3/2020 - AmCham Quarterly

VOL III, No. 3 • ISSN 2545-322X

3/2020

LESSONS FROM THE LOCKDOWN

AMERICAN COMPANIES TRANSITIONED SMOOTHLY INTO WORKING FROM HOME,CONTINUE TO ADAPT TO THE CHANGING SITUATION, AND HAVE IDENTIFIED TRENDS

OF STRATEGIC IMPORTANCE TO BUSINESSESp. 12

CBRE PolandGarminProService FintecoSantander Bank Polska S.A., SwingDevVertiv Polandpp. 50-59

Association of International Certified ProfessionalAccountants

Cresa PolandDentons

KPMGMcKinsey Poland

Łaszczuk & PartnersPwC Legal

SavillsSquire Patton Boggs

Vistra PolandWardyński & Partners

pp. 61-72

COVER STORY

COMPANY PROFILES

May, Junepp. 30-36

MONTHLY MEETINGS EXPERTS

The official magazine of the American Chamber of Commerce in Poland

AMCHAM SPECIAL MEETING WITH JADWIGA EMILEWICZ, DEPUTY PRIME MINISTER AND MINISTER OF DEVELOPMENT, p. 40

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It’s your AmCham...

It’s your debate...

AmCham.pl Quarterly is the official publication of the American Chamber of Commercein Poland. It is a voice for foreign investors and the business community in Poland. Themagazine strives to keep our members and other readers up to date by followingchamber news and reporting on the leading trends in business and policy.

The momentum is growing, as increasing numbers

of people begin to understand the issues involved in

tackling carbon emissions.

MICHAŁ KURTYKA, MINISTER OF CLIMATE, p. 34

Job seekers will need to realize that some industriesare not there forever and that they need to be in-tellectually flexible to educate themselves for new

jobs and responsibilities, even at later stages oftheir professional life.

MARCIN PETRYKOWSKI, MANAGING DIRECTOR OF S&P GLOBALRATINGS, p. 36

Poland will need smart, long-term capital withwhich to fuel post-pandemic economic recovery.

KRZYSZTOF KRAWCZYK, PARTNER, CVC CAPITAL PARTNERS, p. 28

There are questions about the ethical standards offirms and if the products they sell are made in linewith their sector’s best practices and other guide-

lines. Those issues are important to the UOKiK regardless of the company’s origins and its

geographic location.TOMASZ CHRÓSTNY, PRESIDENT OF THE OFFICE OF COMPETITION

AND CONSUMER PROTECTION, p. 32

There were some interesting trends in business

which took off during the pandemic and helped to

take the economy out of the hole, and are expected

to stay for a long time.

SŁAWOMIR S. SIKORA, PRESIDENT & CEO OF CITI HANDLOWY, p. 36

The atmosphere for business is still very good inPoland

GEORGETTE MOSBACHER, US AMBASSADOR TO POLAND, p. 40

We want to come up with a list of such investmentprojects which are critical in Poland. You are our

partners if you have such projects!

JADWIGA EMILEWICZ, DEPUTY PRIME MINISTER AND MINISTER OFDEVELOPMENT, p. 40

AMCHAM.PL QUARTERLY 3/2020

AmCham Advisory Council

The Advisory Council of the American Chamber of Commerce in Poland is engaged in

shaping our advocacy for better investment, creating policies, and working with key

policy-makers in order to address important and highly relevant issues. The crucial role

of companies gathered in the Advisory Council is emphasized by the special client care

we provide to these premium members and the opportunity they have to cooperate at

the highest level, including business to government dialogue, special networking

events, as well as priority at our events.

43 34 44 38 30

52 56 60 50 54 30

38 38 58 30 38 30

YOURAMCHAM

Board of Directors

AmCham Auditor

AmCham Staff

TONY HOUSHChairmanDirector - Poland,Central Europe &Baltic RegionNorthrop Grumman

ROBERT BEDNARSKITreasurerCountry Director of Facebook in Central Eastern Europe (CEE)

JOHN LYNCHMemberFounder and CEO,Lynka

MAGDALENA PAVLAKCHIARADIAMemberManaging Director, Partner ERMPolska

ROMAN REWALDMemberPartner,Weil, Gotshal & Manges

MAREK SZYDŁOWSKIVice ChairGovernment Affairs Adviser,Integer.pl S.A.

JOSEPH WANCERMember Chairman of the Supervi-sory Board, Bank BNPParibas

SŁAWOMIR S.SIKORAMemberChief Executive OfficerCiti Handlowy S.A.

MARCINPETRYKOWSKISecretaryManaging Director, S&P Global Ratings

JOLANTA JAWORSKAVice ChairGovernmental Programs Director, IBM Poland &Baltics

ROBERTORZYŁOWSKIMemberDirector, Central and EasternEurope at Lockheed Martin

JACEK DRABIKMemberCountry Manager, MotorolaSolutions Poland

GEORGETTE MOSBACHERHonorary ChairUS Ambassador to the Republic of Poland

DOROTA DĄBROWSKA-WINTERSCHEIDManaging Director

MARZENA DRELADeputy Director

BARBARA POCIALIKMembership & Committee Manager

ANITA KOWALSKAEvents & Media Manager

MARTA PAWLAKHead of Legal & Public Policy

KAROL WITASZEKLegal & Public Policy Assistant

ELIZA PRZEŹDZIECKAHead of Economic Research

JUSTYNA SEKUŁAOffice Manager

DAVID DOLHOMUTProject Manager

KATARZYNA KOTIUK Accountant

TOMASZ ĆWIOKAmCham.pl Quarterly Editor

JACEK DRABIKKraków & Katowice AmCham Director

MATEUSZ JURCZYKKraków & Katowice Branch Manager

MONIKA CIESIELSKA-MRÓZWrocław Branch Director

JOANNA BOJARSKA-BUCHCICGdańsk Branch Director

AMCHAM.PL QUARTERLY is the official publication ofthe American Chamber of Commerce in Poland,

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In this issueVOL III, No. 3 • ISSN 2545-322X

COVER STORY LESSONS FROM

THE LOCKDOWN

Monthly MeetingsMAY

WELCOME TO THE NEW NORMAL!Companies need to retool and change their business models tomeet the challenges of the new economic reality........................30

SUCCESSFUL ADVOCACYAmCham protected American investors from a new scrutiny systemagainst foreign investment in Poland from outside of the EU..........32

JUNE

NO MORE FOSSIL FUELSPoland takes steps to become a carbon neutral economy..........34

Battling the negative effects of the Covid-19 pandemic on busi-ness..................................................................................................36

American companies transitioned smoothly intoworking from home, continue to adapt to the chang-ing situation, and have identified trends of strategicimportance to business...............................................12

Company Profiles Departments

Daniel Bienias, Managing Director of CBRE in Poland, talks aboutthe last 20 years in the Polish market and the key aspects thathave been driving the company's success there..........................50

Top managers of Garmin —an innovative navigation technologycompany—talk about the accomplishments of Garmin as the firmcelebrates ten years on the Polish market....................................52

HEADS FULL OF IDEAS

NAVIGATING LIFESTYLES

Paweł Sujecki, Chairman of the Board of ProService Finteco,talks about how the company has been building its position inthe market and how technology is driving progress.................54

PEOPLE DRIVING TECHNOLOGY

Magdalena Kusa, International Business Manager at SantanderBank Polska S.A., talks about how the bank positions itself onthe Polish market.........................................................................56

STRIVING FOR PERFECTION

Jo Overline, CEO & Co-Founder of SwingDev, talks about theharmonies between his American business experience and hisPolish partners’ IT talents............................................................58

AN ALLIANCE OF INDIVIDUALS

Bartłomiej Raab, Country Manager Poland & Baltics, VertivPoland, talks about the company’s origins and the challenges ofthe present...................................................................................60

THE ART OF THE OPTIMAL PERFORMANCE

Three ways to thrive in the new normal.....................................62LOOKING AHEAD

The crisis spurs strong and agile investors..................................63A MARKET OF OPPORTUNITIES

Landlords and tenants in the pandemic crisis.............................64UNDER PRESSURE

Tax neutrality no longer so certain..............................................65A MATTER OF CIRCUMSTANCES

Addressing climate change in a post-pandemic world..............66A LONG ROAD AHEAD

A change in construction regulations is on its way....................67BUILDING MADE EASIER

Organizations need Covid-19 risk checklists...............................68A ROADMAP TO SAFETY

Some opportunities for investment financing in commercial realestate............................................................................................69

SCRIPTING A WIN-WIN SCENARIO

New rules for scanning FDI coming to Poland............................70REINFORCING THE NET

Working from home during the pandemic..................................71IT'S TIME TO GET REAL

Competition, protection, and different standards......................72GOING IN CIRCLES

There is momentum for tightening Poland-US economic coopera-tion..................................................................................................40

The Polish government employed tools to help companies battlethe negative impact of the pandemic............................................44

It is hard to overestimate the impact of the US investment on thePolish economy...............................................................................46

AmericanInvestorClubpl is a new source of information for entre-preneurs eyeing business opportunities in the US........................47

The AmCham mentoring program 30 Under 30 has successfullyfound an online formula.................................................................48

Focus

Experts

HANDS ACROSS THE OCEAN

THE GOVERNMENT’S HELPING HAND

LAND OF OPPORTUNITY

CALIFORNIA, HERE WE COME!

THE POWER OF TEAM SPIRIT

OBITUARIES.......................................................................... 49

THE ART OF ADAPTATION

The issue content highlights...................................................1

AmCham Board of Directors & AmCham Staff.......................2

Letter from the Chairman.......................................................5

AmCham Advocacy.................................................................4

Newsline.................................................................................6Agenda....................................................................................8

Guide to AmCham Committees.............................................11

AmCham Events...................................................................43

AmCham Advisory Council.................................Second Cover

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AMCHAM.PL QUARTERLY 3/2020AMCHAM.PL QUARTERLY Vol. III, No. 3

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AMCHAM.PL QUARTERLY Vol. III, No. 1

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AmCham Poland supportsthe collective interests of itsmembers by working to affect changes that improvethe business environment inPoland through: • the close monitoring ofPolish and EU regulations;• position papers, policystatements, and advocacyletters;• direct and frequent inter-action with policy-makers;• active participation in therule-making process.

All AmCham Poland’s positionpapers are available athttp://amcham.pl/advocacy.

ADVOCACYOF AMCHAM

POLAND

Contact:Marta Pawlak

Head of Legal & Public [email protected]

t: +(48)-22-520-5996

LETTERFROM THECHAIRMANDEAR AMCHAMMEMBERS AND FRIENDS,

TONY HOUSHAMCHAM CHAIRMAN

Our top issues include:

I hope that this edition of the AmCham.pl Quarterly finds youand yours well. Hopefully, despite the challenges and disrup-tions of the pandemic, there has been time for you to rest, re-flect, and prepare for the months ahead.

No matter how long one has been in business, regardless ofstudies and degrees, none of us have experienced anything like2020 and a much-changed future. Most of the things wethought we knew about 2021 and beyond were not wrong—they simply ceased to be relevant in our new reality.

Our companies continue their adaptation to the ongoing pan-demic. I am proud to see so many companies making these ef-forts and continuing to focus on keeping people safe, maintain-ing jobs, and looking at new ways of working through schedul-ing, technology, and planning. Big challenges, but necessitybreeds invention.

AmCham has not slowed its work to represent the membershipthroughout the summer on matters of legislation, regulation,and treatment of our companies in the market. Hundreds ofpeople from our member companies have participated in ourvirtual meetings with the Office of Competition and ConsumerProtection, Ministry of Environment, and the Polish Develop-ment Fund, to name but some of the events. We were alsopleased that the Board and Advisory Council could meet withDeputy Prime Minister Jadwiga Emilewicz and AmbassadorGeorgette Mosbacher in July—our first physical meeting sinceMarch.

AmCham's 30th Anniversary investment report featured heav-ily in the media during the summer and is a valuable measureof how far our Chamber, our companies, and this market havecome in the last thirty years. Look for future research on in-vestment going forward. This new edition of the AmCham.pl

Quarterly will inform you of our engagement and issues duringthe summer season and provide a good deal of food forthought about how we are conducting business as we look to-ward a return to growth.

Due to Covid-19, we will not be at some of the large eventswith our ever-popular AmCham Dinner. I look forward to beingable to do that again in the future, hopefully, next year. De-spite these short-term changes, AmCham is fully engaged in anongoing dialogue with officials throughout the Government,Parliament, and policy spectrum. I invite you to keep AmChamposted on issues and ideas, as well as to participate in our vir-tual meetings—and perhaps even some limited physical ones—in the coming months.

I will close by recognizing the great work of the AmCham staffduring the previous months. They have worked to support ourcompanies, our employees, and the market without missing abeat—despite the disruption of remote working and virtualmeetings. Dorota and Team AmCham, thank you!

Stay safe and well. Ever forward!

THE FDI SCREENING REGULATION The FDI screening regulation introduced a newmechanism to control FDI coming to Polandand has been in force since July 24, 2020. Theregulation affects non-EU entities that want toinvest in a Polish entity covered by protection.It applies to the acquisition of shares and stockof the Polish entity, to the amount of 20 per-cent of the voting threshold, obtaining or in-creasing a share in that entity's profits. A non-EU entity that intends to acquire domi-nance over an entity covered by the protectionmust submit information expressing this inten-tion to the President of the Office of Competi-tion and Consumer Protection. According to thenew law, the FDI screening regime is not ap-plied to investors based in the US and otherOECD countries.

RECOMMENDATIONS TO THE GOVERNMENTIN RESPONSE TO THE IMPACT OF COVID-19 AmCham has presented recommendations tothe government on how to keep the Polish mar-ket attractive to foreign investors in responseto the impact of the Covid-19 pandemic. Am-Cham underlined the government's need tofocus its aid programs on large enterprises, in-crease support for maintaining jobs, and intro-duce more transparent criteria for using thePolish Development Fund's support instru-ments. AmCham urged the government not toimpose new fiscal burdens upon companies.AmCham also recommended introducing widerexemptions from the obligation to pay socialsecurity contributions and accelerating someprocedures such as VAT refunds.

THE WITHHOLDING TAX (WHT)AmCham continues its efforts to have the gov-ernment clarify the provisions of the WHT thatwere introduced at the beginning of 2019 andhave created doubts regarding their application

in practice. The WHT affects all entrepreneursoperating in Poland that have foreign businesspartners. The withholding tax applies when a Polish en-tity buys services from abroad, such as market-ing, artistic services, legal advice, market re-search services, or data analysis from an entitythat does not have tax residence in Poland. Upon feedback from the private sector, theMinistry of Finance has established a group thatincludes an AmCham representative to work onclarifying the new provisions. So far, the Min-istry of Finance has published a regulation post-poning the entry into force of the withholdingtax regulations to December 31, 2020. The post-ponement applies only to the mechanism of thecollection of withholding tax.

THE SUGAR TAX AmCham has been monitoring initiatives re-garding the introduction of additional fees onsoft drinks containing sugars. The new regula-tions will come into force on January 1, 2021,and will cover drinks containing sugar andsweeteners, as well as taurine and caffeine. Thenew law will directly and indirectly affect bever-age companies, impacting all companiesthroughout the entire supply chain of sugar-containing products, from farmers to producersto consumers.

THE VOD TAXA new law introducing the VOD tax has been inforce since July 1, 2020. The VOD tax is a newpayment obligation made to the Polish Film In-stitute (PFI) imposed on entities that providevideo-on-demand services. The fee for entitiesproviding VOD services will constitute 1.5 per-cent of their revenue obtained from fees forthe access the VOD, or the income receivedfrom the issue of commercials if the revenuefor a given accounting period is higher.

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serving Polish patients daily, Gemini alsodonated 25,000 FFP3 masks to profession-als at hospitals in Warsaw, Wrocław,Gdańsk, and Zielona Góra.

GOOGLEGoogle worked to limit the proliferation offake news in Search and YouTube, and pro-vided reliable information about the virus,including an SOS alert and a KnowledgePanel information box. Google supportede-learning by creating new distance learn-ing resources, including a collection oftraining materials, a new YouTube Learn-ing Hub, and a series of blog posts and we-binars.

IBMIBM has made its Clinical Development Sys-tem available National Health agenciesfree of charge to reduce the time and costof clinical trials by providing data andanalysis. IBM also granted three months offree access to the IBM Cloud and othertechnologies, and to the IBM Global Uni-versity Programs platforms that providefree online skills education. In addition, IBM and Cisco teamed up withseveral Polish non-profit education organi-zations to support teachers in running on-line classes for students at home. Teacherswere provided with free access to theCisco Webex platform to host online meet-ings, and volunteers from IBM and Ciscoprovided the necessary technical supportand assisted teachers with the trainingneeded to work with the platform.

of 60,000 PLN for the purchase of protec-tion equipment.

CISCOThe IT network company Cisco made itsWebex platform available for free for onlinemeetings and video-conferencing. It has ex-panded the features available to includesupport for up to 100 participants, unlimitednumber and time of meetings, and docu-ment sharing.

DCTThe sea cargo terminal DCT Gdańsk has do-nated funds to the Polish Red Cross to fightthe pandemic. The funds were used to pur-chase a respirator with PEEP function nec-essary for coronavirus, a cardio monitor,laser thermometers, and ozonizers for disin-fecting the uniforms of paramedics workingwith Covid patients.

DELOITTE POLSKA Deloitte Polska rendered financial assis-tance to Warsaw Genomics, a Polish labora-tory specializing in genetic diagnostics, topurchase diagnostic tests for SARS-CoV-2and donate them to Poland’s hospitals andmedical facilities.

GEMINIThe network of pharmacy stores Geminiserved over 200,000 patients in its pharma-cies and over 10,000 through its online plat-form, ensuring the high availability of med-ical products and devices. In addition to

AMAZONAmazon has prepared an educational re-sponse to the school closures acrossPoland by contributing to the Ministry ofDigital Affairs program. Together with itspartner Cyfrowy Dialog, Amazon providedonline access to educational resourcesand supported teachers, parents, educa-tors, and children in home-schooling. The#STEMKindloteka program offers innova-tive e-learning classes and workshops forfree. Earlier, Amazon donated EUR 1 mil-lion to support those impacted by theCovid-19 crisis by financing hospital equip-ment, including tests, protective clothing,and specialist equipment. The funds weredonated to the Polish Red Cross, the TVN“Nie jesteś sam” Foundation, the GreatOrchestra of Christmas Charity, and cho-sen organizations operating on a localscale in the vicinity of Amazon’s opera-tions.

AMRESTThe operator of KFC, Pizza Hut, Starbucks,and Burger King provided free meals to 50hospitals in Poland to support the medicalstaff involved in the fight against coron-avirus. AmRest donated 3 tons of food inMarch alone.

CARGILLThe provider of food, agriculture, financialand industrial products, and servicesCargill supported three local hospitals inPoland. The company’s first donation was


NEWS FROM AMCHAM AND ITS MEMBERS

NEWSLINE

AmCham member companies have supported efforts to combat coronavirus and the spread ofthe pandemic by delivering financial aid to hospitals and organizations and offering online com-munication tools and access to Covid-19 related information. The companies involved included

the following:

INTEGERInteger has donated 109,000 face masksto 18 hospitals all over Poland. The com-pany transported computers used in re-mote learning free of charge for studentsin need. In cooperation with Lotte Wedel,Integer also sent sweets to 465 infectiousdisease hospitals in Poland.

KPMGThe KPMG Foundation in Poland pur-chased laboratory equipment for diag-nosing and researching the coronavirus.They bought 5,000 protective masks forthe staff of one of the hospitals and pro-vided over 300 computers with Internetaccess for students with financial difficul-ties. KPMG Polska also prepared Covid-19information packages for business, in-cluding publications, factual materials,webcasts, and ready-made templates ofapplications to help manage a business.

LUFTHANSAIn March, Lufthansa performed over 260repatriation flights from 60 destinationsworldwide to bring 48,000 stranded pas-sengers back home to Europe. Lufthansaand their Joint Venture partner UnitedAirlines worked closely with the US gov-ernment and officials to gain the neces-sary approvals to operate services tobring US citizens home from countrieswhere flying had been restricted.

MCCORMICK POLSKAMcCormick Polska supported an aid pro-gram to give economically-challengedfamilies access to healthy meals. Mc-Cormick gave the food bank regular in-kind donations and donated productsworth USD 100,000 in February alone.

MCDONALD’SThe Ronald McDonald Foundation do-nated 20,000 medical-grade masks tohospitals in Warsaw and Kraków.

MICROSOFTMicrosoft provided a six-month free ofcharge version of Microsoft Teams, a re-mote work tool, along with the completeOffice365 E1 package. Additionally, thecompany shared a number of guides onbest practices for remote working andworking from home safely.

MONDELEZ INTLMondelēz Intl donated PLN 150,000 PLNfor the Coronavirus Relief Fund organizedby The Great Orchestra of Christmas

Charity. The Fund’s purpose is to supportPolish hospitals by purchasing the neces-sary equipment to fight the pandemic.

NATIVIANAThe mineral water producer Nativiana do-nated its Rodowita brand bottled waterto all hospitals in the Lubelskie region,where Nativiana’s production plant is lo-cated.

ORANGE POLSKAOrange Polska supported a stay-at-homeprogram aimed at among young internetusers. The Orange Flex customer programallocated up to 200GB of data transfers toyoung Orange clients for a symbolic PLN 1a month. In addition, Orange Polska gaveall its mobile customers an additional10GB of data transfers, anticipating thatthey would be making extensive use ofmobile phone communications during thelockdown. The company also extendedfree access to TV channels for Orange TVcustomers until the end of March, and theOrange Foundation created a program foronline learning.

PEPSICOPepsiCo donated its products to Polishhospitals with its partner AmRest throughthe nationwide aid program “#wzywamyposiłki.”

PKP ENERGETYKAThe power supply provider for the railwaysector PKP Energetyka held a program ofwebinars and provided psychological helpfor employees in need. They also sup-ported their retired employees in need ofassistance during the pandemic.

PZL MIELECThe aerospace company PZL Mielec do-nated face masks, face shields, and 100liters of disinfectants to the Mielec munic-ipal hospital, as well as PLN 10,000 to thelocal emergency service. In addition, PZLMielec donated PLN 13,000 to purchase adisinfection device for an ambulance. PZLMielec also ensured timely payments toits suppliers and shortened paymentterms to help its small and medium-sizedsuppliers maintain liquidity.

P&GTogether with the Polish Red Cross, Proc-ter & Gamble distributed P&G products tofamilies in need during the lockdown. Thevalue of the aid rendered reached PLN300,000.

SANTANDER BANK POLSKASantander Bank Polska donated PLN 2million for medical equipment andlaunched a charity fundraiser with theSantander Bank Polska Foundation tocombat the pandemic.

UBERThe cab company Uber offered 10,000car rides for doctors and nurses fromWarsaw, Kraków, Poznań, Łódź, and theSilesian area.

UNUMLife insurance conglomerate Unum finan-cially supported individual employeesand associates as part of their efforts toassist neighbors in need in their commu-nity, especially seniors. Unum Founda-tion set aside PLN 25,000 for this pur-pose, and the company also purchasedmedical equipment for hospitals treatingpatients with Covid-19.

UPC POLAND UPC Poland launched virtual onlinecourses for children to make social dis-tancing easier and made its children’schannels available to all video cus-tomers.

WARDYŃSKI & PARTNERSLaw firm Wardyński & Partners launchedan informational website dedicated toCovid-19 for businesses. At the time ofthe launch, the site contained over 80practical and accessible FAQs as well aslonger articles.

ŻABKA POLSKAThe Żabka chain of convenience storesdonated PLN 4.5 million to support gov-ernment operations to fight the pan-demic. Another PLN 2 million was dedi-cated to purchasing SARS-CoV-2 testsfrom Warsaw Genomics, a Polish labora-tory specializing in genetic diagnostics.The company also allowed its customersto use their loyalty points collected tosupport regional infectious diseases hos-pitals through its mobile applicationŻappka.” The points could be redeemedfor donation vouchers worth between 1PLN and 100 PLN, which the companythen doubled.


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business and non-business disciplines andis driven by the needs of the user. This iswhy in such a multi-user and multi-purposeenvironment, “cloud native” concepts arerevisited and reevaluated. This is why thecloud is becoming more mature as morevendors join the cloud fray, offering newsolutions that cater to a wide range of newusers with diversified and specific needs.

MARKETING & COMMUNICATIONSIn May, the committee met online in themidst of the lockdown to discuss how mar-keters were adapting their communicationpractices to the new normal. The speakerwas Marta Matczak, Brand Strategy TeamDirector at PwC. She gave an overview ofhow companies communicated theirbrands and services to the consumer in theinitial phase of the lockdown, in the con-text of a big change of consumer attitudesand values initiated by the emergency ofthe pandemic. In July, the committee met online to dis-cuss the evolution of e-commerce. Thespeaker was Barbara Grabiwoda, eCom-merce Strategy Director at Publicis Com-merce. In her presentation, Grabiwoda focused onhow organizations should communicatetheir brands, products, and servicesthrough digital channels during the Covid-19 pandemic and beyond. She said that during the pandemic, con-sumers postpone purchasing decisions be-cause they are more concerned with ex-penses as economic uncertainty prevails. In this respect, consumers in Asia and Eu-rope behave in the same way. Data fromAsia, which was ahead of the pandemic de-velopment, show that after lockdown,consumption levels stay below pre-pan-demic levels for a long time. This hurts re-tailers, especially brick-and-mortar stores. Grabiwoda said that younger consumers—Generation Z—were more inclined to limittheir expenditures during the lockdownthan their parents—Generation X, the Mil-lennials, and Baby Boomer generation.This happened because young consumerswere much more inclined to change theirpatterns of consumer behavior than oldergenerations. With limited access to tradi-tional retail, they boosted their consump-tion online, digesting more video materialsand streaming TV than before the pan-demic. Television was also popular withGeneration X and, to some degree, BabyBoomers. In other words, teenage con-sumers were even more driven to theirmobile phones by the pandemic, whileolder generations chose broadcast televi-sion. Grabiwoda said that consumer behaviorschanged across generations because of

the pandemic, but not to the same degree.Some age groups stopped spending dur-ing the pandemic to save money. Otherslooked for their favorite brands at lowerprices, cutting back on purchasing fre-quency and delay major purchases. Somemaintained the status quo in their purchas-ing inclinations by buying the same brandsas they did before the pandemic and pay-ing pre-pandemic prices. Still, they havebecome more selective in luxury goods,looking for the value for money aspect,and reducing their consumption of prod-ucts. Another group of consumers in the“new normal” have continued to maintaintheir purchasing patterns, and are willingto expand them and justify new buying de-cisions. With this, it is clear to see that thepandemic has created new consumer pat-terns. Some of those patterns will stayeven after the pandemic is over becauseconsumer habits, once successfullyadopted, do not go easily. Post-pandemicconsumer data from China, generatedafter the 2003 SARS pandemic, shows thestrength of such new habits. It was onlyafter the SARS pandemic in China that theAlibaba and some other online retail chan-nel took off. Such a sharp growth of commerce makesmarketers adopt new marketing strate-gies. But it also creates new challenges in otherareas. If logistic companies do not deliveron time, it backfires on marketers and on-line retailers. If online services do not sup-port the increased traffic effectively, thedelays can put off buyers. One of the most significant trends that ap-peared during the pandemic is of vastnumbers of consumers ordering groceriesonline, with the highest amount of ordersfor canned and dry foods. With this, Grabi-woda noted that there are challenges formarketers to build consumer confidencearound ordering fresh foods. When it comes to specific trends amongonline consumers in Poland, Grabiwodanoted that Poles appear to be very cost-sensitive. Since shipping adds cost, Poleslook for the cheapest offering to compen-sate for the cost of delivery. This is whythe price-comparing service Ceneo.pl hasbecome the entry point for many onlinebuyers. Online retailers have been increasing theirofferings online, adding goods that com-plement their core offerings. For instance,a toy retailer may also offer bedsheets sothe buyer can order toys and sheets at thesame time and have them delivered in onepackage, cutting delivery costs. It may seem that retailers using e-com-merce channels are now in their heyday.However, the revenues they are generat-

ing in the lockdown are still below thosethey had generated pre-pandemic. This isbecause consumers have generally cuttheir budgets and have become more cau-tious in their purchasing decisions. This af-fected all retailers, including fashion andluxury brands, which were harmed themost. Yet, it turns out that retailers who com-bined brick-and-mortar stores with e-com-merce (the so-called omnichannel) gener-ated the best sales results. Consumershave better brand recognition for brandsthat are also available in high street stores,so when the lockdown is over, they tendto go out to those stores to buy their fa-vorite brands.

REAL ESTATEThe committee met online in May to dis-cuss how the pandemic transformed theonline retail business and its impact on thedemand for warehouse and industrialspace. The speakers were JoannaSinkiewicz, Partner, Head of Industrial andLogistics Agency at Cushman & Wakefield;Mathieu Giguere, Director, Key Accounts &New Business Development at Panattoni;Łukasz Turczyński, Global Accounts & SMEMarket Sales Director at InPost, a deliverycompany, and Artur Łakomiec, CEO ofGemini Polska a chain of pharmacies. Com-mittee co-chair Bolesław Kołodziejczykmoderated the discussion from Cresa. The Polish warehouse market was growingfor the first quarter of 2020 with a strongsupply of new space and stable rates. Yet, new demand was created by the pan-demic-related transformation of retail,which migrated to digital channels. Withthis, the operator from the e-commercesector has become the most importantclient group for the warehouse industry. According to Sinkiewicz, one of the rea-sons the industrial real estate market wasable to hold its own during the lockdownwas because it catered to various clients.While some were hurt by the pandemic,others’ businesses grew. Another reasonwhy the demand for warehouses remainsstrong was that e-commerce, whichthrived during the lockdown, requires upto three times more warehousing spacethan traditional retail. Łukasz Turczyński confirmed that the mar-ket for delivery and logistics services hasbeen excellent. InPost saw the demand forits services during lockdown peak to thelevels the company usually sees during theshopping season in December. Turczyńskinoted that the demand for e-commerceservices grew as new users, who used e-commerce only occasionally, joined theranks of e-commerce users who had fre-quently purchased online before the pan-


Polish and International CEOs that arebased in Poland. The purpose of the pollwas to shed light on the industries’ per-ception of how cloud computing couldpotentially support their businessprocesses. The polling revealed that onethird of companies in the poll had beenusing cloud solutions already, and onefifth were considering cloud applications“in the near future.”The key takeaways from the part of thesample representing companies that hadadopted the cloud were that the majorityof those companies indicated that thecloud exceeded their expectations. Solu-tions such as data storage, processing,and analysis were listed as the most im-portant areas for companies. Companiesalso appreciated the scalability, flexibility,and simplified management of the cloudenvironment. The polling also revealed that when com-panies “migrate” to the cloud for thefirst time, they expect cost optimization.However subsequent implementations ofnew cloud solutions are not as cost-sensi-tive once they are in the cloud. Another takeaway from the poll was thatPolish companies are very timid withadopting cloud solutions. A vast majoritycompanies using the public cloud servicestore no more than 20 percent of their re-sources there. Cloud solutions, however, are taken forgranted by 90 percent of companies inPoland that identify themselves as mar-ket leaders. When it comes to the regulations govern-ing cloud services, most companies per-ceive them as barriers to implementingthe new technology. Yet only a small por-tion of the sample said that the regula-tions were very difficult for their compa-nies to handle. Once a company imple-ments cloud solutions, the developmentof new competencies for the team be-comes one of the key issues.Another speaker, CloudStat’s Michał Fur-mankiewicz, shared his experience imple-menting cloud services for business or-ganizations. He said that unlike the devel-opment of computers and IT networks,the cloud is not driven by “technologynerds.” Cloud technology serves a widearray of end-users from different types of

Poland, some of those targets are very diffi-cult to achieve because of the old packagingwaste system, which was operational untillast year. Yet, as Poland has been realigningits packaging waste management system,manufacturers have to work closely withlegislators to ensure that the new regula-tions will enable manufacturers to achievethe EU targets. A good legislative frame-work is essential. To meet the EU require-ments, the FMCG producers will have tomake huge investments in new productionand packaging processes. Another speaker, Can-Pack’s Bartłomiej Wo-jdyło, said that the industry should not viewthe idea of the circular economy as a threator risk, but as a long-term business opportu-nity. The industry needs to commit itself topro-ecological sustainable standards, andnobody is questioning this. The largest com-panies in the aluminum can production sec-tor are working hand-in-hand to establishthe best standards and practices to increasethe amount of recyclable content. For in-stance, plastic wrap for multiple can pack-ages was replaced with a new type of paintthat keeps the cans together. The amountof raw materials used in the production ofcans has also been reduced over the years. Wojdyło noted that, along with engagingthe major can producers, the industry isworking with suppliers and clients to meetnew, higher recycling standards. Wojdyło said that the industry is unitedaround meeting those new standards be-cause all people concerned—producers,suppliers, clients, and consumers—under-stand that high recycling standards are amust for the modern economy.

