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Key findings from the diagnosis of Innovation and enterpreneurship

dr Piotr Tamowicz

piotr@tayloreconomics.com

 Piotr Tamowicz, Michał Przybyłowski (Taylor Economics)


Key findings

  1. 1. Metropolitan area (MA) constitutes the central point of Pomorskie Voivodeship economy. The stock of enterprises located here (74% of all operating in voivodeship including 81 out 100 large foreign investors) as well as other resources contribute to huge concentration of assets, challenges and problems within a narrow space.
  2. 2. MA combines promising mix of endogenous and exogenous development factors. Internal market is a common basis for business development. It is large in nominal terms (about 1,55 million of inhabitants) although not big enough comparing to southern Poland with is population mounting to 1/3 of a whole country. Prospects for its further significant growth are fragile, while aging of society may additionally affect present demand structure. Some additional growth may be pushed up by development of tourism industry which perspectives improved recently due to heavy investment in high ways and rail. But the internal market has its limits which can be broken out only by wider access to international markets. Direct access to deep see harbor, shipyards, and international routes makes MA naturally exposed to world markets offering comparative advantages over other Polish cities.
  3. 3. There are huge differences between core area of MA and so called surrounding area. The core attracts big companies, more sophisticated and advanced projects. The majority of processing industry is placed within the centre of metropolis. Small firms, services and agriculture falls into surrounding area; it is also less industrialized.
  4. 4. Both areas will face the same obstacles although their extent seems to be different. Core are with its two near- harbor zones offers excellent conditions to deepen industrialization which naturally can be based on export markets and exploit maritime transport advantages. Demand for land within these zones may create following problems: increase in prices (which has to be addressed by broader supply), need for new infrastructure investment (what makes pressure on effective absorption of European structural funds) and spatial planning conflicts. The last issue is of utmost importance. Coordinated review of spatial plans is necessary to curb uncontrolled sub-urbanization, to set new borders between industrial and housing zones and in that way offer better conditions attracting new investors.
  5. 5. business processing outsourcing is another way to overcome internal markets limits by joining global markets and trends (digitalization). This type of business activity is least dependent on fixed assets or other material resources. MA has all necessary attributes to develop such businesses: good living conditions, IT sector tradition, skilled labor. Many international investors have appreciated that locating here its offices. Narrow supply of IT specialists in the major obstacle in further development in BPO projects.
  6. 6. Increase in enterprise stocks needs public support at start-up phase. MA has well developed business development infrastructure (science parks, incubators) although it is highly concentrated within core area and focused on IT and biotech. More such infrastructure needs to be developed in surrounding area; it should be more focused on traditional economy and services.
  7. 7. Access to finance and human resources intensity in R&D sector is satisfied contrary to research equipment which is scarce and outdated. In result R&D output is unsatisfied with little impact on economy. There is an urgent need to improve both research infrastructure and research effectiveness which presently very low.


Recommendations

1. Re-industrialization of MA that can be a key to provide new jobs needs to address the tension in land supply for business purposes. Coordinated review of spatial plans is necessary to curb uncontrolled sub-urbanization, to set new borders between industrial and housing zones and in that way offer better conditions attracting new investors.

2. New investors must be attracted and channeled to core or surrounding area dependent on their needs and profile. InvestGDA and Invest-in-Pomerania are both public agencies responsible for bringing investors to the MA and the region. Careful evaluation of their goals and operations in necessary to better exploit the synergies and overcome overlaps or competition.

3. Opening up to world markets can be better achieved if private efforts are accompanied by integrated public promotion and opportunity seeking. This can be best achieved by setting up public export promotion agency.

4. Further growth of business development infrastructure - which is a huge public asset - must be coordinated to overcome opportunistic investments. Stakeholders board is proposed to be set up to provide independent judgment and coordinate investment.

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