I just returned from Poland and it was very interesting how modern the country was. Definitely more modern and dynamic than Germany, which seems to have just given up on trying to join the 21st century altogether
One of the cool things about America is that we don't have to be so rigid and we can look at various ways to be successful and be pragmatic about it. We can also try different things and see what works at scale, etc. On your point about CR's. I wonder how many of the bigger defense contractors would lobby against that, or be unwilling to accept that. However it may actually be a good opportunity for smaller startups and companies to get a bigger piece of the pie. Afterall, you should have a pretty diverse and resilient supply chain for military procurement projects.
This is a reason why our election is so important this time - our flexibility and capability to respond to external threats and to strengthen bonds with allies and friends is most definitely at stake
Poland has a long history of Vietnamese immigration due to the communist era. Poland should strengthen relationships with Vietnam and try to invite Vietnamese entrepreneurs who want to set up shop in Europe. They can also poach some Chinese entrepreneurs who are freaked out by Xi like Japan is.
I was an “entrepreneur” in Poland for three years. The tax system was hard to navigate when I moved there and it had become worse by the time I left. It’s really tough running your own business because of the way taxes and social insurance (ZUS) are worked out. The previous government failed spectacularly when they claimed to be reforming things with their “New Deal.” The new government needs to take the bull by the horns and comprehensively update the existing mess of overlapping legislation.
I can backup your experiences with legislation system with what I have seen during my PhD study in the academia in one of universities in Warsaw. The higher education system also is rigid to change inefficient habits. Whenever I had discussions with seniors and colleagues, or people with authority the answer was to referring what they have done or what has been the rule so far instead of seeing the point and being open about new ideas.
Referring to Noah's list, I see a long way for people to be ready to embrace chaotic pragmatic entrepreneurs who create new opportunities in uncommon ways.
Yeah exactly! I don’t mind paying higher taxes to support the better social system, and the only good thing about Nowy Ład was that it increased the absurdly low rates for higher earners, but it’s so needlessly complicated. You spend hours filling in various forms every month, using complicated calculations, and then having them rejected because the tax office already had all the information, has done the calculation themselves and come to a figure that’s different by just a few PLN.
My wife's grandparents came from Poland around 1900. We visited a few years ago. Truly a delightful and amazing country. I've traveled around all of Asia and Europe over the last 40 years.
The Polish people have a deep and strong culture. I recommend reading James Mitchner Poland. I'd say reasonably based on historical events.
The first democracy, the Seym. Defeated the Teutonic Knights at the Battle of Gurenwald. Stayed off various Genghis and Tartar invasions. Arguably the best fighting horsemen in history. Saved Vienna and eastern Europe from the Ottoman Turk siege.
Small correction. The world's first written mention of the word vodka was in 1405, in the court documents from the Palatinate of Sandomierz in Poland. In 1537, a group of Spanish conquistadors became the first Europeans to encounter the potato.
One thing that I think is missing in this piece, beyond the brief footnote, is how to boost Poland's fertility rate. Over time horizons longer than 20 years, this is the biggest thing that affects overall GDP once a country is developed. Due to agglomeration effects, fertility also has a big impact on per capita GDP. Poland's fertility rates are lower than Russia's and Germany's.
Personally I don't think any country has really tried hard enough on this.
We know from a lot of surveys that in the countries where fertility has fallen below replacement, if you ask people, they say they're having less kids than they'd like to, and the reason is, basically, they feel economically insecure -- they're afraid of being bad providers. Even in the US that's basically the story.
If you really were willing to step up with UBI and a _huge_ child credit (fully refundable, to be spent on daycare or on compensating a parent for staying home, as you please), and supply-side efforts around daycare (probably increasing legal immigration, among other things), so that everyone felt secure that they weren't going to end up struggling to take care of their kids, I expect we'd see some real improvements. A few thousand bucks does not come anywhere close to compensating for the cost (and risk) of having a kid. If you want to see a real impact, we should be talking about something that's worth like $200k in present value, over the 18 years of raising the kid to college age.
But of course, going up to that scale, similar to a serious UBI, would require MASSIVELY raising taxes. There's no political appetite for it. The net effect for the median person is you have higher taxes, but also get that money back and then some, from the UBI and child credit. But you'd need to raise taxes in a way that would reduce personal consumption of the upper middle class. (See how in much of Northern Europe, small luxuries like restaurants are a lot more expensive, and people live in smaller homes... but in exchange they get to not worry about the cost of higher education, healthcare, etc.)
