biznesowe Faktoria and Forum 76 Business Centre office projects.

Chill-out areas in office buildings

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LOKALE IMMOBILIA | NEWS

Office The Browary Warszawskie scheme is being developed on 4.4 hectares of post-industrial land and will include office, retail and residential space. The flagship project of Echo in Warsaw, it will involve the development of six new residential buildings and four new office buildings, as well as the revitalization of three historic buildings, with the company currently working on the first residential phases of the investment. The whole project is valued at more than PLN 500 million and scheduled for completion in 2020.

ECHO to launch office phases of flagship Warsaw project Warsaw Stock Exchange-listed developer Echo Investment is to soon launch construction work on an 11-floor office building located near the intersection of ul. Wronia and ul. Grzybowska in the Wola district of the Polish capital. It will be part of the company's Browary Warszawskie mixed-use project. The building will offer approximately 15,000 sqm of leasable space, with Echo now in talks with potential tenants. In the near future, the developer also wants to start developing three other new office buildings in the complex. “We plan to go ahead with construction work on the buildings as soon as the administrative processes have finished. We hope to be able to do this before the end of this year,” said Monika Olejnik-Okuniewska, marketing and communication director at Echo Investment. The three buildings will comprise around 35,000 sqm of GLA in total.

5,000,000 the total amount of square meters in office space that could be leased in Poland in 2017-2019 Source: JLL

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SKANSKA working on new office building in Warsaw's Wola district Developer Skanska Property Poland has launched construction work on the second building in its Spark office complex in Warsaw's Wola district. The ten-floor building “B”, which will offer almost 18,000 sqm of leasable space, is scheduled for completion in the first quarter of 2019. The entire Spark complex will comprise a total of more than 70,000 sqm of GLA in three buildings. The project was designed by the Kuryłowicz & Associates architectural studio with Skanska acting as the general contractor. As well as featuring LEED Platinum certification, Spark is expected to become Skanska's first WELL-certified development. The WELL certificate focuses on the health and well-being of a building’s users.

KATOWICE office market slows down Katowice, the fifth-largest office property market in Poland, will this year see the lowest annual supply of new space since 2011, according to a recent report by Savills. The existing stock in the city, which amounted to 447,100 sqm at the end of Q1, is expected to grow by only 7,700 sqm in 2017, the study

said. This will be the lowest figure among the largest cities in the country, noted Wioleta Wojtczak from the research and consultancy department of Savills in Poland. However, this will change as soon as next year when 35,300 sqm of new office space should be completed in Katowice in projects including the first phase of .KTW (TDJ Estate, 18,200 sqm) and the fourth phase of Silesia Business Park (Skanska Property Poland, 12,000 sqm). Since the beginning of 2016, 47,600 sqm of office space has been leased in Katowice. In Q1 2017, the vacancy rate in the city stood at 14.6 percent.

BANK MILLENNIUM renews 18,900-sqm lease deal in Warsaw In what is the largest lease transaction to have been signed in the office property market Poland since the beginning of the year, Bank Millennium has renewed its lease of more than 18,900 sqm in the Millennium Park complex in Warsaw for an additional ten years. Cushman & Wakefield represented the tenant in the lease negotiations, while Savills advised Commerz Real, the owner of the property. The Millennium Park complex is located on ul. Żaryna in the Mokotów district of the Polish capital.

MODE:LINA™ wins in Moscow The mode:lina™ architectural studio earlier this month won the Best Office Awards 2017 in Moscow in the Best Foreign Office category for its design of the Opera Software offices in the Hieronimus building in Wrocław. mode:lina™ is the first Polish studio to have been awarded in the competition. Best Office Awards, part of the Business & Design Dialogue forum on design, technology and management of office and public space, is a prestigious Russian architectural competition that has been held since 2010. Every year more than 100 projects from around the world compete for the awards.

MINDSPACE enters Poland Mindspace, a provider of co-working space, is to open its first location in Poland in October this year. The company will occupy a total of more than 3,000 sqm of space on three floors in the Hala Koszyki building in downtown Warsaw, which is owned by listed real estate investor Griffin Premium RE. The location will accommodate approximately 450 people including teams from innovative enterprises, small and medium-sized businesses and technology start-ups, as well as entrepreneurs and freelancers.

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LOKALE IMMOBILIA | NEWS

Logistics Record demand and supply levels in WAREHOUSE PROPERTY MARKET The first quarter of this year was the best Q1 in the whole history of the warehouse property market in Poland, according to a recent report by JLL. The demand reached the record level of 855,000 sqm, with Silesia, Warsaw and Wrocław having seen the most tenant activity in the period. Developers also put up a record performance in the first three months of 2017 – as much as 538,000 sqm of new space was completed in the period, which brought the total warehouse space stock in Poland to 11.7 million sqm. Almost 1.4 million sqm of warehouse space was under construction at the end of Q1, with 29 percent of that area being developed on a speculative basis. The vacancy rate rose only slightly in Q1, to 6.4 percent, the JLL study said.

PANATTONI to deliver 30,000-sqm factory for Reuss Seifert Industrial space developer Panattoni Europe is now building a 30,000-sqm factory at Nowa Sól in the Lubuskie voivodship in western Poland for Reuss Seifert, a German-based supplier of components for the construction industry. The facility will be

Reklama_Bal_FR_174x114.indd 1

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located within the Kostrzyn-Słubice Special Economic Zone and is being developed in two phases, scheduled for completion in July and autumn 2017. The tenant will start the process of implementing production in the new location later this year and finish it in March next year. CBRE brokered the transaction between Panattoni and Reuss Seifert. Panattoni has already completed a number of industrial projects in Lubuskie, which include a 17,600-sqm factory in Gorzów Wielkopolski that the company developed for Faurecia, a manufacturer of car interior components.

