EEC 2019

The development of Eastern Poland is financed by EU funds and those allocated from the state budget. How are they used? What are their recipients’ ideas for the future?

New companies, roads, investment areas, modernized schools, universities and hospitals. New jobs, investments in renewable energy sources. Jerzy Leszczynski, Marshall of the Podlaskie province, has no doubt that the region has changed significantly over the last decade. He further adds:

- These are only “hard” investments, but a lot has also happened in the social sphere!

Inhabitants of the Podlaskie region raised their competences and skills thanks to trainings and workshops. And because of EU assistance, they founded companies and gained economic independence.

- In short: so much has happened because of the cohesion policy - says Leszczynski. - It has helped us strengthen the competitiveness of this region.

Cooperation against chaos. The opening debate of the Eastern Economic Congress

The starting point

There are no significant differences between cities and villages in the west and east of Poland. In general, roads are not bad, new constructions predominate. And yet, the economic development and the standard of living - according to statistics - in the east of Poland deviate from the leading regions of Poland.

These differences can be seen in many countries. For various reasons, mostly conditions that have their roots in the past (sometimes even distant past). In each country there are regions that don't match the average level of prosperity in the EU.

In 2016, the Inner London region was at the level of 611 percent of the average per capita GDP of the EU, but in the Cornwall & Isles of Scilly region it was at the level of 69 percent. The Italian Aosta Valley region recorded 128 percent, and southern Calabria - 59 percent. That is why the Union convergence policy intends to provide them with a specific aid.

Well-invested funds have produced results in several rigors. When we entered the Union, five provinces of Eastern Poland were at the level of about 28 percent of the average per capita GDP of the EU. According to the latest Eurostat data (in 2016), it was almost 48 percent (podkarpackie and podlaskie provinces) and 49 percent (three other provinces). It can be assumed that due to the faster development of the Polish economy, the value of that index will almost double in relation to 2005 (for the entire Poland this level amounted to 70 percent in 2017).

This provides evidence for the effective implementation of the development aid policy in the Eastern Poland Macroregion - states Adam Hamryszczak, Deputy Minister of Investment and Development.

And yet this is not the only form of aid. Local governments, businesses and inhabitants of these provinces benefit from all national programs and regional operational programs, even if the latter have more modest measures.

- ROP is probably the most important financial aid - says Marshall Leszczynski. - It is a program designed, managed and accounted for the region - “tailored” to our needs, well suited to the region's objectives and challenges.
Cross-border cooperation. How to invest in the future?

Differences in the macroregion

After joining the EU, the Warminsko-Mazurskie and Swietokrzyskie provinces grew at a slower rate. During the pre-accession period these provinces were characterized by a higher level of development than the other three regions of Eastern Poland. There are many reasons - starting from the varying potential of the industry and its structure. An important requirement of the development is the economic strength of subregions, i.e. poviats and communes. The situation of poviats located in the vicinity of provincial capitals or next to other large cities, seems much better. Or when there is a thriving business center, like the Aviation Valley in the Podkarpacie region.

If there are no such places, one can notice depopulation of smaller cities. Young people are looking for jobs in the provincial capital or in a large regional center. If they don't find it, they emigrate to more developed regions or abroad.

These phenomena are supposed to be counteracted by the state's policy. As explained by Deputy Minister Hamryszczak, it applies particularly to the implementation of the polycentric development strategy.

- Poland is not only a country consisting of a few agglomerations, in which the social and economic life is concentrated, but also of over 200 medium-sized cities - he points out.

The abovementioned Aviation Valley includes several cities in the region. It proposes industrialization, but also smart specializations and radiates across many socio-economic spheres, which push up the region in various statistics.

It's characteristic that entrepreneurs from the Podkarpackie province (but not necessarily from the aviation industry) apply for EU funds - both from the ROP, from various national operational programs, and even from those managed directly by Brussels.

In the opinion of the Ministry of Investment and Development, maintaining the current trends in the development of Podkarpackie and Lublin provinces may mean that by the beginning of the next decade they will stop being one of the five least developed provinces in Poland.
Foreign workers are not a panacea for the staffing problems of the Polish economy

Own path

Aviation and cosmonautics, automotive industry, IT, telecommunications and the quality of life - these are the smart specializations of the Podkarpacie region, which will be presented in detail during the first campaign devoted to the region's economic promotion entitled “The Podkarpackie region. Higher levels of innovation”.

As the hosts say, the primary goal of the project is to strengthen the region’s image - as a region that is not only attractive for tourists, but is also dynamically developing. This is where innovative solutions are implemented and the potential for the use of smart specializations is growing. The campaign is to strengthen these processes and attract additional investors.

The Aviation Valley, the largest cluster of aviation companies in this part of Europe, remains the best example of smart specializations in this region. It associates over 160 organizations, employs approx. 28 thousand employees and continues to attract more investors. But this region is also home to such organizations as the East Automotive Alliance or the Podkarpackie Science and Technology Park “Aeropolis” as well as research and development centres of information and communication technologies.

