© Hannover Messe | Ralf Baumgarten

28.03.2017

POLAND IS RELYING ON ITS "COMING OUT" AT THE HANNOVER MESSE

Poland will get a lot of attention during this year's "Hannover Messe". It has big boots to fill. After all, the USA was the partner country of the industry trade fair in 2016. Poland, however, has stepped up to the challenge and would like to show its new strength in Hanover.

By Holger Paul

© Hannover Messe | Ralf BaumgartenThe task is undoubtedly difficult, but ungrateful? Tadeusz Kościński shakes his head decidedly. Of course, the USA as the partner country of the "Hannover Messe" last year enjoyed a great deal of attention, and the country still dominates the headlines due to its new president, Donald Trump. But will Poland go unnoticed as this year's partner country in Hanover? The State Secretary in the Polish Ministry for Economic Cooperation is not too worried. Poland, once an "imitation country", is now on the way to becoming an "innovation country". Kościński proudly points to the successes of young Polish companies in software development, in the FinTech industry and in emobility. Certainly, the lion's share of Polish companies are still small, many of whom do not dare to "go global". But that is precisely why Poland is campaigning for cooperation with foreign companies and the reason why the country will use the Hannover Messe to demonstrate its new strength. On an informational trip for the "Hannover Messe", Kościńsk promotes the exhibition as "a coming out for Poland". The Polish slogan for the industrial exhibition demonstrates total confidence: "Smart means Poland".

On the way to liberating itself from the low income trap

German and European companies, many of whom came to Poland just after the fall of the Iron Curtain 20 years ago, paint a more differentiated, but not negative picture of the neighbor to the east. The flexibility and willingness of Polish workers, as well as the enthusiasm of the younger generation for new technologies and digitalization are praised. The period when the best minds left the country to "Go West" seems to be over. Poland's younger generation wants to be successful at home. And the conditions for success are ripe: specialist staff and university graduates meet a labor market that desperately needs them. This should ensure that salaries increase - "a well-trained engineer already earns as much as in the West," says Kościński happily. Poland is on the way to liberating itself from the low income trap.

Poland is lagging behind in automation

This development is what the country desperately needs, as experts on the ground bluntly acknowledge that Poland is lagging behind in automation, practically having skipped Industrie 3.0. The transition to Industrie 4.0 is therefore even more necessary. Yet, compared to the West, the lower wage level is still one of Poland's biggest advantages, claim companies who are already established in Poland. When the plant in Tarnow in southern Poland was founded by five employees 20 years ago, the wages there were four to five times lower, says Frank Maier, Member of the Board of the Aerzen-based drive specialist Lenze. And this ratio is still relevant today in a plant that now has 160 employees and produces parts for around 50 machine tools. The cost advantage plays an important role - but so does the quality and motivation of the Polish employees. "What we produce or test here in Tarnow is of the same quality as that of German plants," praises Maier. And the icing on the cake is "the first-class collaboration with the local authorities". This is why the medium-sized companies want to grow and build here. Maier is sure that there should be more than 200 people employed in five years' time.

© Hannover Messe | Ralf BaumgartenPoland is still an extended workbench for Western companies today - but Poland is far more than that. The young Polish employees in particular are too confident, for example those trying out new ideas and technologies in the "application center" of Festo on the outskirts of Warsaw. Intelligent transportation of parts in production or a software-based solution for a pneumatic problem - the small test and research center is exemplary in the Festo Group in Esslingen. The average age of the employees here is 26 years and many of them are studying for a doctor's degree alongside their job, says Marcin Zygadlo, Managing Director of Festo Poland. But it will be more difficult to permanently retain these young people, since many young Polish engineers dream of setting up their own companies, says State Secretary Kościński. And the chances look good for both entrepreneurs and foreign investors. Poland plans to use a total of 82 billion euros from the EU coffers to modernize its own economy by 2020. Infrastructural development is the main focus - better rail connections as well as access to high-speed networks for the public and businesses.

Poland has become an important and strong trading partner

Even VDMA Eastern Europe Consultant Yvonne Heidler confirms: Poland has become an important and strong trading partner for mechanical engineering companies from Germany in recent years. The quality of Polish business has continually improved. "For many years, Poland has been a very interesting country for German mechanical engineering companies looking to invest in new sites," explains Heidler. "Solid growth rates of the Polish gross domestic product, reasonable labor costs, geographical proximity to Germany, the suppliers' quality and a highly-qualified workforce make the location attractive."

This is also reflected in the German mechanical engineering sector's country statistics, where Poland defended its 8th place in 2016's export ranking. In the past year, Germany exported machinery and plants worth 5.7 billion euros to its Eastern neighbor. "Exports thus increased by 0.9 percent compared to the previous year," says Heidler - the change in government kept investors in a state of uncertainty for a while. Further growth is, however, expected for 2017. Germany has been Poland's most important supplier of machinery for years. In 2015, 34.5 percent of the machinery imported to Poland came from Germany, with Italy (10.3 percent), China (7.4 percent) and the USA (4.7 percent) trailing far behind. "In addition to quality, the key advantage of German suppliers is their excellent service on site," the VDMA expert summarizes.

Further Information

Hannover Messe | Lenze | Festo

© VDMA
Contact
Holger Paul, VDMA Head of Communication.