A RECORD LEAP IN THE EXPORT OF BUSINESS SERVICES

Can exports be a remedy when the economy is slowing down? This is one of the questions that came up frequently during the 31st Economic Forum in Karpacz in September. The forum featured many discussions on macroeconomic indicators, including exports. The value of exports is also a key indicator for ABSL, with the sector’s performance in this area breaking new records and exceeding expectations.

BY DARIUSZ KUBACKI

The latest ABSL report, Business Services Sector in Poland 2022, shows a higher than expected growth rate in the sector. In February this year, over 400,000 people were employed in 1,714 service centers. The sector’s estimated contribution to GDP is 4.4%, with the value of exports rising to US$26.4 billion, reflecting a record leap of 15.1% year-on-year. The surplus of exports over imports stood at US$11.3 billion.

One Of The Fastest Growing Sectors Of The Polish Economy

More than 47,000 new jobs were created in the second year of the pandemic, an increase of 11.6% year-on-year. Consequently, the industry's share of total employment in the enterprise sector increased from 5.6% to 6.2% (year-on-year). Forty-six new centers began operations, creating 6,400 jobs. There is a visible increase in reinvestment which, despite a smaller number of new entities than last year (74), resulted in a significant increase in the number of jobs. Most new companies established operations in Warsaw, Tri-City, Katowice, GZM and Krakow. Currently 72% of all centers belong to foreign investors from 46 countries. One in five Fortune Global 500 companies have opened a service center in Poland.

A MULTI-FACETED IMPULSE

The influx of foreign investors launching new service centers or increasing their existing presence is one of the key impulses for the Polish economy. This impulse is multi-faceted. Poland is in a leading position among OECD countries in terms of the number of investments acquired, the driving force of which are de facto business services that are increasingly enhancing the image of Poland among global corporates. Poland has proved to be a location from which multiple business directions can be served, with the effect that an increasing number of centers located here have a global reach. This in turn has resulted in the transference of global roles, giving Polish managers the opportunity to manage global processes. At the same time, foreign investors employ over 80% of all employees in the sector, providing them with access to the latest global solutions along with knowledge transfer. The sector is providing more and more complex services, which also gives a strong impetus to education in the field of future competences.

A Record Share Of Highly Specialized Business Services

The modern business services sector in Poland currently has 1,714 workplaces offering business process outsourcing (BPO), shared services (SSC/GBS), IT and research and development (R&D) centers. The complexity of services provided is systematically increasing. The role of complex processes and a further shift to middle and front office environments that generate higher added value is increasing. Global functions are being transferred to Poland, with the share of highly specialized knowledge-based services (KIBS) now 6.5 p.p. higher than before the pandemic.

Pushing Boundaries

The sector has just passed another important milestone. For the first time in history the share of highly specialized services encompasses more than 50% of all services provided in Poland. This clearly shows that our market has significantly changed and matured. Taking into account that 130 workplaces are created in the sector every day, with around 75 of these jobs in highly specialized positions, these “competences of the future” are clearly important.

Talent Pool As A Key Challenge To Growth

Executing increasingly complex processes and taking over global functions require advanced capabilities in both the digital area and soft competences. It is critical to join forces in order to introduce systemic solutions, which are a necessary condition for further development. The events of the last two years have additionally proven the importance of labor market regulations and legal predictability. In addition, global trends, such as changing work patterns and the increasing importance of employees’ well-being, combined with high inflation and wage pressures, require companies to take decisive action. As a result, 85% of companies are considering starting to look for employees outside Poland, and 20% of companies have already recruited abroad. More than half of the sector’s companies are investing in educational programs to improve employees’ skills or enable them to acquire new qualifications.

Driving Business Through Diversity And Inclusion

Currently, centers in Poland employ more than 55,400 foreigners, which accounts for 13.8% of all employees in the sector. In nearly half of these centers (47%), the number of foreign workers constitutes at least 105. The largest group among foreign workers are people from Ukraine (21.9%), followed by Italy (9.0 %) and India (7.9 %). India appears for the first time in the top three (replacing Spain). Data collected just before Russia's invasion of Ukraine indicated that 12,000 Ukrainian citizens were employed in the sector in Poland.

… AND BOOSTING CITIES

The latest ABSL annual report indicates that there are modern business services centers in 84 locations. In 18 of them, the total number of jobs in the sector exceeded 1,000 people, and in eight - 10,000. It is worth noting that Bydgoszcz joined this group of cities as it reached 11,500 sectoral employees. The report shows that smaller cities with over 100,000 residents are becoming increasingly attractive to companies from the business services sector. The city with the largest number of people employed in the sector is still Krakow, with nearly 93,000 people.