New strategy, old challenges. The government is setting ambitious goals for businesses.

• The Ministry of Funds and Regional Policy has published on the government website a draft of the country's medium-term development strategy - "Poland's Development Strategy until 2035".
• This document broadly presents three issues: economic competitiveness, social and territorial cohesion, and national security.
• In the Global Innovation Index, Poland ranks 40th and is described as a country "performing below expectations in relation to its level of development."

The Ministry of Development Funds and Regional Policy has published a draft of the country's medium-term development strategy on the government website – " Poland's Development Strategy until 2035. " This document broadly outlines three issues: economic competitiveness, social and territorial cohesion, and national security.

The area of ​​recommendations dedicated to the economy primarily addresses the dilemmas associated with the still low level of innovation in our economy. Poland ranks 40th in the Global Innovation Index and is described as a country "performing below expectations relative to its level of development."

Experts primarily highlighted the low level of innovation among small and medium-sized enterprises. Over the past two decades, Poland has strengthened its position as an exporter. In 2023, Poland's share in global goods exports reached approximately 1.5% – nearly three times higher than at the beginning of the 21st century. Compared to 2001, Poland has moved up 10 places in the ranking of the largest global exporters, from 32nd to 22nd, according to data from the Polish Development Fund (PFR). However, this result mainly refers to goods with a low or medium level of technological advancement.

If Poland does not change its economic structure and does not focus on technological development, from 2028 the annual GDP growth will not exceed the threshold of 2%.

Advantages of the Polish economy in building a model based on knowledge and technology

The Polish economy is highly diversified compared to other countries. This means that production spans multiple industries, and in the event of a crisis in one sector, there is room for adaptation in others. Together, the three largest industries account for 35% of Poland's exports. By comparison, this figure is 55% in the Czech Republic, 50% in Slovakia, and 42% in Germany (data from the Observatory of Economic Complexity).

The Polish economy demonstrated considerable resilience during the Covid-19 pandemic crisis, which was characterized by significant volatility in consumer preferences. During this time, the Polish economy quickly adjusted its production to the changing conditions, increasing production in some sectors while reducing it in others. As a result, Poland recorded a relatively shallow recession in 2020 and a strong rebound in 2021.

This also bodes well for the economy's transition to higher-value production chains. Economies with narrow specializations have much greater difficulty adapting to new technologies.

Other important elements on which Poland can build its advantage are macroeconomic stability and a high level of human capital.

"Particular attention should be paid to the low debt of the Polish economy – both public and private. Among the 14 indicators monitored by the European Commission are the levels of public and private debt, with permissible thresholds of 60% of GDP and 133% of GDP, respectively. In both cases, Poland is below these values," we read in the government's draft strategy.

During the transformation period, Poland significantly improved the quality and scope of education, and the benefits will be visible for decades to come. In this area, Poland has managed to build a strong position in the services sector, particularly in areas such as IT. As a result, Poland currently records a high and steadily growing surplus in its trade in services (5.3% of GDP in 2023 – NBP data).

The Polish economy suffers from structural flaws that hinder its development

The primary factor that will hinder Polish technological development will be the labor shortage. Poland reached a working-age population of 24.6 million in 2010.

"By 2024, this number had already fallen by approximately 2 million workers. Until now, this decline had been offset by a high increase in professional activity and, as a result, the number of people working in the economy was growing. However, it is possible that its peak value has already been reached in 2023-2025 (nearly 17.4 million) and these labor supply reserves will gradually shrink . The number of people of working age will decrease by another approximately 1.5 million by 2035 and by approximately 6 million by 2050. Therefore, a decline in labor supply seems inevitable," we read in the government's draft strategy.

Polish companies can take advantage of the decline in the number of employees by increasing production automation in their plants.

In the Polish manufacturing sector, there are 78 industrial robots per 10,000 employees. This is significantly less than the EU average (219) and more than five times less than in EU leader Germany (429 – IFR data for 2023).

Another factor hampering Polish development is the persistently low pace of research and development (R&D) spending. Although the sector's share has increased from 0.5% to 1.6% in recent years, it remains below the EU average of 2.2%. Another structural problem facing Poland is the persistently low level of research commercialization. However, in terms of results—such as the percentage of companies implementing innovations, the number of patent applications filed, and the sales of innovative goods and services—our country stands out negatively.