1,000,000 the amount of square meters in warehouse space currently under construction in Poland Source: Colliers International

2017-06-09 15:02:44

Retail Warsaw

Gdańsk

Sosnowiec

FASHION HOUSE outlet centers have new owner Investor Deutsche Asset Management (Deutsche AM) has announced the acquisition of the Fashion House outlet centers in Warsaw, Sosnowiec and Gdańsk from a fund managed by Peakside Capital. The value of the transaction has not been revealed. The three outlet centers comprise a total of more than 50,000 sqm of space and house over 210 tenants. After the acquisition of the Fashion House portfolio, the combined value of Deutsche AM’s assets in Poland has increased to €1.65 billion.

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FROM QUANTITY TO QUALITY

After 15 years of development, the outlet center market in Poland is not expected to see many new project openings in the near future. This does not mean that the sector is not in for major changes BY ADAM ZDRODOWSKI

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he outlet center market in Poland is now almost 15 years old with the first outlet center in the country â&#x20AC;&#x201C; Neinver's Outlet Factory Ursus in Warsaw's Ursus district â&#x20AC;&#x201C; having opened for business in late 2002. A dozen schemes of this kind have been completed in large Polish cities since then. Real estate market experts argue that as there is less and less room for new developments and the expectations of buyers change, the extension and modernization of existing outlet malls, rather than the development of new investments, will be the main trend in the sector in the near future.

ALMOST SATURATED

There are now 14 existing outlet centers in Poland, which, according to Colliers International data, offer a total of approximately 250,000 sqm of leasable space. Typically sized between 10,000 sqm and 25,000 sqm of GLA, they accommodate a combined 1,150 retail units. Five more projects of this kind are currently in the

tion into consideration, the market saturation level is already rather high,” argued Katarzyna Michnikowska, associate director, research and consultancy services, at Colliers International. Asked whether outlet centers would, in the near future, be opened in smaller and smaller cities across Poland just like regular shopping malls have been in recent years, Michnikowska replied in the negative, claiming that there is no such need in this sector of the retail property market. Of a similar opinion was Staniszewska, who maintained that with the exception of Rzeszów, no cities or agglomerations in Poland with fewer than 200,000 inhabitants are likely to see the development of new outlet center schemes. The product typically found in outlet centers, which includes excess and damaged goods, is successfully sold out in the existing outlet malls in the largest agglomerations. Besides, for retail chains, selling in traditional stores remains the priority, Michnikowska noted.

QUALITY GROWTH

pipeline: two in Bydgoszcz (Outlet Center Bydgoszcz and Metropolitan Outlet Bydgoszcz) and one each in Toruń (Outlet Toruń), Gliwice (Silesia Outlet Gliwice) and Kraków (Galeria Plaza Kraków). The majority of the existing outlet centers in Poland are located in large agglomerations. Admittedly, smaller projects have also been opened in the mid-sized eastern cities of Białystok and Lublin, but no major geographical expansion is expected in this market in the coming years. “The current 2 percent-odd share of outlet centers in the total volume of modern retail space will rather not increase in the near future,” said Anna Staniszewska, consulting and research director, CEE, at BNP Paribas Real Estate. “When one takes the number of retail chains interested in this specific channel of distribu-

While the outlet center market will not grow in the same way that the market of regular shopping centers did in the past few years (where developers ventured into smaller cities to fill retail gaps as the largest agglomerations became increasingly saturated), it will keep evolving. In Michnikowska’s opinion, the further growth of the outlet center market in Poland will be defined by extensions of existing malls, rather than by new projects in new locations. It will soon be time in this market for quality growth, rather than quantity growth, she said. Poland’s outlet center market is the largest in Central and Eastern Europe. However, it cannot compare with the markets in Western Europe where both outlet centers and the stores in them are larger than their Polish counterparts, and they offer a wider range of products. Premium brands are one of the major magnets drawing visitors to outlet centers in the more developed Western European markets. By contrast, such brands are virtually absent from outlet centers in Poland, experts note. Many outlet centers abroad offer a “consumer experience” that their Polish peers will find difficult to emulate in the foreseeable future. The reasons for that include the limited number of retail chains that are present in Poland, and the relatively low purchasing power of Polish buyers. Nonetheless, as the Polish outlet center market becomes increasingly competitive, the existing centers will continue to change in order to become more attractive. Efforts aimed at expanding centers’ offering and improving their operational performance are to be expected. The modernization of restaurant and entertain-

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ment areas in shopping centers, which are now increasingly seen as meeting places as much as shopping venues, has already become a major trend in the retail property market in recent years. Now the trend seems to have also started affecting the outlet center sector of the market. Neinver, for one, has recently announced that its Factory KrakĂłw outlet center will get a new food court and a new interior design, with work on the modernization project scheduled to finish later this year. According to Colliers International analysts, owners will be adding complementary functions to their existing centers in order to attract larger numbers of visitors. Depending on the location, this could, for example, mean the opening of a supermarket or a cinema in an outlet mall. Besides, new technologies aimed at mak-

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The current 2 percentodd share of outlet centers in the total volume of modern retail space will rather not increase in the near future.

ing shopping more convenient are likely to be introduced to outlet centers. Also, the individual outlets operating in outlet malls will change, with retailers likely to start seeing the latter as a good testing ground for their products and opening pop-up stores there. One can expect the emergence of lines of products designed specifically for the purposes of outlet centers. Last but not least, the pricing policies of outlets will probably evolve so that more emphasis can be put on bargains and special outlet sales. Whether these strategies will be enough to make Polandâ&#x20AC;&#x2122;s outlet centers prosper remains to be seen. Apart from opportunities, the future also holds risks for the market with the slower retail chain expansion seen in some sectors remaining a major problem, the Colliers International report said.

