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Driving Growth: The Role of SMEs in Poland’s Economy

Discover the latest insights into Poland’s SME sector with the "Report on the State of Small and Medium Enterprises (SMEs) in Poland 2024." SMEs in Poland contribute 45.3% of ...
The recently released “Report on the State of Small and Medium Enterprises (SMEs) in Poland 2024,” published by the Polish Agency for Enterprise Development, is a significant milestone as it commemorates 20 years of Poland’s membership in the European Union (Poland officially joined the EU in May 2004). This comprehensive report offers a detailed exploration of the SME sector, highlighting its performance, economic contributions, and challenges. The publication not only underscores the vital role SMEs play in driving Poland’s economy but also examines the impact of two decades of EU integration on their growth, competitiveness, and innovation. By providing valuable insights and actionable recommendations, the report serves as an essential resource for policymakers, entrepreneurs, and stakeholders aiming to strengthen the SME landscape in Poland and foster sustainable economic development.

1. Economic Contribution and Growth
Enterprises operating in Poland currently generate nearly two-thirds of the country’s GDP (67.9%). SMEs alone contribute nearly half of this figure (45.3%). Over the period 2004–2022, the financial performance of Polish companies has improved dramatically:

  • Total revenues of non-financial enterprises increased nominally by 3.6 times (to PLN 7.9 trillion).
  • Production grew by 3.4 times (to PLN 5.8 trillion).
  • Value added rose by 3.3 times (to PLN 1.9 trillion).

2. Employment Trends
SMEs employ over 6.9 million people, reflecting a 2.3% year-on-year increase. Microenterprises account for nearly two-thirds of this figure, employing almost 4.4 million people. However, small companies saw a decline in employment by approximately 12,000 people, and medium-sized companies by over 26,000. Conversely, large enterprises increased their workforce by nearly 67,000, employing a total of 3.4 million people (33% of the total enterprise sector workforce).

3. Financial Condition
All company categories reported nominal revenue growth in 2022:

  • Micro companies: +24.4%
  • Small companies: +20.4%
  • Medium-sized companies: +27.0%
  • Large companies: +27.7%

However, real growth was lower due to inflation. Profitability varied, with micro companies leading (8.0%), followed by medium-sized (6.3%) and small firms (6.0%). Large enterprises recorded the lowest profitability (5.4%).

4. Sector Specialization
The service sector’s importance rose from 42.8% to 55.2% (up 12.4 p.p.), and construction from 9.3% to 15.5% (up 6.2 p.p.). Meanwhile, trade (down from 35.7% to 20.0%) and industry (down from 12.2% to 9.3%) saw their shares decrease.

5. Export Growth
Since 2005, Polish exports of goods and services have tripled in real terms, reaching over PLN 2 trillion in 2022. The number of product exporters increased by 57% between 2007 and 2022, and service exporters grew by 69% between 2010 and 2022. However, only 4.8% of Polish companies export products, and 0.85% export services. Notably, foreign-capital companies dominate exports, contributing 63.6% of export value while comprising only 32.7% of exporters.

6. Innovation and Technology Adoption
Polish SMEs are increasingly embracing innovation. Between 2020 and 2022, 36.1% of industrial enterprises and 34.2% of service firms were innovation-active. The share of innovative enterprises rose from 22.5% to 32.5% between 2006 and 2022.

Significant progress is evident in ICT adoption:

  • Broadband access increased from 28% in 2004 to 98.7% in 2023.
  • Companies with their own websites grew from 44% to 67.3%.
  • The use of computer networks for orders rose from 4% in 2004 to 18% in 2022.

Top industrial innovators include:

  • Pharmaceutical products: 64.7%
  • Coke and refined petroleum products: 54.8%
  • Computers, electronics, and optical products: 54.1%
  • Chemicals and chemical products – 49.5%.

In contrast, the clothing manufacturing industry is the least innovative, with only 17.2% of companies engaging in innovation.

Leading innovative service sectors:

  • Insurance and pension funds: 88.9%
  • R&D services: 62.2%
  • Film and TV production: 61.0%
  • Information service activities – 50.9%.

On the other hand, the postal and courier services industry ranks lowest in innovation, with just 24.5% of companies implementing innovative practices.

7. Challenges and Future Directions
Despite the sector’s continued growth, SMEs face significant challenges, including complex regulations and skill shortages. Additionally, the adoption of advanced technologies such as AI remains limited, highlighting untapped opportunities for further advancement. To address these issues, the report emphasizes the need for supportive policies and increased investment in green and digital transitions, which are crucial for enhancing the competitiveness of SMEs.

The full report can be downloaded here (in Polish).

About the Author:

Alina Landowska
Alina Landowska
Alina Landowska is an Associate Professor at the University of Social Sciences and Humanities in Warsaw and a Research Fellow at the Centre for World Economy at the UKSW in Warsaw. Her research focuses on global economic trends, particularly international economics and entrepreneurship, using methodologies such as Big Text Data Analytics. She has s...
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