DIGITAL TECHIssues regarding the growth of cloud com-puting in Poland were on the agenda of awebinar held by the AmCham Digital TECHCommittee in June, with speakers SławomirLubak, Partner, Systems & Cloud Engineer-ing at Deloitte, and Michał Furmankiewicz,Cloud Solution Architect and CEO at Cloud-Stat.Sławomir Lubak said that the economiclockdown led many companies to turn tocloud solutions as they searched for tools tomaintain vital business processes and com-munications with clients and stakeholders. During the lockdown, Deloitte polled 200

AGRI, FOOD & FCMG; MANUFACTURINGChallenges and opportunities for businessin managing waste from packaging wereon the agenda of a joint meeting of twocommittees (Agri, Food & FMCG, andManufacturing), which took place in Mayvia the Webex online platform. The speak-ers were Małgorzata Skonieczna, PublicPolicy Director at PepsiCo and Co-Chair ofthe AmCham Agri, Food & FCMG Commit-tee; and Bartłomiej Wojdyło, SustainabilityDeputy Director at Can-Pack, one of theworld’s largest producers of aluminumcans. Małgorzata Skonieczna highlighted key el-ements of new legislation of the EuropeanUnion regarding packaging, which will af-fect most companies using packaging forthe products they deliver. Skonieczna said that the European Com-mission has a comprehensive approach tothe problem of waste generated by con-sumer products, such as plastic. The com-mission’s policy aims to make manufactur-ers use recyclable materials for packagingto reduce the amounts of plastic wastethey produce. The policy is innovation-driven and aims atsetting new standards for the productionof packaging and consumer goods. Thesewill comply with the standards of the so-called “circular economy,” in which allproducts are recyclable or made fromcomponents that do not impact the natu-ral environment. According to MałgorzataSkonieczna, the policy includes provisionsthat affect all phases of a product lifecycle, including packaging. The policy is part of an EU strategicroadmap called the European Green Deal,which addresses sustainability and cli-mate-related challenges. The EU legislation governing packagingwaste belongs to a legislative frameworkcalled the Circular Economy Package,which is comprised of five acts: the WasteFramework Directive, the Packaging andPackaging Waste Directive, the CEP ActionPlan, the Plastic Strategy, and the Single-Use Plastic Directive. Another EU policy critical for manufactur-ers in the union is the EU recycling targetfor packaging waste. When it comes to manufacturers in

INTELLIGENCE FROM AMCHAM COMMITTEES

AGENDA

10 11

Co-Chairs:

Małgorzata Skonieczna, Frito-Lay

Andrzej Pawelczak, Animex

AGRI, FOOD & FMCG

Co-Chairs:

Daniel Martyniuk, Deloitte

Angelo Pressello, Directpl

TECH & DIGITAL

Co-Chairs:

Stan Prusinski, Boeing

James Katzen, Lockheed Martin

DEFENSE & SECURITY

Co-Chairs:

Marta Poślad, Google

Mariusz Mielczarek, Amazon

DIGITAL ECONOMY

Co-Chairs:

Jerzy Kozicz, CMC Poland

Aneta Muskała, International Paper

INDUSTRY & ENERGY

Co-Chairs:

Małgorzata Grzelak, Squire Patton Boggs

Anna Wicha, Adecco Poland

HUMAN RESOURCESMANAGEMENT

Co-Chairs:

Gabriel Buchała, APTIV

Dominik Kania, Woodward

MANUFACTURING

Co-Chairs:

Izabela Morawska, Coca-Cola Poland Services

Łukasz Kowalski, MSL Group

MARKETING& COMMUNICATIONS

Chair:

Bolesław Kołodziejczyk, Cresa

Michał Chodecki, Panattoni

Co-Chairs:

Emilia Wasilewicz, Dow Polska

Mariusz Wawer, 3M Polska

REAL ESTATE

SUSTAINABILITY

Co-Chairs:

Piotr Pikuła, Procter & Gamble

Adam Soska, EY

TAX & FINANCIALSERVICES

Co-Chairs:

Tim Hyland, FCM Travel Solutions

Frank Wagner, Lufthansa Group

TRAVEL & TOURISM

C0-Chairs:

Andrzej Dziukała, Janssen Cilag

Jacek Graliński, Amgen

PHARMA

For the most recent information about the AmCham Committees and upcoming events visit

AMCHAM.PL

AMCHAMCOMMITTEES


demic. InPost estimated that e-commercewill continue to grow after the lockdown,maybe not so steeply as during the lock-down, but will nevertheless emerge as animportant retail channel. Artur Łakomiec said that the Gemini chainof pharmacies had a strong e-commercearm before the pandemic, and its sales arenow surging. However, the penetration ofe-commerce among Polish consumers isstill relatively low, and there is space togrow for the pharmaceutical sector. Be-cause the regulator banned the sales ofprescription drugs through e-commercechannels, the company cannot use the fullpotential of its e-commerce capacity. De-spite that, Łakomiec said that e-commercewould continue to grow because it offersmuch more flexibility than brick-and-mor-tar stores, especially when it comes topromoting and displaying products. In turn, Mathieu Giguere said that thegrowth of e-commerce caused a bigchange in the supply chain because e-stores do not have their own storagespace and take products directly fromwarehouses. This is why the warehousingmarket is poised for growth, because thee-commerce part will rebalance the poten-tial loss of demand from traditional brick-and-mortar retailers. He noted that tradi-tional retail would take off and return toits prominence after the lockdown. In hisview, shopping centers will continue to at-tract crowds of buyers. They will increasetheir share of the market through e-com-merce channels but will still have a longway to overtake traditional retail.

SUSTAINABILITYKamil Wyszkowski, President of the Boardof the Polish Chapter of Global Compact, aUnited Nations initiative for promotingcorporate sustainability, met the commit-tee online in May to discuss global effortsto tackle climate change.In his presentation, Wyszkowski high-lighted the main policy point of the UNGlobal Compact and explained how differ-ent industries approach climate change.He noted that investors in power genera-tion infrastructure tend to avoid projectswith high emissions of carbon dioxide, be-cause companies that meet sustainabilitystandards have lower risks associatedwith air pollution, and higher evaluationsof their shares at stock exchanges.Wyszkowski presented the symptoms ofclimate change in median temperatures inPoland vis-a-vis issues governing watermanagement and other functions vital forthe economy. He also explained the conflicting interestsbetween developed and developingeconomies in climate protection in regardto carbon dioxide emissions.

Wyszkowski concluded his presentation bysaying that climate protection is a strategicissue for the global economy and will leadto global-scale disruptions in the economyand population spreads if not solved. Headded that many global company leadershave a good understanding of the problemand are moving their companies towardsustainable growth paths. Wyszkowski also said that companies whoplan to implement technology upgradesand other investment projects to meet cli-mate protection standards might be ableto receive financing from the World Bankand other UN-affiliated financial institu-tions.

TAX & FINANCIAL SERVICESIn May, Marcin Rudnicki, Tax Partner andHead of International Tax at KPMG inPoland, met with the committee membersonline to discuss the relief programs avail-able to companies through the govern-ment aid program called the EconomicShield. Rudnicki presented a variety oftypes of aid available to companies. Theseinclude financial support from the PolishDevelopment Fund, subsidies to salariesfor economic downtime and reducedworking hours, reliefs in taxes and socialsecurity contributions, loan guarantees,subsidized interest on bank loans providedby the BGK Bank, and financial supportavailable from the Polish DevelopmentFund.

TRAVEL & TOURISMIn June, members of the committee metonline to discuss prospects for the traveland hospitality industry in the post-pan-demic reality. The speakers were TimeaBalzer, General Manager of the BridgeWrocław MGallery; Robert Grader, GeneralManager of the Warsaw Marriott Hotel;Tim Hyland, President of Travel Express(and co-chair of the Travel and TourismCommittee); and Frank Wagner, GeneralManager of Lufthansa Group Poland (andCo-Chair of the Committee). Until international air travel is back ontrack, the hospitality industry will not beable to return to anywhere near pre-pan-demic growth levels. Most airlines hadgrounded their fleets as safety regulationsand travel bans across the European Unionprohibited them from resuming commer-cial flights. Airlines and airport operatorsalso had to comply with industry safetystandards and guidelines related to thepandemic issued by the European Agencyfor Aviation Safety and the EuropeanAgency for Diseases Prevention.Lufthansa’s Wagner noted that the regula-tions regarding passenger sanitary eti-quette made it compulsory for passengersto wear facemasks in all places at the air-

port and on the plane. Many airports wereequipped with thermo-screening devicesto identify passengers with high tempera-tures as potential Covid-19 carriers. Pas-sengers were also prohibited from movingaround the plane in flight and were ex-pected to reduce interaction with otherpassengers and crew members. According to Wagner, the pandemic ledthe commercial air carriers to face an un-precedented crisis, and not all companieswill come out of it alive. People are lessmotivated to travel because of safety con-cerns as well as economic uncertainty. When it comes to creating the demand forair travel in the future, the industry’s chal-lenge will be to build confidence that airtravel is safe in relation to the coronavirus.Wagner cites the industry analysis com-piled by the International Air Transport As-sociation (IATA) suggesting the 2020global demand for flights will reach 25 per-cent below the 2019 numbers. The 2019levels in global air travel will be reached noearlier than in 2023. However, with thesecond wave of the Covid-19 pandemic,the IATA expects that the 2019 levels willbe reached no earlier than in 2024. Concluding his presentation, Wagner saidthat the airline industry is losing five yearsof growth because of the crisis. Robert Grader from Warsaw MarriottHotel said that the majority of hotels hadbeen closed (globally, 75 percent of hotelswere shut down), but some were goingback to business in countries where thepandemic was contained. The WarsawMarriott Hotel did open, but demand wasvery low, and the hotel had to realign itsoffer for the domestic client, since therewas no international tourism. Grader said that even if international travelrestarts, the hotel will have to carry on inlow gear until at least September, as War-saw is not a popular leisure destination inEurope. Timea Balzer said that the domestic mar-ket is a bit stronger than the internationalmarket as cities open. Before welcomingnew clients, the Bridge Wrocław imple-mented Covid-19 safety and hygienic pro-tocols for its staff and trained team mem-bers in recognizing the new challenges.Among the technology solutions appliedby the hotel were mobile phone applica-tions for opening rooms, which limitedtouch-points across the hotel and reducedthe risk of contamination. In conclusion, Balzer said that the pan-demic is a huge challenge for the hotel in-dustry and an opportunity to learn, focus-ing on small, family events held in thehotel and serving clients in these extraor-dinary circumstances.

12 13

AMCHAM.PL QUARTERLY Vol. III, No. 3 AMCHAM.PL QUARTERLY 3/2020

COVER STORY

LESSONS FROMTHE

LOCKDOWN

AMERICAN COMPANIES TRANSITIONED SMOOTHLY INTOWORKING FROM HOME, CONTINUE TO ADAPT TO THE

CHANGING SITUATION, AND HAVE IDENTIFIED TRENDS OFSTRATEGIC IMPORTANCE TO BUSINESSES.

TOMASZ BURAS, CEO OF SAVILLS, SHARES HIS THOUGHTS ABOUT THETRENDS OF THE OFFICE MARKET, WHICH HAVE BECOME MORE POPULAR

BECAUSE OF THE PANDEMIC.....14

ANNA WICHA, PUBLIC AFFAIRS DIRECTOR, POLAND, EASTERN EUROPE & MIDDLE EAST & NORTH AFRICA AT ADECCO GROUP, DISCUSSES HOW THELABOR MARKET HAS EVOLVED AND IS CREATING NEW CHALLENGES FOR

EMPLOYEES AND EMPLOYERS......16

ZBIGNIEW PŁAZA, MANAGING PARTNER AT BOYDEN IN POLAND, SHARES HISTHOUGHTS ABOUT HOW THE CURRENT CHANGES IN THE WAY

BUSINESSES FUNCTION.......18

TOMASZ WALENCZAK, DIRECTOR OF MANPOWER, A BRAND OF MANPOWER-GROUP, TALKS ABOUT NEW TRENDS AT THE LABOR MARKET AND IN CON-

SUMER ATTITUDES........20

JOANNA BOJARSKA-BUCHCIC, CEO OF HR SOLUTIONS GROUP, EXPLAINS THENEW DYNAMICS IN HUMAN RELATIONS TRIGGERED

BY THE PANDEMIC....22

EMILIA WASILEWICZ, MANAGING DIRECTOR DOW POLSKA, TALKS ABOUT HOWTHE CHEMICAL SECTOR REACTED

TO THE PANDEMIC.......24

STANISŁAW MOTYLSKI, VALUE STREAM DIRECTOR AT FLEX, DISCUSSES THE PROS AND CONS OF RUNNIGN

GLOBAL SUPPLY CHAINS....26

KRZYSZTOF KRAWCZYK, PARTNER AT CVC ADVISERS POLSKA, A PRIVATE EQUITY FIRM, LOOKS AT WHERE INVESTMENT

MONEY GOES ......28

14 15

ing employee morale.Of course, some individuals prefer to workalone from home. These are peoplewith strong introvert personality traits whoare independent and work most efficientlywhen distanced from the other team mem-bers. Such traits are often found among ex-perts, freelancers, and software program-mers, to name a few.

HOME, NOT SO SWEET HOMEBuras notes that the widespread workingfrom home experience during the lockdownand the obvious cost-cutting aspects forcompanies revealed some problems de-pending on the workers’ living standardsand family. Those who had comfortableapartments and could set up a place to workthat separated them from other familymembers were happy to work from home.However, workers with small apartmentsthat they shared with spouses and childrenoften found working from home a painfulexperience. The lack of a dedicated place towork became a serious shortcoming. Er-gonomic chairs, desks, and appropriatelighting are all a must for working long hoursat a desk and taking part in video confer-ences and meetings. Many workers had toshare their already insufficient “home officeinfrastructure” with spouses working fromhome. At the same time, they were engagedin taking care of their offspring, who alsostayed at home and used home internet in-frastructure for distance learning and gam-ing. Having spent six weeks during the lock-down working at kitchen and bedside ta-bles, many people developed serious back-bone pains and other issues, including men-tal problems. “Living and working at homebrings about a different type of mentalwear,” says Buras. “People need to draw aline between work and private life—whenyou work at the office, the line is clear cutright after you leave your home.”

HUB AND SPOKETomas Buras notes that the pandemic itselfdid not drastically affect the office market’sdevelopment but did speed up some trendsthat had emerged years before the pan-demic. For instance, it was generally under-stood that commuting to work was difficultfor people in big cities who had to coverlong distances and spend precious timestuck in traffic jams. One of the trends thatemerged in reaction to this was for compa-nies to lease additional offices in locationseasily accessible to their workers. This is analternative to keeping all the workers at acentral location, which is often difficult to ac-cess during rush hour. This model, known as“hub and spoke,” is becoming increasinglypopular due to the pandemic. The model’sname is inspired by the airline model of

transporting passengers from local airportson small planes (spokes) to big airports(hubs), where they continue on their trav-els. This is a good way to spread workersout, avoiding the potential transmission ofCovid across the company. It also makes thelives of commuting workers easier. Somecompanies offer a “flexible” office spaceequipped with all the necessary infrastruc-ture, including secure internet connec-tions. An employer could thus lease 20 work-places in such an office in one location andbuy 20 access passes to other office opera-tor locations in Warsaw for their employeeswho work from home. When people work-ing from home need to have a meeting witha client, they can set up a meeting at any lo-cation in the city and use the “flexible” of-fice. “Such solutions were offered beforethe pandemic, and now the demand forthem is on the rise,” Buras says, adding thatthis model fits into the hybrid model ofwork, combining the home office with thereal one.

THE PERKS OF BUSINESS PARKSAccording to the authors of the Savills re-port, office space in business parks will bemore sought after because of the pandemic.First, this is because business parks, whichare located outside of the city center, solvecommuting problems for many workerswho do not live in city centers. This is a veryimportant aspect for workers who are moreenvironmentally aware and keen to reducethe unnecessary carbon footprint on theircommuting to work. Second, business parkscombine top-class office facilities withamenities including outdoor spaces de-signed to offer comfortable surroundings

for relaxing, socializing, and working. Thisaspect is of increasing importance to ten-ants, as the congestion of city centers is onthe rise.

RESIMERCIALA relatively new idea of combining residen-tial space with commercial (office, retail, andrestaurant) is taking root, and the pandemichas only reinforced this. Since working fromhome may not always be ideal, residentialcompound developers have come up with asolution that devotes part of the area to of-fice space. Such office zones are available toresidents and occupiers of the compounds.They can work there with access to the ap-propriate office infrastructure and every-thing is walking distance from their home. According to Tomasz Buras, remote workingis creating opportunities for co-living brandsin residential real estate as people are plac-ing more emphasis on selecting buildings inwhich they can live and work comfortably.“Co-living is the purest manifestation ofSpace-as-a-Service in the residential sectorand commercial real estate developers canlearn a lot from the residential and hospital-ity world as it shifts from product to serv-ice,” Buras says.

THE OFFICE REVISITEDThe pandemic also reinforced some trendsin office design. After the experience ofworking from home, some workers now notonly appreciate the luxury of working in theoffice, but also expect more from it than be-fore. Those who worked from home and en-joyed the privacy of their own spaces wantthe office to meet their expectations in thisrespect as well. As a result, offices will beeven more comfortable, combining openspaces with the need for privacy and dis-tance from other workers according toCovid precautions. The new office must nowreflect a future agile workforce, offeringcomfort levels similar to what employeeshave (or miss) at home.Tomasz Buras said that it will be interestingto see how the pandemic influences the con-cept of what makes an ideal office. “Em-ployers should take on board their findingsan allow their staff more control in creatingtheir perfect workplace. A well designed,sized and located office premises will driveemployment, improve amenity offering andeven encourage business migration,” saidBuras. "Companies will continue to attractand retain high-performing talent if employ-ees feel that their needs are being priori-tised. These relating to workplace will hope-fully produce more of well-designed andcomfortable offices” Buras said, adding thatworkplace is one of the best ways to mani-fest company’s culture and values.


Peace and quiet: Business parks combine top-class office facilities with amenities includingoutdoor spaces designed to offer comfort-able surroundings for relaxing, socializing,and working.

WORK AND LIFETHE PANDEMIC HIGHLIGHTED SOME LONG-ANTICIPATED TRENDS

REGARDING DEMAND THE FOR MODERN OFFICE SPACE.

Here to stay: With the development of sophisticated distance work tools, the modern office is not on its way out.

As the Covid-19 pandemic hit the country inMarch and sanitary authorities ordered asubsequent lockdown, most companiesadopted a work-from-home mode of oper-ation and sent office workers home tolower their chances of contracting the virus.Had they been working at the office, an out-break would have required the quarantineof not only the individuals with Covid-19, butall other workers who had contact withthem. This was a massive change for manycompanies, with some sending as many as90 percent of their office workers home. Work-from-home mode seemed to work,and many firms said that their employees’efficiency working from home even reachedpre-Covid in-office levels. As the lockdown continued, many man-agers praised the new work model, sayingthat not only did it solve the Covid-relatedsafety issues for their companies, but alsocut operating costs. The latter was equallyimportant at a time when the majority ofcompanies struggled with cash flow and liq-uidity problems due to massive drops in rev-enues. The lockdown in Poland was ended right be-fore summer, and instead of returning tothe office, many workers went on their sum-mer vacations. Many of those who did notgo on vacation continued to work fromhome, as their companies did not insist thatthey return to the office. In many cases, em-ployers encouraged their workers to con-

tinue to work from home, arguing that thisnew model will continue to prevail even afterthe pandemic is over. More and more com-panies are adopting the work-from-homemodel on the strategic level and intend to usefor many years after the pandemic. With this,some analysts have begun to forecast that of-fice space demand will shrink significantly inthe years to come, leading to oversupply thatwill cause a sharp downward trend in rentprices.

THE OFFICE IS HERE TO STAYSome of these predictions are being madetoo soon, argues Tomasz Buras, CEO of com-mercial real estate agency Savills. He pointsat the survey entitled “Office Fit” conductedamong clients of Savills in late April and earlyMay that revealed 89 percent of respondentsbelieve that the office will remain a necessity.With this, the authors of the report estimatethat there could be a 10 percent reduction ofoffice desk space in the months to come, al-though “the impact on total office space willbe negligible.” Tomasz Buras explains thatthis is because the office will remain a criticalwork environment for many companies.Some companies cannot allow their employ-ees to work from home because their profes-sion requires that team members work to-gether, interact, and learn from each otherduring their work. Other firms need officespace to keep their employees physicallyclose to business-critical processes and vital

brick-and-mortar infrastructure.“In con-sulting, especially in transactional advisory,online communication tools help stay intouch and share information, but they cannot replace face to face meetings and ne-gotiations during which you can build trustand relationships much quicker," saidTomasz Buras. "It is also difficult to createcorporate culture and embrace collabora-tion remotely. For this they need officespace”.

HUMAN ENVIRONMENTThere are other reasons why office space isso critical. Young workers, single and under30, feel comfortable in the office. They forminterpersonal relations, find groups of peo-ple they want to belong to, and makefriends. “Personal interaction is an impor-tant part of human behavior and peopleneed it, “ says Buras, adding that the lock-down was a very difficult time for people liv-ing alone who were forced to work fromhome.Another benefit to working in an office isthat team members are close to each other,their team leader and the company’s topmanagement. Their relationships are en-riched with human interaction that tran-scends the verbal and informative and rein-forces their bonds on the level of corporateculture and values. Being together as ateam has a significant positive impact onbuilding the company’s integrity and boost-


16 17

keep their workers at home long after thelockdown. This was in sync with workers’preferences, as polling conducted byPracuj.pl indicated that 80 percent of work-ers in Poland would like to have their workcombine the “home office” with “real of-fice.” Onky 10 percent said they would behappy to work from home all the time and10 percent said they do not want to workfrom home at all. The polling shows that re-mote work is here to stay,” says AnnaWicha, “yet the question is to what extent.”If remote work is to become a standardwork-type feature, there are some issues tosolve. First of all, there is no legal frame-work for remote work in Polish labor law atpresent, and the companies who use re-mote work now do it based on emergencymanagement principles. There are a numberof issues that must be regulated. For in-stance, the Labour Code states that employ-ers are responsible for providing a work-place for their workers, and this responsibil-ity covers safety issues in the workplace.This, of course, is fully achievable with work-ers working from home. An employer can-not inspect employees’ “home offices” be-cause there is no legal framework for thisyet. However, there is no regulation pro-hibiting this, especially if done by mutualagreement. If, today, labor inspectors wereto ask a company with a remote workforcefor documents describing the potential haz-ards their workers could encounter at home(required by law), all companies with work-ers at home would have to pay fines. Ofcourse, the National Labor Inspectorate isholding off on this issue for now, but the sit-uation must not continue as “normal” fortoo long. Other questions arise regarding the respon-sibility for accidents at work. According tolabor law, employers are required to covermedical and other associated costs for em-ployees. This rule also applies to the “homeoffice” workforce, but it is very difficult foremployers to comply with this when theiremployees work at home. Yet another important issue is the cost-shar-ing aspect. People working from home payfor their private computer infrastructure,power, and furniture and other items indis-pensable for work. Some labor law expertssay that home office workers need to be re-imbursed for the costs they personallycover while delivering work to their employ-ers, but there is no regulatory frameworkfor this either. The regulatory framework for remote workhas been used as an emergency tool and isbased on anti-crisis regulations with expira-tion dates. “That is why employers’ organi-zations call for permanent regulations in theLabour Code which permits the use of re-mote work as one of the modes of work or-

ganization,” Anna Wicha said. “We haveprepared recommendations and now areworking on a draft of the legislation,” sheadded.

REDEFINING EMPLOYEE BENEFITSWhile lawmakers face challenges regardingthe universal application of the work-from-home model, employers face their ownchallenges as well. One of the most pressingquestions has become that of employeebenefits. While benefits such as medical cov-erage are still important, others, such as“personal parking space,” are no longer at-tractive, given that the company parking lotis nearly empty at all times. It has becomedifficult to advertise new job openings as of-fering “work in a nice atmosphere with ayoung and ambitious team” when employ-ees are predominantly expected to work athome, alone. Unlimited coffee at the com-pany’s expense is no longer a thrill, nor arefree smoothies. Employees can also forget

about “integration trips” and company get-togethers this year. “This is a challenge,” says Anna Wicha, “be-cause companies will have to find new waysof gratifying their workers. It is hard to re-duce it to the financial aspect, such as finan-cial bonuses. Companies need to show theirappreciation for the work their people de-liver, for their achievements, successes, ded-ication, and commitment. Salary alone doesnot provide that feeling of being properlyrecognized.” This type of gratification is im-portant to all age groups. While older work-ers want to be recognized by the companyin the “old-fashioned way,” younger gener-ations who adapt more easily to workingalone at home than their older colleagueslook for company events and get-togethers.They want to identify with the company andseek out social interaction within the crowd.For many young workers without families

and family-related responsibilities, the com-pany is the only world they know.

RETURNING TO THE OFFICEAs the pandemic continues past the sum-mer vacation, companies are now using thelessons they learned during the lockdownand the subsequent months when workingfrom home prevailed. One of these lessonsis that most workers prefer a hybrid modeof work that combines the home office withthe real office. This means that companiesneed to make the real office Covid-resistant. When polled in August by the Polish Forumof HR, 85 percent of companies in Polandreferred to the changes they had intro-duced in the office as excellent or good. Formost companies, these changes were signif-icant expenditures—over 50 percent of thecompanies which declared “good” or “ex-cellent” levels of anti-Covid preparationsspent between 3 to 5 percent of their an-nual budget on this. Three areas of preparation were deemedmost critical: redesigning common spacessuch as kitchens, locker rooms, and toilets;redesigning workplaces for individual work-ers; and implementing efficient healthchecks at the company’s entry points.“These are issues that all companies willhave to deal with,” says Anna Wicha. While some solutions are simple and do notrequire any technical sophistication (wear-ing face masks, using personal hygiene,keeping social distancing), the problem liesin how companies can guarantee workercompliance in specific situations. For in-stance, workers are under no legal obliga-tion to agree to have their body tempera-ture checked before entering the work-place. According to current regulations, em-ployees with a temperature higher than nor-mal may not be denied access to their work-place. They can be persuaded to go homebut must be reimbursed by the company asif they had worked like any other day. The measures that employers can use tocurb “unsafe” behavior among their work-ers are very limited. In practice, no “penal”measures can be taken, and the only “real”punishment for their noncompliance withthe company’s safety regulations would beto deny them financial bonuses. Anna Wicha notes that Covid safety is ofparamount importance for companies. Hav-ing introduced safety measures, they rely ontheir people’s sense of responsibility in fol-lowing them. Yet, only time will tell to whatdegree this approach is effective.


Flexibility: The economic crisis spurred the64 percent of workers in Poland not seekingemployment abroad to boost their qualifica-tions to remain employed.

A GAME OF CHANGEAS LABOR MARKETS TRANSFORM DUE TO THE PANDEMIC,

COMPANIES AND EMPLOYERS USE DIFFERENT METHODS TO ADAPT TO THE NEW CONDITIONS.

Looking at the labor market in Poland fromthe vantage point of the world’s second-largest Human Resources provider andtemporary staffing firm, Adecco Group,some trends that have emerged after thelockdown are new, while others hadstarted emerging long before the economycame to a standstill in March. The aggre-gated effect of these trends on the marketbrings some long-reaching and perhapseven revolutionary changes, says AnnaWicha, Public Affairs Director, Poland, East-ern Europe & Middle East & North Africa atAdecco Group. The universal application ofremote work solutions at the beginning ofthe lockdown led to as much as 1/3 of thePolish working population to work fromhome for a few consecutive days in Apriland early May. This speaks volumes aboutthe worker competencies desired now,such as literacy in IT, independent thinking,work flexibility, and the ability to plan andexecute one’s work.

SUDDEN IMPACTSOne of the most immediate results of thelockdown imposed in mid-March was theoutflow of foreign workers. As many as 34percent of companies in Poland hiredUkrainians before the pandemic. Quite logi-cally, it transpired in a poll by PersonnelService that 36 percent of companies inPoland are afraid that workers fromUkraine will not come back. They shouldnot worry though, because polling ofUkrainian workers who had returned fromPoland home revealed that 61 percent planto go back to Poland as soon as conditionsallow. “The outflow of Ukrainian workersdoes not seem to be a long-term issue,”says Anna Wicha. “The salaries they make in

Poland are much higher than in Ukraine and,because of cultural synergies, Ukrainians pre-fer to work in Poland and the Czech Republicthan in other EU markets.” However, some-thing that may be a problem with long-termconsequences for companies is the outflowof Polish workers from the market in searchof higher salaries in other EU labor markets.Following international practices to preventthe spread of the virus, the Polish govern-ment imposed an economic lockdown andsoon followed this with an aid plan for com-panies similar to many such programs in theEU. The “Anti-Crisis Shield” offered financialassistance to companies to cover their work-ers’ salaries. The government offered to pay40 percent of the salary, under the conditionthat workers agree to have their salaries cutby 20 percent, and that the company willcover the remaining 40 percent. What the government did not take into ac-count was the fact that the Polish economy’scompetitiveness is based on its low laborcosts. Cutting a worker’s salary by 20 percentis perhaps not as significant for employees inthe UK (where the government introduced asimilar program), because even those re-duced salaries are high enough for earners tomaintain the same standard of living. Makingthe same reduction to salaries in Poland hasled to a situation in which many workers can-not earn enough to maintain their formerlifestyle. While the government is now trying to makeup for its apparent mistake and plans to raisethe minimum wage, it seems that the damagehas already been done. As many as 26 per-cent of working-age Poles now have lowersalaries than before the pandemic. A poll con-ducted by OTTO revealed that a remarkable67 percent of male workers say they intend to

leave Poland in search of higher salariesabroad. In this group, 67 percent said thatthe reason for their wanting to move wasthe fact that higher salaries are availableabroad, and 33 percent said that they wereunhappy with wage cuts or that they hadbeen fired. Moreover, 72 percent of thosewho said they wanted to leave Poland havea high school diploma, while only 11 percenthave just a primary-level education. There-fore, they are quite a valuable workforce,speaking communicative English and withprofessional experience. “Those numbersshould make us consider in what way Polishcompanies may compete for workers withcompanies abroad,” says Anna Wicha. On the other hand, however, some do notwant to go abroad. In this group, 64 per-cent of the polled workers said they werewilling to boost their qualifications to re-main employed. This also shows the impactof the economic shutdown, and employ-ees’ growing willingness to cooperate withtheir employers and adjust their competen-cies to the market demand. “People areafraid of changes,” says Anna Wicha. “Theyknow that they need to learn how to usedigital communication tools, protect data,work within the new, pandemic safety stan-dards…Some of them are even willing tochange their industry.”

DISPERSED WORKFORCE DILEMMASA number of companies had used distancework well before the pandemic, and thiswas universally applied by the majority ofcompanies in Poland during the economiclockdown. Multiple polls suggest that mostcompanies transitioned successfully to dis-tance work. Having seen operating costsdecrease, many companies continued to


Working from home: The universal application of the “home office” across nearly all industries made companies reconsider the competencies theyseek in their workers and benefits packages they can offer them.

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tures to use in online meetings. “Indeed,the art of having effective conversationsonline is different than talking face-to-facein real life,” Płaza said.While the universal adaptation of onlinecommunication tools during the lockdownwas viewed as an emergency measure, it isnow clear that companies will use work-from-home solutions into the rest of 2020and beyond. This will have an impact onthe office market, with Płaza stating, “De-pending the on type of business and com-pany structure, companies estimate that50-70 percent of their people will be work-ing from home.” In his opinion, this willtranslate into a long-term drop in the de-mand for office space by 10-20 percent. “Itwon’t be a crisis, but a huge correction ofthe market,” Płaza said. “We will see it in 2-3 years when tenants’ agreements withlandlords expire and tenants have to rene-gotiate prices.”

