Minister Bienkowska recently announced that Poland will allocate Euro 10 billion to support innovation in Small and Medium Enterprises over the 2014-2020 period. Skeptics observe that Poland ranks 24 out of 27 within the European Union in terms of “innovativeness” and they claim that Poland is not ready yet to become a “Silicon Valley”. Who is right ?
When we talk about innovation, we often think about products like iPhones and 3-D printing, or services like Facebook and GoogleEarth. But this is a very limiting definition of innovation. What most specialists call innovation is the “development and commercialization of products and processes that are new to the firm, new to the market, or new to the world”. This is not only about new products, but also about new, more effective processes. This is not only about inventing something new, but also about applying existing technologies and processes in a new environment, in a new firm.
Poland has no choice but to innovate. Poland’s current model of economic growth may be gradually approaching its limit.
Over the last two decades, Poland’s growth has been driven by a “post-transition” catching up, relying on a relatively cheap, yet well-educated workforce. As the country gets wealthier, as income per capita increases, labor is becoming more expensive. Productivity has to increase in parallel if Poland is to remain competitive. This is where innovation is key.
Make no mistake. The time when innovative products were designed in the West and mass-produced in less-developed countries is rapidly coming to an end. China has dramatically increased its research effort and is now close to the vanguard in a number of areas. Korea is at the forefront of IT developments. New seeds are being developed in India and in Brazil. Chile, once a backward economy, is now a champion of innovation in a broad range of sectors. In the global course for competitiveness, Poland has no choice but to innovate.