Outlet Stats

Shopping mall or outlet center?

According to the latest research by Colliers International, the typical outlet center customer has a 2+1 family, secondary education and an average income of PLN 3,000-5,000. They go to an outlet center by car once every couple of months to spend some PLN 100-300 on clothes, shoes, accessories and sports gear. Here’s some more stats to paint the picture.

15-30 When do

Who buys at outlet centers?

55%

of visitors at outlet centers are women The gender proportions at outlet centers are quite well balanced. The average age of buyers is also higher at outlet centers (30-50 years) than in shopping malls (25-44), while their disposable income usually falls in the PLN 3,000-5,000 brackets. Malls, on the other hand are mainly visited by (usually single) women (75 percent), with more varied disposable incomes (PLN 2,500-5,500).

200,000250,000

That’s how many minutes an average outlet shopper drives to an outlet center. Outlet center goers are willing to drive farther to reach their destination. When going to a mall, on average they spent only 1020 minutes in transit.

3-4

That’s how many times a year customers visit outlet centers. The stat for malls is markedly higher: they are frequented on average 2-3 times a month.

100-300

That’s how much złoty an average customer spend at outlet centers. It’s significantly more than the average value of shopping done at malls (PLN 50-200).

they shop?

40% 40% 20%

Saturday Sunday other weekdays

Outlet shopping happens primarily at the weekend. It’s no doubt destination shopping, as most outlet centers are located in the suburbs of major cities. A Sunday trade ban could therefore cause some serious damage to the outlet business.

70%

of people at outlet centers go there for planned shopping There’s generally little room for spontaneity in outlet shopping. People don’t just drop by at outlet centers: they have a clear purpose for going there, which usually involves hunting for bargains on clothes, footwear and accessories, not to mention sports brands which are a must in every outlet center.

people visit an average outlet center monthly in Poland

80%

SHUTTERSTOCK

of people visiting outlet centers do their shopping there Footfall in regular shopping centers is on average twice as high as in outlet centers. That’s hardly surprising given that most outlet centers are located on the outskirts. However, conversion rates are significantly higher in outlet centers than in regular malls. So even with the lower footfall, retailers at outlet centers can still make a lot of money.

43%

of outlet center customers have kids, which is more than in the case of mall goers (only 30 percent).

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LOKALE IMMOBILIA | RESIDENTIAL Galeria Park Top in Warsaw

GROWING SLOWLY BUT SURELY The luxury residential real estate market in Poland has continued to grow steadily over the past few years. As Poles become more and more affluent, the prospects for this niche sector remain positive

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STEADY GROWTH

According to a recent report by Poland Sotheby’s International Realty prepared in cooperation with Cenatorium, the value of transactions in the Polish luxury and premium residential property market increased by 40 percent between 2012 and 2016, from some PLN 2.5 billion to approximately PLN 3.6 billion. The report, which took into account transactions valued at PLN 1 million and more, said that the 2016 volume was admittedly lower than the one recorded in 2015 (around PLN 4.2 billion), but the number of deals remained at a similar level, of approximately 2,000. The decrease in transaction volume witnessed last year resulted from the shortage of the most expensive properties. While in 2015, 90 homes valued at more than PLN 5 million were transacted in Poland, in 2016 the number of such transactions was around 50 percent lower. The prospects for the coming years are positive. Poland Sotheby’s International Realty experts note that sales in the Złota 44 skyscraper in downtown Warsaw, which was completed a few months ago, will be included in the 2017 volume. Those transactions alone could be worth some PLN 1 billion.

IMAGES COURTESY OF DEVELOPERS

oland’s luxury residential property market has seen stable growth in recent years with the growing number of high net worth individuals in the country having led to an increase in the number and the aggregate value of transactions in the sector. Although the Polish market is much younger and relatively poorly developed in terms of its size when compared with some of the Western European and American peers, the expectations now are that it will continue to be on an upward trajectory in the near future.

BY ADAM ZDRODOWSKI

Also, according to Kazimierz Kirejczyk, managing partner and president of the management board at REAS, the luxury property sector in Poland has been stable in recent years in terms of its share in the total residential sales in the country, which amounts to around one percent. A report published by KPMG and REAS in 2015 estimated the combined annual value of transactions signed in the primary luxury residential property market in Poland at approximately PLN 500 million, with apartment purchases accounting for the bulk of the deals signed in the sector. According to the report, the annual number of agreements for the sale of luxury apartments amounts to 160-180, while the total value of the transactions is at the level of some PLN 440 millionPLN 460 million. In 2015 experts expected the annual number of deals to exceed 250 over the next few years. The completion of large projects and the finalization of package transactions can lead to major fluctuations in particular years. Kirejczyk pointed out that German investment manager Catella Real Estate alone acquired 72 luxury apartments in the Złota 44 building in 2016.