… AND DEEPERAs online work solutions conquer the of-fice, companies are developing new appli-cations to cover business areas beyond theoffice. While it is clear that production lineswill continue to be operated, it is not yetclear to what extent Industry 4.0 solutions,robotization, and automation will reducethe number of workers. This will lead tothe emergence of mixed, digital, and face-to-face management methods as digital so-lutions address these problems.The same trends will appear in other areasoutside of industry as well. “Nearly all busi-ness between clients and banks can beconducted online already,” said Płaza, andthis trend will deepen as people tend touse online tools rather than go to thebank.”Płaza said that banks are ready to reducetheir brick- and-mortar infrastructure andaccompany this with jobs cuts across thesector. With the further digitization ofclient-management processes, govern-ment institutions at the central, regionaland local levels will also follow suit.The lockdown deprived most retailers oftheir ability to sell on High Street. As a re-sult, there was a major rush to e-commercechannels and B2B online platforms. Com-panies used e-commerce to move theirproducts to consumers, hoping to last longenough to see better days. Many of themsaw better days earlier than they expectedas their e-sales surged during the lock-down. With this, e-commerce channelshave now become an indispensable part ofnearly any business.

THE LABOR MARKETThe most immediate impact of the crisis onthe labor market was salary cuts across

nearly all industry fields, with wages beingdecreased by 15-20 percent. Salaries willlikely not return to pre-Covid levels if com-panies do not recover their business tothose levels first. The cuts in salaries and low prospects ofrecovery mean that employee benefits,save for medical coverage, will not play animportant part in making a job attractivefor job seekers. “The market haschanged,” Płaza said, “and it has movedbackwards a few years. It the employer’smarket now, not the employee’s.”This, in turn, will make more people look atjob offers abroad. “Emigration for work al-ways goes up during crisis, so this is a nor-mal trend,” Płaza said. “The inclination tolook for jobs abroad is especially strongamong people aged 30 and below. Theolder you get, the less inclined you are torelocate to a foreign country,” he ex-plained. The widespread application of IT solutions

will also have an impact on worker mobil-ity. “With digital management solutions,managers do not need to live where theywork,” Płaza said. Since they do not needto relocate to small towns where their fac-tories and teams are located, “this helpsmove quality management to those smallplaces,” Płaza explains. Managers do notneed to relocate from where they live tothe city where the company has its office,either. “This may have a huge impact onthe labor market in general,” Płaza noted,“because people in Poland were rather un-inclined to migrate domestically. With digi-tal work solutions, they will no longer haveto face such problems.”As the pandemic aspect of the crisis isparamount, safety in the workplace will beone of the top priorities for employers andjob seekers.

This is where American companies have ahuge competitive edge over domesticfirms and firms from other EU countries,according to Płaza. “An efficient manage-ment of safety in the workplace is a strongpoint of all American companies,” Płazasaid. “One can say that most of them haveit embedded in their corporate DNA.” Plaza said that managing Covid safety willbe a huge challenge for mid-level man-agers across many companies because ofcultural differences, national personalities,and regional and individual experience infighting the pandemic.

NEW SKILLS AND COMPETENCIESAs the new normal emerges in tandemwith growing corporate IT infrastructure,digital sales channels, and online communi-cation tools, an understanding of e-com-merce, B2B channels, online marketing,and other areas related to the digital willbecome critical for company managers.“Understanding the digital world was notso much expected before the pandemic atthe level of senior management,” Płazasaid, “but now it is a must.” These new skills are necessary to effec-tively manage relations on all levels, fromboards of directors to ground-floor work-ers. According to Płaza, this includes thetechnical aspects of using digital tools aswell as also social and cultural aspects.“Using online tools, we emerge into a lessformal atmosphere. We are more at easethere,” Płaza said. Płaza said that such a rapid overhaul inbusiness functions will create demand for anew generation of managers. Desired com-petencies will include the ability to think in-dependently, make decisions quickly andunder stress, access the right resources,use adequate information, and motivateteam members without the need for face-to-face meetings. “The knowledge regard-ing digital communication tools will betaken for granted, so nobody will even askquestions about it during job interviews,”Płaza said. Yet, digital change does not mean thatnew workers will automatically jump intohome office mode. “New hires will have toundergo an integration process at thecompany offices,” Płaza said. “It is wherethey will go through training programs de-signed to merge the hires’ digital skills andexpertise with those required by the com-pany. It will take some time—a fewmonths perhaps—before new hires will besent home to work.” Thus, the digital wavethat has swept across all companies is notlikely to wash their brick-and-mortar head-quarters away anytime soon.


Cultural factor: Online meetings and digitalcommunication tools call for a less formal atmosphere and a more easy-going, per-sonal attitude.

THE GREAT REALITY CHECK

AS BUSINESSES EMERGE FROM THE LOCKDOWN ENRICHED WITH NEWEXPERIENCES, THEY USE NEW SOLUTIONS TO FIGHT THEIR WAY

THROUGH THE CRISIS IN 2020 AND BEYOND.For Zbigniew Płaza, Managing Partner atBoyden in Poland, a part of New York-headquartered Boyden Worldwide Corpo-ration which specializes in staffing seniormanagement positions, the current situa-tion is a mix of an economic crisis challeng-ing businesses in areas such as cash flow,liquidity, pay cuts, and job cuts, as well as apandemic that sets new challenges formanaging workflow processes and humanrelations. It is because of this that he seesthe crisis as a strong catalyst for changeand market progress.

THE HOME OFFICE IS BACKPłaza notes that many companies experi-mented with remote work solutions in thenot-so-distant past and were successful inmany cases. Yet, they were generally dis-couraged from implementing remotework as a permanent full-time workmethod by HR experts who argued that ifpeople worked from home for too long,they would lose their cultural ties and inte-gration with the company. Because of thiswarning, companies that saw benefits inremote work would offer it to their staffon a rotating basis and usually only for oneday a week. With this, the home office wasviewed as an employee benefit, a pleasantdiversion from work at the office. When the pandemic hit the EU and its

member states began closing their bordersand initiating lockdowns, companies reactedby sending their workers home. Large organ-izations hired companies that specialize inrelocation to move and set up entire work-stations in employee homes. In time, it tran-spired that work efficiency was at similar lev-els compared to before the pandemic. Inmost cases, firms successfully finalized allprojects they processed through the homeoffice model. “The work-from-home modelhas become so universal that even firmswith strong traits of hierarchy in their corpo-rate culture, in Switzerland and southernGermany, are resorting to it now,” Płazasaid.

MORE FLEXIBILITYIt is now clear that the work-from-homemodel will have a long-term impact on com-panies. They will use it to a varying degree asthe pandemic continues, and in many cases,well beyond that time. Płaza says that remote work solutions giveorganizations incredible flexibility and speedup business processes, cutting the time or-ganizations need to react to marketchanges. Remote work can be implementedin many areas of business, but the most dra-matic effect the “home office” has had is oncorporate meetings, which have migratedonline en masse. Online meetings not only

cut costs for companies, but also make itrelatively easy logistically to hold any typeof meeting. This trend has already had ahuge impact on corporate travel. However, Płaza noted that not all types ofcorporate travel will be gone. “The de-mand will be there, but at a much lowerlevel. There are some types of businessmeetings that make more sense whenpeople meet face to face,” Płaza said.

GOING DEEPER…Online solutions that support remotework and corporate communication con-tinue to evolve. “We ran a recruitmentprocess for a senior management positionfor a client abroad,” Płaza said. “The can-didates were in the city in Poland wherethe position was available. I was in War-saw, and the client was abroad. I nevermet the candidates in person but talked tothem online. The whole process was exe-cuted online, including the interviews theclient held with the candidates.” Płaza is not surprised that new consultingservices are popping up, as online meet-ings become a corporate standard. Con-sultants offer advice on making the mostof the new communication channels re-garding aspects such as personal presen-tation, creative use of light and back-ground, and specific language and ges-


Market progress: Digital competencies will be a must-have for the new generation of managers.

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LASTING TRENDS THE PANDEMIC HAS FUELED STRONG TRENDS IN LABOR

MANAGEMENT AND CONSUMER PREFERENCES, SOME OF WHICHMAY BE GAME CHANGERS.

As the pandemic stroke in March hundredthousands office workers remained homein Poland and continued to deliver work fortheir companies through work-from-homeIT solutions, collectively known as thehome office. The new way of keeping or-ganisations together not only increasedworkers’ safety against the pandemic butalso considerably lowered the runningcosts of organisations. As companies hadtheir people work from home, their runningcosts dropped opening possibilities for al-locating the saved money for other essen-tial investments. A white-goods company,which before the pandemic had plans to ex-tend their office space to man the customerservice department, later realised that cus-tomer service may be as well delivered bypeople working from their homes. Insteadof leasing more office space the companydecided to spend the money on a “buffer”warehouse, which was operationally es-sential to have as the pandemic had beendisrupting global supply chains.

Over time, business organizations noticedthat work completed from home was similarin quality and timeliness to work their em-ployees had done at the office before thepandemic. As a result, many companiesbegan to design strategies for optimal use ofthe two work locations. Some were very en-thusiastic and declared plans to bringback over 90 percent of employees who hadworked in the office before the pandemic.Others discussed plans for rotating employ-ees between home and the office.According to Tomasz Walenczak, Director ofManpower (a brand of ManpowerGroup)companies deciding how and where theiremployees work should consider several fac-tors critical for the company’s developmentstrategies. “What seems a simple thing—working from home—is a more complexphenomenon than it seems,” Walenczaksaid.

INTEGRITYThe integrity of the company’s people is a

key aspect in managing groups of work-ers and assigning them ambitious tasks.If a company decides to use the home of-fice for a long time, it also has to developonline integration programs. These pro-grams can include “morning coffees” inwhich all home office workers meet on-line from their kitchens and chat, or on-line yoga meetings in which the staff dosome physical exercises from their livingrooms, chatting and having fun. The listof activities that can be used for such on-line integration programs is limitless. Many companies have made good use ofonline communication tools to boosttheir workforce’s integrity, launchingprograms for their upper managementto meet with their company’s teams on-line. Seeing CEOs and presidents in theirhomes, surrounded by children and petswho occasionally drop into the picture,while being briefed about where the firmis going and how the management seesthe situation, proved very beneficial for


People like us: With the emergence of videoconferencing, business leaders can now integrate their teams by sharing their homes and family life inmore informal settings.


team integration. “People who can seehow human and ordinary their bosses are,develop warm feelings towards them,”Tomasz Walenczak said. “Online toolsallow business leaders to get closer totheir people.” he added.

INDIVIDUAL DEVELOPMENTAlong with integrating teams, business or-ganizations also need to help developtheir individual workers’ “transferableskills,” also called “soft-skills. These skillsmake people better workers and man-agers, regardless of the specifics of thebusiness. Decision-making skills are valu-able in any type of trade. Digital and in-terpersonal competencies are of growingimportance, especially during this eco-nomic and pandemic crisis when em-ployee engagement and motivation areessential. What is more, different strategies are nec-essary with teams comprised of youngpeople compared to older and more ex-perienced teams. People who have beenworking with the same standards for thelast 15-20 years will be more heavily im-pacted by the transition to the home of-fice than their younger peers already fa-miliar with the IT world. “Each organiza-tion has to find its own method, becausethere is no golden rule in this area,”Tomasz Walenczak said.

TAKING CARE OF PEOPLEThe pandemic has been a game-changerin many areas, not least in interpersonalrelations. As the pandemic spread acrossthe country, more and more people beganto fear that they or their family and lovedones would contract the virus. Companiesresponded by developing programs inwhich managers meet employees onlineand discuss their problems and feelings. “In every walk of life and in every tradeand business category, people need toidentify with others who represent val-ues,” Walenczak said. “Talking about val-ues without putting them into practice isjust empty words. When people see thatthe organizations they belong to reallycare and want to help them, they knowthey belong to strong organizations, andthis realization builds confidence in theirfirms and leadership.”

THE OFFICE IS HERE TO STAYAccording to Tomasz Walenczak, althoughthe home office has proven effective inmany ways, companies should not confinetoo many people to their homes for toolong. Face-to-face meetings and human in-teraction are all necessary. Teamwork isbeneficial for building morale and cama-raderie, and technology will not change

this. This is why Walenczak believes that thepandemic will not eliminate the officefrom the corporate floor plan in Poland.Cost aspects have become even more crit-ical than before the pandemic-related cri-sis, and many companies looking for cost-efficient opportunities are eyeing Polandas a new location for their shared servicescenters and outsourcing. “The office mar-ket is already recovering as new tenantslook for lease opportunities,” Walenczaksaid.

OTHER TRENDSThe emergence of the home office phe-nomenon signaled just one market trend

that had been present before andstrengthened during the pandemic. Other trends include the growing demandfor IT specialists, software developers,and computer system experts. They aresought after by companies who plan todevelop their home offices and by thoseincreasing their investments in digitizationof their businesses, including e-com-merce, B2B channels, and Industry 4.0tools. While e-commerce and B2B platformshave already taken off, it will take longer,perhaps until 2022, before a significant in-vestment rush is recorded for Industry 4.0solutions. An increasing number of com-panies are considering investing in robotsand customized production lines, butthose investments are expensive. It is cur-rently difficult for many companies to al-locate significant investment expendi-

tures for 2021 when there are so manyeconomic uncertainties and questionmarks regarding the anticipated marketrecovery. Many companies will continueto rely on human workers as the economiccrisis puts downward pressure on salaries.Flexible forms of employment, such astemporary work, will become more popu-lar as businesses strive to optimize theiroperating costs.

GLOBAL VS LOCALThe pandemic has also impacted con-sumer attitudes that had taken root wellbefore the pandemic but now are aboutto blossom. People who have been confined to their

homes with limited outdoor activities aswell as those worried about their healthduring the pandemic are now more inter-ested in healthy living and lifestyles. Thepandemic has prompted customers toseek out natural health products and pri-oritize local producers over big enter-prises. Local trade and craft, and conven-ience stores cooperating with them, arenow on customers’ radars. Such trends have been seen all across Eu-rope and are taking root slowly in Polandbecause the Polish economy is stronglyconnected with the global economy. Yet,as Tomasz Walenczak noted, “Polish con-sumers are increasingly aware of whatthey want to buy and why, and they wantto feel good because of what they buy.”

Think local: The pandemic has led customers to pay more attention to their surroundings and dis-cover businesses in their neighborhood.

FLEXIBLE FORMS OF EMPLOYMENT, SUCH ASTEMPORARY WORK, ARE BECOMING INCREAS-

INGLY POPULAR AS COMPANIES OPTIMIZETHEIR RUNNING COSTS.


from home, and the new way of workingwas universally welcome from all sides.Workers at home felt safe from the pan-demic, and companies could breathe asigh of relief at seeing the risk of havingtheir staff contract Covid decrease.However, Joanna Bojarska-Buchcic notedthat problems began to surface 3-4 weeksinto the lockdown. Some employeesfound it increasingly frustrating having toshare their apartments with the membersof their families while working. Their chil-dren at home needed looking after whennot on their computers. Their spouseswere busy at that time, also working fromhome. It suddenly transpired that em-ployees would need to take care of manymore non-work-related things while work-ing at home than when working at the of-fice. Health issues also popped up. Ergonomicchairs and desks, proper lighting, andother facilities taken for granted at the of-fice were missing, and employees experi-enced backbone pains and other injuriesrelated to spending too much time inunergonomic positions. Workers also suf-fered from growing psychological ex-haustion and anxieties, a common effectof isolation. Extroverts and introvertsboth need frequent contact with otherpeople; the only difference is that intro-verts prefer to choose when these com-munications occur. After the lockdown had been suspended,large numbers of employees decided togo on summer vacation instead of back tothe office. This was a departure for manycompanies whose sales directors usuallyworked at the office in the summer,preparing the business for the upcomingsales season. Large and medium-sized alsopostponed their recruitment processes tolet their HR personnel continue to workremotely as well.

LOOKING FOR THE BEST MODELIt is now clear that not all workers will sus-tain long spells of working at home verywell. Companies realized that they neededto let at least some employees use the of-fice to give them a good reason for takinga break from home.Pandemic-related safety standards, suchas social distancing, have been imple-mented across the office and shortershifts introduced to make room for all em-ployees interested in using the office fora few hours. Yet it transpired that atti-tudes varied among personnel when itcame to following safety standards. Olderpeople kept strictly to the rules, fearingnot only for their own wellbeing but alsofor the health of their family memberswhom they could inadvertently infect.

Some younger workers did not take thepandemic precautions as seriously, in syncwith their generation’s attitude towardsthe pandemic at that time. They believedthat pandemic fears were overrated anddisregarded safety standards with pride asif this were a badge of courage, causingtheir older colleagues to feel unsafearound them. Joanna Bojarska-Buchcicsaid that this a pandemic-related anxietyis thus a new type of dynamic interactionto have surfaced within teams.

YOUNG PEOPLE PARADOXYoung people, aged below 40, have every-thing it takes to be excellent distance-workers. They do not usually have familiesand are not burdened by responsibilitiesrelated to having spouses and offspring.They are digitally competent, adapting to

new technologies and processes quickly,and are resourceful when online.Yet, when confined at home for too long,they become restless.This is so because for Millennials, being inthe office means more than just beingwhere the work is. The office is wherethey forge relations with their socialgroups, interact with their peers, and lookfor long-lasting relationships. Young peo-ple tend to forge strong relationships withtheir peers and want to spend time withthem in and outside of the workplace. Theoffice is a focal meeting point for them,and they want to feel good there and beable to express themselves.Joanna Bojarska-Buchcic noted that some90 percent of young job seekers duringthe recruitment process ask questions re-garding the teams within the company

they want to join, such as how manyyoung people work in the teams, whetherthe atmosphere is formal or not, andwhether they socialize in their spare time. This explains why young workers com-prised the bulk of the first wave of peoplereturning to the office after the lockdown.

DISPERSED WORKFORCE As companies move to get ready to workthrough the remainder of the year and be-yond, it seems to be clear that the pre-vailing method of work will be the so-called “hybrid” method, combining homeoffice solutions with the real office. Thiswill put a strain upon managerial staff andtest their skills in people management. Dispersed groups of people have differentpsychological needs than well-structuredteams in the office. To create optimalstrategies, management will have to fol-low their employees’ work progress athome and the office. They will need towork with hot data and have little time forlengthy analyses. Empathy, intuition, andpsychological skills will become essentialfor their job.

BURNOUT RATEEven before the pandemic, Poles workedlong hours, among the longest in Europe.This is why many workers in Poland expe-rience burnout, something that has a neg-ative impact on work efficiency. It alsonegatively affects relationships withinteams, as unfocused and exasperatedpeople do not make good work compan-ions and cannot encourage team spirit. This, in turn, sets additional challenges toteam leaders and company managers. According to Joanna Bojarska-Buchcic, thecurrent economic crisis and pandemic-re-lated issues will place even more respon-sibility on managers, bringing them muchcloser to the maximum load they can bear.They will be in desperate need of energymanagement techniques, as pre-pan-demic research revealed that 80 percentof managers in Poland already feel over-worked and do not know how to rechargementally. “Managers will burn out in theemotional heat of the work,” Joanna Bo-jarska-Buchcic concluded, “and emotionalstrength as well as psychological skills willbecome crucial for them to continue theirwork long-term.”

My generation: The values young peopleshare within their generation are important tothem, and they want to be free to expressthemselves while working in the office.

WORKING ON THEEDGE

PANDEMIC-RELATED ISSUES PUT PSYCHOLOGICAL STRAIN ON THEWORKFORCE AND CALL FOR NEW COMPETENCIES FROM MANAGERS.

With the new work style of combining thehome office with the real office, manag-ing workers will bring new challenges foremployers. New kinds of algorithms willhave to be developed to compute themost efficient management methods,taking into account variables that impactemployees’ lives, such as their psycho-logical profiles, ages, and living conditionsand family members at home.

WORK FROM HOMEAs the pandemic hit the country, everycompany that could allow its employeesto work from home did so. Those whocould afford to hired specialized firms toset up proper workstations at their em-ployees’ homes, including ergonomicchairs, desks, and reliable IT systems.Companies with lower financial reservessent their workers home only as an emer-gency. They worked out their proceduresover time, deciding what software theywanted to use, and learning from mis-takes, found optimal procedures for in-ternal work as well as communication

with clients. The lockdown fostered an unprecedentedamount of interest in IT solutions amongsmall and medium-sized companies inPoland, especially in online communica-tions, e-marketing, and e-sales. It is safe tosay that the pandemic worked as a catalystfor changes that would have taken years tomaterialize had it been business as usual.

PRODUCTIVITYAccording to Joanna Bojarska-Buchcic, CEOof HR Solutions Group/HR Solutions of theUSA and AmCham Gdańsk Director, work-ing from home is not an entirely new con-cept. It was championed in the UK manyyears ago after research into employee pro-ductivity revealed that humans are themost productive when working a maximumof 4 to 5 hours a day. Working beyond thatlimit results in a sharp decline in their con-centration levels and productivity, whichputs the rationale of working eight-hourshifts from Monday to Friday into question.Further research revealed that remoteworkers maintain high work efficiency and

deliver timely and quality work of thesame caliber as in an office. With this, some companies realized thatif they allowed their workers to workfrom home once a week, they would stilldeliver quality work, and their work/lifebalance would reach a much more desir-able ratio. This seemed a reasonable gainfor companies. Pioneering solutions followed in the UK.Some companies decided to offerWednesdays as “home office” days, andothers chose Fridays. What is more, theyinsisted that their employees working athome should not work longer than fivehours. They should devote the remainingthree hours to reading books, learning,and undertaking other activities to im-prove their professional selves and cre-ativity—all aimed at increasing their workefficiency.

NOT SO EASYWhen the lockdown was announced inPoland on March 18, all companies thatcould do so sent their workers to work


The fear factor: Pandemic-related anxiety is a new problem work teams are encountering.

22 23

24 25

ally and in Europe, and projected the au-tomotive business would shrink by 30-40percent for the rest of 2020. However, themarkets grew for a wide range of othersectors: healthcare, sanitary products anddisinfectants, industrial alcohols, and ship-ping and food packaging. “Across all primary and tertiary food pack-aging, food packaging film recorded oneof highest demand growth for our busi-ness in Europe,” Emilia Wasilewicz said.

ACTION AND REACTIONWith such a rapidly changing and volatilemarket, the company reinforced its mar-ket analysis capacity to project short-termdemand—2-3 months ahead—and adjustproduction capacity accordingly. “Wewanted to learn how our clients were see-ing the markets and how we could meettheir new needs and support our busi-ness,” Wasilewicz said. “This knowledgewas essential for us too, because weneeded to optimize our activities in pro-duction, technology, logistics, and secureour supply chains.”

ONLINE WORKDow contacted its clients via online com-munication tools. The company had beenready to make good use of such IT solu-tions because Dow had been developingIT applications and online tools for thecompany’s B2B platforms years before thepandemic. The company developed themon different markets worldwide andacross various sectors of the economy,aiming to support client orders and securesupply chains. The know-how generatedby that experience paid off during thepandemic. “Digital solutions had beenemerging years ago within Dow, and now,when the pandemic sped up the applica-tion of digital solutions across the busi-ness world, we know how to take advan-tage of it,” Wasilewicz noted. She saidthat Dow’s marketing efforts are veryweb-oriented, especially when it comes tocustomer seminars or tailored marketingor technical training. “We have done sev-eral webinars for our product distributorsin Eastern Europe,” Wasilewicz said.“Thanks to our online platforms and solu-tions, clients now have the opportunity toboost their turnover in their markets.”

OPTIMIZING COSTSDow has increased its expenditure toboost its capacity for IT tools and onlineplatforms. However, like any company in acrisis, not knowing where the market isgoing long-term, the company began tooptimize costs. Having revised costs andexpenditures and reviewed technological

requirements for keeping production linesrunning, the focus continues to be aroundcontrolling working capital.

SAFETY AT WORK AGAINWorking during the pandemic involvedkeeping part of Dow’s office workershome. While all of them were sent to workfrom home at the beginning of the pan-demic—which was a necessary Covid-19precaution at that time—in time, Dowbegan to set up Covid-safe office spaces.The first wave of office workers, almost 10percent, returned to the office in May. Thecompany continued to prepare and im-plement Covid-19 safety rules for the of-fice so its office workforce could have asafe place to work at the company’s prem-ises. Yet, Dow maintains a flexible approach tothe process. Employees who preferred towork from home were allowed to do so.

Eventually, the work system will combineworking from home with working in theoffice.For many workers, working from home isnot a problem. They were already usingdigital communication tools regularlywithin Dow’s global communication struc-ture as employees of a global company.However, members of local teams find itmore challenging to adapt themselves toworking from home mode. Before thepandemic, they would routinely addressmost business details in-person.The company looks out for its dispersedworkforce, regularly hosting online“morning coffee” meetings to keep theirspirits high and their sense of camaraderieintact. Team leaders do online check-inswith their team members to assess theirwellbeing and family situation, how this is

impacting work efficiency, and how thecompany can help maintain this at desiredlevels. There is a general understandingthat if people who work from home needto take care of their home duties, they cando so any time necessary. Regardless ofthis, they continue to deliver quality workto the best of their abilities.How many people will return to the officeafter the summer vacation is still a bigquestion for the company. After all, it alldepends on how the pandemic develops.Safety is paramount for Dow, and thecompany has an internal expert groupwhose members monitor the pandemicsituation and set safety recommenda-tions. They will not recommend officeworkers return in large numbers until theysee a decline in Covid-19 cases in Poland.

THE GOVERNMENT’S ROLEThe Polish government’s aid program,“The Anti-Crisis Shield,” offered financialassistance to companies in financialstraits. However, Dow’s turnover did notdrop low enough to qualify for the pro-gram. Yet, according to Emilia Wasilewicz,many of the company’s clients and othercompanies in the chemical sector did re-sort to the “Shield,” which helped themsalvage jobs and, in some cases, pre-vented them from going bankrupt. The chemical sector is specific, as the con-tinuity of production processes relies on acomplex network of suppliers and sub-contractors. If one company that pro-duces a component needed to produce arange of other products experiencesproblems, its clients are in trouble too,and the whole production chain is dis-rupted. In other words, the chemical in-dustry is a network of combined or“linked vessels,” and if one has a leak, thewhole system is hurt. Such a crack in the system can have majorconsequences for a range of industries towhich the chemical sector delivers. This iswhy Emilia Wasilewicz said that the gov-ernment should treat the chemical sectoras a strategic sector. Unlike in the US, thePolish government has no regulations tosafeguard automatic aid to chemical com-panies to maintain their production, sup-ply chains, and jobs during global eco-nomic disruptions and crises. It is too badbecause the timely and uninterrupted pro-vision of chemical products is critical forenergy, healthcare, disinfectants, foodpackaging and many other strategic sec-tors.


Safety first: Worker safety and advanced riskmanagement are integral aspects of DowChemical and are deeply embedded in itscorporate culture.

RESILIENCE INSAFETY AND

DIVERSIFICATIONTHE CHEMICAL INDUSTRY IS OF STRATEGIC IMPORTANCE TO

THE ECONOMY IN GOOD AND BAD TIMES.

Safety and risk management are integralaspects of Dow Chemical and are deeplyembedded in its corporate culture. Be-cause of this, the company had no diffi-culty implementing new pandemic-re-lated safety measures on its productionlines and throughout the entire companywhen the lockdown began. Like mostcompanies with a significant number ofoffice workers, Dow sent most of themhome in the initial phase of the lockdown.However, working with distance commu-nication tools and taking part in video

conferences was nothing new for many ofthem. “We are a global company and someof our people routinely communicate withtheir counterparts in other Dow companiesaround the world,” said Emilia Wasilewicz,Managing Director Dow Polska.

WATCHING THE WORLDDow’s product portfolio covers nearly allsectors of the economy and a number ofmarkets around the world. The effects ofand reactions to the pandemic were variedacross different sectors and in different re-

gions of the world. The company had towatch the data coming in and project itsproduction capacity based on how eachclient was doing. It was of strategic im-portance for the company to become asflexible as possible to react to the chang-ing supply and demand. To ensure thecontinuity of business, Dow also had todetermine which sectors of the economywould experience a growth in demandfor its products.The company saw a decline in ordersfrom the automotive sector, both glob-


Strategic thinking: Maintaining production, undisrupted supply chains and jobs in the chemical sectors is vital not only for the sector itself but for arange of other strategic sectors, such as healthcare and energy, which cannot function without the smooth provision of chemical products.

26 27

garding supply chains. There may be otherfactories in the same sector in the af-fected area who are also trying to relocatetheir production to other factories andlooking for a supplier to buy the compo-nents and rough materials lost in the dam-aged factory. Often, whoever strikes adeal first is the winner, as supply is limitedin emergencies, and alternatives are hardto find.

GLOBAL COMPANYFor Flex in Poland, the advance of the pan-demic was not a surprise. With the arrivalof Covid-19 in Poland, the number onefocus for Flex was keeping the company'sworkforce and their families safe. In Janu-ary, the company set up a crisis manage-ment team that began to draw up plansfor different emergency scenarios. Alongwith creating Covid-19 safety plans for thecompany, supply managers also beganmonitoring global supply markets for dis-ruptions and other problems. Helpfulknow-how and best practice guides camefrom other Flex companies that had al-ready experienced and dealt with pan-demic-related problems. “This is thestrength of a global corporation,” saidStanisław Motylski, Value Stream Directorat Flex in Poland. “Had we been a localproducer of electronic components herein Tczew, we would not have known whatto do at the beginning of the pandemic.Yet, as a part of a global corporation wehad instant access to information and ex-pertise in many areas of crisis manage-ment.”

BEYOND THE FIRST TIERAs the pandemic hit Europe, forcing peo-ple and businesses to migrate to onlinecommunication solutions and e-com-merce, the capacity of computer net-works was stretched thin in many places.Higher network capacity was needed, andnew orders from telecom companiespoured into Flex. The company was morethan happy to oblige. At the same time,though, a number of Flex’s direct, or first-tier, suppliers found themselves in direstraits. For some, this was due to eco-nomic lockdowns imposed in their coun-tries. Others found that their second-tiersuppliers could not deliver. Finding newsuppliers and alternative shipping routesbecame crucial for Flex to be able to ac-cept new orders and deliver on time.The company developed its informationsystem many years ago to scan marketsand production capacities in real-time. Itis more than paying for itself now, as Flexin Poland buys over 1,000 items from sev-eral thousand suppliers worldwide. “Be-fore the pandemic, the company was rou-

tinely monitoring the status of its first-tiersuppliers,” said Stanisław Motylski. “Now,the supply chains are so disrupted by thepandemic that we are monitoring second-tier and even third-tier suppliers to makethe right decisions about whether oursubcontractors will be able to deliver.”This may sound easy but is difficult toachieve because the pandemic closed offmany airports and shipyards. Even whenFlex’s supply chain managers could allo-cate the items the company needed, thelocations they were available requiredthem to establish new shipping routes, asmany airports and cargo ports along theway had been closed by local sanitary reg-ulators. “Our supply chain team workedmiracles,” said Stanisław Motylski.There is now a major trend of near-shoringsupply chains and producers to client mar-kets because of such problems, and Flexis not an exception. Even before the pan-demic, the company relocated many of itsfactories to China—a significant emerging

market for telecoms—anticipating prob-lems with exporting products to Chinadue to the ongoing trade dispute with theUS.

WORKFORCE MANAGEMENTAs Flex saw its numbers of new ordersrise, Poland’s economic lockdown re-sulted in limiting the company’s work-force potential. Many workers had to stayat home to take care of their children, andapproximately 20 percent of the produc-tion workers stayed home altogether. Thecompany was thus forced to redesignworkers’ shifts to ensure the continuity ofproduction. Another challenge came from the public

transportation system. The company em-ployees 3,600 people, more than half ofwhich commute to work with public trans-portation. Yet, when sanitary authoritiescut the number of available space for pas-sengers in half to help commuters socialdistance, a significant part of the com-pany’s workforce could not get to workon time. The company asked public trans-portation officials to increase the numberof busses at specific hours and also hiredprivate transport companies to bring peo-ple to and from work. While the company’s supply teams“worked miracles,” there were delays inproviding necessary parts, forcing thecompany to send their workers home withpay. When the components finally arrived,the company had to work overtime tomeet its deadlines, and the productioncost was increased as remote workersworked longer hours. However, therewere no other options, as the Polish LaborCode does not provide for flexible labor.According to Stanisław Motylski, if thereis any lesson to be learned from the lock-down experience, it is that Poland needs alegal framework for flexible labor. Themodern economy requires such solutions,and without these, the Polish economywill stay less competitive than in manyother countries.

