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2020 OECD Economic Surveys: Poland 2020

image of OECD Economic Surveys: Poland 2020

COVID-19 has hit the Polish society and its economy hard, even if to a lesser extent than other European countries. Employment has declined and public debt has increased abruptly, which will make it more challenging to solve long-term issues, such as the low productivity of some workers, weak environmental outcomes and rising ageing costs. Ensuring longer working lives in good health will be key to secure the pension system’s sustainability. To boost the recovery and sustain the pre-crisis growth in living standards, Poland needs to invest in greener infrastructure, additional healthcare capacity and better skills. Easing the reallocation of firms and workers would facilitate shifts in the economic structure induced by the current crisis and raise productivity. Finally boosting the capacity of small and medium-sized enterprises (SMEs) to innovate would help them to export more and adapt to a rapidly changing international environment.

SPECIAL FEATURE: BOOSTING SMEs’ INTERNATIONALISATION

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Boosting SMEs’ internationalisation

The rapid internationalisation of the Polish economy has helped develop competitive export-led manufacturing and services sectors fostering robust growth and productivity performance. However, the benefits of this development have been unequal. Many small and medium-sized enterprises (SMEs), some regions and social groups have lagged behind. Poland’s integration into world trade has largely focussed on downstream activities of value chains and relatively labour-intensive products that incorporate little domestic value added. The coronavirus (COVID-19) crisis has put additional pressures on SMEs. A broad range of well-coordinated policies is required to boost SMEs’ internationalisation and their productivity, while easing labour reallocation during the ongoing recovery. Providing stronger support for training programmes in smaller firms and within small firms’ networks would help them upgrade the skills of their workforce, notably for their managers, and ease new technology adoption and internationalisation. Streamlining regulations on start-ups and limiting regulatory and tax barriers to firm expansion would raise firm entry and growth. Strengthening post-insolvency second chance policies for honest entrepreneurs would ease resource reallocation and the adaptation of SMEs to an uncertain and rapidly changing international environment. Improving transport and digital infrastructure would lower trade costs and raise productivity. Ensuring that innovation policies adapt to smaller firms would boost their innovativeness and ease their integration in national and international value chains.

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