As an economist I think the reason for this should be clear to you: the incentive is not big enough. All policies so far are just about mitigating some of the costs of raising a child. Traditionally, people had children to secure a reasonable standard of living when they got older. So to increase the fertility level you should be made significantly better off financially after raising two or three children than if you stayed childless.
That would mean a massive transfer of money from older people to younger people, from men to women and from working people to people raising children. There is no modern society that has taken that step, but in 50-100 years it will become inevitable. I think it would be nice if we come up with ideas for a working economy that transfers a large amount of its GDP to parents with young children and still functions.
I thought, from a cursory survey, that there's a U-shaped curve where countries with low levels of female participation in the workforce have (relatively) high TFR, countries with high female participation but also good childcare/parental leave policies also have relatively high TFR and countries where women work but it's hard/expensive to work and have kids have a low TFR.
(U-shaped because the presumed X-axis is "level of sexism", ie very sexist countries have good fertility because women can't work anyway, very low sexism have good fertility because women can work and have kids, and middle-sexism countries are bad because women have to choose between work and motherhood)
The US is something of an outlier on this (higher TFR than you'd expect from the policy mix), but part of that disappears if you disaggregate into states - still an outlier, but no longer as remarkable a one.
The thing is that the "good" TFRs are 1.6 or so and the bad ones are <1, all of which are below replacement. So there are some ideas on "boosting" fertility, but they boost it all the way from "catastrophic, like Korea or Italy or Greece" to "not enough, like the US or France or Sweden".
In Poland you have guaranteed free kindergardens, nurseries are sometimes also free, there's 1-year paid maternity leave and on the top 3-years unpaid one, quite generous child money programs.
Yeah, there's quite a lot of discussion recently in Poland about source of this fertility issue and nobody really knows. Economics, childcare, housing - it's all matters but it's not the real point. It's more a culture issue - like if you go deeper in data it appears that it's not that people have lower number of children but rather there's growing group of people having no children at all. Also there's very strong sex bifurcation with girls being much better educated, progressive and moving to big cities and boys less educated, conservative and staying in countryside - it happens all around the world but in Poland it's stronger.
I'd go further and say that natalism is counterproductive and families should figure out for themselves how many children to have, or whether to have children at all.
There really isn't a Goldilocks fertility level. Many nations are already reckoning with sub-replacement level fertility, so too low is bad. Too high of a fertility rate is also very bad, as it brings with it a youth bulge that ends up disordering societies. High fertility rates also coincided with historical periods of high infant mortality, labor-intensive agriculture, as well as constant warfare where a substantial portion of the population was killed off before middle age.
If you are a parent, can you imagine the economy and society as a whole being so stable for 20 years *per child* that you can not only materially provide for, but also avoid transmitting your anxieties on your child in order for them to grow up to be a self-sufficient adult? "Good schools" are a myth, largely because what is perceived to be a good school is largely determined by the parents' station in life rather than the activity of the child within it. The home environment of a child from birth to age 5 matters more to their well-being than the next 13 years of schooling.
I don't think that's true. I think that the ideas that have been tried and evaluated rigorously (expanded child tax credits, subsidized childcare, parental leave policies) have been shown to have small (but non-zero) effects raising fertility. There are other topics (like which housing topologies make people likely to have more kids) that should be researched more but just because there isn't rigorous research from which we can draw high confidence conclusions doesn't mean we have 'no idea' what the effects might be. One thing that hasn't been tried so there is limited evidence for effectiveness but is an 'idea' that would be to encourage people to have children when they are younger. For example, a more generous child tax credit for children of people under 25. Or policies that help people in graduate school become parents. I think big boosts to fertility rates could also be achieved by marketing pronatal cultural ideas, but I don't think there's strong evidence yet for which cultural ideas are effective at this and how to market them effectively.
