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Practical "Optimism" As An Economic Engine

[fa icon="calendar'] Wed, Mar 14, 2012 / by David Dallaire

Quick Thoughts On The Polish Economy

I had the good fortune on Monday to attend an event held by the Pacific Northwest Chapter of the Polish American Chamber of Commerce at the World Trade Center in Seattle this past Monday, March 12th.  The event was set up to take advantage of the Aerospace and Defense Supplier Summit being sponsored by Boeing and held in Seattle this week. There was a fairly good contingent of executives from Polish manufacturers and contractors as well as some of the government agencies charged with attracting and guiding FDI to Poland and it's Special Economic Zones.

This is the second event I have attended this year, and what stood out for me at both events was a reminder of a concept I called "Practical Optimism" which I first experienced years ago right after I started my career in Japan. The Poles have done wonders with their economy since the fall of communism in 1989. In addition to embracing membership in the EU and the customs benefits that brings, they have continued to invest in their manufacturing sector to create a youthful, yet highly skilled population of capable workers, and complemented that with the opening of fourteen special economic zones which are spread throughout the country on over 20,000 hectares of land that are designed to attract both manufacturing and services FDI. While the diverse set of industries that many of them have attracted accounted for much of the buoyancy of the Polish economy during the recession (it was the only EU member state who's economy continued uninterrupted growth throughout the recession), some of these have started to specialize to achieve the economies of scale and the efficiencies of production that are so common to some industrial areas in China.

Clustering in Special Economic Zones

One area in particular has concentrated on aerospace, and is now known as "Aviation Valley". Poland has a somewhat rich, yet largely overlooked contribution to early aviation (see some history here, here and here), but sees a future in it as a major player in the parts and equipment sectors that support the industry. Why? The leaders I spoke with at this event were all consistent about a few key factors: the relative youth of their workforce; the transparency and simplicity of their regulations in the SEZs and the advanced metalworking skills they feel that is part of their manufacturing culture where they excel beyond the typical skill set a competitor in, say, China would find. The combination has certainly paid off: Since 2003, the SEZs have grown from 18 manufacturers to over 90, with employment growing from 9,000 to over 23,000.

But there was one other advantage I could see that became apparent after six or seven conversations with some of our visitors - it was the "Practical Optimism" referred to earlier. You see, there are any number of countries where much of the investment environment can be replicated, but what I think Poland has hit upon is a somewhat refreshed national identity of "We can do this!"  One senses that there is a strong consensus around looking forward to the future (rather than hanging on to old glories or bitter memories of the past) and tackling every obstacle with a measured dose of practical problem-solving. They seem to truly believe they now own their own destiny, and are not about to waste the chance (they have a long history of heartbreak to motivate them as well).

Polish Air Force WWIBut there was one other advantage I could see that became apparent after six or seven conversations with some of our visitors - it was the "Practical Optimism" referred to earlier. You see, there are any number of countries where much of the investment environment can be replicated, but what I think Poland has hit upon is a somewhat refreshed national identity of "We can do this!"  One senses that there is a strong consensus around looking forward to the future (rather than hanging on to old glories or bitter memories of the past) and tackling every obstacle with a measured dose of practical problem-solving. They seem to truly believe they now own their own destiny, and are not about to waste the chance (they have a long history of heartbreak to motivate them as well).

"Optimism" as an Element in Economic Planning?

Countries like Brasil come to mind for their recent string of successes in making all these parts work together. Yet others, like the Philippines, seem to have the positive, optimistic elements but not the practical steps required to justify the positive attitude that is all around. It also makes me wonder what we in the U.S. can learn from some recent successes of smaller countries like this. There was a time when everyone here had a similar "We can do anything" attitude, but that seems to be inconsistently found across many classes and political lines while we have also simultaneously forgotten about how important a continuing investment in our labor force is to justify a forward-looking approach.

How about where you live? Does optimism play a factor and would more of it help?

For a great site with all the basics on investing in Poland, including some easy-to-digest statistics, check out the PAIZ agencies site here.  And for local Seattlites, use these sites to stay on top of all things Polish in Business or Culture (I've also been told the restaurant at the Polish Home Association is a hidden gem in Seattle as well!).

David Dallaire

Written by David Dallaire

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