In Poland: Innovate to Invigorate

New. Creative. Idea-driven. Disruptive.

Businesses around the world are relying on change to build their brands. In Poland, experts say, businesses need a little more of this entrepreneurial spirit. In short, they need to innovate. And to be innovative, small- to medium-sized businesses need a nudge both from the state and from organizations like the World Bank. Right now, the World Bank is working with Poland’s Ministry of Economy to develop an innovation system that is local, organic, and business-driven.

The idea is to create “Made in Poland” innovations; innovations that keep the economy bustling and that solve local and global needs with local ideas. Economists worry that growth might stagnate if Poland doesn’t start shifting from imitating others to generating new ideas, from quantity to quality, from potato chips to microchips.

Simply put, Poland has not yet invested enough in Research and Development (R&D) and innovation. And the impact of that spending seems to be less meaningful than similar spending by its central European peers, at least so far (this might be the result of the time lag between an action and observable results). In 2013, R&D spending amounted to only 0.9% of Poland’s GDP, at the tail end of European Union rankings.

Poland simply can’t afford to increase public spending on R&D while continuing to achieve negligible results. Efficient investment of more than 10 billion euros from the European Union (EU) and budgetary funds until 2020 will be instrumental in pushing the country toward new, innovative business ideas.

But, World Bank experts say, to fully benefit from these large funds, Poland must create a climate of entrepreneurial inquiry, where innovative ideas (both disruptive and incremental) are able to be conceived, nurtured, and ultimately delivered in the form of a viable business.

The way to do that is to go back to the drawing board and start from the firm level, and move up.

What do innovative companies really need?

If we don’t know, let’s ask them. The World Bank is conducting in-depth interviews in four regions of Poland to learn from innovative entrepreneurs what their actual needs and barriers to growth are. Seasoned experts conduct the interviews with the companies’ top management, based on a structured questionnaire.

The resulting information, likely to be the first of its kind in Poland and Central Europe, will help detect the types of behaviors and types of firms—“champions,” “emerging champions,” and “sleeping beauties”—that could provide the highest rate of return on public investments to support R&D and innovation.

Which economic activities to prioritize?

The World Bank is also experimenting with so-called “Smart Labs.” These Smart Labs bring together fifteen-plus cutting-edge professionals, from innovative companies, academia, research and development institutes, the government, local leaders and the World Bank. The aim of Smart Labs is to analyze the business potential of a potential growth area like “healthy food” or “smart homes.”

The focus would then move to whether there is enough critical mass for R&D-driven growth in a certain area, and the best ways for public spending to support such growth. This sort of collaboration is the first of its kind in Poland and one of the first attempts in Europe.

How to “crowdsource” innovative ideas?

Crowdsourcing is another idea for improving the quality of the dialogue between the public sector and small- to medium-sized businesses. The World Bank will rely on crowdsourcing and ask companies to respond to questions about the opportunities and the barriers to innovation.

The crowdsourcing tool would be a cost-efficient method to collect specific ideas on how to improve the way public money is spent. The answers to these questions can be used to engage companies about the best ways to fuel growth and innovation both locally and around the country.

The key to success will be to convince companies to participate in the crowdsourcing. The World Bank plans to experiment with various inducements, from allowing the participating companies to compare themselves to industry peers to distributing lottery tickets for innovation vouchers to fund the companies’ ideas and a feedback loop will support the crowdsourcing process.

The more firms that participate in the process, the more ideas that will be generated.

Where do companies want to put their R&D money?

So far, officials from Poland’s national and regional innovation- support institutions have not yet sufficiently analyzed the data from thousands of R&D grant applications. That means they haven’t been able to tease out new business and technology trends, and adjust public spending accordingly.

The World Bank is now helping these institutions create a new way to collect and analyze data from more than 15,000 R&D and innovation grant applications to the National Center for R&D (NCBR). These applications reflect the real interests of the private sector in new technologies, supported with their own money.

The objective of the data analysis is to build “innovation maps” to better understand where companies see the real potential for innovation and R&D-based growth, and where the technological and business strengths of the country lie.

All of the four elements—firm interviews, Smart Labs, crowdsourcing and innovation maps—form a new process called “entrepreneurial discovery process” (EDP) to be piloted in four selected regions of Poland. The insights from the pilot will help create a process for replication across the country and beyond.