If Poland is seeking entrepreneurial immigrants, they might look to south Asia. Immigrants from this region have had a significant and very positive impact on the U.S. IT and other advanced hardware, software and tech services industries as creators, founders, and implementers. Some have benefitted from family money or access to investors back home similar to those enjoyed by American entrepreneurs -- family friends, schoolmates, etc. I have no idea what Poland might do to make itself attractive to south Asians but it would be worth investigating. In the US case, it was higher education followed by living conditions, freedom from oppressive cultural traditions, and public policies that discouraged free thinkers and small entrepreneurs.
Indians are already the fourth-biggest population and the biggest outside ex-Soviet states, and those in Warsaw run the gamut from Uber drivers to high-powered bankers. They've started more than a few businesses, though I haven't seen many above the retail level. Casual racism remains commonplace even among educated and younger people.
I was wondering when Poland would be considered a developed country. That is cool to hear!
To one point about entrepreneurship and Indians. I'm obviously generalizing but I don't really think Indians will ever find Poland as an highly attractive place to go to set up the kind of tech companies you are alluding to for the simple reason it isn't an English speaking country. As an anecdote, due to working in tech and living on the west coast I've met a number of Indians who worked in Japan and none of them bothered to learn more than basic Japanese because they were all looking to get out to the US. They were unable to recruit with US/UK multi-nationals out of university but wanted to leave India so they signed up with large Japanese or Korean companies to get experience and use that experience to jump to the US. Call it the pull of the empire or what have you but it is what it is.
If Poles come to speak English as well as the Dutch or the Germans or the Swedes, then they can recruit English speakers: Spotify (based in Stockholm, Sweden) is an essentially English-speaking company; I have a friend who works there and spoke no Swedish when she got the job (she says she almost never speaks Swedish at work, but learned so she could socialise outside of work and also because she wants to become a citizen, many of her colleagues only have very basic Swedish and there are large circles of English-speaking techies that they socialise in). Spotify may not be quite on the FAANG level in terms of prestige, but it's definitely on the next tier down.
Poland’s industry has benefited from the ring-fenced EU customs union, and having lower labor costs has long attracted investment from Germany and other richer countries as an assembly location. I had a friend who was finance director at a European auto manufacturer who referred to Poland as “Germany’s Mexico” as far back as the early 1990s.
Poland (with EU help and a pretty good education system) has done a lot better job than Mexico in moving up the income chain. However (unlike Mexico) it doesn’t have a lot of dynamic consumer goods, manufacturing or media conglomerates, whereas Mexico has a few world class companies. Poland is stronger in small business (small businesses above the size of family-owned but not big enough to matter have a hard time fighting off the corruption, graft and crime in Mexico). As you note, Poland’s home grown banking system is small, but branches of French and German banks are active and have more scale.
The two major problems for Poland are that its labor costs are converging with EU competitors (though its labor environment and work rules are a lot friendlier than, say, France) and it is mostly dependent on the EU for its export markets - which is one of the most sclerotic, slow-growing markets to be reliant upon.
Developing home grown service, retail and finance sectors could help, but, as we see in the UK and US, a consumer/services/finance oriented economy isn’t a panacea. Without its tech industry, the US would be a lot poorer (at the average, maybe not the be median).
Poland should continue to be one of the better performers in Europe, but the integration with Europe that was a huge advantage when Poland was poor is less of an advantage today and could become an anchor given the EU’s anti-competitive stances on most everything and its poor growth prospects and demographics.
Maybe Poland can become a European center for care homes in a cheaper locale run by more caring and efficient workers? That is an EU growth sector for sure. 😊. Healthcare generally could be an opportunity- bring the patients to Poland rather than shipping the nurses and doctors abroad
On becoming an EV manufacturer, although it's true that Poland is the second largest manufacturer of batteries in Europe, those are lead acid batteries, which are completely different in chemistry, design and manufacturing process from the modern lithium ion technology used in all EV's today. It's an apples to oranges comparison and being able to manufacture lead acid batteries has no relevancy to being able to make lithium
Ion batteries for EV's. And by the way, the same holds true for batteries for drones.
Also I think coming up with and owning the IP for the batteries is a bigger value-add than making them, inasmuch as you can separate the two. The Danish example is a case in point. Novo Nordisk is hugely successful not because it makes a bunch of Ozempic on licence but because it figured out how to make it and owns the rights to produce it, or license production to others.
