From Imitating to Innovating

Time to Change Gears for Poland’s Economy

Poland is Europe’s growth champion. It has more than doubled its GDP per capita since the beginning of post-socialist transition in 1989, consistently growing since 1992, and was the only EU economy to avoid a recession in 2009. Poland is a prime example of the success of the European “convergence machine”. In 2014, the level of income adjusted for purchasing parity exceeded $24,000 and reached almost 65% of the level of income in the euro zone, the highest absolute and relative level since 1500 A.D.
 
However, past successes do not guarantee a prosperous future and Poland cannot afford to grow complacent. Given the significant productivity gap—Poland’s productivity per hour amounts to less than half of that in Germany—technology absorption will continue to drive private sector productivity in the near term, but it is unlikely to help sustain—not to mention accelerate—economic growth in the long term as Poland moves closer to the technology frontier. Investment in private sector R&D and innovation will have to increase far more rapidly. Growth can stagnate if Poland doesn’t start shifting from imitating others to generating new ideas, from quantity to quality, and from potato chips to microchips.