- We are the largest IT company in Poland and one of the largest in Europe. Our company operates in over 50 countries - said Adam Goral, President of Asseco Poland. - Despite the fact that we have large branches in Warsaw, Krakow and Wroclaw, our headquarters remains in Rzeszow, which I am very proud of.

He announced that he is about to open the Asseco Innovation Hub, an innovative R&D center for the entire group.

The Lublin province, with important universities, focuses on the development of agriculture and agri-food industry (fruit and vegetable, sugar, dairy, milling, brewing, tobacco, beekeeping), as well as a new type of specialization - organic farming.

- It is necessary for a country to have large land resources, high share of agricultural population and significant agricultural production - says Artur Habza, Director of the Department of Economy and International Cooperation of the Marshal’s Office in Lublin. -  Let's not forget that in the eastern part of the Lublin Upland there is a hard coal mine “Bogdanka”, one of the largest employers in the province.

He emphasizes that, according to the global trends, the province is also trying to develop the business environment.

There are over 150 clusters, chambers of commerce, local development agencies, local action groups, craft guilds, industrial and technology parks in the region.

It's characteristic that in these conditions the migration of people in the Lublin region is evident mainly in... suburban areas. Regarding depopulation, it is mostly evident in the provincial capitals – with benefits for the commune of Glusk, Wolka and Konopnica, where the population increased by several percent.

Podlasie closer to China

Podlasie also does not seize the occasion by the forelock... Examples? Even a threefold increase in the efficiency of metal treatment will be achieved by Promotech due to the new machine operated by a robot.

- Investments in innovative technologies are our response to the challenges of the progressing digital revolution, called the IV industrial revolution - says Marek Siergiej, president of Promotech.

PLN 40 million of co-financing from the ROP will allow the Barter Company in the Podlaskie province to build (at a cost of PLN 121 million) the first intermodal terminal in the region. It will be built in Sokolka, just behind the border crossing point in Kuznica Bialostocka. This investment will meet the growing cargo transport from China, thus relieving e.g. the terminal in Malaszewicze.

A new factory belonging to will be built in Rzedziany, near Tykocin - it will produce ice cream wafers from... coffee grounds, but also from other ecological ingredients, such as cocoa, sesame or bran. Wafers will be healthier, with lower sugar content.

There are many similar examples. Over the last 12 years, the Podlaskie province has attracted many investors to this agricultural region, like IKEA near Orla or Forte in Suwalki (one of the largest furniture manufacturers in Europe). This is the effect of the work of 11 clusters, centers of economic growth in the subzones of the Suwalki Special Economic Zone and the Tarnobrzeg Special Economic Zone.

But the attractiveness of this region also grows “from within”; over the last decade, due to economic development and financial aid, we have become a place with high technologies and modern, dynamically growing companies - emphasizes Leszczynski.

Mlekpol, Piatnica and Mlekovita (the largest Polish exporter of dairy products) have developed on the foundation of already existing local dairy cooperatives. 20 percent of Polish milk, one in three cubes of butter consumed in Poland and one in three kilograms of cheese come from this region. The Podlaskie province is also one of the largest fish processors and exporters in Europe, but also manufacturers of luxury boats and yachts.

Jerzy Leszczynski recalls that this is also the effect of well-prepared investment areas. Their base, which is located in the Podlaskie Investor Assistance Center, covers over 1066 ha of land, including facilities such as “brownfield”, i.e. halls, warehouse and administrative facilities.

Companies that invest in Special Economic Zones of this province may enjoy income tax exemption up to 70 percent of the value of capital invested, and get support from ROP (PLN 60 million were allocated for this purpose) for the creation of a new investment area. Investors appreciate this effort. As well as the border location, with the possibility of quicker access to close resources and well-qualified human resources, university graduates.

-      The last factor is our huge asset - emphasizes Jerzy Leszczynski. - We believe that we will soon attract more modern business services.

In progress

The regions of Eastern Poland certainly need a better transport network. Four large investment projects are being carried out at the moment. They will significantly increase the attractiveness of all these regions and will allow mass tourism to “discover” them: Via Carpatia, Via Baltica, Rail Baltica and the Eastern Railway Line.

There is no dilemma whether to help the regions of Eastern Poland. We cannot stop these special contributions - say Deputy Minister Hamryszczak and Marshall Leszczynski.

- Despite our successes, we still have a lot of tasks to solve, which is why cohesion policy must be continued in new financial perspective 2020-2027 - says Marshall of the Podlaskie province. - It is necessary to endeavour for it at the local and national levels, and actively participate in the work on the future shape of this policy and its budget.

  © Polskie Towarzystwo Wspierania Przedsiębiorczości (Polish Entrepreneurship Support Association) 1997-2018



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