I agree in principle, the challenge with advanced battery technology is that much of the IP, and technical expertise, resides in Asia (China and Korea)and the US. This extends also to the required advanced battery manufacturing technology. For Poland to match or exceed those countries battery IP starting from essentially zero is too much to expect.
Actually I like your 6th suggestion for Poland, because in history Polish nationalists tried to cooperate with Japan quite a lot, to weaken Russia!
The most notable event is when Jozef Pilsudski tried to supply Japan with intelligence against Russia during Russo-Japanese war, and even wanted to create a Polish Legion in the Far East in the war, similar to what the Czechoslovak Legion would do in the Russian Civil War later: https://en.wikipedia.org/wiki/J%C3%B3zef_Pi%C5%82sudski#Armed_resistance
Japan even did not recognize the declaration of war from Poland in WW2, since it considered Poland to be "compelled" to declare war against Japan by the Allies: https://youtu.be/BO-mnNg4iZo?si=X_xOGmA1f8Fgk2kH
I just returned from Poland and it was very interesting how modern the country was. Definitely more modern and dynamic than Germany, which seems to have just given up on trying to join the 21st century altogether
The UN should strategically carpet bomb every big city in the world every 75 years for the sake of modernity and progress!
This elicited an audible chuckle. Well done!
Curtis LeMay for UN Secretary General
Poland is doing what Germany isn’t. Defending itself and, therefore, helping Europe.
America should take a clue from this. We cannot build Naval vessels in a timely manor.
We cannot do it in a fiscally responsible way. CRs are the death to military procurement projects.
I see no reason not have Japan build some naval vessels. Subs, frigates or destroyers. Missile ships.
They are our allies, and we need them to beef up their military. China is a threat to Japan.
I can't agree more with this take. Agreed 100%.
One of the cool things about America is that we don't have to be so rigid and we can look at various ways to be successful and be pragmatic about it. We can also try different things and see what works at scale, etc. On your point about CR's. I wonder how many of the bigger defense contractors would lobby against that, or be unwilling to accept that. However it may actually be a good opportunity for smaller startups and companies to get a bigger piece of the pie. Afterall, you should have a pretty diverse and resilient supply chain for military procurement projects.
This is a reason why our election is so important this time - our flexibility and capability to respond to external threats and to strengthen bonds with allies and friends is most definitely at stake
Poland has a long history of Vietnamese immigration due to the communist era. Poland should strengthen relationships with Vietnam and try to invite Vietnamese entrepreneurs who want to set up shop in Europe. They can also poach some Chinese entrepreneurs who are freaked out by Xi like Japan is.
Had no idea Poland was such a powerhouse. Encouraging stuff!
I was an “entrepreneur” in Poland for three years. The tax system was hard to navigate when I moved there and it had become worse by the time I left. It’s really tough running your own business because of the way taxes and social insurance (ZUS) are worked out. The previous government failed spectacularly when they claimed to be reforming things with their “New Deal.” The new government needs to take the bull by the horns and comprehensively update the existing mess of overlapping legislation.
I can backup your experiences with legislation system with what I have seen during my PhD study in the academia in one of universities in Warsaw. The higher education system also is rigid to change inefficient habits. Whenever I had discussions with seniors and colleagues, or people with authority the answer was to referring what they have done or what has been the rule so far instead of seeing the point and being open about new ideas.
Referring to Noah's list, I see a long way for people to be ready to embrace chaotic pragmatic entrepreneurs who create new opportunities in uncommon ways.
Jon, fully agree. Reason is PL has the <worst> tax system in the OECD and EU (in terms of sheer complexity, not actual rates). Check the images here: https://medium.com/@kowalskr/niezno%C5%9Bny-ci%C4%99%C5%BCar-biurokracji-i-obietnica-legaltech-74483a7ca1a7
Yeah exactly! I don’t mind paying higher taxes to support the better social system, and the only good thing about Nowy Ład was that it increased the absurdly low rates for higher earners, but it’s so needlessly complicated. You spend hours filling in various forms every month, using complicated calculations, and then having them rejected because the tax office already had all the information, has done the calculation themselves and come to a figure that’s different by just a few PLN.
Exactly the issue(s) - bureaucracy and lack of tax system design (it's a loophole patchwork with no system design behind it)
My wife's grandparents came from Poland around 1900. We visited a few years ago. Truly a delightful and amazing country. I've traveled around all of Asia and Europe over the last 40 years.
