As the authors of the report “The role of domestic capital in the economy” argue, two decades ago foreign capital was a symbol of the success of the Polish transformation. Factories with German logos, French retail chains, American shared services centers – all this created the impression of a country that had finally become part of the West. Today, however, this model is exhausted. As the PKO BP report shows, further development requires a new impulse: strong domestic private capital.
— Capital has nationality. Growth based solely on the inflow of foreign investments is no longer guaranteed. Poland needs its own strong companies that will invest and create jobs based on national savings, he argues Piotr Bujakchief economist of PKO BP.
In the years 2000–2020, Poland was a textbook example of the success of globalization. The inflow of foreign direct investment helped build modern industries and increase exports. Companies with foreign capital are responsible today over 60 percent Polish exports and employ one third of the workers enterprise sector.
The rest of the article is below the video
Price of success: EUR 15 billion less per year
According to OECD data, cited by the authors of the banking publication, foreign demand has increased since Poland's accession to the European Union 2.5 million jobs. However, alongside the benefits, there were also costs – financial and decision-making. Poland has today negative net international investment position (-EUR 242 billion)which means that more capital in the country is owned by external investors than by Polish companies abroad. Moreover, according to the PKO BP report, each year approx. EUR 15 billion in dividendsi.e. nearly 2 percent. GDP. This money could finance research, innovation and investment that must wait today. — Growth based on external capital has made Poland a manufacturing power, but also an economy with a surplus of labor and a property deficit – we read in the PKO BP report.
Read also: Poland has fantastic economic indicators. Except for one thing. Here we have a problem
Small companies, big problems
The authors of the report note that the structure of Polish entrepreneurship resembles a pyramid with a very wide base. The vast majority of companies are micro-enterprises, and only a few reach an international scale. According to the report only 9.3 percent Polish companies can be considered fast-growingcompared to the EU average of 10.5%.
The largest industries – automotive, electronics, chemicals, pharmaceuticals – are dominated by foreign concerns. In 2024 foreign capital generated 38 percent. added valueeven though it constituted only 8 percent. companies operating in Poland. This means that the Polish economy – although modern – remains a wage economy.
Efficiency versus profitability
As the authors of the publication argue, foreign concerns are more productive and have access to modern technologies, know-how and financing. The data shows that labor productivity in companies with foreign capital is 40-50 percent. higher than in enterprises with domestic capital. However, in recent years, Polish companies have started to catch up, especially in the food, furniture and ICT (information and telecommunications technologies) industries.
What's more, net profitability (ROS) in many domestic companies is higher than in foreign companies. In industries such as the production of furniture, metal products and electrical appliances, Polish companies achieve higher margins, despite their smaller scale. According to PKO BP experts, this is proof that local knowledge and flexibility can compete with global structures. Companies with Polish capital understand the local market better, respond faster to changes and invest more often in relationships than in pure scale.
The PKO BP report indicates three sectors in which domestic capital is a condition for national security: energy, arms and pharmaceuticals.
Read also: Small and medium-sized companies benefit from digitalization. How not to get left behind? [RAPORT]
Energy: whoever controls electricity controls the state
Polish groups such as PGE, Tauron, Enea, Energa today ensure the country's energy security. However, the position of foreign investors is growing in the renewable energy sector. The share of Polish companies in the supply chain for offshore wind farms is: only 20-25 percentalthough the government target is 50%. Meanwhile, as the PKO BP report emphasizes, the energy transformation can become a powerful development impulse if most of the investment will stay in the countryand will not flow to foreign contractors.
Arms: an impulse for technology and exports
After the outbreak of a full-scale war in Ukraine, revenues of the defense sector in Poland in four years they doubled from PLN 15 to 30 billion. Polska Grupa Zbrojeniowa and its companies have become a pillar of security and one of the largest employers in heavy industry.
Domestic capital in this sector is also transfer of technological knowledgewhich can strengthen other sectors of the economy – from robotics to digital systems.
Pharmacy: the most difficult independence exam
Although Poland is the fifth drug market in the EU, its share in European production is only 1%. The authors of the report point out that as many as 70 percent The industry's revenues are generated by foreign companieswhich are often limited to the packaging of medicines and their distribution. Poland's trade deficit in this industry is already 6.7 billion eurosand the domestic production of active substances (API) is marginal. PKO BP experts call for: systemic tax, grant and refund incentives for Polish pharmaceutical companies. — State security also means the ability to independently ensure access to medicines and medical technologies, argue the authors of the report.
Savings, fuel for investment
In Poland, the national savings rate is 17.5 percent GDPand investments – less than 17 percent. This is well below the EU average. PKO BP economists remind the so-called Feldstein–Horioka puzzle: countries that save little cannot invest much without foreign debt. Therefore, according to the authors of the report, strengthening domestic capital requires the development of long-term forms of savings, the mortgage bond market, investment funds and the activity of venture capital funds. — We must learn to finance our own development from our own resources. Without this, we will only be a subcontractor of someone else's future – he comments on the research results Marta Petka-Zagajewskadirector of the Macroeconomic Analysis Office of PKO BP.
Selective openness instead of protectionism
The authors of the report do not call for closing the economy, but for “selective openness”. In their opinion, Poland can still attract foreign investments, as long as they are there they strengthened local value chains and did not drain capital. Preference should be given to projects with a real impact on the economy – with production, research and development centers and decision-making functions in the country – It is not about protectionism, but about balance. Global capital can be an ally if it operates within the framework of the Polish development strategy, says Bujak. The report ends with a clear conclusion: strengthening domestic capital is not an ideology, but an economic necessity. The Polish economy is entering a decade in which the advantage will not be determined by cheap labor, but by the ability to invest, innovate and financial independence.