Foksal 13/15 in Warsaw

YOUNG MARKET

Poland's luxury residential property market is still relatively young and is at an early development stage. Indeed, its beginnings can be traced back to the early 2000s, according to Arkadiusz Wojciechowski, managing director, business development, at Poland Sotheby’s International Realty. The market is also relatively small. “The luxury residential property market in New York’s Manhattan is ten times as big as the luxury residential property market in Poland,” Wojciechowski said. Wojciechowski argued that there is actually no precise definition of luxury residential property. “What is regarded as luxurious in Poznań, for instance, may not be seen as such in Warsaw,” he said. It is the location, standard and transaction price that define an apartment as luxury property. Admittedly, the latter criterion can sometimes be misleading. Wojciechowski said there are undervalued properties in this sector, whose prices only rise after some time, for example when they are re-sold on the secondary market. Besides, apart from luxury projects, single luxury apartments – usually very large, located on the top floor of the building and offering a commanding view of the area, can also be found in a number of premium residential schemes. Kirejczyk argued that quality rather than price is the most important feature defining luxury residential property. However, generally speaking, one can safely say that the prices of luxury apartments usually start from approximately PLN 15,000-PLN 16,000 per sqm. In the opinion of Kirejczyk, the luxury residential product available in the Polish market is still relatively “modest” compared to the luxury properties found in some of the most prestigious and most expensive locations in the world, including London and New York. He pointed out that apartments sized slightly more than 100 sqm are the standard in the luxury sector in Poland, while those sized approximately 200 sqm and above are very rare. By contrast, in the more developed markets, 200-sqm apartments are quite common, he said.

DOMINANT WARSAW

Poland Sotheby’s International Realty data shows that the market is concentrated in five large cities and agglomerations with Warsaw, Wrocław, the Tri-City, Kraków and Poznań together

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accounting for 72 percent of all transactions. The Polish capital alone accounts for 50 percent of deals in the sector. In absolute numbers, this is not much. In Warsaw, where some 24,000 apartments were sold last year according to REAS data, the average annual luxury sales are at the level of between 200 and 300. Also, the annual supply of luxury homes in the city lies somewhere between these two figures. In practice, this means that only a few (or just over ten in very good years) new luxury projects are launched in Warsaw annually. Neither the size of the Polish market nor the prices of luxury residential property in Poland are likely to grow significantly in the short-term perspective. The main reason for this is the fact that the biggest international capital is not present in Poland and the richest people in the world are not doing business in Warsaw. As this is not likely to change in the coming years, the market will rather

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Cosmopolitan in Warsaw

Neither the size of the Polish market nor the prices of luxury residential property in Poland are likely to grow significantly in the short-term perspective

grow in a stable way as Poles become more and more well-off. In Wojciechowski’s opinion, the growth of the market is in line with the increase in the number of affluent Poles. According to him, foreigners account for a relatively small share of transactions in the luxury residential property market in the country. There are factors hindering the development of the market on the supply side too. The availability of sites for new luxury residential schemes continues to be a major problem in Warsaw – mainly due to unresolved land ownership and planning issues, Kirejczyk said. Unstable supply is one of the teething troubles in the sector. Nevertheless, one can expect new schemes to hit the market in the near future. “A number of very interesting luxury projects located in the downtowns of the largest Polish cities are currently in the pipeline,” Wojciechowski said. In his opinion, buyers in this sector are now rediscovering central locations and there is a lot of demand for the best properties in urban centers. Some of the schemes there are not even advertised in the media, he noted.

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INSTITUTIONALIZED LUXURY RENTALS COMING TO POLAND

WBJ sat down with Xavier Jongen, management board member at investment manager Catella Real Estate, to talk about the company’s No. 44 rental apartments in Warsaw and the luxury rental property market in Poland INTERVIEW BY ADAM ZDRODOWSKI

WBJ: The institutionalized luxury rental property market is still almost non-existent in Poland. What was the rationale behind your unprecedented decision to acquire 72 rental apartments in the Złota 44 residential tower in downtown Warsaw last year? Xavier Jongen: Firstly, we believe that the market in Poland, and Warsaw in particular, has changed a lot over the last 28 years. That Poland is currently still an ‘unidentified institutional residential investment market’ does not change market fundamentals and actually gives a competitive advantage to those investors who do their homework and want to contribute to these fundamental changes. The residential market is fascinating both for historical reasons and for the current stage of where structural market-driven adjustments stand. Indeed, as the Polish people have

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Warsaw is already one of the great capitals cities of Europe, even if it is not always recognized as such

earned their improved living standards, they can afford to modernize their housing conditions. Clearly, Polish people have slowly started to substitute lesser quality dwellings for more sustainable and better-designed dwellings and also desire a more diversified market that includes room for an institutional private rental market. Importantly, this underlying demand for change is predominantly internally funded, unlike the transformation that occurred in the residential markets of former Eastern Germany. All of this yields great long-term investment opportunities and makes market developments quite robust. Warsaw is already one of the great capitals cities of Europe, even if it is not always recognized as such. Secondly, we think that Złota 44 offered a unique investment opportunity. This is a landmark building that has become part of the Warsaw skyline and is recognizable abroad.

