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According to the Minister of Economy, non-government organisations can play an important role in this sphere. - The execution of projects whose goal is the implementation of innovative solutions in the economy, needn’t be the exclusive domain of public administration - he said. The deputy premier however drew attention to the issue of the need to find solutions connected to EU law. In this way he addressed the tasks of NOT, regarding the introduction of innovation under the framework of the Innovative Economy Operational Programme (IE OP).

The implementation of innovative measures could also be eased by the abolition of legal barriers. - The European Union has stated that over five years the administrative red tape should be reduced by 25% - the Deputy Premier said. He announced that Poland’s target in this sphere would be established early in 2008. - We intend to reach the position where Poland becomes the easiest country in Europe to run a business in - he added.

Attending the meeting with the deputy premier, were: the NOT National Council, the Governing Body, the presidents of the associations affiliated to NOT and the presidents of the NOT Individual Regional Organisations.

The Polish Federation of Engineering Associations (NOT) is the largest organisation of engineers in Poland (app. 120,000 members). One of the organisation’s goals is to support innovation in the field of small and medium sized businesses. NOT organises competitions, checks motions from the Ministry of the Treasury and allocates additional finance for industrial research and development work from budgetary sources. It also participates in the IE OP.

However, the IMF also warned that inflationary pressure in the near future would remain. This will be caused by factors like, the increases in real incomes and the higher levels of productivity in industry.

In accord with the IMF forecasts, in 2008 inflation will be above 2.5% and for most of the year the inflation rate will be above the higher inflationary limit of 3.5%.

Therefore, according to the IMF a further tightening of monetary policy is applicable. But, as Mr Thomson stressed - It must be a careful tightening of monetary policy. It is important to meticulously follow the performance of the foreign markets and also to watch out for wage pressure.

Mr Poul Thomson underlined that in order to maintain a lively economy in the medium term, the government must carry out essential reforms. Firstly to control the increasing wage pressure and secondly to speed up structural reforms.

- The International Monetary Fund acknowledges the Polish government’s declaration of bringing down the deficit to a level of 1% of GDP by 2011 - he said.

The fund supports the government’s proposed tax reductions, but as Mr Thomson emphasised the country’s priority should be to reduce the deficit. This is why the IMF urges Poland to cut spending, to rationalise and sort out the social programmes, which mainly refers to pensions and early retirement.

Reform is needed in retirement and pensions and also the Agricultural Social Insurance Fund. An employment level increase is also essential, especially among those over the age of 50.

Mr Thomson drew attention to the fact that app. 70 items of Poland’s public expenditure are so called fixed sums, regulated by laws. This is why the IMF urges the government to verify the statutes. - The crucial issue will be the reorganisation of the social programmes - he said.

The leader of the IMF mission also stated that the fund supports Poland’s declared intention of joining the Euro, as quickly as the conditions allow. He emphasised, that the adoption of the Euro would mean the abandonment of an independent monetary policy. This is why it must be ensured that the economy “is prepared to withstand the shocks by increasing the elasticity of fiscal policy”.

INVESTMENTS IN POLAND

As Rockwool have stated, the opening of the third production line at the Małkinia works will begin in July 2008. The investment is largely due to the growing demand for building materials, which has been particularly visible since Poland’s entry into the EU.

According to the President of the Board of Rockwool Poland, Mr Andrzej Kielar, the development will enable the doubling of production capacity at Małkinia, together with the creation of 75 new workplaces. A further 100 jobs will be created among firms cooperating with the plant.

The investment is being carried out by an international team of engineers and specialists, from Poland and Denmark. Most of the construction and assembly work, will be carried out by local Polish companies.

- The investment of an international corporation such as Rockwool is a sign to other businesses and companies, that it’s worth considering Suwałki’s SEZ for the location of an enterprise - said Mr Grzegorz Markiewicz, board president of the SSEZ. - The development of the factory in Małkinia is not only the opportunity for new workplaces in our region. It’s also a tangible sign for western firms, that it’s worth locating a business here - he added.

The development of the Małkinia works is another of the company’s large investments in Poland. In August 2006 a modern production line for the manufacture of ceiling tiles was opened at a factory in Cigacice. The value of that investment was over 70 million PLN and enabled the creation of 80 jobs.

Rockwool Poland has been operating since 1993; it produces stone wool at two factories - in Cigacice and Małkini. During the 15 years of its activities in Poland, Rockwool has invested over 400 million PLN. Both of the Polish factories have been acknowledged as being the most productive plants in the Rockwool group and the marketing strategy of the Polish section - as the best strategic plan in 2001.

Last year the Zone, which is publicly financed, had its area increased by app. 100 ha and there was a marked increase in employment among the firms operating within its area.

- In 2007 in comparison to December 2006, there was an increase in the actual workplaces created of app. 40%. 10 firms began trading. At the end of 2006 there were 3,340 workplaces, whereas at the end of III 2007 (these are the figures that are currently available to us) there were 4,761 – the president Mr Szymon Madera, emphasised.

According to the statistics from the first three quarters of last year, the level of capital investments in the SSEMP was almost 1.2 billion PLN, which is a 20% increase compared to the figure from 2006. According to the SSEMP these figures confirm the commitment of investors to the chosen locations and provide an optimistic tone regarding the stability of the local labour market.

