Are IT investments in Poland still profitable?

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

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).

When deciding to invest 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 been attracting foreign investors also for the IT industry for many years.

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

This offer is appreciated by investors. 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. 38 million potential consumers in the country, an approximately 500-million-strong market in Europe is incredibly attractive in terms of business. In addition, Poland is a leader in the CEE region when it comes to attracting greenfield investments.

We wrote about Poland’s geographical location in Europe and its economic importance in the previous paragraph. The location of our country has huge advantages in the context of transport, supply chain, or even access to the workforce.

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

Poland is in Central Europe. Thanks to this, you can quickly and efficiently reach virtually any country in Europe. There are 15 passenger airports in our country. The largest airports are Warsaw Chopin Airport, Kraków-Balice Airport, and Gdańsk Airport. These airports offer flights not only to European countries but also to transcontinental ones. Airplanes fly to most European cities every day, or even several times a day. You can fly to European 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 labor market is well developed. Labor costs are still among the lowest and are growing at a slower rate 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. According to EngiRank 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 first cycle and uniform IT majors. It is currently the most popular field of study. What’s more, most experts are fluent in English as well as German, French, Spanish, and Italian. Thanks to this, the language barrier does not affect communication.

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

Poles are an innovative nation. It is estimated that about 60% of all start-ups in Poland are 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. Thanks to this, their know-how can be much broader than that of 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. It is also important to find a reliable partner who will support you in legal, HR, and fiscal activities.

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