When is the rental service in Złota 44 due to start? We plan to make the apartments available for rent on September 1. The building has already been completed, but some finishing work is still underway inside it. The first future inhabitants who have bought apartments in Złota 44 will be moving into the building over the summer. What will the rental prices be and what is the minimum rental period in Złota 44? We will offer apartments in three different finishing standards. Depending on the standard and the size of the particular apartment, the rental rates will range from approximately PLN 9,000 to around PLN 21,000 per month, which includes access to an unparalleled level of service and amenities. As for the minimum rental period, we want the asset to be in line with our other long-term institutional investments. Consequently, we shall be renting the apartments for at least 12 months, but of course there may be some minor exceptions. However, we will certainly not offer onenight or weekend stays in the building. How large is the pool of potential tenants? Luxury rentals like those offered in Złota 44 are great because they offer optionality – a term from Nassim Taleb. We have defined six different market segments which include CEOs and other top managers of international companies, diplomats and top level civil servants, Polish business people who require a second home in Warsaw, Polish seniors who have sold their home and would like to actively retire in a healthy environment, shared living for successful young professionals and the liberal employed like lawyers who seek a perfect mixture between a home and a working space offering unparalleled professional amenities. We estimated the potential demand for luxury rentals in Warsaw and concluded that these segments represent very significant numbers. Are you planning further acquisitions in the luxury residential property market in Poland? We do not want to be too exposed to the luxury sector of the market, especially since we have already invested in the best asset. Since the Złota 44 acquisition, we have also made two other purchases in the residential market in Poland – in Warsaw's Wola district and in Kraków – but those were in a different price segment. We want to continue to be an active investor in rental properties in Poland. We are constantly looking for new opportunities to invest and will probably make another acquisition in the Polish market later this year. What is the availability of this kind of investment product in Poland? This kind of product is hardly available in Poland unless you are interested in new developments. We are interested in cooperating with developers on the development of rental apartments. However, with

the residential market in Poland now putting up a very strong performance, not all developers want to sell packages of apartments to investors. The prices of apartments sold to individual buyers are higher than the average apartment price in a package sale so in the current market situation many developers find package sales unattractive. However, with us, developers can de-risk their position and raise their corporate brand image, which some of them find a very attractive proposition.

UNPRECEDENTED DEAL In July last year, Catella Real Estate, acting on behalf of the Catella Wohnen Europa fund, bought 72 luxury apartments located on floors 11 through 19 of the iconic Złota 44 residential tower in downtown Warsaw from investors Amstar and BBI Development. The buyer, for whom the acquisition – the first transaction of this kind to have been signed in Poland to date – marks the entry into the Polish luxury residential property sector, intends to rent the Złota 44 units on a long-term basis under its newly created No. 44 brand.

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LOKALE IMMOBILIA | RESIDENTIAL

POLAND’S LUXURY SECOND HOMES As the summer vacation season arrives, we take a look at new luxury second homes in some of Poland’s major seaside and mountain resorts. According to Marlena Kosiura, an expert from InwestycjewKurortach. pl, an industry website, Poland still lacks classic luxury second-home villas that can be found in southern Europe, which are built for the most affluent and demanding buyers. However, a certain number of luxury apartments are usually included in large schemes that also comprise higher-standard apartments. Typically, these are the largest units in a given development, located on the top floors and offering panoramic views of the sea or the mountains. Some of them feature large roof terraces. The vast majority of luxury second homes are located on the Baltic coast and in the Polish mountains. In Kosiura’s opinion, it is difficult to find truly luxury residential property located on the shores of Poland’s lakes. The prices of the most prestigious properties range from PLN 1 million to PLN 3 million, Kosiura said. Here is a short overview of selected new second-home projects in Poland. All the schemes are scheduled for completion within the next few years and include what can be defined as luxury apartments. The list was compiled in cooperation with experts from InwestycjewKurortach.pl.

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PROJECT NAME: Dune (building 'B') LOCATION: Mielno INVESTOR: Firmus Group COMPLETION DATE: H2 2017

PROJECT NAME: Active Village LOCATION: Karpacz INVESTOR: Kristensen Group COMPLETION DATE: to be announced

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LOKALE IMMOBILIA | RESIDENTIAL

PROJECT NAME: Seaside Park LOCATION: KoÅ&#x201A;obrzeg INVESTOR: Equinox Capital Partners COMPLETION DATE: Q4 2018/Q1 2019

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PROJECT NAME: Gwiazda Morza LOCATION: Władysławowo

INVESTOR: Gwiazda Morza COMPLETION DATE: Q1 2019

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LOKALE IMMOBILIA | DESIGN

CHILLOUT SPOTS

Some bounce rubber balls against the wall, shoot hoops into a wastepaper basket, listen to tunes on their headphones, while others sneak out for a quick cig behind the office building. We all need to take a breather every now and then. With the increasing talent shortage, employers go out of their way to make their offices more appealing and attractive, and to stimulate their staff into working more efficiently. There’s something for everybody: foosball tables for the competitive types, bean bags, comfy couches and hammocks if you enjoy a quiet siesta, stationary bicycles for health nuts. They have all become quite commonplace in modern office design. There’s even something for music enthusiasts who feel like they could use a little bass jam session in the middle of the afternoon to get their creative juices flowing. Makes you wonder how much soundproofing the designer had to put in to accommodate everything! Check out this month’s lineup of some of the most relaxing and most radical chillout spaces in Polish offices.

Right: JLL OFFICES (WARSAW SPIRE, WARSAW) | DESIGN: Tétris | CONTRACTOR: Tétris

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LOKALE IMMOBILIA | DESIGN

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Opposite page top and above: WYBOROWA PERNOD RICARD OFFICES (LUMEN, WARSAW) | DESIGN: Massive Design | CONTRACTOR: Tétris Opposite page bottom: AM TECHNOLOGIES OFFICES (JEROZOLIMSKIE BUSINESS PARK, WARSAW) | DESIGN: Katarzyna Bachanek-Duś | CONTRACTOR: Spaceplan Below: STANLEY BLACK & DECKER OFFICES (PROXIMO I, WARSAW) | DESIGN: Tétris | CONTRACTOR: Tétris