INDUSTRY 4.0The company has applied Industry 4.0 so-lutions wherever possible. For instance,its robotized welding station does workthat used to require six individualwelders. Another application of Industry4.0 solutions came right after the lock-down was announced in Poland. To pre-vent the spread of the virus between fac-tory buildings, the company used robotsto deliver materials. With this solution,teams of workers in separate productionhalls were kept safe from the virus. Unfortunately, Flex can only apply Indus-try 4.0 solutions in limited areas. The mar-ket life of most of the company’s productslasts between 1 to 1.5 years. Meanwhile, ittakes 4 to 6 years for an entire robotizedproduction line to pay for itself, which isnot feasible for Flex. “We just can not af-ford to buy a customized production linebecause it will never pay for the cost ofthe investment,” Stanisław Motylski said.“But we use Industry 4.0 solutions wher-ever we can,” Motylski added. “Those arereally great solutions!”


Stanisław Motylski: Customized productionlines are too expensive for companies thatmanufacture products with a relatively shortshelf life.

LIVING IN A DISRUPTIVE WORLD

MONITORING GLOBAL SUPPLY CHAINS AS AN ALTERNATIVE TO NEARSHORING.

In April-May 2011, many electronics man-ufacturers in Japan experienced dramaticlosses after an earthquake and tsunamihit their factories’ production. Flex, whichbusiness spans an array of industries fromtelecommunication, through consumerand industrial electronics, to IT infra-structures, operates over 100 factories in30 countries around the world. Thus thecompany sees the world as a rather un-predictable place. An earthquake in Mex-ico can affect production at Flex factoriesand delay products. A local outburst of acontagious disease in Asia can result indwarfing Flex’s production capacityacross its factories in the affected area.Flex thus prefers to approach risks proac-

tively, rather than react to an event andcount their losses.

A FAST GAMEFlex has built an information network thatgathers data regarding a number of pro-duction-related variables from each factoryand supply chain, connecting its factoriesand key markets. In case something hap-pens, the system allows for decisions to bemade quickly regarding what to do. For ex-ample, Factory X suddenly goes offline as aresult of an earthquake. The damage hasbeen done, and the repair time is estimatedat five months. The system knows what wasbeing produced at the affected factory andsuggests other Flex factories that could fill

in the gap. To make decisions, the systemuses factors including the technology andengineering required, the supply statusfor each factory including stocked items,the time it takes to ship the product tothe client from the substituting factory,and which delivery routes are the best.Once the decision has been made, thetechnical production data is sent to thefactory that has been chosen to fill in forthe damaged one. The necessary compo-nents are purchased or rerouted to thefactory, and the factory readies itself forproduction, limiting the disruption inproduct delivery as much as possible. Thespeed of action is essential, especiallywhen it comes to making decisions re-


People matter: Flex can only apply Industry 4.0 solutions in limited areas.

28 29


tainty is not the best time for selling acompany,” said Krzysztof Krawczyk, part-ner at CVC Capital Partners, a private eq-uity firm. Another reason why many firms were notin desperate need of fresh money wasthat governments earmarked enormousamounts of money to help companies inall sectors of the economy. In some in-stances they bought corporate bonds as afinancial backstop in response to the coro-navirus crisis.Commercial banks also played a very pos-itive part in stabilizing the economy. Forcompanies in financial straits, the mostchallenging part is servicing their debt.Unlike shareholders who can postponedividend payments for a year or two, com-mercial banks are not in a position toallow their clients to stop servicing theirdebt. “Banks acted in a very rational andresponsible way, and so far no spectacu-lar failure to reach a new deal took place,”Krzysztof Krawczyk said.

FAITH IN THE ECONOMYThe Covid-19 pandemic will impact theM&A and stock markets, but not as signif-icantly as the government of the EU stateshad feared. According to Krzysztof Kraw-czyk, investors are rushing to buy equityinstead of bullion, real estate, or govern-ment bonds for the first time in the historyof major economic crises. “After goingdown for several weeks, stock prices havealready returned to pre-Covid levels,”Krawczyk said. “What is more, the S&PIndex reached historic heights in the sec-ond half of August. Apparently, capital isseeking out well-performing, 'immune' tothe pandemic companies."Krawczyk noted that equity markets offerthe best returns to investors in the pres-ent economic situation, unlike bullion orgovernment bonds. The latter are securedby governments, which generated hugedeficits due to the massive anti-crisis fi-nancial aid they rendered. Yet there arecompanies which have done quite well inthe new normal and continue to generateprofit. “Investors realize that in the long-term, such companies will offer muchhigher return on investment than moretraditional, “safe” asset classes,” Kraw-czyk noted.

BIG QUESTIONSMoving forward will not be an easy ride,though. The pandemic has changed con-sumer styles and the question is how longthese changes will continue after the pan-demic, and which business sectors will beable to return to pre-pandemic levels.Krawczyk noted that no one currentlyknows the answer. Market data from Asia,

where the pandemic crisis developed ear-lier than in Europe and the US, give someindications. Still, there are cultural differ-ences between the markets, which addsbias to any conclusions that market strate-gists and planners could make. For in-stance, a footfall in the shopping mall inChina rebounded massively just beforethe second wave of the pandemic. Yet theconsumers may return again because inAsia they are more accustomed to prob-

lems related to outbreaks of diseases, assuch problems occur there more fre-quently than in Europe. The question isthus whether consumers in Europe will re-turn to shopping malls after the pandemicor choose to keep using use e-commercesolutions. Knowing how consumer behav-ior trends will shape up long-term is cru-cial for companies deciding on their in-vestment strategies. Another critical focus for companies draw-ing up investment plans is optimizing theiroperational costs, including how the re-cent phenomenon of the home office willfit into this. Companies observed high pro-ductivity from their employees workingfrom home at the beginning of the pan-demic, which led them to rethink the ideaof the most optimal organization struc-

ture. While the home office has its up-sides, it also has its downsides dependingon the type of work, living conditions,and, most importantly, the employee’spersonality. Taking all of this into account,it seems that a new structural model willappear that embraces a variety of worktypes, tailored to the individual worker.No one can predict the long-term effectsof this, but it will undoubtedly bring newchallenges and opportunities for companymanagers.

NOT ALONEQuestions also remain about the role ofnational governments in helping the econ-omy through the crisis. Financially assist-ing companies is a good short-term op-tion, especially for small firms. But publicaid is not as effective for large companies,as it introduces a large control mechanisminto financial reporting. Financial aid is not good for the state cof-fers, as it drains them quickly in the longrun. In China alone, the accumulatedamount of money assigned by the gov-ernment through aid programs has al-ready surpassed the country’s GDP bythree times. The Polish government has limited finan-cial resources comparable to other EUstates, and the country’s GDP per capita iswell below Germany, France, Italy, andSpain. This is why instead of generatingdebt, the government should initiate suchpolicies that open up the Polish economyto foreign direct investment. “Poland willneed smart, long-term capital with whichto fuel post-pandemic economic recov-ery,” Krawczyk said. “The country is a partof a larger economic of international eco-nomic ecosystems—such as the EU, andthe OECD—comprising of countries thatshare same values. Investors from thosecountries have proven many times thatthey conduct business in Poland in re-sponsible and sustainable ways. So Polandshould use the economic stability of thosecountries and attract their investors’ fi-nancial support for the benefit of its owneconomy.”Krzysztof Krawczyk noted that the bestpolicy now would be for the governmentto listen to the feedback from such coun-tries regarding regulatory and policy is-sues and keep adjusting them to meet thehigh, internationally-shared standards.

Passé? Unlike during all past global economiccrises, investors did not perceive gold as thebest long-term option for their capital invest-ments.

POLAND WILL NEED SMART, LONG-TERM CAPITAL WITH WHICH TO FUEL

POST-PANDEMIC ECONOMIC RECOVERY.

BRAVE NEW WORLDAS PANDEMIC-AFFECTED MARKETS STABILIZE, INVESTORS SEE NEW

LONG-TERM OPPORTUNITIES.As the pandemic-related economic crisisdeveloped in Europe, governments of theEU member states began to worry thattroubled companies in need of fresh cap-ital could become susceptible to hostileacquisitions by “opportunistic investors.”After acquiring control of troubled com-panies, such investors could, for instance,shut them down in Europe. They couldthen offshore their business to other lo-cations and enjoy lower operating costsor more favorable taxation and otherbusiness incentives. If that happened tocompanies of strategic importance to theEuropean economy—such as producersof medical face masks, disinfectants, andhealthcare equipment, among others—it

would compromise the safety of the nationand its long-term economic security. The EU member states were under an obli-gation to implement such laws regardlessof the pandemic. The European Commissionhad decreed this well before the pandemicbegan, giving EU members over a year toimplement the changes. Yet, as the pan-demic hit the economy, all governmentsacross Europe duly obliged. In Poland, thelaw was introduced as an amendment tothe 2015 Act on Control of Certain Invest-ments, which came into force as part of thefourth edition of the government aid pro-gram called the Anti-Crisis Shield. The pandemic had a significant impact onthe financial situation of companies. Those

whose business included direct contactwith clients, such as hotels, restaurants,and parts of the retail sector saw their fi-nancial situation deteriorate. On theother hand, companies that were activein the digital economy saw a boom. Afterthe initial economic shock, most compa-nies began to find their market momen-tum and a wave of hostile acquisitions didnot sweep across Poland or Europe.

NO HOSTILE ACQUISITIONSOne reason why the M&A and equity cap-ital markets froze for a few months wasthat most companies postponed negoti-ations with potential investors. “A timeof economic turmoil and global uncer-


Tough negotiations: Banks played an essential role in helping companies in financial straits improve their financial situation.

30

motely.”According to Jacek Poświata, adoptingdigital collaboration solutions is part of theprocess through which companies will beable to return to business in the new real-ity. “Retooling for the new world meansdefining what is critical for companies torun their business,” Poświata said. “Somethings that companies earlier thoughtwere important are no longer important.Working in an office was such a thing––itwas unthinkable that workers could workfrom home. Now we know they can.”Poświata also said that companies get en-gaged in the retooling process as theysearch for new business models that willhelp them best adjust to the new reality.While every company has to find its ownmodel, there are some principles andguidelines for success. One of these is sim-plicity, and companies are working to elim-inate “unnecessary complexities in organi-zations and processes” while “focusing onautomation and digital solutions." Compa-nies also need to find the best ways tomanage talent so it can flourish in the newnormal. Another principle pertains to ac-countability and visibility. “Cost accounta-bility will be even more important than be-fore,” Poświata said. “We need to find thefunds with which to finance the new wayof work.” Companies will also need tobuild resilience in their operations andlower the total cost of ownership and re-structure business models in order to bemore agile.


AppointedGeneralManager ofCisco inPoland in2017, Kaniais responsi-ble for salesand tech-nology andoverseescoopera-tion withover 800 partner companies inPoland. He is also a member of theCisco Board of Directors for East-ern Europe. Kania joined Cisco in1998 as a member of Cisco's salesforce. From 2012-2017 he served asAdvanced Services Director andhis responsibilities included creat-ing Cisco's Global Delivery Centerin Kraków, a part of Cisco GlobalServices Center. He also served asDirector of Cisco Global DeliveryCenter in Mexico.

PRZEMYSŁAW KANIA FABIO POMMELLAMARCIN PETRYKOWSKI JACEK POŚWIATA


MONTHLY MEETINGMAY

WELCOME TO THE NEW NORMAL!

COMPANIES NEED TO RETOOL AND CHANGE THEIR BUSINESS MODELS TOMEET THE CHALLENGES OF THE NEW ECONOMIC REALITY.

Experts participating in the AmCham Maymonthly meeting concluded that theCovid-19 pandemic will have a long-term ef-fect on a number of industries as compa-nies intensify the use of IT technologies tosupport work-from-home and work au-tomation, governments increase spendingon healthcare, and consumers become ex-tremely cautious in their purchasing deci-sions.The meeting agenda was titled “DoingBusiness in the Time of the Pandemic” andspeakers included Przemysław Kania, Man-aging Director of Cisco System Poland;Marcin Petrykowski, Managing Director ofS&P Global Ratings; Fabio Pommella, Chair-man of the Board at Whirlpool Polska; andJacek Poświata, Managing Partner at Bain& Company Poland. The discussion wasmoderated by Tony Housh, AmCham Chair-man, Director for Poland, Central Europe &the Baltic Region at Northrop Grumman.

A GRIM PICTUREExplaining the economic implications ofthe Covid-19 pandemic, MarcinPetrykowski said that the global spread ofthe disease marked “the largest crisis thathas hit the global economy in a very longtime.” Petrykowski added that the blow tothe economy is so major that it will lead to“a massive transformation of the eco-nomic setup that we have experiencedover the last few years,” and that most keyeconomies have suffered. This, combinedwith the collapse of oil and commoditiesprices due to low demand, is now placingsignificant pressure on creditworthiness.Many companies will go bankrupt or strug-gle long-term as they restructure their busi-ness models. “Particularly in Europe, wehave major issues with the ability of smallcompanies to withstand the shock causedby the pandemic,” Petrykowski said. When it comes to what degree individualsectors are sensitive to the crisis, the mostinjured ones have been tourism, aviation,automotive, media and entertainment, re-tail and restaurants. “Companies in thosesectors are in massive need of liquidity and

are tapping into capital markets to get cashto withstand the shock to their revenues,”Petrykowski said. He noted that, to make matters worse, lowgrowth levels coincide with relatively highinflation rates. “This is why governmentsand central banks are so actively engagedin helping the economy with fiscal policiesas well as monetary policies,” he said.

THE POLISH ECONOMYAccording to Petrykowski, the Polish econ-omy entered the Covid-19 crisis in relativelygood shape. In addition, the governmentwas able to effectively support companiesin Poland through the “Anti-Crisis Shield”aid program, which amounted to 10 per-cent of the country’s GDP. Because of this,the Polish economy is expected to take offnext year, delivering an estimated growthof 5 percent GDP by 2021.Yet, threats to the economic growth inPoland remain its demographics and declin-ing workforce as the Polish society ages.The significant role of government-con-trolled companies in the economy posesanother problem and “adds to the risk ofsome policies not being followed from eco-nomic and commercial perspectives,"Petrykowski said.Other issues that may stall a quick eco-nomic recovery, Petrykowski noted, in-clude Poland’s relatively low labor produc-tivity and outflow of foreign workers.The downsizing of EU structural funds forits member states could also have an un-welcome effect for Poland, as investmentsmade with EU funds currently contribute to50 percent of Poland’s GDP.

GOING DIGITALDespite the general economic gloom, thereare industries that are doing relatively wellbecause of the pandemic. Jacek Poświatanoted that some sectors saw a huge in-crease in demand during the pandemic asconsumers began stockpiling certain items.Indoor workout equipment sales also grewin the initial phases of the lockdown. Poświata said that some industries, such as

airlines, got hit hard in the short term butwill have a slow and steady recovery in thelong run. “Other companies, mainly thetech sector, are seeing a spike in sales, andthis growth momentum will most likelycontinue in the long run,” Poświata said.This was explained by Cisco’s PrzemysławKania, who said that many companies havebeen able to switch to work-from-homemode and do business relatively smoothly.“I did not expect that to go so easily, asmany companies had not been really pre-pared for the move. Yet, they did their bestunder pressure from the pandemic.”Kania added that digital collaboration tech-nologies have been successfully employednot only in supporting work within compa-nies, but also between companies. “Manycompanies switched to digital and haveembraced collaboration technologies doingvery serious business transactions,” Kaniasaid. He added that Cisco saw a huge spike inuse of its collaboration technology and that“globally, we have seen between 8-12 timesthe uptake of call hours and voice callhours, bandwidth that was used for videoconferencing. In Poland it was muchsteeper, twice more than the other re-gions. It is good because it shows that Pol-ish companies catch up faster.”Kania noted that most companies Ciscoworks with “declare very aggressive num-bers in terms of how they are going towork—big companies say some 50 percentof their workforce will be online and 50percent at the office, while smaller compa-nies say that up to 70 percent of their work-force will work online."

NEW PRINCIPLESFabio Pommella agreed that digital solu-tions and automation are being embracedby a growing number of companies. “Com-panies are investing in R&D, digitization,and automation, which has an effect on theability of various departments to workfrom home," Pommella said. “Currently, 40percent of our workforce work in the officewhile the other 60 percent work re-

NEW LABOR ATTITUDESThe Covid crisis has had a major effect onthe labor market in Poland, noted FabioPommella. While before the crisis, “peoplechanged jobs too frequently and tooquickly” in search for higher pay, they nowtend to stick to their jobs for fear of losingthem in this time of economic uncertainty.“Before the pandemic, the absentee rateamong production workers was 7 percent,but when the pandemic started it droppedto 3 percent,” Pomella said. As companies adjust to meet the chal-lenges of the new reality, it is still a matterof discussion what effects the change willbring for the labor market. Kania notedthat the Polish labor force is relatively con-servative, and many people tend to staywhere they live instead of relocating to bigcities where high-paying jobs are available.Kania said that with a more universal appli-cation of work-from-home solutions, “peo-ple will embrace this change of working inremote ways and will be able to work andconsume in the places they live in withoutthe need to relocate to big cities,” whichwill help the Polish economy take off. For Petrykowski, the change in labor mar-ket behavioral patterns will extend evenfurther. Until now, “there used to be a lowwillingness to change jobs and profes-sions,” Petrykowski said. Yet, with the neweconomic reality settling in, people will berequired “not only to change their behav-ior as consumers, but also as employees.Job seekers will need to realize that some

industries are not there forever and thatthey need to be intellectually flexible to ed-ucate themselves for new jobs and respon-sibilities, even at later stages of their pro-fessional life."

CONSUMER CONFIDENCEYet, even if companies apply the right tech-nologies to meet the challenges of thenew reality and the labor market embracesthem, the economy will not pick up with-out strong consumer confidence.Marcin Petrykowski noted that consumerspending dropped by 60 percent becauseof the pandemic. According to Jacek Poświata, the pan-demic widened the income disparity gapglobally. Consumers are now much morecautious in choosing products to buy andthe aspect of value-for-money is becomingeven more paramount than before.Digital and online purchasing habits haveincreased with this as consumers buy morefrom home than before and become moresophisticated in choosing products and on-line platforms. But as companies do cut jobs, especiallymedium-sized ones, there will be short-term disruptions in the consumer market,noted Fabio Pommella. “Consumers will bedisinclined to overspend in the months tocome, and it is now anybody’s guess howlong it will take for consumer confidenceto return to pre-crisis levels,” Pommellasaid.

ManagingDirectorS&P GlobalRatingssince 2014.Petryko-wski is en-gaged asHead of Eu-rope, Mid-dle Eastand Africa(EMEA) Re-lationship Management, RegionalHead for Central and Eastern Eu-rope (CEE), and General Managerfor Poland, running day-to-dayoperations of the Warsaw office.Petrykowski has over 15 years ofexperience in the Fintech indus-try through S&P and MCI CapitalS.A., a private equity firm, wherehe served as a Non-ExecutiveMember of the SupervisoryBoard.

Serves asPresidentof theBoard atWhirlpoolCompanyPolska fol-lowing the2018merger ofWhirlpooland Indesit. Pommellabegan his career at LaboratorioAcustica e Vibrazioni in AdlerPlastic. He joined Indesit Com-pany SpA as a process engineer inthe Carinaro Plant in 2001. In2006, he joined the Polish struc-tures of Indesit as Cooking PlantDirector, and later the CoolingPlant Director. He was appointedas Site Industrial Manager for allfour plants in Łódź in 2013.

Partner atBain &Company'sWarsaw of-fice andmanagingpartner ofBain'sPoland andCEE offices.He is aleader inthe firm'sPrivate Equity and Strategy prac-tices. He has extensive experi-ence in a range of business areasincluding chemicals, utilities, en-ergy, banking, retail, healthcareand consumer products, as wellas in advising national and localgovernments in Poland and East-ern Europe. Outside of Bain,Poświata is a member of thehighly-regarded Polish BusinessRoundtable (PRB).

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vestors. It will also monitor the long-term impacts of investments in terms ofthe business sustainability of the compa-nies investors take control of, especiallycompanies that deliver value-added serv-ices to the economy.

CHANGING TIMESThere are sectors of the economy inwhich companies can be still very suc-cessful although, at present, they havebeen losing their value rapidly, and theyare easy prey for hostile acquisitions. “Ifwe allow that to happen now, we maysee major disruptions across many sec-tors of the economy from a long-termperspective,” Chróstny said.The speaker noted that infrastructuralcompanies have always been consideredstrategic, and with the Covid-19 pan-demic, the definition of a “strategic com-pany” has been broadened to includefood and healthcare companies as wellas other companies critical to the epi-demiological safety of the nation, suchas face mask producers.The UOKiK will also protect e-commerceand BtoB platforms and if such compa-nies face takeovers by non-EU investors,the UOKiK will investigate the origin ofthe investors’ capital as well as the po-tential long-term economic effects ofthose takeovers.

BEING PRACTICALIn FDI and M&A investigations, investorswill be assigned one handler to coverboth investigations. Major transactionswill involve a team of specialists of all rel-evant laws in order to conclude the in-vestigation as quickly as possible.The UOKiK will have up to five months toissue its decision but will keep its stan-dard 30-day timeframe for issuing deci-sions pertaining to other cases.

Chróstny said that in time, as the UOKiKgenerates experience dealing with cases,the law can be amended to be evenmore practical for investors. When theCovid-19 crisis subsides, the regulationwill be suspended and the UOKiK will re-turn to business as usual. “There arequestions about the ethical standards ofcompanies and whether or not the prod-ucts they sell are made in line with theirsector’s best practices and other guide-lines,” Chróstny said. “Those issues areimportant to the UOKiK regardless of thecompany’s origins and its geographic lo-cation.”

THE FINAL LAWThe meeting with Tomasz Chróstnyhelped AmCham present its position onthe proposed legislation, with AmChamarguing that US investors should be ex-cluded from the new regime. The originaldraft had only exempted investors fromEU countries, Liechtenstein, Iceland andNorway from the restrictions. The parlia-ment passed the new law on June 19th,and in the final version of the new legis-lation the FDI screening regime does notapply to investors based in the US andother OECD countries.The FDI screening regulation is anamendment to the Act of 24 July, 2015regarding the control of central invest-

ments. The amendment introduces anew mechanism to control foreign in-vestments in Poland and affects non-EUentities that would invest in a Polish en-tity covered by protection. This amendment adds a new category ofprotected entities, and includes compa-nies with activities in the sectors oftelecommunication, electricity genera-tion, production of chemicals, produc-tion of pharmaceutical products, and IT.A non-EU entity that intends to acquiredominance over an entity covered byprotection is required to submit its inten-tion to do so to the President of the Of-fice of Competition and Consumer. Abreach of the FDI screening regulation(i.e. acquisition or gaining a significantinterest or dominant position withoutsubmitting the notification to the Presi-dent of the Office of Competition andConsumer Protection) is subject to a fineof up to PLN 50,000,000 (an extremelyhigh fine cap in the Polish law), imprison-ment from 6 months up to 5 years, orboth penalties jointly.


TOMASZ CHRÓSTNYMEET THE SPEAKER

Appointed Presidentof the Office of Com-petition and Con-sumer Protection inJanuary 20202, hejoined the UOKiK in2019 as its Vice Presi-dent. Chróstny graduatedin finance and ac-counting at the War-saw School of Eco-nomics and in man-agement and produc-tion engineering atthe Warsaw Univer-sity of Life Sciences.

He also completed apostgraduate courseat the Institute of En-terprise at the War-saw School of Eco-nomics. During hisstudies, he wasawarded a scholar-ship in industrial andmechanical engineer-ing at the VitusBering University Col-lege.His professional ex-perience includes au-diting financial state-ments of financial in-

stitutions, companyvaluation and detec-tion of crime andfraud. He served asthe director of theDepartment of Eco-nomic Analysis at theMinistry of Entrepre-neurship and Tech-nology. He was alsothe minister’s repre-sentative at the Sci-entific Council of thePolish Institute ofEconomics.

“There are questions about the ethical standards of

firms and if the products they sell are made in line with

their sector’s best practices and other guidelines. Those

issues are important to the UOKiK regardless of the

company’s origins and its geographic location.


MONTHLY MEETINGMAY

SUCCESSFUL ADVOCACY

AMCHAM PROTECTED AMERICAN INVESTORS FROM A NEW SCRUTINY SYSTEM AGAINST FOREIGN INVESTMENTS IN POLAND FROM OUTSIDE OF

THE EUROPEAN UNION.

Companies in strategic sectors of theeconomy need to be protected againsthostile takeovers by investors from out-side of the European Union, said TomaszChróstny, President of the Office ofCompetition and Consumer Protection(UOKiK), the speaker at AmCham’s sec-ond meeting of the month online onMay 27. Chróstny referred to a new legislation inthe making at the time of the meetingthat would give extra protection to com-panies against hostile takeovers, some-thing the government considered immi-nent during the Covid-19 pandemic. "Wedo not want to impede the investmentprocess from outside of the EU,Chróstny said. The cash companies re-ceive is important now because it helpsthem sustain their operations. At thesame time, however, just like govern-ments in France, Germany and other EUmember states, the Polish governmentis afraid of losing control over the sec-tors of the economy which are strategic

from a long-time perspective,” Chróstnysaid. He also said that the new regulations arenot meant to make investing more diffi-cult for investors from outside of the EUbut are aimed at ensuring that suchstrategic companies are safe in the EU.“We want to protect domestic enter-prises against capital and companiesthat intend to disrupt the continuity oftheir business,” Chróstny explained. The speaker noted that in the history ofthe growth of the Polish free marketeconomy, there have been many caseswhen Polish companies were taken overby hostile investors. Having acquiredthose companies, the investors closedthem down in Poland and relocated pro-duction to countries outside of the EU,such as Ukraine.

DRAWING THE LINEChróstny noted that while most inve-stors are honest and meet business andethical standards, there are also those

who would take advantage of Polishcompanies. He said that, on the onehand, Poland should guarantee that allmarket players such as enterprises, in-vestment funds and others operating onthe European market and in the EU willhave the space they need to do busi-ness.On the other hand, Poland also wants toensure that hostile investors who arepursuing a political agenda and are notdriven by business principles can nottake advantage of the changing marketconditions introduced by the Covid-19pandemic.Chróstny noted that such hostile in-vestors reside outside of the EU and theUS and do not comply with business reg-ulations in those economic areas. Theseinvestors move from country to countryworldwide and are often backed by for-eign governments.The new legislation will empower theUOKiK with new competencies to safe-guard the Polish economy from such in-

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the transition period and will replacecoal-powered facilities in the initial phaseof the national power system’s transfor-mation. Nuclear energy will also be im-portant for the country’s power genera-tion, accounting for around 14 percent ofthe total demand for electricity in Polandby 2050. The country could reduce its energy de-pendence and operational costs byaround EUR 75 billion through decar-bonization, achievable at a potentialextra cost of EUR 380 billion. Decar-bonization could also contribute to thedevelopment of new economic sectorsand create as many as 300,000 new jobs.Furthermore, around 47 percent ofPoland’s domestic demand for energy iscurrently covered by imports. Moving tocarbon neutrality could lower this to 7percent, and up to EUR 15 billion couldbe spent in Poland instead of buying en-ergy from abroad.

MOUNTING COSTSMinister Kurtyka noted that the transi-tion to carbon neutrality is “a very capi-tal-intensive process—EUR 380 billion,on top of the business as usual costs,”he said.Poland has done its best to secure asmuch financial support from the Euro-pean Union as possible, and “from Janu-ary to May 2020 the EU transition fundwas increased from EUR 7.5 billion toEUR 40 billion , with a record high alloca-tion for Poland.” The European Commission also listedPoland as a beneficiary of the Covid-19recovery fund, of which roughly EUR 60billion has been designated for Poland.“This money will partly be used to fi-nance challenges in transforming Polandto carbon neutrality,” Kurtyka said, “es-pecially when it comes to the transporta-

tion sector. The sector alone requiresEUR 180 billion to meet carbon neutralitystandards.”

MOVING WITH CAUTIONMinister Kurtyka noted that in order forit to succeed, the energy transformationneeds strong public support in Poland.“The momentum is growing, as increas-ing numbers of people begin to under-stand the issues involved in tackling car-bon emissions,” he said. Nevertheless,reaching ambitious ecological targetswill be challenging and involve con-sumers, product prices and higher taxa-tion. “This is the question of the pricesof electric power, heat, buildings, trans-portation, and agriculture production,”the minister said. “We must keep publicacceptance for those changes. When weare talking about tax hikes in Poland, wealso need to talk about European solidar-ity and sharing the burden of the trans-formation with other EU memberstates.”Kurtyka said that the costs of the energytransformation are not only a hot topicin Poland but also in other EU countries,such as France, where many socialgroups are negatively affected by risingtaxation. “The social aspect of the trans-formation has to be taken into account,”the minister said.This is why Polish industries will onlybegin decreasing their carbon dioxideemissions in 2040-50, at the latest possi-ble moment. Technologies to help cutemissions already exist but are ex-tremely costly. Poland prefers to wait abit longer, hoping that in time the costof these technologies will lower and Pol-ish industries, especially the energy-in-tensive ones, will be able to maintaincompetitive production costs whenadopting these technologies. This is a

strategically important aspect of thetransition not only for Poland, but forthe European economic zone as well. Ifenergy-intensive Polish companies losetheir competitive edge, they will alsolose their ability to produce the goods inPoland. Production will move to othercountries that are transforming to a car-bon-neutral economy and can also offerlow production costs. This means thatnot only will jobs be relocated to outsideof the EU, but also carbon dioxide emis-sions.

TAPPING INTO NEW ENERGYSOURCESPoland has been transforming its powersystem to embrace other forms of en-ergy, including photovoltaic and wind.“Poland has already installed 10,000megawatts of renewable energy genera-tion capacity,” Kurtyka said. “This meansthat one in every four megawatts of theentire power sector in Poland comesfrom renewables.”He also noted the increasing pace ofprogress in installing photovoltaic capac-ity. It took Poland eight years to installits first 1,000 megawatts of photovoltaicgeneration, while it only took eightmonths to build the most recent 1,000megawatts of photovoltaic generationcapacity delivered to the market. Poland has no power plants and nuclearenergy is considered a new type of en-ergy source for the country. MinisterKurtyka said that the Polish governmentis interested in developing a nuclearpower program with international part-ners. The first one will be developed withthe US, and the governments of the twocountries are in advanced stage of nego-tiations.


MICHAŁ KURTYKA

Appointed Ministerof Climate at thenewly-created min-istry in 2019. Hemoved there fromthe Ministry of En-vironment, wherehe had served asSecretary of State.Kurtyka began hisprofessional careerat the Office of theCommittee for Eu-ropean Integration.He later became in-volved in Europeanintegration projects

specializing ineconomy, global-ization and climatechange. In 2016, hejoined the Ministryof Energy, responsi-ble for the techno-logical develop-ment and imple-mentation of inno-vations in the en-ergy sector, specifi-cally, the imple-mentation of cli-mate and energypolicies in the fueland gas sector. He

was appointed Gov-ernment Plenipo-tentiary for thePresidency ofCOP24 at the 2018United Nations Cli-mate Change Con-ference. Havinggraduated from theParisian École Poly-technique, Kurtykaacquired a scholar-ship in quantum op-tics from the Na-tional Institute ofStandards andTechnologies,

Washington, D.C.,where he workedunder the leader-ship of Nobel laure-ate in physicsWilliam D. Phillips.He also studied atthe University inLouvain-la-Neuve.Kurtyka earned hismaster’s degree atthe SGH WarsawSchool of Econom-ics and earned aPhD from the Uni-versity of Warsaw.


MONTHLY MEETINGJUNE

NO MORE FOSSILFUELS

POLAND TAKES STEPS TO BECOME A CARBON NEUTRALECONOMY BY 2050, YET CHALLENGES ARE MOUNTING.

