Poland's Entrepreneurs Reinvent the 'Private Operator' Stigma

Article excerpt

Part 1 of a two-part series on Poland's rising economy

Tomasz Kasprowicz received a PhD in economics in the US and then returned to his native Poland for a plum job as a consultant at McKinsey & Company. In terms of salary and prestige, the position was unparalleled.

But ultimately Mr. Kasprowicz decided to take a far less established path. He quit and started a tiny IT company near Krakow in 2008.

"I wanted to do what I wanted, which is not possible if you work full-time at a corporation," says Kasprowicz, a young father dressed in a checkered button-down shirt and sneakers on a rainy Saturday afternoon in Krakow.

It's a sentiment that any young, smart, university-educated person might express. But in a Polish context, it underlines something new going on here: a sense of optimism in this Central European nation after decades of isolation from the West and exile to the periphery of European affairs.

Yes, the economy has radically slowed, showing that the red-hot growth that made Poland the only European Union nation not to fall into recession in 2009 is not limitless. Some say Poland has hit a wall, or will soon, if more is not invested, especially in innovation and relieving business owners of burdensome bureaucracy. Polls also show a populace tiring of the center-right party of Prime Minister Donald Tusk, after his party was the first to be elected for two consecutive terms since the fall of communism.

But Poles do not seem to have lost faith in their country, viewing it as a continuing success story within feeble Europe. The most hopeful even see its rise - alongside other nations of Central Europe as southern Europe flails - as part of a much bigger repositioning of continental power.

"Europe has always been totally imbalanced. Europe meant 'Western Europe,'" says Marcin Piatkowski, an economics professor at Kozminski University in Poland's capital Warsaw. He says he believes Poland is entering a "golden age," part of a tectonic shift that is equalizing power for the first time in modern history.

"We are as close to the 'West' as we've ever been," says Mr. Piatkowski, sitting in a Warsaw Starbucks downtown, where the Soviet- era Palace of Culture and Science once loomed lonely over the skyline but is now accompanied by slick, modern highrises and cranes building more.

A new stage of growth?

Poland's economy has been one of the most robust in Europe. In 2009, it grew by 1.6 percent, while the EU contracted on average 4.5 percent, leading Prime Minister Tusk to declare the country a "green island" in a sea of red. But Poland's growth rate for this year is estimated at about 1 percent, and strong growth could peter out, say critics, if reforms aren't made.

There are many factors that have buoyed Poland's economy in the past 20 years, and all have natural limits. After the fall of communism, the 1990s saw insatiable consumption in a population of 38 million. After Poland's accession into the EU in 2004, it received billions of euros in structural funds to build things such as new roads and highways. Companies making labor-intensive products like cars are drawn to Poland's cheap but educated labor force. In the most recent crisis, the depreciation of the zloty, Poland's currency, kept exports strong. (Though committed to adopting the euro eventually, Poland is likely many years away from doing so.)

But consumer demand has slowed, and growth is not sustainable without a new focus that makes it easier to do business, says Jeremi Mordasewicz, an economist at the Polish Confederation of Private Employers, called Lewiatan.

If the first and second "phases" of economic growth were the fall of communism and Poland's entry into the EU, he says, today the country needs a "third impulse" to boost growth. "Entrepreneurs are crucial for us to make the gap smaller between Poland and the rest of Europe," says Mr. Mordasewicz.

While entrepreneurs were tolerated to a degree in the Soviet era in Poland, they were still viewed with some distrust. …

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