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LOKALE IMMOBILIA | OFFICE

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BROUGHT TO YOU BY MERIDIAN

The World is Getting Smaller, You Just Need To Grab It

Aldona Ponikowska is the IB Diploma Coordinator at Meridian International High School in Warsaw. She teaches English and a Theory of Knowledge. She holds a master's degree in English Philology and a postgraduate degree in Business Management from the University of Illinois and the Technical University of Lublin

WBJ: You are the head of the IB Diploma Program in one of Warsaw’s leading private high schools. Who is that program for? Aldona Ponikowska: It’s for most students, Polish or foreign. However, it must be remembered that it is a demanding course. Consequently, the chances of success are higher if the candidates are motivated, have a good level of English and strong analytical skills. The IB Diploma is recognized by most universities in Poland and abroad, including the world's top institutions. Usually, non-Polish candidates decide to do the program. Most of them come to Poland for a short period of time, two or three years only, after which they move to a different country. But the IB DP is also an opportunity for Polish candidates who are interested in studying abroad, or would like to have such an option available. At Meridian, we observe a growing number of Polish kids who apply to our school because of the IB Diploma Program. However, high school candidates can also continue their education in the Polish “Matura” Program that is offered here alongside the IB DP. How does the IB Diploma differ from the Polish “Matura” Program? It differs a lot. First of all, the course takes two years of consecutive study. The induction period can be called a Pre-IB course. It combines teaching the core Polish curriculum with an introduction to the actual IB Diploma course. The Polish curriculum is taught in Polish and English. By the end of grade 10, our students make their final decisions regarding the subject choices for the two-year ID DP program. What about the curriculum? The idea behind the IB Diploma Program is not only to expand a student’s knowledge in varied areas, but also to develop their critical thinking skills and prepare them for another level of education and living in a modern society. One may say it is closer to university studies than to traditional schooling. The program requires much more individual work and

activity than the Polish “Matura” Program. Apart from acquiring knowledge, all students are expected to submit written work for each selected subject, which is then internally marked and externally moderated. Their results, combined with the scores of the final examinations, contribute substantially to the overall assessment in a subject. It is also mandatory for the students to complete a course in the Theory of Knowledge, CreativityActivity-Service program, and write a research paper on one selected subject – a so-called Extended Essay. What subjects are taught? By the end of the Pre-IB class, a candidate chooses their subjects from six subject groups, which include: Studies in Language and Literature, Language Acquisition, Individuals and Societies, Sciences, Mathematics and The Arts. Three of those must be completed at a standard level and three at a higher level. All students also have to attend Theory of Knowledge classes, which focus on critical reflection, exploration of the nature of knowledge and appreciation of varied perspectives. What subjects are available in those groups? It is actually school-dependent. An authorized school may offer any number of courses available in a group. Within the tenyear period we have been offering the IB Diploma Program, the number of courses on our offer has increased to approximately 20 subjects, including: Polish, English, French, Spanish, German, Business Management, Economics, Geography, History, Psychology, Biology, Chemistry, Physics, Computer Science, Mathematical Studies, Mathematics and Visual Arts. All of the courses are taught by long-term IB DP teachers, some of whom have substantial academic experience.

MERIDIAN INTERNATIONAL SCHOOLS ul. Wawelska 66/74, 02-034

SOCIAL MEDIA

We know that a social media presence is a must nowadays. We utilize various platforms to bring the best results, which translate into brand awareness and sales results. We know what kind of content engages customers. We know how to speak their language and initiate discussions. We stay up to date with trends. We react instantly. We offer a valuable opportunity to communicate with customers in real time. See more at www.sm.valkea.com

Life + Style Sweater, Vistula, PLN 199

SUMMER SETS SAIL

The sea breeze is breathing new air into marine design, combining classic, understated elegance with sporty, laid-back ease

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Life+Style 01

Magdalena Iwańska Fashion editor, stylist, trendsetter.

Magda creates fashion and lifestyle magazines for Valkea Media and is often involved in Poland's biggest fashion events, co-operating with and helping style showbiz celebrities.

CULT RETRO AVIATOR GLASSES, LEATHER BELTS AND A CLASSIC WATCH ARE MUST-HAVES NOT ONLY FOR A YACHTING ENTHUSIAST. TO COMPLETE THE SEASIDE LOOK YOU’LL NEED LEATHER LOAFERS OR URBAN SPORTS 04 03

05 1. Tommy Hilfiger, PLN 619 2. Yes, PLN 159 3. Ray-Ban/Perfect Vision, from PLN 600) 4. Tommy Hilfiger, PLN 129 5. Omega/W.Kruk, PLN 38,700 6. Vistula, PLN 149 7. Sebago/S'portofino, PLN 540 8. Max Mara, PLN 645 9. Weekend by Max Mara, PLN 1,419 10. Max Mara, PLN 6,509 11. Michael Kors/Yes, PLN 1,300 12. Lacoste/Apia, PLN 299 13. Ray-Ban/Perfect Vision, from PLN 1,000

(All brands can be found at Dom Mody Klif)

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Coat, Solar, PLN 699; Jumpsuit, Solar, PLN 529; Bag, Solar, PLN 249

THE ALWAYS-ELEGANT WHITES, THE INVARIABLY STYLISH NAVY BLUE – TOGETHER WITH ALL THE OTHER SHADES OF BLUE – WILL HELP YOU BRING OUT YOUR SUMMER RADIANCE AND HIGHLIGHT YOUR SUBTLE TAN. ACCESSORIZE WITH WHITE AND NAVY BLUE BELTS, AND A TOUCH OF GOLD 10 11

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Life+Style

Coast To Coast

Summer brings with it Poland's annual stampede towards the coastline. Yet while most resort towns find themselves submerged under scrums of braying holidaymakers, finding a class coastal retreat has never been more easy...