The Polish economy’s successful transi-tion to carbon neutrality by 2050 isachievable but must be done with cau-tion. Poland does not want to lose itscompetitiveness and jobs in industrialsectors to less carbon-restrictedeconomies in other countries, saidMichał Kurtyka, Minister of Climate andguest speaker at the AmCham monthlymeeting in May. Earlier this year, McKinsey Poland pub-lished a report called “Carbon-NeutralPoland 2050—Turning a challenge intoan opportunity.” Representatives ofMcKinsey Poland joined the meeting topresent insights of the report, with pre-senters including Marcin Purta, Manag-ing Partner, McKinsey Poland, andGustaw Szarek, Associate Partner atMcKinsey’s Warsaw Office. AmChamChairman Tony Housh led the discussion.

UNDERSTANDING THE CHALLENGEAccording to McKinsey experts, Polandwill have to start the process of decar-bonization to achieve zero net emissionsof carbon-dioxide to be considered car-bon neutral. Reaching this goal in Polandby 2050 is within grasp but will be a sig-nificant challenge. From 1990 to 2017, Poland was able tocut 15 percent of its carbon dioxide netemissions from 447 mega tons annuallyto 380 mega tons. Today, the main gen-erators of carbon emissions are powerand heating (responsible for generating38 percent of all emissions), heavy indus-try (22 percent), transportation (15 per-cent), buildings (11 percent), and agricul-ture (11 percent). All other producers ofcarbon dioxide emissions contribute theremaining 3 percent. In order to achievecarbon neutrality, the major carbon diox-

ide-contributing sectors of the economywould need to cut their emissions, withno exclusions. At the same time, how-ever, cost factors need to be a majorconsideration so that the reductionprocess does not destabilize any eco-nomic sectors. One of the biggest challenges for Polandwill be redesigning its power system.Around 70 percent of the country’s coal-powered power generation system isover 30 years old. In the next 20-30 yearsall of Poland’s power-generation blockswill need to be decommissioned. Thisprovides an opportunity for renewableenergy, including offshore and onshorewind generation, to replace coal. Ac-cording to McKinsey, wind energy willreplace coal in roughly 70 percent of thecountry’s power generation capacity.Gas will have a prominent role to play in

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MONTHLY MEETINGJUNE

THE ART OF ADAPTATION

BATTLING THE NEGATIVE EFFECTS OF THE COVID-19PANDEMIC ON BUSINESS, COMPANIES NEED TO MOVEQUICKLY TO SALVAGE CASH FLOW AND JOBS. THOSE

WHO THINK IN INNOVATIVE WAYS AND MAKE GOOD USEOF NEW BUSINESS TOOLS ARE THE WINNERS.

The topics of discussion at the secondAmCham Monthly Meeting in June werethe impacts of the Covid-19 pandemic onAmerican business in Poland in areas in-cluding regulatory framework, workforce,the investment environment, and howthe pandemic drove companies to innova-tive to adjust to this new reality. Themeeting was conducted online via a Ciscointeractive platform. The speakers wereMark Loughran, General Manager at Mi-crosoft; Sławomir S. Sikora, President &CEO of Citi Handlowy; Adam Pieńkowski,Managing Director of McDonald’s Polska;and Alain Simonnet, Managing DirectorEast Europe Region of 3M. The discussionwas moderated by AmCham ChairmanTony Housh. The meeting was opened by the US Em-bassy Chargé d’Affaires, B. Bix Aliu, whosaid that the American business commu-nity in Poland rose to the challenge offighting the pandemic, as over 80 USfirms (including AmCham member compa-nies) have donated support, with thetotal value of their aid exceeding PLN 16million. “With this, the US business com-munity demonstrated its values and thestrength of the US-Poland bilateral rela-tionship,” the chargé d’affaires said. He added that the pandemic rose aware-ness to the fact that many jobs can be ac-complished remotely, saving significantoverhead costs. It also increased the needfor better remote access necessary tosupport telework and other work basedoutside of the traditional office. Now, thegoal for US companies in Poland is to as-

sess the long-term impacts that they mayexperience from the crisis and build back-to-growth strategies for the market.

ECONOMIC PERSPECTIVEIn discussing the impact of the crisis onthe economy, Citi Handlowy’s SławomirSikora said that the economic lockdown inPoland started relatively early, with only68 Covid cases across the country. Theearly lockdown proved effective in slow-ing down the spread of the virus, but alsoled to many companies losing their cashflow overnight. At the time, the two major questionsbanking sector professionals and theirclients were asking were how long thelockdown would continue and how to en-sure liquidity while the economy wasfrozen. The banking sector reacted swiftly tomeet the new needs of its clients. Startingin late March, essential payments werepostponed or extended over 6 months.Over 1 million institutional and individualclients benefited from that program. Thegovernment then implemented the “Eco-nomic Shield,” a program aimed at help-ing companies retain liquidity. Programfunds were sourced from the governmentand distributed through a number ofbanks. With this, the banking sector dis-tributed around PLN 50 billion within 9weeks to companies and their collective2.6 million employees. Sikora noted thatthe government program was a massivehelp to companies and amounted to 12percent of the country’s GDP in total.

Sikora said that after stabilizing the situa-tion during the economic lockdown, themain question for the banking sector nowis how quickly the economy will recoverand if there will be a second wave of theCovid-19 pandemic.According to Sikora, market analysts of-fered a very pessimistic forecast at the be-ginning of the crisis in mid-March, predict-ing a contraction of the economy of over10 percent for 2020. However, economicdata for March and April showed therewere grounds for optimism. In June, mar-ket analysts calculated that the economyhad dropped by 9.5 percent in the secondquarter of 2020, which led them to esti-mate that Poland’s economic growth willdecrease by only around 5 percent in2020.Sikora added that companies as well asconsumers began to adapt to the new re-ality relatively quickly, which was benefi-cial for the economy. “There were someinteresting trends in business which tookoff during the pandemic and helped totake the economy out of the hole, and areexpected to stay for a long time,” Sikorasaid. “The first one is work-from-home,and another is the digital transformation.While the former is obvious to all corpora-tions, it is interesting to know that nearlyall sectors of the economy make good useof online interaction tools, including con-sumers who increased their spendingthrough digital channels.”

A MAJOR TURNING POINT3M’s Alain Simonnet also underlined the

[email protected] krakow@amchampl [email protected] [email protected]


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started thinking about how to return togrowth. The first step was to redirect 3M’sglobal and local supply chains for sourcingsafety solutions, such as the M95 mask.“When governments in Europe and else-where close their country borders, theyimpede our supply chain,” Simonnet said.With this and all other aspects taken intoaccount, 3M came up with a number of ap-proaches to ensure its path back togrowth. First, the company worked toadapt its operation models to its cus-tomers in the e-commerce and business-to-business environments. “There hasbeen an enormous growth in B-to-B trans-actions, and we are doing very nicelythere,” Simonnet said. The company also made serious advancesin big data management. “We use big datato enhance our customers’ experience,”Simonnet said. “It is an important way tochange our commercial approach. We usevirtual and augmented reality solutions torespond to customers’ problems and thisis an area which we are discovering andworking on.” Regarding enhancing the efficiency of pro-duction processes and the flexibility andcontinuity of manufacturing operations,3M began to explore Industry 4.0 solu-

tions. “We are only at the early stage ofthe change and we are going to continueto invest in it,” Simonnet said. The company revised its model for en-hancing the employee experience that hadinitially focused on equipping more teamswith online communication tools. But itsoon transpired that to be successful, thecompany would have to improve its em-ployees’ skills so they could use the newtools confidently and creatively. “This is amust-have,” Simonnet said. “We need tolearn. We call this challenge a Flexibility 2.0Company Framework and implement itacross the globe in sync with local laborlaws.”

MOVING FASTThe franchise restaurant chain McDonald’sruns 445 outlets in Poland and employssome 25,000 people. It served around 1million customers a day before the pan-demic. The company found itself in an un-precedented situation in the first 3 monthsof the crisis as its sales dropped by 60 per-cent and the number of customers by 80percent. The company had to close nearly95 stores, most which were located inshopping malls.“It was a dramatic drop and there wasfear among our employees,” Pieńkowskisaid, adding, “We had to act very quickly.”As a global company, McDonald’s is ableto use its experiences in other markets toapply the best safety solutions for its cus-tomers, workers and suppliers. The first phase of adapting to the pan-demic focused on securing the liquidity ofthe chain’s franchisees and securing jobs.Pieńkowski said the government’s anti-cri-sis program helped maintain the organiza-tion’s liquidity. However, McDonald’s stillhad to cut some jobs, as it was virtually im-possible to keep all of its staff membersfrom the pre-pandemic phase.The second phase focused on adapting so-lutions to help the company function inthe “new normal.” The company had toreshuffle some business processes to beimmune to the dangers of Covid-19. Luck-ily, around 70 percent of McDonald’srestaurants in Poland already had drive-thru lanes, and the company also openeda phone order service, “McDelivery.”McDonald’s also created programs to ben-efit the local community, and McDeliveryprovided meals for hospital workers, deliv-ering over 50,000 meals to 50 hospitals inPoland.

RECOVERY PHASEHaving contained the initial effects of thecrisis, McDonald’s went into the recovery

phase and managed to reopen all of itsrestaurants. However, the takeout part ofthe business was still generating more in-come than its dine-in business, and thecompany had to rebuild its sales. For in-stance, Morning Business Breakfast saleswere almost zero at that time, and thesales of other menus were much lowerthan in the same period of 2019. The biggest challenge for the companywas in reopening its McDonald’s restau-rants in shopping malls, due to the highrent at these locations as well as lack ofdrive-thru options. Another challenge was effectively enforc-ing safety rules across the restaurants.While some guests wore masks inside therestaurants, others were reluctant to doso. These guests apparently did not under-stand why they were supposed to wearmasks, creating tensions among cus-tomers and the staff. Pieńkowski said that in order to adapt tothe new normal, the company will need tocreate innovative solutions for businessprocesses as well as for client service. Theinnovations will also include interior re-design and floor layouts so that customerflow and delivery areas will not intersect.The company will also significantly investin developing new functionalities for theapplications it uses, especially regardingmobile orders and pay systems.

SETTING NEW STANDARDSThe meeting’s final speaker, Microsoft’sMark Loughran, said that while a crisis likeCovid-19 can drive some companies totheir collapse, others can thrive if theymanage to refocus and use creative solu-tions to grow their business. Loughrannoted that the Covid-19 crisis is caused bya special type of behavior, human-to-human proximity. Companies and indus-tries are thus working to implement spe-cific changes in their business models tochange these behaviors. IT is one industryoffering innovative solutions for movingbusiness models away from the need forhuman-to-human proximity. “This unparal-leled opportunity to use different digitaltools is used now to learn, do business,and even socialize,” Loughran said. ManyIT companies have entered the educationsector and offer online platforms forgroup interaction with the goal of replicat-ing a classroom. They offer their solutionsto support schools, teachers, and stu-dents, and will continue to develop themin the months to come, as this new mixedeconomic model continues.

ALAIN SIMONNETManaging Director of 3M East Europe Re-gion, covering countries includingPoland, Ukraine, Czech, Slovakia, Hun-gary and Georgia. He joined 3M in 1990and has since then held many manage-ment positions related to sales and mar-keting in Great Britain and France, gradu-ally expanding his responsibilities fromlocal to European. He has very broadbusiness experience and brings severalyears of successful management of com-plex organizations and customer experi-ence to 3M. Simonnet holds a Master inMechanical & Aerospace Engineeringfrom ENIT in France and graduated fromthe Chartered Institute of Marketing inthe UK; he is also a certified Lean SixSigma Black Belt.

need to innovate to find new ways in re-sponding to the Covid-19 situation. The com-pany globally manufactures over 55,000 dif-ferent products (including over 20,000 prod-ucts in Poland alone) used in nearly all sec-tors of the economy. 3M suffered a double-digit decline in demand from the automotive,aerospace, and transportation sectors due tothe pandemic. In dentistry, demand for oralcare and orthodontics dropped to almostzero in the first months of the pandemic, asclinics focused on coronavirus-related prob-lems. On the other hand, the pandemicboosted demand for industrial safety solu-tions, not only for respirators, but also for ITand telecom. This included remote workingsolutions, packaging solutions for cateringservices, safety solutions for food and drinks,and some special solutions for pharmaceuti-cals and biopharmaceuticals. 3M found itself at a major turning point, andit was clear that its priorities should be setaround health and safety of the employees,uncompromising ethics and business conti-nuity. The company began by investing in verystringent safety measures, and successfullyimplemented them at all production sites. InPoland, 95 percent of the company’s officeworkers were ready to work from homewithin 7-10 days from the start of the eco-nomic lockdown. “We saw to it that all valuestreams showed satisfactory productivity,”Simonnet said. “There were no brokenprocesses anywhere in the company.”The company applied a wide range of digitalsolutions, including augmented reality man-agement tools, to maintain production re-motely by allocating required resourcesbased on data. These changes had a widereach, affecting the 4,000 people working in3M production plants in Poland. At the same time, 3M reprioritized its invest-ment plans for 2020. The company wasforced to postpone some investment proj-ects originally scheduled for this year. How-ever, it decided to proceed with all of its in-vestment projects in sustainability and inno-vation development. 3M learned a lot from through the Covid-19crisis, with company managers learning howto efficiently use IT collaboration tools tosupport the back office, sales department,engineering and production. “We discoveredthat we could talk to suppliers and cus-tomers and our colleagues in the company,and work efficiently,” Simonnet said. “It isnot always ideal, but we work to improve onthat.”

RETURNING TO GROWTHAs the company settled into the so-called“resilience mode,” company managers


Charge D’Affaires a.i. at the US Embassy inWarsaw, B. Bix Aliu returned to the US Em-bassy in Warsaw to serve as the Deputy Chiefof Mission in June 2019. In 2005, Bix was aVice-Consul and Deputy Cultural Attaché atthe Embassy. Most recently, Bix served as theUS Consul General in Kraków. Prior to return-ing to Poland, Bix was the Deputy Chief of Mis-sion at the US Embassy in Montenegro, wherehe often served as Chargé d’Affaires, a.i. A ca-reer member of the Senior Foreign Service,class of Counselor, Bix began his Foreign Serv-ice career in Macedonia, where he was in-volved in the Rambouillet Peace Accords as amember of the delegation of the US SpecialEnvoy to Kosovo.

B.BIX ALIU

MARK LOUGHRAN SŁAWOMIR S. SIKORA

Managing Director of McDonald’s Polska,Pieńkowski began his career at Levi StraussPoland and later moved to Kraft Food, Inc. Hejoined McDonald’s in 2006 as the Marketingand Research Manager and took over respon-sibility for Marketing in 2008. In 2009, he as-sumed an additional two-year assignment,working with the European Marketing Teamto develop a marketing strategy for Europeancountries in Sport Sponsorship. Adam waspromoted to Senior Director of Marketing inMcDonald’s Germany, moving to Munich inJuly 2013. In September 2014, Pieńkowskimoved back to Poland. He returned to Polandin September 2015, in the position of Multide-partment Senior Director.

Sikora has been the Chief Executive Offi-cer of Bank Handlowy in Warsaw S.A.since 2003 and was a member of the Citi-group Management Committee in NewYork from 2005-2008. He served as ChiefExecutive Officer of American Bank inPoland from 2001-2001. Sikora was theHead of Corporate and Investment Bank-ing at Powszechny Bank Kredytowy S.A.from 1994-2001. Prior to this, he held anumber of senior positions at the Ministryof Finance in Poland, including the Headof Banking and Financial Institutions(1989-1994). Sikora is a graduate of theWarsaw School of Economics (SGH) and aKonrad Adenauer Research fellow at theUniversity of Cologne.

General Manager at Microsoft Poland,Loughran worked for GlaxoSmithKlinebefore joining Microsoft. For 6 years, hemanaged the company’s business in Cen-tral and Eastern Europe. He worked andlived in Poland for 4 of these years, asGeneral Manager and President of theManagement Board at GSK Poland. Dur-ing this time, he led the merger of PolfaPoznan with the international business ofGSK. Loughran also sat on the board ofthe Confederation of Polish Employers(KPP). He also held the position of SalesDirector, and later, General Manager atNokia UK & Ireland. Loughran has an MAand PhD from the University of Cam-bridge.

ADAM PIEŃKOWSKI

40 41

the first time. The government alsoamended the law on investor tax havens,known as Special Economic Zones(SZEs). Investors can now choose factoryand facility locations in any part of thecountry, regardless of the geographicalspread of the actual SEZs.

REGIONAL FOCUSThe minister added that there are re-gions in Poland that need new invest-ment to transform into a developedeconomy. She gave the example ofUpper Silesia, a region which "comes tomind naturally when we think about eco-nomic transformation." Silesia is an ex-ample of a successful transformationthat began with just a few investorslanding their projects in the region.Those few attracted further investment,and today the region, which for decadesused to depend on coal mining andheavy industry, has more jobs in IT thancoal mining. There are other regions of Poland whichwould also greatly benefit from such in-vestment, the minister said. Apart fromEastern Poland, there are some "pocketsof economic underdevelopment" in theWielkopolska region, where coal-pow-ered power plants will soon be closedand thousands of workers will start look-ing for new jobs. The government plans"to steer investments in the infrastruc-ture" in Wielkopolska, in hopes thatother investors will follow suit. The min-ister urged American companies to plantheir next big investment projects in "re-gions that need heavy investments to be-come as attractive to live in as otherparts of Poland."

NEARSHORING SUPPLY CHAINSDeputy Prime Minister Emilewicz saidthat the pandemic revealed shortcom-ings in global supply chains of pharma-ceuticals and health equipment. For ex-ample, the pandemic showed personalprotection equipment (PPE) and certaindrugs to be essential for the stability ofthe nation's health system. However,border closures can easily mute the sup-ply chain from Asia and economic shut-downs freeze global trade. The onlyplausible solution to guaranteeing thecountry’s supply is to produce thoseitems domestically, but this is currentlybeyond Poland's capacity. "Unfortu-nately, neither personal protectionequipment nor even simple drugs suchas paracetamol are produced in Polandor the EU," Emilewicz said. "Their pro-duction was relocated from Europe to

Asia twenty years ago." Because of this, the government is nowevaluating the possibilities of having theproduction of some drugs and PPE"near-shored" to Poland. Engaged in thisprocess are government-affiliated agen-cies, the Polish Development Fund, andthe Polish Agency of Trade. "We are dis-cussing this issue with the pharmaceuti-cal sector to find out what items may beproduced in Poland and what itemsshould be produced domestically," minis-ter Emilewicz said. The minister explained that the govern-ment's goal is to have foreign and Polishcompanies produce those items inPoland. "What we want is that the pro-duction facilities be in Poland, includingchemical companies which produce com-ponents for the pharmaceutical indus-try," minister Emilewicz said.

ENERGY INDEPENDENCEDeputy Prime Minister Emilewicz saidthat the government is ramping up ef-forts to make Poland energy independ-ent by the end of 2022 and a regional en-ergy hub in Europe, a task in which theUS has been assisting Poland for manyyears. "We appreciate the work with theUS administration in energy security,"minister Emilewicz said. She explained that the modernization ofthe Polish power system is a must interms of climate protection, and is "amatter of common sense." 80 percent ofthe system's power generation relies oncoal, what the minister described as a"heritage of the post-Cold War period,"adding that "there is no other country inEurope except Poland which has to do so

much big work to get the transformationdone."The government is working to changethe regulatory framework for onshorewind farms to attract new renewable en-ergy investors. "We will shorten the re-quired distance to residential areas be-yond which wind farms must not be lo-cated," the minister said. She added that

before this happens, the governmentmust consult with local communities toobtain their consent to developing windfarms closer to where they live. "Thereare social tensions regarding this frame-work," Deputy Prime Minister Emilewiczsaid. The government is planning three majorinvestment projects in onshore powerfarms by the Baltic coast. One is to be "afully private investment," while state-owned companies will complete theother two. The government plans onbringing the projects to the marketwithin ten years.Minister Emilewicz regretted that theconstruction of wind farms has been aslow process in Poland and that Ameri-can companies with the right technol-ogy, experience, and know-how have notbeen as included and involved as theyshould have been. "We need the righttechnology, and we need to have goodpartners if we are to make good use ofthe technology," the minister said. "Tak-ing into account the presence of US in-vestors in Poland and the good trackrecord of their investments, I can hardlythink of any better technology partnersthan American companies."

SHARED SERVICES SECTORThe modernization of the nation’s powersystem and building broadband internetin Poland’s eastern parts are not the onlystrategic reforms the government hasbegun. They would also like to see thefurther contribution of shared servicesto the generation of the value of Polishexports. The sector of shared serviceshas now become the top sector when it

comes to generating the highest portionof Polish exports across all sectors of theeconomy, even surpassing the automo-tive sector, which for years had beennumber one. The government is nowconsulting with the industry organizationThe Association of Business ServiceLeaders to learn how to boost the sec-tor's exporting potential and attract


“We want to come up with a list of suchinvestment projects which are critical inPoland. You are our partners if you have

such projects!


FOCUSFOCUS: POLAND-US PARTNERSHIP

HANDS ACROSS THE OCEAN

THERE IS MOMENTUM FOR TIGHTENING POLAND-USECONOMIC COOPERATION.

In July, AmCham held its first in-personmeeting since March. The guest speak-ers were Jadwiga Emilewicz, DeputyPrime Minister and Minister of Develop-ment, and Georgette Mosbacher, USAmbassador to Poland and HonoraryChair of AmCham Poland. They met the representatives of Am-Cham companies who are also membersof the AmCham Advisory Council. Theagenda was the economic cooperationbetween Poland and the US; its poten-tial and areas that will benefit from im-provement.

THE AMBASSADOR'S BRIEFAmbassador Mosbacher thanked DeputyPrime Minister Emilewicz for her deepunderstanding of the specifics of Ameri-can investors in Poland. She praised theminister's involvement in facilitating theexemption of American investors fromthe Anti-Overtaking Bill, a new legisla-tion to prevent hostile acquisitions ofPolish companies by investors outside ofthe European Union. "The atmospherefor business is still very good in Polandthanks to the Deputy Prime Minister,among others, and I do have to applaudher because she has been a big part ofkeeping that going," Ambassador Mos-bacher said. The ambassador said that Polish-US rela-tions have never been stronger, as bothcountries are engaged in extending their

cooperation. This year, there will be sig-nificant breakthroughs in key areas ofcooperation, including national securityand civilian nuclear power. AmbassadorMosbacher said that the United States isworking hard to help Poland achieve en-ergy independence by the end of 2022,which will turn the country into a re-gional energy hub for Central and East-ern Europe.

THE BLOW OF THE PANDEMICThe Polish government is fully aware ofhow critical foreign direct investment isfor the development of the Polish econ-omy, especially now, as the Covid-19 pan-demic takes its toll on Polish firms. "Over40,000 small and medium-sized compa-nies disappeared from the Register ofCommercial Entities in Poland almostovernight after the pandemic hit thecountry," minister Emilewicz said. However, as the economy moves on tothe recovery phase, more and morecompanies are applying to be included inthe register. "This is why I'm quite opti-mistic about where the Polish economywill be by the end of 2020," ministerEmilewicz said. According to government forecasts, thePolish economy will be the least affectedby the Covid-19 pandemic among all theEU member states. Government econo-mists do not expect the economic dropin 2020 to exceed 4.6 percent of GDP,

and the unemployment rate will not behigher than 7-8 percent.The Deputy Prime Minister noted thatthe Polish economy's relatively goodshape for 2020 would not be possiblehad it not been for government aid pro-grams that delivered financial assistanceto troubled companies to help themmaintain cash flow and avoid layoffs.In addition to the aid programs, the gov-ernment launched several investmenttools to help companies restructuretheir operations to better adapt to thecurrent business landscape. These in-vestment tools include a new tax incen-tive for investors planning to purchaseautomatization and robotization solu-tions. The tax incentive is structured sim-ilarly to the incentives that are availableto investors in R&D. "The main goal ofthe government is not allowing Polandto lose the high economic position it en-joyed for many years, that of one of themost popular places for foreign direct in-vestment in the EU," Minister Emilewiczsaid. She added that the government had un-dertaken several legislative initiatives toimprove conditions for investors acrossthe country well before the Covid-19pandemic. These initiatives have made iteasier for companies reinvesting inPoland to obtain public aid such as taxdeductions and incentives, compared tocompanies investing in the country for

43


AmCham in Warsaw

Face to face with

Deputy PM

1. The meeting is about to begin. 2. Tony Housh, AmCham Chairman (Northrop Grumman); Jadwiga Emilewicz, Deputy Prime Minister, Minister of Devel-opment; Georgette Mosbacher, US Ambassador to Poland. 3. Anita Kowalska, AmCham; Tony Housh; Marta Pawlak, AmCham; Stacy Ligas, KPMGPoland. 4. Fabio Pommella, Whirlpool Poland; Mariusz Wawer, Alain Simonnet, 3M Poland; Marek Szydłowski, AmCham Vice Chairman (Integer.pl SA). 5. Małgorzata Wadzińska, Gabriel Ragy, Procter & Gamble . 6. Andrzej Dziukała, Janssen Cilag Poland; Krzysztof Adamcewicz, Roche Polska. 7. JolantaJaworska, AmCham Vice-Chairman (IBM Poland); Tisha Loeper-Viti, US Embassy in Warsaw. 8. Adam Błażeczek, Artur Łakomiec, Gemini.

In July, AmCham held an exclu-sive summer meeting withDeputy Prime Minister and Minister of Development Jadwiga Emilewicz, and US Am-

bassador Georgette Mosbacher.The venue was the Warsaw Mar-riott Hotel. It was a live, in-per-son meeting held with all Covid-19 precautions.

1 2

3 4

5 6 7 8


more investors in shared services centersfrom the automotive industry. Such newinvestments "would greatly complementthe existing auto manufacturing sectorand boost its potential," MinisterEmilewicz said.

FINANCING INVESTMENT PROJECTSAs the modernization of the Polishpower system picks up speed, the gov-ernment is doing its best to ensure the fi-nances to support every step. Goodnews has come from the informal capitalof the EU, Brussels, where heads of EUmember state governments recently metto discuss the details of the long-term EUbudget. Poland will be the third-largestbeneficiary of EU financial aid from 2021-2027, receiving billions of euros from theEU Transition Fund and the Covid-19 eco-nomic aid program called the RecoveryFund. Deputy Prime Minister Emilewiczsaid that the government will be able touse money from both funds to financestrategic programs for the economy. TheTransition Fund is meant to support thedevelopment of projects to combat cli-mate change and the Polish governmentplans to use these funds to help trans-form power generation from coal to gas.

Another source of money for infrastruc-tural investment projects is the PolishDevelopment Fund. This fund is aimed atexpanding the IT capacity of the Polisheconomy and financing the constructionof broadband internet infrastructure."The focus is especially on the easternparts of the country, as the internet in-frastructure there isunderdeveloped…this is one of our cen-tral goals," minister Emilewicz said. Theminister added that Poland had usedgovernment-controlled companies to de-velop strategic areas of the economy inthe past. However, the incumbent gov-ernment is pioneering a new approachthat involves considering private in-vestors as partners in developing thesestrategic economic areas. "We try toidentify key investment projects that areof paramount importance to the Polisheconomy," the minister said. "Those in-vestment projects are going to be under-taken by the public sector, but we arealso open to private investors."The minister said that private investorsshould contact the Ministry of Develop-ment about investment projects they areplanning, "and perhaps some of themare so important for the Polish economy

that they can get financial aid from theRecovery Fund," Minister Emilewicz said."Let us know because we want to comeup with a list of such investment projectswhich are critical in Poland. You are ourpartners if you have such projects!"

A BROADER LOOKClosing her address to the AmCham Advi-sory Council members, the Deputy PrimeMinister said that the Covid-19 pandemichas transformed many value chains inthe Polish economy and globally. How-ever, this process had already been un-derway since before the pandemic. Thepandemic has provided the opportunityto reconfigure and strengthen economicrelations between the US and the EU, es-pecially when it comes to the collabora-tion between the US and Poland. "Wewould particularly like to strengthen ourcooperation in broadly understoodtelecommunication, IT, energy, and avia-tion...We look forward to continuing ourgood cooperation with American part-ners," the minister said.

JADWIGA EMILEWICZ GEORGETTE MOSBACHER

Appointed DeputyPrime Minister ofPoland in 2020. Shehad been appointedMinister of Develop-ment in 2019 afterthree years of serviceas Deputy Minister ofDevelopment, andearlier as Minister ofEntrepreneurship andTechnology. Beforethat, she served asUndersecretary ofState in the Ministryof Development.From 1999–2002, sheworked in the Depart-ment of Foreign Af-

fairs at the Chan-cellery of the PrimeMinister. In 2009, shebecame the Directorof the Museum of thePeople's Republic ofPoland in Kraków. Sheis a Councilor in the re-gional assembly of theMałopolskie Voivode-ship and Vice-Chair ofthe Commission forthe Innovation andModern Technologies.Emilewicz graduatedfrom the Institute ofPolitical Studies at theJagiellonian Universityand has begun doc-

toral studies at theJagiellonian Univer-sity's Department ofInternational and Po-litical Studies. She re-ceived an Oxford Uni-versity scholarshipand a scholarshipfrom the AmericanCouncil on Germanyprogram by DrägerFoundation, Zeit-Stiftung Ebelin undGerd Bucerius. Shealso held the post ofPresident of the Bet-ter Poland Founda-tion.

Appointed US Ambas-sador to Poland in thesummer of 2018 andhas been President ofGeorgette MosbacherEnterprises, Inc., abusiness and market-ing consulting com-pany in New YorkCity, since 1992. Sheserved as CEO ofBorghese Inc. from2001 to 2015. In 2016,she was confirmed bythe US Senate as aMember of theUnited States Advi-sory Commission onPublic Diplomacy.

Mosbacher foundedthe New York Centerfor Children, which as-sists abused childrenand their families, andhas served on theboards of numerouscharities supportingveterans and theirfamilies. She is a Fel-low at the ForeignPolicy Association anda board member atBusiness Executivesfor National Securityand the Atlantic Coun-cil. She previouslyserved as a co-chair ofthe Republican Na-

tional Committee's Fi-nance Committee andwas the first womanto serve as the Gen-eral Chairman of theRepublican GovernorsAssociation. Ms. Mos-bacher authored twomotivational booksfor women, earned aBachelor of Sciencefrom Indiana Univer-sity, and receivedmany awards recog-nizing her humanitar-ian and entrepreneur-ial contributions.

42

The speaker said that the PDF does notintend to take ownership of companiesthat have problems during the pan-demic. After some time, as the situationin the country and companies improve,the PDF will sell its stakes back to thosecompanies.So far over 400 companies have appliedfor the aid and, according to Borys, up to600 large enterprises will be beneficiar-ies of the PDF aid program eventually.

SUPPORT FOR INTERNATIONALENTERPRISESThere are, of course, some requirementsregarding whether or not internationalcompanies can be eligible for the coron-avirus-related public aid. One require-ment is that public aid sourced from Pol-ish taxpayer contributions must go tocompanies that conduct business andpay taxes in Poland. Companies applyingfor aid from the state must be registeredin Poland and should have tax residencyin the European Economic Zone. Compa-nies with tax residency in a tax haven donot qualify for state aid. The list of coun-tries considered tax havens by the EU isavailable on the European Commissionwebsite.

SEEKING INFORMATION AND APPLY-ING FOR AIDCompanies interested in seeking assis-tance from the PDF should email the con-tact center, where they can get in touchwith a PDF advisor who will provide allessential information and answer ques-tions. Another option is to visit the PDFwebsite and use the artificially intelligentchat box which, according to PDF inter-nal statistics, has answered 90 percentof all questions successfully so far. Borys said that while the PDF receives3,000 to 4,000 inquiries from companies

daily, a relatively large workload toprocess by PDF officers, the fund is capa-ble of handling them all quickly thanks toits effective IT system.