Among the most recent investors is the Polish-Dutch firm Hoomark Artex, which will invest 10 million PLN in Wykroty. The fully automated plant will be built on a site of 1.5 ha and 20 people will be provided with work, in the production of patterned paper and decorative items. Another investor is the Karko company, which already operates in Kamienna Góra, its second plant will be set up in the halls vacated by Floreta. The investment is to be worth 2 million PLN and by 2009 10 workers will be employed in the production of lamps and lighting equipment. In Lubań, on the terrain of the former Railway Repair Works, on a 0.5 ha plot, a connection for concrete will be established by Łużyce Beton. The investment will be worth 2.5 million PLN. The entrepreneur promises to employ 6 workers by the end of March 2009.

4 further companies that have been awarded permits and will begin trading: in Lubań financed by German capital Zeibina Kunstoff-Technik Poland Sp. z o.o. (plastics), in Nowogrodziec the Dutch firm Wieffrink Poland Sp. z o.o. (also plastics), in Janowice Wielkie the German Thom-Poland Sp. z o.o. (metal products) and in Kamienna Góra the Irish producers of wooden windows and doors Wilton Timber Products Poland Sp. z o.o. The company will invest a total of 5.3 million PLN and employ 70 people.

Currently talks are being held with investors regarding trading in: Kamienna Góra, Lubań and Ostrów Wielkopolski, in the sectors of construction, furniture and the motor trade.

The management have declared their desire for further areas for investments and they plan to increase the zone’s terrain by 200-300 ha. They’re interested in Jelenia Góra, Wykroty, Bogatynia, Lwowek ¦l±ski and Lubomierz.

- The procedure in connection with gaining new areas and assessing their usefulness for investment is in progress, so currently it’s hard to specify what amount of land we will finally be recommending for inclusion in the special economic zone – the president explained.

This year there will also be investments in the construction of service roads and provision of utilities for the plots, the SSEMP has designated almost 8 million PLN for this.

October a record month for the automotive industry
October was a record month in the history of the automotive industry in Poland to date - it was stated by the Polish Motor Industry Chamber (PIM). The value of exports reached a new value of 1.63 billion EUR. The achieved results enable the maintenance of PIM’s forecast, which anticipated a value above 16.1-16.2 billion EUR for the whole of automotive industry in 2007.

The result was 21% above that of October 2006. This excellent result was achieved by the export of parts (130%), passenger cars and commercial vehicles (112%).

Over 10 months in 2007, automotive products valued in excess of 13 billion EUR were exported abroad (almost 1.6 billion EUR more than in the analogous period in 2006). The ratio of growth in the period was 13%.
The main recipient - is still the EU
The EU has been dominant as the major recipient and market for the Polish motor industry’s products. During the period mentioned, 86% of all the exports reached this market.

Germany remains the most important export market, receiving a quarter of all Polish produce. Second place was taken by Italy with 20%. Third and fourth places, were taken by Spain and Gt. Britain (each with 6%) and then finally in fifth place was France, which received 5%.
The unchanging 3 pillars of exports
Exports from the automotive sector continued to be dominated by three groups of products: passenger cars and commercial vehicles (export value 4.6 billion EUR), parts and components (3.9 billion EUR) and high compression engines (2.6 billion EUR). Their joint share in the exports of the period mentioned was 85%.

Exchange rates (as of 24.01.2008):

	Buy	Sell
USD	2.4688	2.5186
EUR	3.5962	3.6688

Source: www.nbp.pl

ANALYSES AND REPORTS

Accumulated strategic risks in global business

Legal regulations, sudden changes in financial markets and ageing corps of personnel, are the most serious risk factors that will influence the future of businesses in 2008 - it appeared from a new report by the consultancy firm Ernst&Young.

The report “Strategic risks in business in 2008 - The ten most serious threats on a global scale”, indicates the level of risk in the main branches of the world’s economy, together with the five most rapidly growing problems.

- The report presents an outline of all the threats that we’re able to see - said Mr John Murphy from Ernst&Young. - The causes of the risks and the way of accounting for them will change over time.

Legal regulations and issues of their compatibility with the law, remains the most serious strategic risk factor for the largest global corporations - the report states. At the forefront of the threats is placed the upheavals on the world’s financial markets, the increasing ages of personnel and of clients. In many sectors these have forced upon the enterprises an essential adaptation to drastic changes in demand and the limited availability of qualified staff. Among the threats has also been noticed the inability to utilise gains in growth from the eastern markets.

- Together with the level of growth in the globalisation of firms, the question of compliance with regulations is becoming a rapidly increasing challenge - explained Mr Jim Holstein from Ernst&Young. - Companies are forced to take notice of varied regulations in different markets.

Among the remaining questions are the transformations in sectors, upheavals on the energy markets, increasing costs, rapidly growing pressure to use ecological solutions and changes of demand.

The analysts where then asked about the remaining fears outside of the top ten risk factors, which could make an impact on the world’s economy over the coming 3-5 years. The five greatest were - the deficit in specialists in the labour market, a pandemic, the growth (and presumably fall) of the level of investment in private equity, the inability to introduce innovation and the state of the Chinese economy.

The list of the ten most important risk factors varies depending on the economic sector considered. This emphasises the gravitas of a good knowledge of the sector in the process of analysing and managing the strategic risk. However, the survey enables teams to assess the most important risk factors, which could affect every business regardless of the sector of activity.

Mr Holstein explained how by the help of a few simple operations managers could minimise the threat. - It’s important to have an open mind and to precisely analyse the business environment. Each year it’s worth carrying out a risk assessment, to prepare a scenario, then to check how we would cope in the given crisis situation, if it were actually to occur. It’s also important to ensure whether the control and monitoring processes are working, which would inform us of an impending threat. The worst thing is to be subject to a surprise! - he added.

The report was written on the basis of the answers of over 70 analysts worldwide, representing over twenty fields that affect the economic environment.

Source: www.ey.com

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