Alex Webber Journalist

Based in the Polish capital since 2000, for the past six years Alex has served as the editor-in-chief of the Warsaw Insider lifestyle magazine. He regularly contributes to both domestic and international titles specializing in subjects ranging from business and real estate to culture and travel.

THE HIGH LIFE SOFITEL GRAND

Since Sopot's inception as a tourist destination, the talk of the town has been the Grand Hotel by the bottom of the pier. Originally completed in 1927, this historic hotel has greeted everyone from Greta Garbo and Marlene Dietrich, to Charles de Gaulle and... Adolf Hitler. The private beach, luxury spa and champagne-sipping guests ensure that the sense of Gatsby-esque luxury lingers to this day. (Sopot, sofitel.com)

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FOR WOW FACTOR

THE LONG TREK

BOULEVARD

VILLA PARK

ON THE WATER

FOR HOME COMFORT

HT HOUSEBOATS

SIELSKA CHATA

ALL PHOTOGRAPHS PRESS MATERIAL

Mere meters from the sand, Boulevard presents a string of luxury apartments lined up against the beach. Super modern by design, the key feature of these glass-fronted behemoths are floor-toceiling views of the ocean out in front. If you᾽re really splashing out, then the “exclusive” suites come with the additional bonus of a rooftop jacuzzi with vertiginous views of the crashing waves. (Ustronie Morskie, blvd.pl)

Despite the name, the lodgings at HT don't so much resemble traditional houseboats as they do floating blocks of glass and wood. Beautiful in every respect, there's more to HT than novelty factor alone: the sensation of opening the curtains each morning to find yourself on the sparkling waters of Lake Jamno is a buzz in itself – it's a feeling beaten only by watching the sun go down with a glass of something bubbly. (Mielno, hthouseboats.com)

Viewed on a map, Villa Park rubs shoulders with Germany and all manner of tacky resort towns. Despite this, the atmosphere here is of seclusion and serenity. Windy cliff-side beaches and pristine woodland are ripe for exploration should you tear yourself away from the hotel, though that's not necessarily a given. Spend your days chilling out in the spa before retreating to white-on-white rooms that are the epitome of class. (Wiselka, villa-park.eu)

This wood-framed fisherman's cottage has been repurposed as a charming guesthouse with soothing colors and a cheerful style. A piece of home-from-home, there's a warmth here that's often absent from your more generic tourist options. They're also justly proud of their food, which includes their own-made preserves, pickles, cheeses and suchlike: dinner under the stars is what memories are made of. (Leba, sielskachata.pl)

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Life+Style

CITY SLICKERS

FROM HEL

GDAŃSK PURO

FULINOWO

Designed by the London-based practice DeSallesFlint, accommodation in the Puro involves touchscreen tablets to 'control the environment' and beds that are marshmallow soft. Naturally though, guests gravitate towards the striking, brick-lined public areas that are filled with vibrant pops of artwork and eclectic items accrued from design stores. The gabled townhouses, soaring steeples and cobbled back alleys of Gdańsk's historic center are practically on your doorstep. (Gdańsk, purohotel.pl/gdansk)

When the tourists arrive, there are times when the Hel Peninsula really can feel like the physical embodiment of... hell. Less frantic than its neighboring hotspots, the fishing town of Kuznica feels like a breath of fresh air, and so too does its Fulinowo guesthouse. Rooms have a contemporary nautical style, though expect to find yourself spending most of your time swinging in a hammock on the quiet, wood-clad patio. (Kuznica, fulinowo.pl)

3 2 1

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SOPOT SECRET

DESIGN MINDED

FISHER HOUSE

CISOWY ZAKÄ&#x201E;TEK

Sopot's strength lies in the variety of its accommodation. If you're looking for something more personal and private, then eschew the big brands for lodgings such as Fisher House, a charismatic boutique residence with a flowery garden and rooms that are both chic yet homely. Although well segregated from the human flotsam that streams into town, the nocturnal attractions of Sopot are just a 10-minute walk should you want to join the party. (Sopot, fisherhouse.pl)

Ideal for a break with plenty of friends, Cisowy is comprised of 14 bow-roofed bungalows that have each been highly personalized and creatively-styled: you imagine it's a matter of time till the interiors are profiled by Wallpaper* or Dwell. Fields and forests and sun-kissed beaches are within easy reach, as is the award-winning local restaurant, Ewa Zaprasza. (Sasino, cisowyzakatek.pl)

5 6

7 8

01. Willa Park

2. Boulevard 3. HT Houseboats 4. Sielska Chata 5. Cisowy ZakÄ&#x2026;tek 6. Fulinowo 7. Sofitel Grand 8. Fisher House 9. Gdasnk Puro

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EVENTS

Warsaw Business Journal relives the most important recent business and industry events