The Polish people have a deep and strong culture. I recommend reading James Mitchner Poland. I'd say reasonably based on historical events.
The first democracy, the Seym. Defeated the Teutonic Knights at the Battle of Gurenwald. Stayed off various Genghis and Tartar invasions. Arguably the best fighting horsemen in history. Saved Vienna and eastern Europe from the Ottoman Turk siege.
Invented vodka - potatoe vodka.
Great restaurants!!
Small correction. The world's first written mention of the word vodka was in 1405, in the court documents from the Palatinate of Sandomierz in Poland. In 1537, a group of Spanish conquistadors became the first Europeans to encounter the potato.
One thing that I think is missing in this piece, beyond the brief footnote, is how to boost Poland's fertility rate. Over time horizons longer than 20 years, this is the biggest thing that affects overall GDP once a country is developed. Due to agglomeration effects, fertility also has a big impact on per capita GDP. Poland's fertility rates are lower than Russia's and Germany's.
Oh, well that one is simple: No one has any idea how to boost fertility rates!
Affordable childcare and humane parental leave poilicies!! No brainer
I support these things of course, but sadly their effect on fertility is marginal...
Personally I don't think any country has really tried hard enough on this.
We know from a lot of surveys that in the countries where fertility has fallen below replacement, if you ask people, they say they're having less kids than they'd like to, and the reason is, basically, they feel economically insecure -- they're afraid of being bad providers. Even in the US that's basically the story.
If you really were willing to step up with UBI and a _huge_ child credit (fully refundable, to be spent on daycare or on compensating a parent for staying home, as you please), and supply-side efforts around daycare (probably increasing legal immigration, among other things), so that everyone felt secure that they weren't going to end up struggling to take care of their kids, I expect we'd see some real improvements. A few thousand bucks does not come anywhere close to compensating for the cost (and risk) of having a kid. If you want to see a real impact, we should be talking about something that's worth like $200k in present value, over the 18 years of raising the kid to college age.
But of course, going up to that scale, similar to a serious UBI, would require MASSIVELY raising taxes. There's no political appetite for it. The net effect for the median person is you have higher taxes, but also get that money back and then some, from the UBI and child credit. But you'd need to raise taxes in a way that would reduce personal consumption of the upper middle class. (See how in much of Northern Europe, small luxuries like restaurants are a lot more expensive, and people live in smaller homes... but in exchange they get to not worry about the cost of higher education, healthcare, etc.)
But those same Northern European countries don’t have any higher fertility rates. The subsidies or lack of them aren’t the problem
They have much higher fertility rates than Southern Europe (compare Greece or Italy with Sweden or the Netherlands)
As an economist I think the reason for this should be clear to you: the incentive is not big enough. All policies so far are just about mitigating some of the costs of raising a child. Traditionally, people had children to secure a reasonable standard of living when they got older. So to increase the fertility level you should be made significantly better off financially after raising two or three children than if you stayed childless.
That would mean a massive transfer of money from older people to younger people, from men to women and from working people to people raising children. There is no modern society that has taken that step, but in 50-100 years it will become inevitable. I think it would be nice if we come up with ideas for a working economy that transfers a large amount of its GDP to parents with young children and still functions.
I thought, from a cursory survey, that there's a U-shaped curve where countries with low levels of female participation in the workforce have (relatively) high TFR, countries with high female participation but also good childcare/parental leave policies also have relatively high TFR and countries where women work but it's hard/expensive to work and have kids have a low TFR.
(U-shaped because the presumed X-axis is "level of sexism", ie very sexist countries have good fertility because women can't work anyway, very low sexism have good fertility because women can work and have kids, and middle-sexism countries are bad because women have to choose between work and motherhood)
The US is something of an outlier on this (higher TFR than you'd expect from the policy mix), but part of that disappears if you disaggregate into states - still an outlier, but no longer as remarkable a one.
The thing is that the "good" TFRs are 1.6 or so and the bad ones are <1, all of which are below replacement. So there are some ideas on "boosting" fertility, but they boost it all the way from "catastrophic, like Korea or Italy or Greece" to "not enough, like the US or France or Sweden".