ECONOMIC OUTLOOKAccording to Borys, the second quarterof 2020 showed a sharp decline in eco-nomic activity due to the economic lock-down and turbulences in trade, supplychains, and lowered consumer demand.He said that the government expects theGDP drop in Q2 to be around 8 percentyear-over-year. This will be a strong blowto the economy, but not as strong assome economists had predicted earlier.Retail sales numbers, energy demand,and manufacturing output are down, andthe economy is currently at around 20percent of its pre-Covid levels. Yet, thespeaker noted that despite these prob-lems, the labor market is relatively stablefrom a macroeconomic perspective. Onlyaround 200,000 jobs were lost duringthe lockdown, which translated into arise in the unemployment rate to about 6percent. This number could have beenmuch higher, however, had it not beenfor the 3 million employees who werehelped by the Economic Shield withsome form of aid. The 3 million employ-ees translates into nearly a quarter ofthe full-time Polish labor force. The PDFestimates that this year its aid programwill help preserve the jobs of half ofPoland’s small and medium-sized enter-prises, or 3.5 million jobs in total.

HELPING THE ECONOMY RETURN TO NORMALAccording to Borys, to help the economyreturn to one of growth, the govern-ment will focus on supporting the de-mand side in the consumer sector andboosting direct investment. The govern-

ment plans to offset the expected de-cline in investments from the private sec-tor by initiating new public investmentprojects, mostly in infrastructure. As faras Borys could tell, growth as measuredyear-over-year should return to pre-Covid levels sometime in the first or sec-ond quarter of 2021. Despite such opti-mistic forecasts, there is still a lot of un-certainty around the development of thepandemic in Poland and Eurozone coun-tries. The ongoing pandemic will un-doubtedly further stretch the bankingsystem, while corporate debt will con-tinue to increase. This will create disrup-tions in global trade, which will declineby 15 percent this year. However, thegovernment believes that the Polisheconomy will be highly resilient to theglobal crisis. This line of thinking is insync with forecasts from the EuropeanCommission, which predicts the Polisheconomy will be the least affected bythe coronavirus crisis among all EU mem-ber states.

WORKING CLOSER TOGETHERClosing his presentation, Borys encour-aged AmCham members and all mem-bers of the international business com-munity in Poland to contact PDF repre-sentatives for information regarding aidprograms and guidelines on how toapply for assistance. The Monthly Meet-ing in July was a special one, as membersfrom the International Group of Cham-bers of Commerce (IGCC) attended alongwith AmCham members. AmCham tookover the IGCC chairmanship at the begin-ning of July and invited IGCC members tomeet Paweł Borys at the meeting onlinethrough a videoconferencing platformprovided by Cisco.


PAWEŁ BORYS

Borys was ap-pointed CEO of thePolish Develop-ment Fund in 2016.He graduated fromthe Department ofFinance and Bank-ing of the WarsawSchool of Econom-ics with a major ininternational finan-cial markets andbegan his profes-sional career in2000 by joining theErste Bank Groupin Poland as Chief

Economist. In 2001,he was appointedas Head of theAnalysis Depart-ment and then In-vestment Directorfor funds managedby the DeutscheBank Group—Deutsche AssetManagement andDWS. In 2005, hejoined AKJ CapitalS.A. as Vice-Presi-dent and Presidentof the Manage-ment Board of AKJ

Investment TFI.From 2010 to 2016,Borys served asManaging Directorat PKO Bank PolskiS.A. Borys has ex-tensive corporateexperience, havingworked on 18 su-pervisory boardsof Polish and for-eign companies, in-cluding threebanks, an insur-ance company, andan investmentfunds company. He

was formerly amember of theStock ExchangeIndex Committeeat the WarsawStock Exchangeand a member ofthe Go Global Pro-gram Council. In2013, the Polishmagazine Sukcesnamed him one ofthe best Polishmanagers under40.


SPECIAL MEETINGJULY

THE GOVERNMENT’SHELPING HAND

THE POLISH GOVERNMENT EMPLOYS TOOLS TO HELPCOMPANIES BATTLE THE NEGATIVE IMPACT OF THE

COVID-19 PANDEMIC.In July, AmCham held a special meetingwith guest speaker Paweł Borys, Presi-dent of the Polish Development Fund(Polski Fundusz Rozwoju S.A.), a govern-ment-affiliated institution designed topromote the growth, innovation, and de-velopment of the Polish economy. President Borys met AmCham membersto discuss the Polish Development Fund’s(PDF) response to the Covid-19 pandemicand highlighted the fund’s programsaimed at helping companies hurt by thecrisis maintain cash-flow, preserve jobs,and weather the crisis.Borys explained that the PDF’s invest-ment priorities include projects address-ing infrastructure, climate change and thetransformation of the Polish energy sys-tem into a carbon-neutral one. The fundalso works to boost local development byallocating investment money to local andregional governments and has been con-ducting a government-sponsored reformof the Employee Pension Fund since lastyear, using the ZUS system.

After the coronavirus pandemic hit thePolish economy, the government ex-tended the PDF’s responsibilities to in-clude distributing anti-crisis financial aid.The most expansive aid program, the“Anti-Crisis Economic Shield,” waslaunched in April and is designed forsmall and medium-sized enterprises.They can seek financial assistance fromthe program by applying for it throughtheir banks and can use the assistancefor up to 12 months. Borys said the program has been wasvery successful in delivering financial as-sistance totaling PLN 57 billion (whichamounts to nearly 3 percent of Poland’sGDP) to over 320,000 small and medium-sized companies over the last twomonths.According to Borys, a major part of theprogram’s success was due to howquickly and efficiently it worked. Compa-nies could apply for aid online, which sig-nificantly cut the time the PDF needed toprocess applications. This allowed the

PDF to transfer money to companiesthat met the aid criteria within one ortwo days after submitting an applica-tion. The PDF opened an aid program forlarge enterprises in June after receivingapproval from the European Commis-sion. Companies with operating lossesgenerated during the economic lock-down may now apply for liquidity loans,preferential loans, and a number of capi-tal instruments to use as liquidity loans. The government’s key objective is tohelp companies preserve jobs, and moregenerally, maintain proper liquidity inthe corporate sector.To qualify for aid, companies had toshow a 25 percent drop in revenue orhigher, measured on a month-to-monthbasis or year-on-year. This type of aid is especially importantfor companies that generated unsustain-able debt during the lockdown. The PDFcan turn this debt into loans or helpcompanies by purchasing their shares.

44 45

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AMERICAN INVESTOR CLUB

CALIFORNIA, HERE WE COME!AMERICANINVESTORCLUB.PL IS A NEW SOURCE OF INFORMATION FOR

ENTREPRENEURS INTERESTED IN BUSINESS OPPORTUNITIES OFFERED BY THE US MARKET.

In April, the AmCham program offeringadvice and guidelines to Polish compa-nies interested in doing business withAmerican partners, the American In-vestor Desk (AID), launched a websitecalled American Investor Club (american-investorclub.pl). The new website is de-signed to serve as a source of informa-tion and expertise for Polish entrepre-neurs looking for business opportunitiesin the United States.AmericanInvestorClub.pl is an onlinesource of information dedicated toprocesses, procedures, regulations, andbest practices necessary for developingbusiness links with US-based firms.The information on the website is organ-ized by different sectors of the economyand includes updates on trade numbersand seminars, trade fairs, and otherevents promoting business opportunitiesin the US. It also includes overviews ofbusiness-related regulations across dif-ferent states.Another function of the site (and hence

its name) is to generate a network of con-tacts between companies interested inthe US market to share best practices andexperience in initiating business proce-dures with American firms.The site responds to the needs of poten-tial investors in the US, observed duringAID seminars held earlier this year. Theseneeds were especially articulated by manyPolish business representatives in Gdańsk,Kraków, Poznań, Warsaw, and Wrocław,where the US Commercial Service and AIDheld a roadshow called SelectUSA earlierthis year.AmCham will continue to develop thewebsite by extending its content that fo-cuses on the current trade situation be-tween Poland and the US, the global eco-nomic situation, and the needs ofmedium-sized companies from all sectorsof the economy.

FDI FROM POLANDPolish companies export more to the USthan the US to Poland (from January—

June 2020 the US trade deficit with Polandreached USD 81.5 million). The inflow ofFDI to the US from Poland is relativelymarginal but seems to be on the rise. Canpack, the Poland-based can manufac-turer, recently announced plans to buildits first beverage can plant in North Amer-ica. Canpack purchased land in Pennsylva-nia, where it will build a can and end plantalong with an R&D center. The value ofthe investment is estimated at USD 366million. Another significant Polish investorin the US is the state-owned copper pro-ducer KGHM. The company purchased theQuadra FNX with its American assets, acopper mine. Polish factories in the US include the Pol-ish furniture producer Com.40, the candlemanufacturer Korona, the producer ofchemicals for building and constructionSelena, and the cosmetics producer Ingot.AmRest, which operates the PizzaHut,KFC, and Starbucks brands in Poland, hasalso entered the US market.

FOCUSAMERICAN INVESTMENT

LAND OF OPPORTUNITYIT IS HARD TO OVERESTIMATE THE IMPACT OF AMERICAN

INVESTMENT ON THE DEVELOPMENT OF THE POLISH ECONOMY.

Discussing “30 years of American investments” at the press conference: Tony Housh, AmCham Chairman (Northrop Grumman); Jadwiga Emilewicz,Deputy Prime Minister and the Minister of Development; Stacy Ligas, Senior Partner and CEO, KPMG Poland.

American companies are the second-largestsource of foreign direct investment (FDI) inPoland, according to a report entitled “30years of American investment.” The reportby AmCham Poland and KPMG was pub-lished in April. In July, the Ministry of Devel-opment held a press conference to presentthe report and the scope of Poland-US eco-nomic cooperation. By the end of 2018, American investmentprojects in Poland reached USD 24 billionand accounted for 11 percent of all FDI inPoland. Investors from the US were secondonly to investors from Germany (21 percentof the total FDI value) and preceded coun-tries including France (10 percent), theNetherlands (9 percent), and the UK (6 per-cent). According to AmCham research,there are over 1,500 American companiesactive in Poland. The aggregated value oftheir assets in Poland is USD 54.5 billion. Their investments span a range of vital sec-tors, including IT, biotech, aviation andaerospace, automotive components, R&D,financial services, real estate, agribusiness,consumer good, and shared services cen-ters. The companies employ approximately267,000 employees and indirectly employ309,000 overall. Employment in companieswith American capital has doubled from2010-2018. “American investors continue tobe one of the most important partners forPoland,” said Jadwiga Emilewicz, DeputyPrime Minister and the Minister of Develop-ment, who spoke at the press conference.

The Deputy Prime Minister noted that UScompanies do not only invest in high-valuesectors of the Polish economy. They are alsopresent in many other parts of the country,where they utilize local talent and signifi-cantly contribute to the economic develop-ment of Poland’s regions. The majority of companies with Americancapital are registered in the MazowieckieVoivodeship (60 percent), and its capital War-saw dominates as the investment location.However, as much as 57 percent of Americancompanies’ investments are located outsideof this voivodeship, according to AmChamdata. Other attractive regions for Americanbusiness include Wielkopolska and its capitalPoznań, Pomerania and its capital Tri-city, andMałopolska and its capital Kraków. Deputy Minister of Development Olga Seme-niuk said at the press conference that US in-vestors are also keen to utilize Poland’s Spe-cial Economic Zones. “The zones with thegreatest number of US investors include Ka-towice, Łódź, and Wałbrzych. There are 100US investment projects in those SEZs, valuedat USD 1.9 billion. Semeniuk explained that while the SEZs in Ka-towice and Wałbrzych attract American in-vestors in the transportation sector, invest-ments in the Łódź SEZ are mostly focused onthe IT and telecom sectors.

NUMBER CRUNCHINGThe report offers in-depth analyses of US in-vestment with criteria including the sectors

of the economy and industries, and geo-graphic location. The report presents “TopChart” of the top-performing US compa-nies based on the number of employees,the value of assets, the operating revenueand the shareholder's funds. The companywith the highest number of employees isAmazon, followed by United TechnologiesCorporations. The largest US-owned firmin terms of asset value (not counting thebanking sector) is the franchise conven-ience chain Ż̇abka, owned by CVC CapitalPartners. Philip Morris International hasthe highest operating revenue in Poland,followed by CVC Capital Partners. Thelargest US investors in Poland are Interna-tional Paper, Giorgi Global Holdings (ownerof the Can-Pack Group), and Amazon.

DATA ON POLAND-US TRADEThe report also includes a separate sectionon trade between Poland and the USacross commodities and sectors. The num-bers show that America is growing in im-portance as a trading partner for Poland,with rising sales of Polish goods and serv-ices in the US. Of interest is the fact thatservices exports rose by a record, climbingby an annual average of more than 25 per-cent in 2016-2018.The report is available at AmCham.pl. Fol-low the link “Key data on American compa-nies in Poland”.


48 49


FOCUS30 UNDER 30

THE POWER OF TEAM SPIRITTHE AMCHAM MENTORING PROGRAM 30 UNDER 30 HAS SUCCESSFULLY

FOUND AN ONLINE FORMULA.

Meeting in progress: Participants of the 30 Under 30 AmCham mentoring program take part in an online session in April.

When in January, AmCham announced the6th edition of 30 Under 30—a mentoringand business leadership program for 30professionals from AmCham membercompanies aged below 30—no one wouldhave ever thought that this edition wouldbe so much different than the five previ-ous ones. First, AmCham received a very high num-ber of 180 applications. Second, the pan-demic struck just before the kick-off meet-ing in March and the meeting was not ableto take place due to the Covid-19 precau-tion measures imposed by the sanitary au-thorities. AmCham decided not to post-pone or cancel the meeting and insteadtook it online to the Webex platform, simi-larly to its other events, including the Am-Cham Committee Meetings and MonthlyMeetings.Yet some challenges still surfaced. One ofthe program objectives is team buildingand networking between participants, andit transpired that meeting these objectiveswould be difficult during online sessions.

However, participants and speakers didtheir best to adjust to the situation andused their creativity to make team buildingand networking as real as possible. Thegroup spent many hours together onlinehaving an "online lunch," while some partic-ipants even played musical instruments to-gether online.The agenda points discussed at onlinemeetings were not the same as originallyplanned. Program speakers reacted to pan-demic-related changes in the business envi-ronment and discussed issues critical to thesituation, including managing crisis andchange, positive thinking, and making themost of uncertainty. The first speaker in April was MarcinPetrykowski, Managing Director, S&PGlobal Ratings & AmCham Board Member.He discussed the disruptions in the globaleconomy caused by the pandemic, how thesituation calls for openness to new chal-lenges on the part of business leaders, andhow they can be flexible in managing newproblems.

In April, another speaker was Jason Wor-lledge, Resident Country Director, Interna-tional Republican Institute, who talkedabout the political aspects of the pan-demic crisis. In May, the speaker was Beata Pawłowskaof GM Oriflame, who spoke about thetypes of character traits and and thinkingthat make true leaders. In June, the program had two online ses-sions with business consultants RafałMotriuk and Aleksandra Motriuk, whotalked about how to build self-confidencein the corporate world. In July, the onlinefloor was taken by Sebastian Drzewiecki,VP and Managing Director of Sabre, whopresented on the importance of feedbackand communication for leadership. "Having been through the first part of theprogram which lasted 4 months, all theparticipants agree that the programworked," said Mateusz Jurczyk, AmChamKraków & Katowice Branch Manager, whocoordinates the 30 Under 30 program.


OBITUARY

DONALD MUCHA1932-2020Donald Mucha, one of AmChamPoland's seven founding members,passed away on June 23, 2020 in Ari-zona at age 88. Don was originallyfrom Chicago, Illinois where heearned his B.Sc. in Engineering fromthe University of Illinois and an MBAin International Finance from the Uni-versity of Chicago. He also attendedKent College of Law. He formed hisfirst joint venture company betweenPoland and the U.S. in 1974; he beganventure capital operations in Polandin the 1980s. Among others, Don wasa founding member of Unitronex, heserved as Chairman of Netia, the firstPolish Telecom company to be on theNASDAQ, he served as CEO of PolarisHoldings, Inc. as well as CEO of MREI,LLC in Phoenix, Arizona. Don had arich and varied professional and in-vestment career. Don was an impor-tant and engaged member of Am-Cham for over 20 years, including theco-founder of our Real Estate Com-mittee. Don is survived by three sonsand his wife of 22 years, Dorota Szan-decka-Mucha.

JOHN (JACK) ANTHONY DEVITO1959-2020Jack DeVito passed away on April 7,2020, in his home in Connecticut fromCOVID-19 complications. Jack came toPoland in recent years to create andlead the Nativiana Roztocze company,which launched its Rodowita brand ofnatural mineral water this summer.Jack was a vibrant new member of theAmCham community who brought anexpert team of professionals and hisdaughter, Courtney, to Poland to cre-ate this new business venture. Jackloved helping and supporting localcommunities and gave in-kind dona-tions to assist nurses and doctors dur-ing their fight against the pandemic.Jack is survived by two daughters anda son.

GINA PODHORECKA1961-2020Gina Podhorecka, of Canton, Texas,passed away in Warsaw, Poland, onJune 11, 2020, at the age of 59, aftera short battle with cancer. Pod-horecka came to Warsaw in Sep-tember 1991 and was one of thefirst people hired by William Kirst atPrice Waterhouse (now PwC). Shehad a trailblazing role in the eco-nomic transition of the early 1990sfrom the inside of key financial com-panies, even if she was not so visi-ble to the outside world. Gina alsoplayed a behind-the-scenes role atthe American Chamber of Com-merce in Poland. She was therewhen our logo was developed andworked for many years on ourAmerican Investor monthly maga-zine, making sure it came out withstyle and quality content. Gina was a beautiful, smiling, big-hearted woman that made an im-pression on everyone she met. Shewas a go-to person for expatriatesthat needed help and advice. Shewas also a networker of interna-tional and Polish women in Warsaw,organizing a loose RNWW lunch se-ries, which stood for Real NeatWomen in Warsaw. Gina was Presi-dent of Goodwill Poland from 1993to 1998. Her most recent career wasat the Pekao Investment Bank,where she worked since 1996, edit-ing its equity research publications,as well as sector reports and macro-economic reports. Her researchcovered not only Poland and Cen-tral Europe, but also the Balkans,

Russia, and Turkey. At the time of herdeath, she was Senior Editor for Emerg-ing Europe Publications in the EquityResearch Department. Gina attended Baylor University andearned her bachelor’s degree fromTexas Tech University. In 1987 she mar-ried Marek Podhorecki, who precededher in death by five years.AmCham’s Managing Director, DorotaDąbrowska-Winterscheid, has a particu-larly fond connection to Gina, as it wasGina that offered Dorota her first job inWarsaw at PriceWaterhouse, straightout of college. “If you actually make itto Warsaw, then I’ll give you a job!” Gina touched many lives throughoutthe decades and leaves many friends,colleagues, and family saddened by herearly and unexpected death.

50 51

How do you evaluate CBRE's impact

on the development of the com-

mercial real estate market in

Poland?

We have worked hard to be univer-

sally recognized as the market

leader among commercial real es-

tate consultancies. We achieved it

by carefully following the needs of

the commercial real estate sector.

We base our strategy on constant

business development, which is

prompted by the constant develop-

ment of the market in Poland. We

look for such solutions which pro-

vide precisely the services that our

clients need. We specialize in the en-

tire array of commercial real estate,

including offices, logistic and stor-

age facilities, retail, hotels, and,

most recently, alternative invest-

ments such as residential for senior

citizens and senior citizen medical

care centers. The latter category is

just starting to take root in Poland,

but investors are already focusing

on it, which means we are inter-

ested in it as well.

As such a big market player, do you

still find areas in which you seek

partners to expand?

We are still hungry for success, and

our heads are full of new ideas. We

have been broadening our compe-

tencies in Central and Eastern Eu-

rope, and our market position is get-

ting stronger. We are extending our

expertise in new areas thanks to

strategic partnerships with external

companies that support us in deliv-

ering quality service in different

fields of expertise. Our construction

advisory has forged a very success-

ful strategic partnership with Forbis

Group, a company specializing in de-

sign and building services. Our alter-

native investment division has also

been successfully working with Red-

Net Property Group, and we will

keep growing such strategic part-

nerships in the years to come.

In what way is CBRE different from

its competition?

We are not afraid to be challenged.

If we need to change our strategy to

align it with the current market de-

mand, we do it! Changes involve

risks and require time to implement,

but we implement them succes-

sively. Our share of the market goes

to show that the changes we imple-

ment are not random. I have been

with CBRE for nearly a decade, and I

can say that the company knows

well how to use its international po-

tential.

What can you tell me about CBRE's

corporate culture?

People are the key aspect of our

corporate culture. We focus on at-

tracting the best professionals in

the market, and we have been suc-

cessful in this for many years. We

deliver top-quality conditions for

their work at the office, and they

can also take advantage of flexible

work and working from home. We

look at what they expect of us and

adjust our offerings to their expec-

tations. We see that our efforts

translate into the top quality work

our people perform and their high

levels of commitment.

How do you manage to hire and

keep the best talent?

The human aspect is the most im-

portant part of our business. Among

our people are those with many

years of experience in commercial

real estate as well as individuals

who joined our company from out-

side of the real estate business.

Each person brings a huge value to

our company. We learn from one an-

other and share our experiences.

We do our best to retain the best

talent, and when you look at how

long some of our people have been

with the company, you will see that

we are successful.

What is driving the development of

commercial real estate in Poland?

What are the trends today?

The market of commercial real es-

tate has been growing dynamically

in Poland in recent years. Growth

has been very rapid in each segment

of the market, and new trends ap-

pear every year. Despite the fact

that the economy's growth will be

slower in 2020, three aspects will

dominate the market of commercial

real estate: new technologies, sus-

tainable development, and client ex-

perience fulfillment.

From the perspective of foreign in-

vestors, do you think Poland is a

good market for foreign invest-

ment?

Yes, indeed! The growth of commer-

cial real estate in Poland is fueled by

foreign investments, mainly from

Europe, Asia, and the Pacific, and

the Republic of South Africa. The

share of domestic capital is minus-

cule. Last year, the value of all trans-

actions in the market surpassed EUR

7.7 billion, with domestic investors

generating only 2 percent of that

amount. What foreign investors find

attractive about Poland is its geo-

graphic location, a relatively strong

economy, and stable macroeco-

nomic indicators.

Do you see any issues, such as regu-

lations, for instance, that need

changing to make Poland a better

place for investors?

Many domestic investors eye com-

mercial real estate but cannot enter

it in a structured way because of the

lack of proper regulations for insti-

tutional investors. There are no re-

gulations for small investors or pri-

vate individuals who would like to

invest their money in commercial

real estate in Poland. Unfortunately,

Poland lacks a legal framework for

real estate investment trusts, and,

regretfully, we do not expect that

such a framework will be created

any time soon.

As a top manager, what impact

would you like to have on the

people that work for you regarding

the level of their professionalism

and career development?

I rely on partnerships and dialogue. I

value my job highly, for it gives me

constant opportunities to meet new

people with whom I can share expe-

rience and knowledge. This is why it

is my ambition that our workers

continuously develop their compe-

tencies and reach for new business

tools to make their work more inter-

esting and effective. I also know

that our company hires experts in

their fields, so I trust them 100 per-

cent and do not pretend to be an

expert myself in every field.


Poland lacks a legal framework forreal estate investment trusts, and,regretfully, we do not expect thatsuch a framework will be created

any time soon.

In brief, what can you tell me about

the company's history in Poland?

What were the development mile-

stones?

This year CBRE celebrated its 20th

anniversary in the Polish market.

When the company entered Poland

in 2000, it employed 20 people in its

office. Seven years later, we more

than tripled the number of our em-

ployees and moved our head office

to one of the most prestigious office

towers in Poland. In the meantime,

we also opened regional offices. The

key moment came in 2011 when we

extended our business to property

management, allowing us to partner

with big investors.

Another milestone in our business

development came in 2015 with the

purchase of Global Workplace Solu-

tions from Johnson Controls, a com-

pany specializing in property man-

agement, real estate, and facilities.

With this, we were able to extend

our offer to the broadly understood

facility management. In Spring 2021,

we plan to move to the most mod-

ern office building, currently under

construction in a new business cen-

ter in Warsaw. Our new head office

will comprise over 4,000 square me-

ters of the most modern space

today.

CBRE currently employs nearly 500

people in Poland, so it is clear that

we have been continually moving

forward.

Company Profile CBRE

HEADS FULL OF IDEAS

AmCham.pl QuarterlyEditor Tom Ćwiok talks

with Daniel Bienias, Managing Director of

CBRE in Poland, about thelast 20 years in the Polish

market and the key aspectsthat have been driving the company's success there.


52 53

What is the company's policy re-

garding sustainability and reducing

its carbon footprint?

SB: This is an important issue for us,

especially because we are interested

in reaching younger customers. Our

factories in Taiwan and the US have

rolled out various initiatives to be as

carbon neutral as possible. We have

to be legally compliant with the

chemicals and materials we use, in-

cluding the disposal

of batteries and other items. From

the design side, we have a compliant

engineering team as well as teams

looking at recycling opportunities.

Our US factory has reached zero-

landfill on customer returns because

our teams work together with our

suppliers to ensure that the returns

won't go to the landfill. Right now,

we are trying to expand that US pro-

gram into all of our offices. Our verti-

cal structure supports this effort be-

cause we can control the whole

process, from raw materials to final

products, and in returning products

to factories. We can see the problem

more closely because we are in-

volved in the process at each stage,

which makes us successful in this

field.

What were some of the milestones

in developing Garmin sales in

Poland?

Przemysław Łojek: We started with

establishing Garmin Polska in January

2010. This was a big step forward for

us and involved developing the Pol-

ish company division from the

ground up. It was an exceptional op-

eration for Garmin, which usually ac-

quires local distributors when enter-

ing new regional markets. The first

important thing for us was to de-

velop new distribution models for

each of our product segments: auto-

motive, outdoor, fitness, marine, and

aviation. At the time, the market for

personal navigation devices was de-

creasing in favor of mobile applica-

tions, which was challenging for us.

We decided to develop the fitness

segment and smartwatch product

category, which accounts for 30 per-

cent of our business today. A key

point of Garmin's strategy is to ac-

quire complementary companies. We

are able to enter new markets each

time Garmin makes a big step world-

wide, with examples including Fusion

in marine entertainment, Navionics in

cartography, and inReach in satellite

communication. Our business in

Poland has grown to employ about

25 persons, and we are now taking

another giant step of acquiring the

Garmin business in the Baltic region.

We have also been focused on imple-

menting Garmin Pay technology over

the last two years. This technology is

currently available in 10 banks in

Poland, and we aim to make this pay-

ment available for at least 90 percent

of individual bank accounts.

The Covid-19 pandemic stroke

Poland in March. How has been

Garmin Poland coping in the new

normal?

PŁ: We adapt to the ongoing situa-

tion and consistently implement our

business strategy. The lockdown has

exposed many new challenges for

everyone in the Polish market, and

we have had to accommodate our

workflow to be in line with current

regulations and recommendations.

Although restrictions have been

lifted, we are still willing to cooper-

ate with our sales partners partly re-

motely, as this practice has proved

just as effective as traditional meet-

ings.

Garmin has recently acquired the

distribution and marketing of the

Tacx brand from Velo in Poland.

What were the challenges in this

process? How important is the Tacx

brand for Garmin in Poland now?

PŁ: The acquisition of Tacx was an im-

portant strategic step in developing

the Garmin cycling product portfolio,

as the vertical integration of our busi-

ness processes is one of our keys to

success. It was essential for us to

offer our customers even more op-

portunities in terms of training

throughout the year. We are very

grateful for our

partner's professionalism and com-

mitment during the distribution and

marketing integration process.

The Garmin gear combines the best

software and hardware materials

across a range of products, along

with reliable transmission technol-

ogy. What is the role of technology

in developing the Garmin business?

Dan Bartel: Garmin provides GPS so-

lutions for five different markets, and

we are focused on developing and in-

corporating tech innovations and ap-

plying them to our products. We

push ourselves to develop the tech-

nology and maintain leadership in all

product segments. Garmin is also ex-

panding its business by acquiring in-

novative companies such as Tacx and

Navionics from complementary in-

dustries. This gives us the possibility

to advance our know-how and imple-

ment it to our products. This year we

came out with an aviation emergency

system for landing called Autoland

and solar charging technology for

Fenix smartwatches. These innova-

tions also help us expand our current

segments in new fields, from fishing

lines in the marine segment to in-

Reach products in the outdoor seg-

ment.

What is driving the market in

Poland?

PŁ: The biggest market for Garmin

products in Poland is currently in the

smartwatch segment. This segment

has seen strong growth, so we are

offering a wide range of products to

meet the different needs of our cus-

tomers. In addition to highly ad-

vanced outdoor and premium GPS

watches, Garmin also offers afford-

able fitness trackers and lifestyle

smartwatches.

Do you find Poland to be a good

market for business?

PŁ: We consider the Polish market a

good market for tech companies.

The country's gross domestic prod-

uct is growing dynamically, and soci-

ety is very open to new technologies.

Polish customers are very aware of

product aspects such as quality and

technology and are willing to pay a

fair price for high-end products sup-

ported by after-purchase services.

Having a good general understand-

ing of our technologies and product

support helps us build a strong rela-

tionship with our customers that will

last for years.

Is there anything that you can think

of in terms of regulations and laws

that impedes doing business in

Poland?

PŁ: We understand the need to close

loopholes in the fiscal system, but it

will take effort and significant finan-

cial outlays to implement these

changes. We're

aware that some of our business

partners consider the tempo of

changing the regulations to be de-

manding for their business.

What are the company's plans for

Poland in 2020 and beyond?

PŁ: Since May, we have introduced a

dozen or so products on the market

while expanding the range of prod-

ucts with revolutionary solar technol-

ogy. Garmin has also acquired the

physiological analysis leader Firstbeat

Analytics Oy, placing the company at

the forefront of physiological analyt-

ics. Recently, we have also been de-

veloping a range of niche products

such as Tacx trainers and luxury

watch collections. We are continuing

to expand the Garmin Pay contact-

less payment solutions in coopera-

tion with banks and payment organi-

zations in Poland and develop distri-

bution networks to make our prod-

ucts even more accessible.

Przemysław Łojek


In 2019, the value of Garmin stock on

NASDAQ grew by 36 percent. How

would you explain that?

Sean Biddlecombe: Our business is

divided into five segments, and each

division is developing the product

range dedicated to this segment. Our

Aviation Division grew very well last

year because we came out with new

products for aircraft manufacturers

and also for the aftermarket. We

were able to manage and keep our

profitability in the automotive sector,

where mobile apps and inbuilt sys-

tems are replacing personal naviga-

tion devices. We have brought out

new categories of products cus-

tomers still like and buy, as well as

improved the motorbike and dash-

cam offerings. We have rolled out

many products in the organically-

growing fitness segment, including

bike computers, GPS watches for

running, fitness trackers, outdoor

watches, wellness smartwatches,

and our new outdoor Fenix 6 series

with an innovative solar-charged

watch. We also released a new GPS

with an implemented inReach sys-

tem, which allows two-way satellite

communication from anywhere on

Earth. We have developed products

for marine boaters, as the marine

segment is growing very quickly in

Poland, as well as fishing products.

These small handhelds can be used

to upgrade electronics on a boat and

entertainment systems, and our new

Navionics cartography also helped

grow that business. Overall, Garmin's

biggest strength is our vertical inte-

gration, which helps us design, build,

and support the products and sell

them on the market. Each of the

Garmin divisions presents new rele-

vant features on the market, which is

key to our business.

What is the significance of the Polish

market for Garmin in the region?

SB: We have been in Poland for ten

years and were represented at first

by an independent distributor. We

then decided to enter the market as

part of our vertically integrated busi-

ness model, which helps us better

control the market and advertise and

support customers more efficiently.

Przemysław Łojek and his team have

grown Garmin's business in Poland to

five times its original size over the

last ten years. We

have our largest East European office

in Warsaw, and it contributes very

well to this region. The Polish market

is very interesting. As a global com-

pany, we always try to be the market

leader and have high expectations

for each office. We initially observed

that the Polish market is focused on

lower-priced items. However, the

local office is still able to sell high-end

luxury watches, fitness products, and

marine devices. Even outside of

Poland, you could wonder if this kind

of product would be able to sell, but

the Polish team can do it anyway. But

there is also a difference here: while

the automotive segment is decreas-

ing in western countries due to popu-

lar mobile applications, the Polish

market is still strong, especially in the

dashcam market. We have also ob-

served that fitness and triathlon

equipment has been trending in

Poland over the last few years due to

better training technology and

changing lifestyles.