CAN POLAND BECOME A FINTECH LEADER IN EUROPE? The FutureTech Congress ended its two-day event devoted to innovations in the fintech, insurtech and big data industries. During two days of debates and speeches, Polish and foreign experts talked about the impact of technology on the future of business. More than 2,500 attendees participated in the congress, which featured over 150 panelists and speakers representing such industries as fintech, insurtech, big data, finance, banking, insurance, IT, consulting and start-ups, as well as public administration.Deputy Prime Minister Mateusz Morawiecki, emphasized that Polish fintech solutions are already gaining ground on international markets. “We want to be the Silicon Valley of CEE. More and more creative projects and joint initiatives are taking place in Poland and Central Europe,” Morawiecki explained in his speech on the first day of the FutureTech Congress. “The state should create good development conditions for entrepreneurs. If we can also support their grants or inspire cooperation with universities and other companies, that is how modern economic ecosystems are born,” the Deputy PM stressed. The FutureTech Congress, which is organized by MM Conferences S.A., is an event that consists of three projects taking place simultaneously and featuring three thematic pathways: the FinTech Digital Congress, the InsurTech Digital Congress and the BIG DATA: Think Big CEE Congress. The speakers at the Congress were both experts from abroad, such as Chris Skinner, Stephen Brobst, Spiros Margaris and Ghela Boskovich, and leading Polish entrepreneurs and managers from the financial and technological sector: Zbigniew Jagiełło, Łukasz Wejchert and Cezary Stypułkowski.The Congress was also accompanied by the FutureTech Night event with the FutureTech Awards for the best solutions, products and services in the fintech, insurtech and big data industries. Among the winners were ZenCard, Alfavox, Grupa Warta, Polski Standard Płatności, Vivus Finance, Currency One, Alior Bank and Samsung Electronics Polska.

Traditional Polish cuisine • Live music • The best wine, regional beer and spirits • Grand Kredens • 20 years full of tradition

Share your opinion!

Al. Jerozolimskie 111, tel. +48 22 629 80 08. mob: +48 697 900 000, kredens@kredens@kredens.com.pl, www.kredens.com.pl

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ON BUSINESS AND THE ECONOMY – THE 9TH EUROPEAN ECONOMIC CONGRESS More than 130 sessions, 700 speakers, over 9,000 participants, including 660 media representatives – the ninth edition of the European Economic Congress (EEC) has ended in Katowice. The Congress was attended by representatives of the EU administration, the Polish government, the Polish and EU parliaments, ministers and deputy ministers from Europe and around the world, CEOs from the largest businesses, experts, and opinion leaders. The European Start-up Days event held in parallel in the Spodek Arena was visited by over 2,500 people. “Once again, the European Economic Congress spoke with a strong voice in economic circles on what will decide the future of Europe and Poland. For three days Katowice was the meeting place for various professional groups and opinions. The diversity of views on the discussed issues showed the enormous value of the project, generated ideas, and allowed us to observe trends which will impact the economy in the years to come. This year’s edition of the Congress was attended by over 9,000 participants, and the European Start-up Days by more than 2,500. If entrepreneurs and young people display such a huge interest in the event, it means that creating space for dialogue and the establishment of business relations makes sense,” said Wojciech Kuśpik, President of the PTWP SA Group, the initiator of the European Economic Congress, summarising this year’s edition of the event. During a gala accompanying the EEC, the best-practices and investment-success stories were awarded in the 6th edition of the Top Communal Investments competition. This was a special edition focused on projects completed in the public and private partnership (PPP) formula. The awarded municipalities included Warsaw, Kraków, Płock, Poznań, Wrocław, Sierpc, Katowice, Solec-Zdrój and Szydłowiec.

WARSAW DINING DESTINATION indoor food hall with exciting events, plus 19 great restaurants, cafes and speciality shops 63. Koszykowa Street 5 mins from Warsaw Central train station 200 parking places

www.koszyki.com

HalaKoszyki

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EVENTS

Warsaw Business Journal relives the most important recent business and industry events

NEW RETAILERS ARE COMING TO POLAND THE FOURTH EDITION OF THE REDI FAIR TOOK PLACE ON 7-8 JUNE AT THE NATIONAL STADIUM IN WARSAW. A CONSIDERABLE INTEREST IN POLAND THIS YEAR TRANSLATED INTO A RECORDBREAKING ATTENDANCE BY MORE THAN 40 RETAILERS INTERESTED IN OPENING THEIR STORES IN POLAND

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“The talks with the representatives of brands lasted since the end of 2016; apart from the representatives of European brands, guests from the US, Ukraine and Turkey also visited ReDI. We haven’t said the last word yet; other retail chains have already declared that they will take part in next year’s edition of the fair, as their expansion plans are still in a too early stage to participate this year,” said Radosław Knap, General Director, Polish Council of Shopping Centres. Furthermore, the fourth edition of ReDI welcomed nearly 400 representatives of retail and service chains operating in the Polish market. ReDI is one of the few occasions in the year when managers, developers and service providers for shopping centers can meet such a wide range of tenants. Unsurprisingly, the meetings at the fair resulted in the signing of several lease agreements for space in shopping centers. This year’s ReDI fair was also a place of important meetings: developers and retailers could meet representatives of municipal authorities who presented their cities' investment offers that included plots of land and space for lease in attractive locations. The ReDI City Zone was also an opportunity to build good relations with local governments, which are so important in the everyday operation of projects. Apart from meeting new and expanding retailers, cities, developers and asset managers, service providers and industry experts, the fair provided an opportunity for its participants to gain knowledge during the series of panels ReDI to Talk. “Last year, 22 new brands entered Poland. The Polish market is ready for new retailers, and there are plenty of those interested in developing in Poland. We are glad that more than 40 new brands decided to roll out in the Polish market and participate in the ReDI fair. The Polish Council of Shopping Centres, being an association acting in order to advance the industry actively encourages new brands to become interested in Poland and to provide businesses operating in the Polish market with an opportunity to meet their representatives,” Knap said. The Polish Council of Shopping Centres has already started endeavors to acquire representatives of new brands for the fifth edition of ReDI, which will take place in 2018. The aim of the organizer is to beat this year’s record and to generate a stronger interest among brands and distributors present in Europe and expanding from the Middle and Far East.