In Poland you have guaranteed free kindergardens, nurseries are sometimes also free, there's 1-year paid maternity leave and on the top 3-years unpaid one, quite generous child money programs.
Doesn't work.
It doesn’t work - that’s widely know. Why did you bring it up?
they do best, recommend you follow them https://x.com/morebirths
Yeah, there's quite a lot of discussion recently in Poland about source of this fertility issue and nobody really knows. Economics, childcare, housing - it's all matters but it's not the real point. It's more a culture issue - like if you go deeper in data it appears that it's not that people have lower number of children but rather there's growing group of people having no children at all. Also there's very strong sex bifurcation with girls being much better educated, progressive and moving to big cities and boys less educated, conservative and staying in countryside - it happens all around the world but in Poland it's stronger.
I'd go further and say that natalism is counterproductive and families should figure out for themselves how many children to have, or whether to have children at all.
There really isn't a Goldilocks fertility level. Many nations are already reckoning with sub-replacement level fertility, so too low is bad. Too high of a fertility rate is also very bad, as it brings with it a youth bulge that ends up disordering societies. High fertility rates also coincided with historical periods of high infant mortality, labor-intensive agriculture, as well as constant warfare where a substantial portion of the population was killed off before middle age.
If you are a parent, can you imagine the economy and society as a whole being so stable for 20 years *per child* that you can not only materially provide for, but also avoid transmitting your anxieties on your child in order for them to grow up to be a self-sufficient adult? "Good schools" are a myth, largely because what is perceived to be a good school is largely determined by the parents' station in life rather than the activity of the child within it. The home environment of a child from birth to age 5 matters more to their well-being than the next 13 years of schooling.
We should try more dakka. https://thezvi.wordpress.com/2017/12/02/more-dakka/
Also, when do we get the Noahpinion treatment of the economics of fertility? Now that is a meaty topic.
I don't think that's true. I think that the ideas that have been tried and evaluated rigorously (expanded child tax credits, subsidized childcare, parental leave policies) have been shown to have small (but non-zero) effects raising fertility. There are other topics (like which housing topologies make people likely to have more kids) that should be researched more but just because there isn't rigorous research from which we can draw high confidence conclusions doesn't mean we have 'no idea' what the effects might be. One thing that hasn't been tried so there is limited evidence for effectiveness but is an 'idea' that would be to encourage people to have children when they are younger. For example, a more generous child tax credit for children of people under 25. Or policies that help people in graduate school become parents. I think big boosts to fertility rates could also be achieved by marketing pronatal cultural ideas, but I don't think there's strong evidence yet for which cultural ideas are effective at this and how to market them effectively.
If Poland is seeking entrepreneurial immigrants, they might look to south Asia. Immigrants from this region have had a significant and very positive impact on the U.S. IT and other advanced hardware, software and tech services industries as creators, founders, and implementers. Some have benefitted from family money or access to investors back home similar to those enjoyed by American entrepreneurs -- family friends, schoolmates, etc. I have no idea what Poland might do to make itself attractive to south Asians but it would be worth investigating. In the US case, it was higher education followed by living conditions, freedom from oppressive cultural traditions, and public policies that discouraged free thinkers and small entrepreneurs.
Indians are already the fourth-biggest population and the biggest outside ex-Soviet states, and those in Warsaw run the gamut from Uber drivers to high-powered bankers. They've started more than a few businesses, though I haven't seen many above the retail level. Casual racism remains commonplace even among educated and younger people.
Excellent post. Thank you.
I suggest you post it on Quora. There is a huge hunger for positive discussion of Poland. I wrote this
https://qr.ae/prn7mE about Poland there, and over 242,000 people viewed it
Good tip and generous of you to suggest.
This entire post today is based. Poland has made insane advancements and they should keep it up. Makes me really want to visit!
I was wondering when Poland would be considered a developed country. That is cool to hear!
To one point about entrepreneurship and Indians. I'm obviously generalizing but I don't really think Indians will ever find Poland as an highly attractive place to go to set up the kind of tech companies you are alluding to for the simple reason it isn't an English speaking country. As an anecdote, due to working in tech and living on the west coast I've met a number of Indians who worked in Japan and none of them bothered to learn more than basic Japanese because they were all looking to get out to the US. They were unable to recruit with US/UK multi-nationals out of university but wanted to leave India so they signed up with large Japanese or Korean companies to get experience and use that experience to jump to the US. Call it the pull of the empire or what have you but it is what it is.