Company Profile Garmin Polska

NAVIGATINGLIFESTYLES

AmCham.pl Quarterlyeditor Tom Ćwiok speaks

with Dan Bartel, VicePresident of Sales at

Garmin; Sean Biddlecombe, Managing

Director at GarminEMEA; and Przemysław

Łojek, Managing Directorat Garmin Polska—an in-novative navigation tech-nology company—as thefirm celebrates ten years

on the Polish market. Dan Bartel Sean Biddlecombe


What can you tell me about the

company’s history in Poland? Espe-

cially, what were the development

milestones?

There were many important mo-

ments in our company’s history, in-

cluding in 2007, when Polish Enter-

prise Fund V. purchased part of Skar-

biec Asset Management Holding. As

a result of this transaction, the com-

pany changed its name to ProService

Agent Transferowy. 2012 was also

important, as this is when we

bought the FIN24.pl company spe-

cializing in software development. In

2012, Highlander Partners, L.P., be-

came the new owner of ProService

Agent Transferowy. On June 1, 2016,

100 percent of the company’s shares

were acquired by funds managed by

Oaktree Capital Management LP and

Cornerstone Partners.

In 2017, we merged with Aspartus

Sp. z o.o., a company that provides

software solutions and carries out

maintenance services for businesses

including proprietary systems, com-

prehensive services, and institutions

in the insurance sector. In 2017, ProS-

ervice Agent Transferowy and ProS-

ervice Finteco Sp. z o.o. merged. The

purpose of the merger was to

strengthen our company’s image as

a leader on the FinTech solutions

market. In the same year, we bought

the IFAS company, which focused on

the accounting of closed-end invest-

ment funds and the accounting of

capital companies and partnerships.

At the beginning of 2018, we bought

Turbine Analytics SA, a company that

specializes in the processing of data

from financial markets, provides IT

systems, and offers advisory services

related to quantitative methods in

risk management, investment port-

folio management, trading, and op-

erating activities. We also signed an

agreement in which the ProService

Finteco Group was joined by

Makeitright, a company specializing

in Test and Business Process Au-

tomation and Robotics Process Au-

tomation.

What are the pros of your com-

pany’s service?

We have been operating on the mar-

ket for over 25 years, providing serv-

ices at the highest level, which is con-

firmed by recommendations from

our clients. We create our own inno-

vative solutions that we are able to

implement in an extremely fast and

effective manner. We provide our

clients with the highest safety stan-

dards confirmed by certificates. Hav-

ing a number of companies from vari-

ous areas in our group including au-

tomation, robotization, software, ar-

tificial intelligence or data process-

ing, and financial markets, we are

able to provide comprehensive serv-

ices in the investment, banking, and

insurance sectors.

We share our knowledge about our

products and new solutions with our

clients by organizing free webinars,

publishing expert articles, and partici-

pating in industry events. We also up-

date all information on our website,

where we describe our products and

their possible applications in a simple

manner.

In what ways is ProService Finteco

different from its competition?

We are distinguished by our compre-

hensive approach to serving our

clients. The companies that join us

gain a competitive advantage or re-

duce costs in areas in which we have

key competences as an organization.

Our organization is customer-ori-

ented, and we listen to our clients.

We observe the markets in which

they operate in order to be ready in

advance with the necessary tech-

nologies or trends for our customers’

activities, development, or expan-

sion.

What can you tell me about your

company’s corporate culture?

We are a company that focuses on

open communication, mutual help,

and a friendly atmosphere. Our val-

ues are Passion, Development, and

Customer Orientation. We are pros!

We promote our employees’ pas-

sions so they can develop their inter-

ests and share them with others. We

focus on cooperation, friendly rela-

tions and a good work atmosphere.

We care about work-life balance and

our employees’ wellbeing, and we

offer them a number of benefits.

What is driving the market develop-

ment in the banking and financial

services sector in Poland?

The Polish financial services industry

is distinguished by its high adoption

Company Profile ProService Finteco

PEOPLE DRIVINGTECHNOLOGY


with Paweł Sujecki, Chairman of the Board of

ProService Finteco, aprovider of comprehensiveoperational support serv-ices for financial institu-

tions, about how the com-pany has been building itsposition in the market and

how technology is driving progress.


of IT technologies. For example, we

are among the leading countries with

the highest use of mobile applica-

tions in the banking sector in the

world. Another example is the use of

contactless payments. Currently, all

POS terminals in Poland are prepared

for this, and almost 80 percent of all

non-cash payments are made con-

tactless, using cards, and Apple Pay

and Google Pay applications. Accord-

ing to our assessment, further IT in-

novations will include the use of

blockchain as a durable medium and

the replacement of transactions con-

firmed on paper with fully electronic

documents, for example. Another de-

velopment will be digital onboarding,

which is a method of registering

clients on financial platforms using

face and video recognition and ID

document scanning. Yet another in-

novation will involve improving the

Customer Experience function on fi-

nancial services platforms through a

new User Experience mechanism in-

volving real-time data analytics. It will

use transactional data as well as Big

Data analytics including geolocation

and clickstream data. Another inno-

vation worth mentioning is the RPA,

the robotic process automation of

back-office processes.

We are also aware of the fact that

the Polish financial market is quite

shallow compared to developed

countries, which is why we are devel-

oping our IT solutions for markets in

the US, Canada, Israel, Germany, Lux-

embourg, and Austria, among others.




ment?

Yes. We have been emphasizing this

for a long time, and we can now see

that it is also reflected in the activi-

ties of large international corpora-

tions that are transferring their cen-

ters, technological facilities, or back-

offices to Poland. Poland meets all of

the necessary aspects to be an at-

tractive place to build a business.


latory and legal, that need changing

in order to make Poland a better


It is worth to underline that in cur-

rent circumstances, investors are

likely to face challenges from the

coronavirus outbreak. Not only is the

Polish economy at risk, but so is the

global economy. Therefore, every

government needs to act swiftly to

combat the pandemic and its nega-

tive economic impacts. From our per-

spective, a further leveraging of tech-

nology might be one of the best and

feasible solutions. We have seen very

positive dynamics in robotic process

automation. Automation and the ap-

plication of technology to support

many business and administrative

processes have an undoubtedly cru-

cial role to play and will have a huge

impact on investment decisions.

Thus, legal solutions are needed to

support the application of such tech-

nologies. This will not only make

Poland a better place for investors in

the future but will also help to solve

the difficult problems of today.

How do you see the current situa-

tion on the labor market?

Thousands, if not millions, of people,

are already unemployed as the global

economy is wobbling from the ef-

fects of the coronavirus. This creates

a situation where employers who

have recovered from the crisis and

can now resume recruiting will do so

in different market conditions than

before the pandemic. Recruiting in a

period of high unemployment can

present unique challenges, especially

compared to our recent problem: re-

cruitment during a low unemploy-

ment rate. For those in the field of re-

cruiting, it will be a time to plan for

new challenges that will emerge with

the changes in employment.

As a top manager in your company,

what impact would you like to have

on your people?

Being a supervisor comes with chal-

lenges, but it is also a position where

you can help individuals achieve their

personal career goals. Employees

tend to feel more involved when

they feel that their employer is con-

cerned with their development. The

career development path provides

employees with a constant mecha-

nism of improving their skills and

knowledge, which can directly im-

pact the entire organization by im-

proving morale, professional satisfac-

tion, motivation, productivity, and re-

sponsiveness in achieving depart-

mental and organizational goals.

What was the impact of the Covid-19

pandemic on the company’s plans in

Poland, and how has it altered the

company’s plans for 2020 and be-

yond?

Probably not only for us, but for

most companies too, the biggest

change was the transition to remote

work and the implementation of new

security procedures, teamwork moni-

toring, integration, and motivation.

Technology will help achieve this, and

this is what is already happening.

Over the last few months, companies

made a giant leap forward when it

comes to the application of distance

work solutions. When you look at

our company of 750 people, we went

into home office mode nearly

overnight! This is an irreversible tech-

nological and organizational change,

and it will fuel the economy in the

years to come. Looking at 2020 and

beyond, I have to say that we have

not had to change our plans too

much. Luckily enough, our company

offers software solutions for the fi-

nancial sector as well as software

and IT solutions, especially those in

artificial intelligence and relationship

management. This is what more and

more companies are looking forward

to implementing in the time of the

pandemic and beyond.


Every government needs to actswiftly to combat the pandemic

and its negative economic impacts.A further leveraging of technology

might be one of the best and feasible solutions.

5554

What can you tell me about the com-

pany's history in Poland? What were

the milestones in the bank's develop-

ment in Poland?

The history of our bank dates back to

1988, the time of economic transfor-

mation in Poland. We were initially

Bank Zachodni, and then, after the

merger with Wielkopolski Bank Kredy-

towy in 1999, operated under the

name Bank Zachodni WBK. Since 2011,

the bank's main shareholder has been

Banco Santander. the largest financial

institution in the eurozone with over

150 years of experience. Its mission is

to help people and businesses pros-

per in the spirit of its core values—

Simple, Personal, Fair—and to be-

come an institution that is increas-

ingly committed to social responsibil-

ity.

Our primary goal has always been to

help people and businesses prosper,

so it was a natural step for us in 2018

to integrate even more closely with

the Santander Group. Our goal was to

offer our clients in Poland an even

greater range of products and serv-

ices with a global reach, exploiting

the potential and opportunities that

Santander has in all the markets in

which it operates. This is why 2018

was a landmark year in the history of

the bank. We went through a re-

branding and renaming and became

Santander Bank Poland. We have

been appreciated for our efficient re-

branding and communication activi-

ties, which have been recognized as a

market model for other brands wish-

ing to make similar changes in the fu-

ture.

Today, Santander Bank Polska S.A.

Group is one of the largest financial

groups and the largest bank with pri-

vate capital in Poland. We offer finan-

cial solutions for individuals, micro,

small and medium-sized enterprises,

and Polish and international corpora-

tions. The bank has one of the largest

networks of branches and partner

outlets in Poland and provides serv-

ices through electronic access chan-

nels, including mobile banking. It is

one of the market leaders in the use

of modern technologies in banking

services, consistently building its

brand in accordance with the strate-

gic goal of becoming the best bank

for the client.


the banking and financial services

sector in Poland?

In addition to technological progress,

the process of continuous changes in

our industry is also driven by customer

expectations and developments in the

regulatory environment, including

growing burdens imposed on banks—

capital, liquidity, technology—and in-

creasingly strong consumer protection

mechanisms, generating costs for fi-

nancial institutions. Fintech's activity

increases competition on the market

and mobilizes for continuous improve-

ment of products and processes. In-

creasing information needs of the

banks themselves, as well as of super-

visors and central banks, force

changes in technology. The economic

situation and decisions made by cus-

tomers are of great importance too.

Today's world and the challenges

posed by the pandemic testify to the

importance of focusing on the cus-

tomer and understanding their needs,

flexibility, and conducting business re-

sponsibly while caring for others.

Being a large financial institution, we

have always been prepared to re-

spond to the changing needs of cus-

tomers and the world. This is an inte-

gral part of our approach to doing

business. It is one of

the reasons the

mechanisms devel-

oped so far, also

within the Santander

Group structure, and

allows us to share

our resources with

others. During these

unexpected changes

and transformations,

leaders must strive

to balance short- and

long-term goals. De-

spite many studies

and forecasts, today,

we are not sure what

our reality will be like

in the coming period.

We need to prepare

for different scenar-

ios and be ready for

the next, unforeseen

changes. The pan-

demic has acceler-

ated the race for

new digital solutions

and innovations, but at the same time,

we must be able to create a vision of

the future and set new trends.

What can you tell me about San-

tander's corporate culture?

Simple, Personal, Fair values guide all

our actions. We believe that ideas are

not enough to build a culture based on

ethics. That is why we care about edu-

cation and undertake a number of ini-

tiatives to broaden the knowledge of

our employees and customers about

the products we offer and social is-

sues. Activities aimed at employees

make Santander Bank Polska a good

place to work and contribute to the

achievement of the 2015-2030 UN Sus-

tainable Development Goals, which we

Company Profile Santander Bank Polska S.A.

STRIVING FOR PERFECTION

AmCham.pl QuarterlyEditor Tom Ćwiok talkswith Magdalena Kusa,

International Business Manager at Santander

Bank Polska S.A., abouthow the bank positions

itself on the Polish market.


particularly care about in our relations

with employees. We are oriented to-

wards cooperation, a culture of dia-

logue, and bottom-up initiatives, with

respect for diversity and care for the

natural environment.

Responsible banking means, for us,

taking into account the broader and

long-term context of our activities.

That is why we want to be part of an

environment in which growth is inclu-

sive and sustainable. We are a strate-

gic partner of the Responsible Busi-

ness Forum and joined the Partnership

for the Implementation of Sustainable

Development Goals (SDGs). We aim to

be an initiator of activities bringing us

all closer to achieving these goals. We

listen carefully to the needs and opin-

ions of our social and business part-

ners, who expect us to be effective in

doing business and to engage in mar-

ket, social, educational, and other cur-

rent issues of importance to the com-

munities. To this end, the Santander

Group has committed itself, among

other things, to spending more than

EUR 120 billion between 2019 and 2025

to finance investments and environ-

mental solutions and to increase ac-

cess to banking products and services

for more than 10 million people over

the same period. We consider it our

duty to take responsibility for our im-

pact on the environment and our

stakeholders, because only with such

an approach can we achieve sustain-

able, stable growth and create eco-

nomic and social values.

How has the Covid-19 pandemic im-

pacted the banks' business develop-

ment and operations? What steps

have been taken to ensure that the

bank can function in the new reality?

The Covid-19 pandemic came unex-

pectedly and now poses an unprece-

dented challenge not only for banks,

but also for all sectors of the economy.

Financial resilience and business mod-

els adopted have been put to the test.

In a short period of time, we had to re-

vise and adapt our operating proce-

dures to the current situation and

needs of our customers or partners.

We have smoothly switched to the

mode of remote operations and serv-

ice and reorganized our activities. We

are still watching the situation closely

and trying to anticipate what might

happen in the future. Digital develop-

ment is certainly an area that has al-

ways been at the center of interest in

the banking sector, but nowadays, it

particularly deserves attention and a

new approach. The majority of society

has transitioned to remote mode.

Trends such as the touch-free econ-

omy have been strengthened. Some

have, as far as possible, completely

transferred their activities to the digi-

tal world. Customers are increasingly

opting for online or mobile banking so

that this area will require further trans-

formation and better adaptation to

today's world.

We focus on aid packages, on ensuring

the safety of our employees, on digitiz-

ing and adapting our products and

services to the changes in our immedi-

ate environment and, more broadly,

on changes taking place in the society.

Such activities have always been in-

scribed in our DNA. We actively partici-

pate in the implementation of many

initiatives proposed by government in-

stitutions and launch our own proj-

ects. First of all, we extended compa-

nies the opportunity to apply for a

grace period in the repayment of loan

principal installments, the so-called

credit holidays, as well as for a grace

period in factoring and leasing pay-

ments under concluded agreements.

Holders of overdraft facilities were al-

lowed to postpone repayment for at

least another two months. Customers

can also avail themselves of loans with

de minimis guarantees covering up to

80 percent of the total financing value

and BGK's Liquidity Guarantee Fund

for the largest enterprises. We have

streamlined remote solutions so that

customers can bank from home safely

and conveniently. Thanks to our dona-

tions and organized fundraisers, we

have donated over PLN 5 million to-

gether with our customers to help hos-

pitals in need.

Thanks to our educational activities,

customers were provided with an-

swers to many questions concerning,

among others, government aid solu-

tions, financial assistance available for

entrepreneurs, and remote accounting

services from a dedicated helpline. We

also launched a special website called

RazemPomagamy.pl, where cus-

tomers can find interesting informa-

tion and advice regarding the pan-

demic. Moreover, as one of the

world's largest institutions, the San-

tander Group donated EUR 100 million

to fight the effects of the pandemic.

These are just some examples of the

initiatives we have taken. We are still

watching closely, analyzing the coron-

avirus situation, and working on fur-

ther solutions for our customers. We

are an institution that has an impact

on shaping the “new normal,” and we

will do our best to make sure it is good

for our clients and society as a whole.

What is the bank's involvement in cor-

porate social responsibility?

As the largest private bank in Poland

and belonging to an international

group, we feel responsible for all of so-

ciety when deciding how to use our fi-

nancial potential. We want to con-

tribute to overcoming the great chal-

lenges facing society, Poland, and the

world. This is part of our strategy,

which is based largely on the sustain-

able development goals that identify

the most important and pressing prob-

lems needing to be addressed.

We pursue the principle of sustainable

growth by supporting environmentally

friendly solutions, sustainable and

green financing, and supporting the

transformation of the Polish energy

sector into a low-carbon model.

Joining the pact for the sustainable

use of plastics, issuing green bonds,

and granting loans and leases support-

ing energy efficiency are just some of

the numerous environmental initia-

tives that we have recently launched

at Santander Bank Polska.

In 2019, we signed the first ESG-linked

(Environmental, Social and Gover-

nance) loan agreement with Energa in

Poland. Such an agreement is based

on an assessment of the borrower's

commitment to sustainable develop-

ment to motivate companies to invest

in ecological solutions.

We also adopted a package of five en-

vironmental and sectoral policies, in-

cluding policies dedicated to climate

and energy. These regulate, among

other things, the terms of financing

coal companies, the total reduction of

exposure to coal mining by 2030 and

prohibit new financing for coal mining.

They also mandate the reduction of fi-

nancing for existing coal-fired power

plants and prohibit financing for new

coal-fired power plant projects.

In June this year, Santander Bank Pol-

ska and mBank signed an agreement

worth EUR 79 million to finance a solar

power plant project. The financing will

be used to build 128 solar power plants

with a total capacity of 121 MWp, to be

built in Poland in 2021. This transaction

is the largest solar project financing in

Poland so far.

We are continuing to improve the

processes related to social, environ-

mental, and management risks. These

risks play an increasingly important

role from a business perspective, and

the streamlining of processes will

allow us to increase our involvement in

the further development of Renew-

able Energy Sources in Poland, for ex-

ample.


vestors, how do you evaluate Poland

as a market for foreign investment?

Poland is still an attractive destination

for foreign investments. With its

skilled labor force (and labor costs still

among the lowest in Europe), large

consumer market, quickly growing

productivity, and strategic location in

the center of Europe and at the gate

to Eastern markets, Poland is an inter-

esting place to be for many multina-

tional companies. In the last twenty

years, Poland has been consistently

building its position as a manufactur-

ing hub for Europe and as a very

strong business services hub. This

trend continues and was recently con-

firmed by the announcements that Mi-

crosoft and Google are going to invest

in Poland USD 3 billion in the coming

years in cloud computing services.

What may raise concerns of foreign in-

vestors is Poland's conservative gov-

ernment's policies, which are challeng-

ing the rule of law and the stability of

the judiciary system. However, it

seems that EU membership is an im-

portant anchor and ultimate guaran-

tee for institutional stability and sound

legal framework. From an investor's

point of view, a desirable change in

policy would be for much higher stabil-

ity and predictability of regulations, in-

cluding tax legislation.

What are the company's plans for

2020 and beyond?

At the heart of our business are our

customers, and we are always adjust-

ing to working with them, meeting

their expectations, and helping them

and their businesses to continue to

prosper and grow. As Paweł Stam-

burski, Head of Product, Business &

Corporate Banking at Santander,

points out, "One of the ways to meas-

ure our customers’ level of satisfaction

is the Net Promoter Score. Our NPS

grew by 13 points from just February

to June. This clearly illustrates that our

customers very much appreciate and

value our support and work with

them."


5756

In brief, what can you tell me about

the company’s history in Poland?

What were the development mile-

stones?

SwingDev started as a partnership

between our US and Polish co-

founders about 7 years ago. We saw

a unique opportunity to help com-

panies in the US thrive by matching

them with a highly-skilled engineer-

ing talent pool in Poland. Three of

our founders have an engineering

background with a unique blend of

sales, technical, and operational

skills. SwingDev is uniquely posi-

tioned because we have a very close

relationship with most of the major

venture capital firms in the Bay Area

and NYC. While my co-founders

were building the foundations for

our engineering team in Warsaw, I

moved from Arizona to San Fran-

cisco to establish the relationships

that would become the foundation

of our future growth. After three

years of being in the Bay Area, I

transitioned over to being on the

ground with our Warsaw team and

having a more active role under the

roof of our office on Nowy Świat.

What are the pros of SwingDev

service, and in what way do your

customers benefit from your

presence in Poland and the US?

The team at SwingDev has become

a world-class design and engineer-

ing consulting team through our ex-

perience with hundreds of startups

and enterprise clients. Nearly all of

our clients are in the US market, so

our processes and approach to solv-

ing problems are aligned with their

needs. We give a lot of focus to

bridging the gap between US and

European culture. This is nearly im-

possible for competitors to do with-

out a combination of American and

Polish co-founders working on a

foundation of mutual trust.

In what ways, according to you,

Swing Development is different

from its competition?

For me, SwingDev is different from

the competition because of our

people. Not in the cheesy corporate

PR, “our people are the best” way,

but because we target unique indi-

viduals who are motivated to solve

complex problems. Competitors

“body lease” their employees to

companies and blindly do anything

they say, whether it is good for the

client or not. Our team members

are encouraged to express their

opinion, treat clients as partners,

and not be a team of “yes-men.” It

is extremely valuable to our clients

to have a team that uses their

knowledge and experience to treat

them like true partners.

By matching brilliant minds in War-

saw with our clients who are the

most innovative forward-thinkers in

the World, we are in a unique posi-

tion to create extraordinary results

and relationships. I don’t feel like

we have any true competition in the

Polish market. We are uniquely posi-

Company Profile SwingDev

AN ALLIANCE OF INDIVIDUALS


with Jo Overline, CEO &Co-Founder of

SwingDev, a boutique ITbusiness, about the

harmonies between hisAmerican business expe-

rience and his Polishpartners’ IT talents.


tioned with the trust and relation-

ships we have built with the leading

venture capital firms and compa-

nies in the US.

What can you tell me about Swing

Dev’s corporate culture?

Corporate culture is something that

does not exist at SwingDev. We like

to call ourselves an Alliance of Indi-

viduals, which means our culture is

heavily influenced by every member

of our team. Just because we are

board members doesn’t mean we

know everything, and we aren’t en-

titled enough to think we should

strictly define our culture. Instead,

we created the foundations, values,

and framework to allow our team

to define our culture and have an

environment that is challenging and

supportive. We love to see people

come on board to our team and

thrive when they are freed from

corporate culture’s typical shackles.

This is a win for both our team and

our clients.

Even before the Covid-19 pandemic,

there was a high demand for IT

specialists and software program-

mers. Do you face any issues with

finding the right talent to work for

your company, and if so, how do

you cope with that?

In the IT field, it is definitely an em-

ployee market right now, and it has

been for a while. Recruiting is a

challenge for everyone, but we are

able to attract and retain the type

of talent that will thrive at

SwingDev— someone who knows

what they are doing and who wants

to use their experience to find

unique and creative solutions to

solve design and engineering chal-

lenges. A lot of times, candidates

find us a refreshing opportunity for

change from the typical corporate

environment.

We are a very close family-like bou-

tique business that treats each em-

ployee like a person, not a resource.

We work with our employees to cre-

ate situations where they can ex-

press their strengths and earn expe-

rience working through challenges.

We are also in a unique position to

have created an environment

where our employees get to work

closely with fast-growing innovative

startups and witness how these

companies grow from roots to bil-

lion-dollar valuations. I don’t know

of any other company that has man-

aged to thrive in this sweet-spot.


business services in Poland?

A few years ago, I would say the ini-

tial attraction to the Polish market

was due to its decreased cost. How-

ever, people quickly discovered that

the real value in Poland was ex-

tremely high skill levels and compe-

tencies. This is critical to the growth

of the Polish engineering market,

because as engineering wages have

risen to match global levels, we still

have a huge advantage to offer our

clients. Our clients often say our

teams have a considerably higher

output than their internal teams.




ment?

For the technology market, I think

that Poland is a great market to in-

vest in, but with the right combina-

tion of strategic foreign partner-

ships. I see tech companies in

Poland do incredible things, but

they lack the ability to be successful

globally because they cannot effec-

tively tell a story, market, and

launch to the end-consumer. If you

are able to bridge the gap and con-

nect the strengths of a Polish team

to the strengths of a foreign team,

there is an enormous upside.


latory or legal, that need changing

in order to make Poland a better


As a business owner in both the US

and Poland, it would be nice to see

more accommodations for doing

business in Poland easier. The labor

law should be simpler, potentially

less taxed, and more attention

needs to be placed on making it a

“friendly” place to do business. It is

endlessly and unnecessarily compli-

cated to own and operate a busi-

ness in Poland.

As a top manager, what impact

would you like to have on the peo-

ple that work for you regarding the

level of their professionalism and

career development?

We are realists. The days are gone

when people start a career at a

company and work there for their

entire lives. It is my belief that if a

person chooses to dedicate a pe-

riod of their life to being part of our

team, we have an obligation to re-

turn that with a benefit greater

than a paycheck. It doesn’t matter if

it is design, engineering, or back-of-

fice; we work extremely hard to

give our team members a path to

learn and improve their skills. If the

time comes that they decide to

leave us, we can be proud that we

did our best to give them a step-

pingstone to the next phase of their

career that we could not offer

them. The tech world is small, so we

never know when our paths may

cross again.

What are the company’s plans for

2020 and beyond?

This is a difficult question right now

because we are entering a period of

global crisis. However, initial signs

are that we have an enormous op-

portunity to support our industry

and grow to the next level. Hiring

freezes in the US, and a quick tran-

sition to remote work is creating an

environment where companies are

not as productive as they hope to

be, and they need the support of

trusted external resources. We plan

to do what we always do—build

partnerships, build trust, promote

transparency in communication,

and deliver at all costs.

Tech companies in Poland do incredible things, but they lack the

ability to be successful globally because they can not effectively tell

a story, market, and launch to theend-consumer.

5958

6160

What is the history of the company

in Poland?

Our company has a long history on

the Polish data center market that

consists of many significant chap-

ters. The former brand, Emerson

Network Power, part of Emerson

Electric until 2016, has operated in

Poland since 2002. The brand inher-

ited the legacy of Liebert Hiross

Poland, whose roots date back to

the 1970s. Since that time, thou-

sands of Hiross, then Liebert, then

Emerson Network Power, and finally

Vertiv devices have been installed

across Poland in various sectors and

industries including landline and mo-

bile telecommunications, banks and

financial institutions, government in-

stitutions, collocation and hosting

companies, industrial applications

and laboratories, educational facili-

ties, and technology parks. In late

2016, a completely new chapter

began after the Network Power

business unit spun off from Emer-

son Electric, forming a new stand-

alone company—Vertiv. In February

2020, through a business combina-

tion with GS Acquisitions Holding

Company, Vertiv became a public

company on the New York Stock Ex-

change. Known for its industry-

changing solutions and a well-

earned reputation for innovation,

Vertiv continues to raise the bar in

critical power, precision cooling, ac-

cess, and control of IT infrastructure

and IT device monitoring and man-

ageability.

What is driving the market in

Poland, how does Vertiv fit in with

the demand, and how important is

the Polish market for its overall

global business?

According to the latest PMR re-

search company forecast, the Polish

data center market’s value will ex-

ceed PLN 2 billion and will double its

computing power to 166 MW by

2025. Global players such as Google

and Microsoft have announced large

investments, and we continuously

see new projects being developed

by telecommunication and coloca-

tion providers. The most visible

trend on the Polish market is the in-

vestment in large (over 500 kW) and

small (up to 100 kW) data center fa-

cilities. Vertiv, as a global provider of

critical digital infrastructure and con-

tinuity solutions, serves its cus-

tomers by designing and building fu-

ture-ready infrastructures, no matter

the scale of investment. We leverage

our portfolio of hardware, software,

analytics, and services to ensure our

customers’ vital applications run

continuously, perform optimally, and

scale with their business needs.

How will the NYSE listing affect the

company’s Polish operations?

As a result of our business changes,

Vertiv can increase our focus on en-

gineering, research, and develop-

ment, accelerating our growth

strategy, and strengthening our

product and service leadership in

the industry. We will continue to

focus on the evolving needs of our

customers in over 130 markets we

serve, including Poland.

What are professional and personal

qualities that you look for in job

seekers, and what is the company’s

corporate culture like?

I look for bright, enthusiastic, and

talented people from different

backgrounds that can contribute to

Company Profile Vertiv Poland Sp. z o.o.

THE ART OF THE OPTIMAL PERFORMANCE

AmCham.pl QuarterlyEditor Tom Ćwiok talkswith Bartłomiej Raab,

Country Manager Poland& Baltics, Vertiv Poland,

about the company’s origins and the challenges

of the present.

the development of innovation and

increased commitment to the team.

As an employer, Vertiv strives to

create a global workplace that sup-

ports and promotes diversity and

nurtures respect for the individual.

We want to be the employer of

choice in terms of talent develop-

ment, career growth, benefits,

training, scholarships, and social

and recreational programs for our

employees.

Many companies in Poland and Eu-

rope find it difficult to recruit the

right talent. Do you face such is-

sues in Poland?

According to Vertiv’s Data Center

2025 report entitled “Closer to the

Edge,” the skills shortage in the

data center industry is getting

worse. The whole industry needs to

act now to maintain and strengthen

its talent pool for the future, also in

Poland. At Vertiv, our talent acquisi-

tion team is interested in expanding

and enhancing diversity in our uni-

versity relations and recruiting ef-

forts. We look for diverse candi-

dates when hiring employees, from

interns to executives. We target tal-

ent early in their careers, prioritize

employee development, and create

career paths to help them grow and

develop their talent. Due to the cur-

rent skills gap in the data center

space, it is critical to look at recruit-

ing people outside of the data cen-

ter sector who are familiar with crit-

ical industries, such as pharmaceuti-

cals and petrochemicals. These po-

tential candidates have a similar

skillset to data center professionals

due to their experience working in a

critical environment and can apply

their knowledge and experience to

the data center world.

As an international investor in

Poland, do you find Poland a good

country for business?

According to PwC, foreign investors

are increasingly choosing Poland as

a place to invest in, primarily due to

the knowledge, experience, and

commitment of highly qualified em-

ployees and a resilient economy

and a strong domestic market.

From our perspective, an important

factor is also the data center mar-

ket size. An analysis conducted by

Audytel showed that the Polish

data center market is the largest in

the Central and Eastern Europe re-

gion. We can expect the recently

announced investments from

Google and Microsoft to further

strengthen this leadership.

Is there anything that you think

should be improved in regulatory

areas to make Poland a more busi-

ness-friendly country?

Poland was placed 34th in the world

and 14th in Europe in TMF Group’s

The Global Business Complexity

Index 2020, which analyzes and

ranks the most complex jurisdic-

tions in the world. This indicates

that Poland’s regulations are gener-

ally far from perfect for running a

business. Registering a new com-

pany can be a complicated and

time-consuming process. Still, new

solutions aim to speed this up, such

as by setting up a company via elec-

tronic banking. But a lot more could

be done online to minimize the time

spent having to go to different of-

fices. In addition, once a company is

established, a tremendous amount

of time is needed in order to pre-

pare and pay taxes. According to

World Bank data, this time has in-

creased by 24 percent to 334 hours

over the last five years. Tax proce-

dures in Poland are thus the 3rd

most time-consuming in Europe,

and this is a very important area for

improvement that affects every en-

trepreneur’s daily operations.

What was the impact of the Covid-

19 pandemic, and how has it al-

tered, if indeed, the company’s

plans in Poland for 2020 and be-

yond?

The pandemic has created a chal-

lenging new reality for all of us, re-

gardless of industry or location,

that demands we are flexible and

ready to help however we can at a

moment’s notice. As a company

dedicated to keeping people con-

nected and information flowing, we

are working in Poland to keep busi-

nesses—both ours and our

clients’—moving forward through

these complex times. We have en-

acted a global pandemic response

plan which included appointing a

team that meets regularly to assess

the latest updates and take decisive

action to best protect our employ-

ees, customers, and communities. It

is important to note that based on

guidelines set by governing authori-

ties in most areas where we oper-

ate, Vertiv is considered an essential

business. We provide the critical

digital infrastructure that allows IT

and telecommunications networks

to work, meaning we play an impor-

tant role in keeping hospitals, gov-

ernments, and other essential serv-

ices running and connected. As a re-

sult, we continue to operate our

manufacturing facilities and our

service employees continue to as-

sist our customers. No one knows

how long this pandemic will last or

how much our lives will continue to

evolve at work and home. Despite

the unknown, Vertiv has the people,

technology, and focus to continue

serving our customers, supporting

our employees, and working to

make a difference in our communi-

ties. As always, our team is ready

and willing to jump in and help any-

where and anytime we are needed.


