Are IT investments in Poland still profitable?

IT investments in Poland were often considered profitable. For many years, Poland has been at the forefront of countries in terms of IT investment popularity. Poland has a developed technology sector, and many IT companies, including international corporations, operate in the country.

In this article, you will learn:

• Which large IT companies have invested in Poland?
• What affects the attractiveness of the market for new investments?
• What attracts IT investments to Poland?
• What is the greatest asset of the Polish IT market?
• Is Poland an innovative country, and what impact can it have on your business?

The Polish economy is developing steadily and seems to emerge from successive crises unscathed. Despite the pandemic or the war in Ukraine, it remains an attractive country for foreign investments. Poland is ranked 3rd* in the list of the best countries to invest in Central and Eastern Europe. International giants such as Motorola, Samsung, Nokia, Google, Microsoft, IBM, Cisco, HSBC, Visa, and Intel have opened their branches in many Polish cities.

Large IT companies have opened their R&D centers and successfully run their projects here, employing several hundred to several thousand employees.

(*Global Best to Invest 2023 report).

Before investing in a specific country or region, companies consider several factors.

The most important of them are:

•  economic stability,
• investment potential,
• location,
• human capital,
• innovation.

Economic stability facilitates the establishment of long-term development strategies. Investment potential allows you to estimate business growth.

The location and extensive infrastructure enable distribution and supply chain planning.

Human capital and innovation allow us to assess whether our business has a chance to be implemented.

Poland has also attracted foreign investors to the IT industry for many years.

Investors appreciate belonging to the European Union and NATO, which is a kind of security guarantee for businesses opened here. An additional advantage is investors’ access to the single European market.

The Polish government offers foreign investors many facilities. The most important of them are:

• 14 economic zones where new enterprises can count on preferential tax rates
• Status of a science and research center (enables real estate tax exemption)
• Support for innovative enterprises under PAED government grants

Investors appreciate this offer. Let the numbers prove it: in 2022, over EUR 3.7 billion was invested in Poland.

Poland is the largest country in Central and Eastern Europe. With 38 million potential consumers and an approximately 500-million-strong European market, Poland is incredibly attractive in terms of business. In addition, Poland is a leader in the CEE region in attracting greenfield investments.

In the previous paragraph, we discussed Poland’s geographical location in Europe and its economic importance. Our country’s location has huge advantages in terms of transport, supply chain, and even access to the workforce.

North-south and east-west transport routes intersect in Poland. In addition to road, rail, and sea transport, air transport is worth emphasizing.

Poland is in Central Europe. This lets you quickly and efficiently reach virtually any European country. There are 15 passenger airports in our country. Warsaw Chopin Airport, Kraków-Balice Airport, and Gdańsk Airport are the largest airports. These airports offer flights not only to European countries but also to transcontinental ones. Planes fly to most European cities every day or several times a day. You can fly to Europe’s capital cities in a maximum of 3 hours. For example, a flight from Krakow to Oslo takes about 2 hours, to Barcelona 2 hours and 45 minutes, and to Berlin 1 hour and 15 minutes.

For the IT industry, access to reliable Internet is crucial. In second place are modern office spaces.

The extensive Internet infrastructure means that companies do not have to limit themselves to employees living in a specific economic zone. A reliable Internet connection covering the entire area of our country allows you to hire IT specialists from all over Poland.

The volume of modern office space is constantly growing in Poland. At the end of 2022, office space reached 12.2 million square meters.

The labour market is well developed. Labour costs are still among the lowest and are growing slower than in other European countries. We also have one of the lowest unemployment rates. According to various reports, there are currently about 586,000 people working in Poland. IT specialists. Their number is constantly growing.

Most specialists with many years of experience have completed higher education. Polish technical universities educating IT staff are among the best in Europe. EngiRank says the best university in New Europe is the Warsaw University of Technology. The second place was taken by the AGH University of Science and Technology in Kraków. Polish computer science students are regularly finalists in international programming competitions.

In the 2022/2023 academic year, 44,000 students started their studies in the first cycle and uniform IT majors. IT is currently the most popular field of study. What’s more, most experts are fluent in English, German, French, Spanish, and Italian. Thanks to this, the language barrier does not affect communication.

The IT market in Poland is highly effective in encouraging the economic migration of specialists from neighbouring countries.
Emphasizing the advantages of human resources for investments in Poland, one should mention the lack of differences in business culture. The way of communication, behaviour, and approach to work is consistent with the Western work style. It is worth mentioning that Poland is in the same time zone as most Western European countries.

Poles are an innovative nation. About 60% of all start-ups in Poland are estimated to be from the IT/ICT industry. Most start-ups are in the Dolnośląskie and Mazowieckie voivodeships. In third place is Kraków, in the Lesser Poland Voivodeship.

Why should the number of start-ups be important for IT investors in Poland? IT specialists gather valuable experience in greenfield projects, which allows them to have much broader know-how than specialists working on brownfield projects.

In recent years, we have noticed a trend of “regionalization” in foreign investments.

There is a shift away from investing in distant countries, and more and more companies from Western Europe are choosing to nearshore.

However, regardless of whether we choose a nearshoring or offshoring strategy, the profitability of the investment depends on many factors. Entering a new market requires, above all, a precise definition of the investment objective. Then, it is worth analyzing the competition, customers, or the market. The first months are crucial for the success of the investment. Finding a reliable partner supporting you in legal, HR, and fiscal activities is also essential.

Are you considering investing in Poland’s IT market? Are you looking for a business partner who is an expert in introducing foreign companies to the Polish IT market?