If Poles come to speak English as well as the Dutch or the Germans or the Swedes, then they can recruit English speakers: Spotify (based in Stockholm, Sweden) is an essentially English-speaking company; I have a friend who works there and spoke no Swedish when she got the job (she says she almost never speaks Swedish at work, but learned so she could socialise outside of work and also because she wants to become a citizen, many of her colleagues only have very basic Swedish and there are large circles of English-speaking techies that they socialise in). Spotify may not be quite on the FAANG level in terms of prestige, but it's definitely on the next tier down.
Good overview, thanks.
Poland’s industry has benefited from the ring-fenced EU customs union, and having lower labor costs has long attracted investment from Germany and other richer countries as an assembly location. I had a friend who was finance director at a European auto manufacturer who referred to Poland as “Germany’s Mexico” as far back as the early 1990s.
Poland (with EU help and a pretty good education system) has done a lot better job than Mexico in moving up the income chain. However (unlike Mexico) it doesn’t have a lot of dynamic consumer goods, manufacturing or media conglomerates, whereas Mexico has a few world class companies. Poland is stronger in small business (small businesses above the size of family-owned but not big enough to matter have a hard time fighting off the corruption, graft and crime in Mexico). As you note, Poland’s home grown banking system is small, but branches of French and German banks are active and have more scale.
The two major problems for Poland are that its labor costs are converging with EU competitors (though its labor environment and work rules are a lot friendlier than, say, France) and it is mostly dependent on the EU for its export markets - which is one of the most sclerotic, slow-growing markets to be reliant upon.
Developing home grown service, retail and finance sectors could help, but, as we see in the UK and US, a consumer/services/finance oriented economy isn’t a panacea. Without its tech industry, the US would be a lot poorer (at the average, maybe not the be median).
Poland should continue to be one of the better performers in Europe, but the integration with Europe that was a huge advantage when Poland was poor is less of an advantage today and could become an anchor given the EU’s anti-competitive stances on most everything and its poor growth prospects and demographics.
Maybe Poland can become a European center for care homes in a cheaper locale run by more caring and efficient workers? That is an EU growth sector for sure. 😊. Healthcare generally could be an opportunity- bring the patients to Poland rather than shipping the nurses and doctors abroad
Excellent! This is the kind of article that Noah specializes in.
After seeing the store "Guns & Tuxedos," I was disappointed to learn that they do not actually sell guns.
Go to “Blood Bath and Beyond”
On becoming an EV manufacturer, although it's true that Poland is the second largest manufacturer of batteries in Europe, those are lead acid batteries, which are completely different in chemistry, design and manufacturing process from the modern lithium ion technology used in all EV's today. It's an apples to oranges comparison and being able to manufacture lead acid batteries has no relevancy to being able to make lithium
Ion batteries for EV's. And by the way, the same holds true for batteries for drones.
Also I think coming up with and owning the IP for the batteries is a bigger value-add than making them, inasmuch as you can separate the two. The Danish example is a case in point. Novo Nordisk is hugely successful not because it makes a bunch of Ozempic on licence but because it figured out how to make it and owns the rights to produce it, or license production to others.
I agree in principle, the challenge with advanced battery technology is that much of the IP, and technical expertise, resides in Asia (China and Korea)and the US. This extends also to the required advanced battery manufacturing technology. For Poland to match or exceed those countries battery IP starting from essentially zero is too much to expect.
Actually I like your 6th suggestion for Poland, because in history Polish nationalists tried to cooperate with Japan quite a lot, to weaken Russia!
The most notable event is when Jozef Pilsudski tried to supply Japan with intelligence against Russia during Russo-Japanese war, and even wanted to create a Polish Legion in the Far East in the war, similar to what the Czechoslovak Legion would do in the Russian Civil War later: https://en.wikipedia.org/wiki/J%C3%B3zef_Pi%C5%82sudski#Armed_resistance
Japan even did not recognize the declaration of war from Poland in WW2, since it considered Poland to be "compelled" to declare war against Japan by the Allies: https://youtu.be/BO-mnNg4iZo?si=X_xOGmA1f8Fgk2kH