The business services sector stabilizes the economy

Despite the pandemic, the business services sector is still one of the fastest-growing sectors of the Polish economy. Employment growth in the sector was 3.9% last year, while the overall Polish economy contracted by 2.7%. In 2020, employment increased to 355,000, new investments and reinvestments were made. Seventy-four new service centers began operations, creating 4,800 new jobs. Most new jobs were created in the Tri-City (14.1 thousand), Warsaw, and Poznań.

Currently, the share of the modern business services sector in GDP is over 3.5%. Due to the international nature of services, most centers provide services to clients from all over the world, and thus the sector remains a significant exporter. The estimated value of business services exports in 2020 was nearly $23 billion (22.9), increasing 10.2%. The sector's share of total exports, including goods, is at 6.9%.

Demand for "competencies of the future"

The modern business services sector in Poland currently creates 355,000 jobs in 1,602 business process outsourcing (BPO), shared services (SSC/GBS), IT and research and development (R&D) centers. The latest data confirm that the complexity of services provided in Poland is systematically increasing. There is a clear trend towards a more significant role of complex processes and further transition from back-office to middle-office, generating higher added value. At the same time, trend-driven changes are increasing the demand for employees with digital competencies.

The labor market sees increased demand for specializations that can be considered future competencies and are related to process automation, cloud architecture, analytics, and big data mining. The need for employees who can perform global functions is noteworthy. Soft skills such as teamwork, communication, or critical thinking are the competencies that make them successful.

Our analyses confirm the increase in the complexity of tasks performed in service centers, which require increasingly higher qualifications and competencies of employees. One of the main challenges of development from a time perspective is the availability of appropriately prepared staff. To maintain the competitiveness of Poland and the transformation from settlement centers to decision support centers, we need systemic, often long-term solutions, including the expansion of the talent base. We need to take care of the development of competencies related to innovation, modern technologies, digitization, and thoughtful solutions to encourage highly qualified specialists to stay in Poland. Lack of eligible employees who could introduce innovations is also perceived as a barrier to the development of innovativeness - emphasizes Wojciech Popławski, Vice President of ABSL.

Tri-City, a leader in creating new jobs

Among major business service centers, the largest percentage increase in employment between 2016 and 2021 was recorded in the Tri-City (by 88.4 percent, or 14.1 thousand people), with significant growth also recorded in Warsaw (85.6 percent) and Poznań (72.0 percent).

The annual ABSL survey, which assesses factors that influence business operations in different Polish cities, also shows that Tri-City is the leader in the category of perception of quality of life, followed by Wrocław and Poznań, and the leader in the category of cooperation with local investor service centers, followed by Łódź and Wrocław respectively.

- The business services sector is one of the critical elements of the strategy for economic promotion and investment attractiveness of Pomerania, implemented by the Pomerania Development Agency as part of the Invest in Pomerania initiative. The increase in employment in the sector in Pomerania is a result of objective advantages reflected in statistical data, thriving companies that are the best ambassadors of our location, and support from the institutions established for this purpose. Together with our local government partners, under the patronage of the Self-Government of the Voivodeship, 10 years ago, we committed that Pomerania would be a stable, safe, open, and friendly region for all the residents and guests. By fostering attitudes of kindness, caring for one another, and acting for the common good, we create an attractive space for residents to live and for entrepreneurs to do business by the declaration "Values in business and everyday life in the Tri-City and Pomorskie Voivodeship" adopted by the Voivodeship Local Government and the authorities of the individual cities that make up the metropolis - says Piotr Ciechowicz, Vice President of the Board of the Pomerania Development Agency.

From the role of imitator to the position of innovator

The ABSL Strategic Foresight 2021 study shows Poland is no longer considered a low-cost location but rather a location with optimal costs per value generated. Soon, the key will be the ability to innovate, to continuously commercialize improved and new services and solutions introduced to the global market, where Polish centers already operate. Innovation will become the dominant method of operation.

The ABSL report shows that the modern business services sector in Poland is characterized by a high level of innovation. As much as 72.9 percent of representatives of the sector declared the introduction of innovations in the last 3 years in comparison to 26.1 percent noted by the CSO in the sector of enterprises. The innovations concerned changes in products, assortment, processes, or company organization. The analysis shows that currently, one of the main challenges of the business services sector is the transition from the role of a follower to the part of the creator of global trends, which means that a significant change in mentality towards greater creativity and innovation and expansion of decision-making competence is needed.

- An essential factor in the development of the economy is the growing and innovative service sector, which, together with modern and competitive industry, creates a synergy that is crucial for the further development and future of Poland. The drivers for the development of both sectors will be digitization, shortening of supply chains, and a pool of talent available on the market with competencies matching the needs of the business - emphasizes Anna Kornecka, Deputy Minister of Development, Labour and Technology.

Demand for hybrid offices

Accelerating digitalization, changing the work model to hybrid or completely remote, the need to look for new talents, and the emphasis on developing soft skills - these are the prominent trends that result from the ABSL report. The post-pandemic reality will require new patterns of behavior and a redefined role of offices. Currently, office space is estimated at 11.9 million square meters. Poland is the undisputed leader in the office market in the CEE region and one of the global leaders. Despite the economic slowdown, more than 707,000 sqm of new buildings were completed in 2020, a level comparable to 2019. Regional markets follow the capital's growth and reap the benefits while encouraging foreign investors to open regional offices once the headquarters' operations are up and running.

ABOUT THE REPORT (The raport is available here)

The report was prepared by the Association of Business Service Leaders (ABSL) in cooperation with The Adecco Group, Colliers, and Mercer. Polish Investment and Trade Agency is an honorary patron of the publication "Business Services Sector in Poland 2021". A substantial partner of the publication "Business Services Sector in Poland 2021" in the scope of developing data on the science and higher education sector is Information Processing Centre - National Research Institute.

About the Polish Investment and Trade Agency

The Polish Investment and Trade Agency (PAIH) is an advisory institution operating in cooperation with the Polish Development Fund Group (PFR) under the leadership of the Ministry of Development, Labor and Technology. PAIH is the first point of contact for exporters and investors. It operates both in Poland and through a network of offices around the world. It works to strengthen the recognition of Polish brands on international markets, promotes domestic products and services as well as technological solutions made in Poland. The agency helps entrepreneurs choose their optimal expansion path abroad. It also supports the inflow of direct foreign investments to Poland and the implementation of Polish investments in the country. PAIH cooperates with the public sector and regional partners, offering, among other things: training, audit and promotion of investment properties, cooperation in the organization of business missions and communication support in the implementation of joint projects.

ABOUT ABSL

Association of Business Service Leaders brings together more than 220 of the world's largest companies representing a sector that employs more than 350,000 people in Poland. Over 1.5 thousand service centers, scattered in more than 50 cities, create a thriving ecosystem supporting innovative solutions implemented by international corporations. ABSL aims to build attractive and sustainable ecosystems, which through this positive engagement, will create new, valuable jobs and responsibly develop investment and business in local communities.