Despite the unknown, Vertiv hasthe people, technology, and focus

to continue serving our customers,supporting our employees, and

working to make a difference inour communities.


EXPERT Building business resilience

In the past few months, wehave seen the world as weknow it turned upside down:millions of people have lost theirjobs and incomes, companieshave been struggling, supplychains have faced major disrup-tion, and financial markets havebeen rattled. It's fair to say thatCovid-19 and the subsequent na-tional lockdowns have chal-lenged our long-held businessassumptions and rules of opera-tion. We still don't know how longthis pandemic will impact globaleconomies, and even once lock-downs are fully lifted, there willbe no going back to "businessas usual." With the OECD pre-dicting the most severe reces-sion in nearly a century, we can-not shy away from the need forchange. A new reality is sinkingin. It will require careful plan-ning, scenario analyses, andsometimes a rethinking of theirbusiness model. Finance professionals drive ef-fective business management inany economic climate, but it is intimes of crisis, such as these,that their expertise and skillscome to the fore. As companieslook to the future, they will rely,possibly more than ever, ontheir finance teams' expertise tohelp them recover from the cri-sis. Here are three ways financeprofessionals can help theircompanies navigate uncer-tainty, improve operations, andeventually thrive again in achanged, ever-evolving environ-ment:

SCAN THE NEW BUSINESSHORIZONFinance professionals now needto explore possible future sce-

narios and what steps need tobe taken to safeguard theircompany's future, integratingelements such as digital trans-formation, supply chain, the reg-ulatory environment, orchanged customer behaviours.Companies need to think aboutthe future through the perspec-tive of different stakeholders intheir company and how this af-fects them. It's only once theyhave done so that they can de-vise new, sustainable businessstrategies and drive recovery.

FOCUS ON KEY STRATEGIC ISSUESFor finance professionals to as-sess the true impact of the pan-demic on their companies, theymust look at how their long-term performance and strategymay have been affected. Identi-fying, analysing, and addressinga company's strategic issues willoften be the difference be-tween having a good and agreat strategy to build out oflockdown, return to normalityand grow. So what do compa-nies need to think about? • Strategic position: What doesthe external environment looklike now? This means looking atelements such as global andeconomic outlooks in the coun-tries where the company oper-ates, the marketplace, and howits competitors are evolving. • Strategic options: What newbets could the company take?This is focused on future devel-opment and value creation, in-cluding identifying gaps in theiroffering, assessing opportuni-ties to create new incomestreams, and engage with newcustomers.• Strategic implementation:What projects is the company

implementing? This requires theorganization to re-evaluate cur-rent projects and carefully con-sider which ones should be pri-oritized.• Strategic risks: What new risksis the company facing? This re-quires companies to look atnew risks they may now face(e.g., staff safety, cash flow is-sues, supply chain disruption)and how to mitigate them.

ASK FUTURE-FOCUSED QUESTIONSA business model does not justrelate to the operational as-pects of what a company does –the products and services it de-livers on a day-to-day basis –and the financial metrics associ-ated with those. It's a muchbroader framework that encom-passes the purpose, values, andstrategy of a company, articulat-ing how it meets the long-termneeds of its customers andother stakeholders.As companies navigate towardsthe post-Covid-19 world, theymust holistically review theirbusiness model and establishhow it has been affected by thecrisis, looking beyond the hit totheir short-term financial per-formance. To avoid making deci-sions that could potentially leadto future corporate failure, fi-nance professionals need to askfuture-focused questions to as-sess how their organization de-fines, creates, delivers, and cap-tures value in a changed envi-ronment. This includes ques-tions such as: • Is the company's purpose rel-evant in a post-lockdown world? • Do products and services stillresonate with the company'scustomers in the age of socialdistancing? • How can technology helpchange the way the companydelivers products and servicesto customers?• How will the company share

the surplus value amongst its in-ternal and external stakeholdersin the new reality?

NO TURNING BACKThe road ahead will be difficultbut carrying on as before thepandemic simply is not an op-tion if companies want to sur-vive. Armed with the right infor-mation and scenarios, financeprofessionals can help theircompanies plan their transitionto a post-Covid-19 reality, buildmore resilience, and generateand preserve value—not just inreaction to the current crisis,but in preparation for whatevercomes next.That is why the Chartered Insti-tute of Management Account-ants (CIMA) launched “Reimag-ine business resilience in theCovid-19 world,” a free resourceto help organizations steerthrough the short- and long-term ramifications of the Covid-19 crisis. And over the comingweeks, CIMA will release five ad-ditional "how-to" guides to helpvulnerable businesses further,including:• How to get your finances inorder• How to get more help fromthe government• How to adapt your businessmodel • How to optimize your supplychain• How to build resilience for thefuture We wanted to do something forthe greater good and put ourmembers' long-standing experi-ence and solid expertise in busi-ness and finance at the serviceof businesses as they adjust tothe new normal. It's critical thatwe stand behind good busi-nesses and their employees andhelp them get back on their feetto achieve sustainable recoveryin a changed, ever-evolving envi-ronment.

LOOKINGAHEADThree ways to thrive in thenew normal.

By Andrew Harding, FCMA, CGMA, Chief

Executive, Management Accounting at the

Association of International Certified

Professional Accountants.

62 63


Commercial real estate

With the ongoing pandemic af-fecting global markets, it is in-teresting to look at how thenew economic situation maychange the commercial real es-tate market situation. After a spell of optimism and re-turn to relative normalcy, themarket was dimmed by fears ofa second wave of the pandemic. However, despite the continueduncertainty, investors with ac-cess to a large pool of liquid cap-ital are likely to take advantageof many new opportunities inPoland. Commercial real estateis among the few asset classesthat remain a long-term safehaven in times of crisis. Natu-rally, financially agile investorsand developers who maintainample cash reserves and otherliquid financial instruments willenjoy the upper hand. Lower in-terest rates will support mergerand acquisition deals. There willbe acquisitions of propertiesthat have a weaker capacity togenerate long-term income andare unable to deliver to paybackfor their acquisition or construc-tion.When the situation stabilizes, arealignment of vendors’ expec-tations will become a fact,which may result in more invest-ment deals. Also, many develop-ment projects will require a newstrategic approach with reposi-tioning or even repurposing.

OFFICEThe office market was at a his-torical high before the pan-demic. After a brief period ofturmoil, “normalcy” is returningto offices as well. As the experi-ment of remote work has failedin many sectors and companies,these organizations are the firstto return to the workplace.

Some clients have put thesearch for office space com-menced before the pandemicon hold and are waiting to seehow the situation will unfold.Others, including IT and e-com-merce, are upsizing their offices. Office landlords now have anopportunity to retain their cur-rent tenants through lease rene-gotiations with an option to ex-tend lease terms. Some new of-fice projects may attract tenantsfrom rapidly growing sectors,particularly IT and e-commerce.Developers will have to step uptheir efforts to gain new tenantsand come forward with moreattractive rental rates or addi-tional discounts if constructioncosts permit. Whether smallertenants will revert to using co-working spaces more and helpco-working providers maintainan appropriate profitability levelremains in question. There is nodoubt that co-working spacesare still the best option for ten-ants looking for a prestigiousaddress.

WAREHOUSE AND LOGISTICSE-commerce has been growingrapidly for several years, and thepandemic only reinforced thisprocess. Lockdown measurespushed many people to try on-line shopping, and most weresatisfied. Flexible responses to customerneeds and short delivery timeare critical in e-retailing. This, inturn, affects warehousespace—there is a new demandfor more warehousing from e-commerce, something that willaccelerate considerably now. In addition to the most sought-after big-box warehouses, thereis a growing demand for for-mats such as small business

units or last-mile logistics facili-ties close to large city centers. The growing demand for ware-houses is benefiting logistics op-erators, along with courier anddelivery companies. Food andpharmaceutical companies re-main very active. Many retailersare already planning to diversifytheir business risk in case an-other wave of the epidemicblocks their stores’ business andare moving some of their opera-tions online. The current situa-tion is a learning experience forconsumers who are adapting toonline shopping, which willboost demand for modernwarehouse space in the longterm. In turn, this will further ac-celerate the transformation ofexisting retail schemes so thatthey can best respond to con-sumer needs. Supply chain di-versification and bringing manu-facturing closer to consumermarkets by international corpo-rations can be a big opportunityfor the warehouse and indus-trial market. Poland is in the toptier in the race to attract such in-vestors.

HOTELSUnlike, for instance, in Germany,where domestic demand plays amajor role, hotel occupancy inPoland is largely generated byinternational travelers: tourists,businesspeople, and foreign na-tionals attending conferences.As long as foreign tourists avoidPoland, this sector will find it dif-ficult to return to pre-pandemicprofitability levels.Opportunities will be plentiful inthe hospitality sector, where re-building high occupancy ratesand income levels will be a slowbut steady process. Investorsknow that there is no escapefrom globalization and that peo-ple want to travel both on busi-ness and for leisure and will doso even more after the pan-demic is over. Unfortunately,

many facilities may be closeddown or will have changedhands by then. Individual hotelswill continue to transform intochain-branded hotels, as non-chain hotels currently accountfor nearly 70 percent of the Pol-ish hospitality market. Interna-tional brands with strong capitalpositions and structures willhate to miss out on such oppor-tunities.

CONCLUSIONSInvestment funds are watchingthe market and will certainly notmiss out on any opportunity.Despite brief spells of turmoil,capital values of the most stableproducts in central locations willhold firm. Discounts are unlikelyin Warsaw, in particular. Capitalvalues are likely to experience asharper fall in smaller cities, andpricing will have to be adjustedto buyers’ possibilities and ap-petite for risk. Some investmentfunds that have historically tar-geted retail and offices maychange tack and focus on ware-house and industrial facilities. Leading investors think long-term rather than short-term,and the current situation is anopportunity for the most agilemarket players. If there is a tem-porary dip in property prices, in-vestors seeking long-term prof-its will have the chance to earnhigh rates of return in the fu-ture.Solid economic fundamentalswill be instrumental in the fastrebuilding of asset values inPoland. If they are not weak-ened by the country’s over-reg-ulation and fiscal policy and thegovernment temporarily helpsentrepreneurs maintain liquid-ity, investor confidence in mostcommercial real estate sectorsshould fully recover by the endof this year.

A MARKET OFOPPORTUNITIESThe crisis spurs strong andagile investors.

By Piotr Kaszyński, Managing Partner, Cresa

Poland, and BolesławKołodziejczyk, Ph.D., Head

of Research & Advisory,

Cresa Poland.


EXPERT Retail

After the record-breaking yearof 2019, the Covid-19 pan-demic has been a genuineshock for the Polish retail sec-tor. A trade ban was appliedto premises in large shoppingcenters with sales areas ex-ceeding 2,000 square meters.This included practically all re-tail, service, and entertain-ment activities in shoppingcenters except for groceries,pharmacies, drugstores,newsstands, construction ma-terials stores, and pet shops. Poland took a different ap-proach compared to othercountries like Germany or Aus-tralia, in which the retail sec-tor organizations quicklyadopted guidelines to negoti-ate individual solutions appli-cable to tenants affected bylockdowns. The Polish govern-ment passed a unique legisla-tive measure on April 1 to tem-porarily extinguish all parties’obligations under leases orequivalent agreements con-cerning retail locations inlarge shopping centers. Thismeasure was considered anunprecedented interventionin contractual relationshipsbetween businesses. The eco-nomic burden of the costs as-sociated with owning and op-erating a shopping centerthus fell entirely to landlords,whereas tenants and land-lords had previously sharedthis. The only state supportprovided to landlords was thepostponement of real estatetaxes and perpetual usufructfees, with the option of partialabatement of such paymentunder certain circumstances.From a legal perspective,however, such unilateralmeasures may be tantamount

to expropriation withoutproper compensation.

FIGHTING FOR SURVIVALLandlords and tenants pre-sented several policy posi-tions in the legislation processconcerning the “anti-crisisshields,” state measuresadopted to help the economyin crisis. Intensive negotia-tions also took place concern-ing the present and future re-lationships between the land-lords and tenants. From thevery beginning, the tenants’goal was to achieve a statu-tory regulation imposing thesettlement of rent and otherrental charges with the land-lords. This was to be based onthe occupancy cost ratio(OCR) set at different levels,adjusted to the tenant’s busi-ness scope and valid for ap-proximately a year after thetrade ban had lifted. The uni-versal adaptation of thismeasure would be a clear de-parture from the market-stan-dard combination of minimumrent, turnover rent, and serv-ice charge applicable in the re-tail sector, and was stronglyrejected by the landlords andfinancial institutions. The con-sequence of a universal OCRapproach would have been arevolution in risk allocationwithin the entire retail sectorand led to massive disruptionsof existing businessmodels. Eventually, the Polishgovernment did not followthe tenants’ proposals.The government mostly liftedthe retail trade ban afterseven weeks, from May 2.However, trade was and still issubject to restrictions limitingthe number of visitors in the

stores and imposing addi-tional sanitary measures.Footfall indications from thePolish Shopping CentersCouncil (PRCH) show moreand more customers returningto large shopping centers,reaching approximately 80percent of pre-pandemic lev-els by June 2020.

THE ARGUMENTTenants claim they cannoteasily convert the rising foot-fall to rising income, and theirmain argument is that “shop-ping as an experience” is stillfar from its pre-pandemic sta-tus. In their view, the “shoppingcenter channel” in the “om-nichannel” world has changedconsiderably due to restric-tions and persistent fear ofthe pandemic. Tenants believethat this situation justifies theradical revision of economicconditions regarding leasingspace in the affected shop-ping centers.Landlords claim that the pan-demic is by no means a lastingchange and that trading levelswill eventually return to nor-mal. The universal or wide-spread adoption of turnoverrents would transfer a signifi-cant part of the standard re-tailer’s risk to the landlord. Inthis approach, rents woulddrop, for instance, if the fash-ion tenants’ collections for up-coming seasons failed to meettheir customers’ expectations.This would drastically changethe valuations of properties,leading to different perspec-tives of risks connected withreal estate investment andlending. Hence, the strong re-sistance against this approachpresented by the landlordsand the financial sector.

THE SOLUTION AT HANDPolish Civil Law includes a spe-

cific legal measure allowingcontract parties to apply to acourt of law to adjust their re-lationship in case of an unex-pected change of circum-stances. However, this mecha-nism was rarely used beforethe pandemic. With no ade-quate case law and experi-ence in its application, tenantshave begun to lobby for leg-islative measures such as thetemporary extinguishing oflease obligations, and, whenthe negotiations with thelandlord were not progress-ing, tenants even attemptedto terminate leases for under-performing locations. Whilelease terminations can be con-tested, the verdicts in judicialreviews of extraordinary cir-cumstances would never beissued in time to save strug-gling tenants.

FIRST CASUALTIESAfter a quick initial reactionand adoption of legislativemeasures, the state was noteager to intervene in landlordand tenant relationships fur-ther, leaving market partici-pants to seek difficult com-promises over the future oftheir relationships. The dead-line for completing landlord-tenant negotiations was Au-gust 2, and the future will tellwhether and to what extentthe reshaping of the marketwill be permanent. The cur-rent situation already broughtits first large shopping center(Sukcesja in Łódź) to bank-ruptcy, and retailer brands infashion (Camaieu), media(Mole Mole bookstore), andrestaurants (Vapiano) are dis-appearing. Human bonds andthe importance of social inter-actions connected with adeep tradition of retail tradeshould prove stronger andeventually lead to the rejuve-nation of this sector.

UNDERPRESSURELandlords and tenants inthe pandemic crisis

By Piotr Staniszewski, Partner,

Real Estate Poland, Dentons.

64 65

Corporate Income Tax

If you are planning to mergetwo companies, be careful!Until recently, tax neutrality formost mergers was clear andcertain, and if there were busi-ness reasons for a merger, itwas considered tax neutral.However, following a changeeffective from January 1, 2018to the Corporate Income TaxAct, a merger may now be con-sidered taxable in certain situa-tions.According to the amended pro-visions of the Corporate In-come Tax Act, the taxable rev-enue is the value of the ac-quiree's assets received by theacquirer or the newly formedcompany. The value is deter-mined at the date of themerger. However, the follow-ing is excluded from the tax-able revenue:• the value of the acquiree'sassets received by the acquirercorresponds to the issue priceof the shares allotted to theshareholders in the mergingcompanies;• the value of the acquiree'sassets which corresponds tothe acquirer's percentage ofthe acquiree's share capitalwhere this percentage is deter-mined as at the last day preced-ing the date of the merger, ifthe assets are received by anacquirer holding at least 10 per-cent of the acquiree's sharecapital.Let it be noted that the aboveexclusions will not apply if themerger was completed for rea-sons not considered "valid eco-nomic reasons."

THE MOTIVESAccording to the justification ofthe amendment to the Corpo-rate Income Tax Act, the pro-posed changes to the tax provi-

sions governing mergers werenot intended to be revolution-ary. On the contrary, the inten-tion was to make the new pro-visions an equivalent of theprevious rules. However, uponcloser inspection, no such con-clusion can be drawn from thewording of the new provisionsor the individual tax rulings is-sued based on them.The first major change is therule that the amount of rev-enue for the acquirer must bedetermined first. This amountmay then be reduced by (1) theissue price of the shares in theacquirer allotted as part of themerger and (2) the amountbeing the product of the ac-quirer's percentage of shares inthe share capital of the ac-quiree multiplied by the valueof the acquiree's assets.

THE PRICE OF A SHAREA new term in the amendedprovisions is the issue price of ashare. The Corporate IncomeTax Act defines this term as theprice for which a share is taken,and which is specified in thecompany's statute or its arti-cles of association. If these doc-uments are not available, theprice of a share can be found asspecified in any other similardocument, as long as this priceis not lower than the marketvalue of the share.The prevailing view in individualtax rulings is that the issueprice of shares is the price"paid" to the acquirer forshares in the acquirer's capital,i.e., the market value of the ac-quiree's assets. However, ac-cording to some commentarieson the new provisions, theissue price should be defined asthe price the acquirer or newlyformed company pays to any

shareholder in the acquiree forthe acquiree's assets. Thismeans that the issue priceshould be equal to the marketvalue of the shares in the ac-quirer or the newly formedcompany in return for the ac-quiree's assets.It seems that the "issue price"concept was introduced in theCorporate Income Tax Act toprevent non-taxable transfersof assets between sharehold-ers in merging companies andensure that the share exchangeratio in a merger is based onthe market value of the assetsof the merging companies.However, given the doubts sur-rounding the interpretation ofthe new provisions, it is notclear whether the exclusionfrom revenue will apply if theshare exchange ratio is basedon market values, and whetherit is also necessary for the valueof the increase in the acquirer'sshare capital to be determinedbased on market values.

DOWNSTREAM MERGERSParticular attention should begiven to downstream mergers,the parent company's acquisi-tion by a subsidiary. In suchcases, the subsidiary buys backits shares from the parent com-pany and then redeems theshares or issues them to ashareholder in the acquiree.Such a merger may be com-pleted with or without increas-ing the acquirer's share capital.Individual tax rulings disagreeon whether a downstreammerger completed without anincrease in the subsidiary'sshare capital, i.e., without newshares being issued, may be atax neutral transaction. For ex-ample, in his interpretation onNovember 15, 2019, the Direc-tor of the National Tax Informa-tion agrees with the applicantthat the taking of shares, whichis referred to in the definition

of the issue price, should be in-terpreted to mean not only thetaking of newly-issued sharesas a result of the share capitalincrease but also the situationwhere the acquirer issues anyshares it has acquired as a re-sult of the merger. This meansthat the exclusion may applyunder such circumstances.In another interpretation onJuly 3, 2019, the Director of theNational Tax Information statesthat the revenue exclusion ap-plies where new shares are is-sued and allotted to the share-holders in the merging compa-nies. This should not beequated with the allotment ofexisting shares. This interpreta-tion means that a downstreammerger is a taxable transaction.

CONFLICT WITH EU DIRECTIVEGiven that the new provisionsare unclear, if a merger is com-plex or there are changes in thevaluation of the merging com-panies, it may be impossible toensure the transaction's taxneutrality. In such cases, it isfair to say that Polish regula-tions conflict with an EU direc-tive concerning mergers,namely, the EU Council Direc-tive 2009/133/EC of October 19,2009, concerning mergers onthe common system of taxa-tion applicable to mergers, divi-sions, partial divisions, trans-fers of assets, exchanges ofshares concerning companiesof different Member States,and the transfer of an SE's orSCE's registered office be-tween the Member States.Today more than ever, taxablepersons should take care toverify whether a particularmerger may enjoy the benefitsof tax neutrality and shouldapply for an individual tax rul-ing if they have any doubts.

A MATTER OF CIRCUMSTANCESTax neutrality is no longer so certain.

By Małgorzata Gleń, Director, Tax,

M&A Team, KPMG in Poland

EXPERT Carbon neutral economy

According to the latest reportfrom McKinsey & Company,“Carbon-neutral Poland 2050.Turning a challenge into an op-portunity,” the country canachieve climate neutrality by2050 but requires proper poli-cies to address all of the chal-lenges on the way. Poland is not blessed withrivers that could support ex-tensive hydro generation andhas half of the sunny hours ayear that California enjoys. Nat-ural gas is scarce, and geopolit-ical factors make it difficult toimport on a sustainable scale.The Baltic Sea provides an op-portunity for offshore windgeneration in the north, buthigh-consumption areas are lo-cated in the south of the coun-try. Poland does not have a sin-gle nuclear-power reactor ei-ther. What Poland does have isa significant agricultural sectorand coal-fired power stationsthat progressively deplete coalreserves. Poland’s greenhousegas (GHG) emissions in 2017were 380 MtCO2e, which isover 800g of CO2e for everyeuro of the country’s GDP.That makes Poland the third-most carbon-intense economyin the European Union.

FIVE KEY SECTORSThe overwhelming majority ofGHG emissions in Poland areproduced by industry (22 per-cent of total emissions), trans-portation (15 percent), build-ings (predominantly heatingand air conditioning 11 per-cent), agriculture (almost 11percent), and power (38 per-cent). To achieve carbon neu-trality by 2050, each sectorwould need to reduce its emis-sions radically. In transporta-tion, replacing internal com-

bustion engine (ICE) vehicleswith electric vehicles and hy-drogen-based alternativescould help cut emissions by upto 99 percent. In buildings, im-proving insulation and reduc-ing the use of coal, natural gas,and oil boilers and stovescould significantly reduce emis-sions as well. Transforming the power sectorwill be a significant challenge,as around 77 percent ofPoland’s electricity is currentlygenerated from coal. The de-mand for electricity will morethan double over the next 30years due to increased wide-spread electrification, such asthe introduction of electric ve-hicles, heat pumps in buildings,and electric furnaces in indus-try.Poland’s energy infrastructureis aging, and approximatelytwo-thirds of its installed coalcapacity is over 30 years old.These assets will eventuallyneed to be replaced, providingPoland with an excellent op-portunity to redesign and re-build its energy system to bezero-emission.

MONEY WELL SPENTGiven the scope and magni-tude of the economic crisis re-sulting from the Covid-19 pan-demic, the question is whetherthe world can afford to pay at-tention to climate change atthis time. Yet, according toeconomists and climate ex-perts, the world cannot affordto do otherwise, as invest-ments in the transition to alower-carbon future will createnew jobs in the economy. EUleaders reached a landmarkEUR 1.82 trillion budget at themost recent EU summit in July.The Covid-19 recovery package

reached EUR 550 billion, whichis to be spent on green proj-ects over the next seven years.Reportedly, Poland will be enti-tled to use EUR 160 billionfrom the EU post-pandemic re-covery package. These fundscould play a vital role in the de-carbonization process. Accord-ing to McKinsey’s analysis, inorder to achieve net-zero emis-sions by 2050, Poland’s rate ofdecarbonization should accel-erate by a factor of four overthe next decade.

MULTIPLYING RISKSClimate change is referred toby experts as a “risk multi-plier” because the change inglobal temperatures can con-tribute to the spread of newviruses and pandemics. Re-searchers from major scienceorganizations and researchcenters, including StanfordUniversity, recently expressedthis opinion. They noted thatrising temperatures could cre-ate favorable conditions forthe spread of certain infec-tious, mosquito-borne diseasessuch as malaria and denguefever. Disappearing habitatsmay force various animalspecies to migrate, increasingthe chances of spilloverpathogens between them. Onthe same note, the factors thatmitigate environmental risksare likely to help mitigate therisk of pandemics as well.

GOOD TRADESThe Covid-19 pandemic trans-formed people’s lifestyles andoffered them an opportunityto find a balance betweenwhat worked before and whatneeds to be done in the newnormal. Some new practiceswill likely endure long after thelockdown ends. Among factorsthat could support and acceler-ate climate action are tele-working and a greater reliance

on digital channels, as thesecan all help reduce transporta-tion demand and emissions.

COST AND BENEFITAchieving carbon neutrality by2050 would require an addi-tional investment of EUR 380billion, the McKinsey report es-timates. However, around 70percent of that investment isexpected to be cost-effectiveby 2050. Securing and invest-ing this capital and coordinat-ing the investment would be achallenge of historic propor-tions. But decarbonizationcould bring Poland many bene-fits, including increased energyindependence, a reduction inoperational costs of up to EUR75 billion, improvements ineconomic competitiveness andquality of the environment,and the development of a setof modern industries. Poland could develop low-emission industries, includingthe production of heat pumps,electric vehicle battery compo-nents, electrified agriculturalequipment manufacturing, andBaltic offshore wind develop-ment. According to McKinsey’scalculations, combining theseactivities could boost Poland’sGDP by one to two percentand could create 250,000 to300,000 new jobs. When analyzing the costs andbenefits of decarbonization,we must take into account thefact that climate action maycurrently appear less impor-tant than combating the eco-nomic consequences of theCOVID-19 pandemic. But it isworth remembering that in-vesting in infrastructure andlow-carbon technology couldbe just the new engine ofgrowth that the Polish econ-omy needs, especially after thepandemic.

A LONG ROADAHEADAddressing climate changein a post-pandemic world

By Marcin Purta, Managing

Partner, Warsaw Office,

McKinsey Poland, and GustawSzarek, Associate Partner

Warsaw Office, McKinsey Poland.

66 67


Construction law

The amendment of the PolishConstruction Law on February13, 2020 will simplify and ex-pedite the real estate devel-opment and constructionprocess and achieve greaterstability in the determinationprocess. An analysis of theamendment suggests that itis a step in the right direction.The amendment will comeinto force on September 19,2020.

NO BUILDING PERMITSThe amendment introducesinto Art. 29 of the Construc-tion Law transparent catalogsof projects not requiring abuilding permit but requiringnotification to the competentauthority, and projects requir-ing neither a building permitnor notification. Various pro-visions under previous lawsincluded information on thistopic, which sometimes madeit difficult for investors to de-termine what type of ap-proval was required from thearchitectural and construc-tion administrative authori-ties for the given project.Sometimes answering thisquestion required an analysisof the entire act, and eventhen, the answer was not al-ways obvious. The introduc-tion of clear regulations willspeed up the developmentprocess and dispel investors’doubts about the formal legalrequirements for carrying outthe project.A new feature is an expressprovision in the ConstructionLaw stating that projects in-volving postal lockers do notrequire a building permit ornotification. This also appliesto ATMs for deposits or with-drawals, ticket machines,

vending machines, and ma-chines for delivering othertypes of services, with aheight of up to three meters.It had been unclear how toclassify postal lockers underprior law as investors wereunsure whether the installa-tion qualified as a structureand if a building permit wasrequired and had to notify thecompetent authority of theintention to erect the device.

NEW CLASSIFICATIONThe February 13, 2020 amend-ing act introduces a divisionof construction designs intodesigns to develop a plot orsite, architectural and con-struction designs, and techni-cal designs. This division isaimed at simplifying proce-dures and expediting pro-ceedings. The architecturaland construction administra-tive authority will approvethe design for the develop-ment of the plot or site. Theywill also approve the architec-tural and construction designvia the decision issuing a con-struction permit but will ap-prove the technical designonly at the stage of applyingfor an occupancy permit.

COMMENCING OCCUPANCYWITHOUT PERMITA “yellow card” mechanismhas been introduced regard-ing the occupancy of a struc-ture without the required no-tification of the constructionsupervision authority of com-pletion of construction or arequired occupancypermit. Under this mecha-nism, the authority supervis-ing construction must instructthe investor or owner thatthe structure cannot be occu-

pied without an occupancypermit or without making aneffective notification of com-pletion of construction. Theauthority must record in theinspection if they find that astructure or part of a struc-ture is being occupied with-out the required permit or no-tification of completion ofconstruction. 60 days later,the authority will verifywhether the structure is stillbeing occupied in violation ofthe regulations. If the user ofthe structure (or part of astructure) does not cease theillegal occupancy, then theconstruction supervision au-thority must issue an orderimposing a fine for the illegaloccupancy of the structure.Such a fine may be imposedmultiple times, and theamount of the fine will in-crease each time.

INABILITY TO INVALIDATE OCCUPANCY PERMITOne of the changes to theConstruction Law that in-vestors have most eagerly an-ticipated is the introductionof a rule forbidding the invali-dation of a decision issuing anoccupancy permit more thanfive years after the decisionbecame legally final. Underprior law, irregularities in theconstruction process thatcould potentially invalidate anoccupancy permit were oftendiscovered when a potentialproperty acquirer was con-ducting due diligence. This sit-uation constituted a consider-able risk for the buyer, andparties in such cases often de-cided to take out insurancecovering the title to the prop-erty.

UNLAWFUL STRUCTURESThe amendment introducessolutions to streamline the le-galization procedure as well

as a new and simplified proce-dure to legalize the unlawfulstructures that are buildingsconstructed 20 or more yearsearlier. In this simplified pro-cedure, the authority willcheck aspects such as whenthe construction was com-pleted and whether the struc-ture is fit for occupancy. Theauthority will not verify, forexample, whether the struc-ture complies with the localzoning plan. Significantly, theinvestor will not be requiredto pay any legalization fees inthe case of the simplified le-galization procedure.

OTHER IMPORTANTCHANGESOther significant changes in-troduced in the amendmentinclude streamlining theprocess to transfer a buildingpermit or the rights regardingthe notification of construc-tion. Also, the requirement tonotify the supervising con-struction authority of the in-tended commencement datefor works on single-family res-idential buildings was elimi-nated. Regulations concerning thecompletion of constructionwere tidied up and clarified aswell. The amendment alsochanges the definition of theimpact zone of a structure.Under the new definition, astructure’s impact zonemeans the area around a des-ignated structure. It is basedon separate regulations intro-ducing restrictions on the de-velopment of the area relatedto the structure. In practice,this means that it will bemore difficult for the ownerof a neighboring property tojoin the administrative pro-ceeding as a party.

BUILDING MADEEASIERA change in constructionregulations is on its way.

By Agata Biernadska, Advocate and

Associate, Łaszczuk & Partners.


EXPERT Pandemic law

The new business reality duringthe Covid-19 pandemic involvesmeeting numerous legal re-quirements and adapting tosanitary standards aimed at en-suring the safety of employeesand clients and preventing thespread of the virus. The failureto meet the imposed sanitarystandards to decrease the riskof Covid-19 infections may re-sult in criminal or civil liability ofa company and its managerialstaff. Therefore, appropriatemechanisms become necessaryto limit the liability mentionedabove. These elements are par-ticularly important because ofthe risk of subsequent wavesof the pandemic. It may turnout that only companies thatcan guarantee adequate levelsof safety for their employeesand clients will be able to con-tinue functioning.

PERSONAL LIABILITYOne of the Covid-19 liabilityrisks is related to sanitary is-sues and may occur when anemployee or a customer be-comes infected. In such a case,compliance with sanitary stan-dards by the company and itsmanagers may be a way to as-sess the extent to which the in-fection could have occurred asa result of misconduct. In otherwords, compliance with sani-tary standards may be an ele-ment of assessing how muchreasonable care has been takenin the company. If a lack of rea-sonable care is demonstratedby a prosecutor or an infectedperson, a risk of criminal or civilliability for the managers or thecompany itself maymaterialize. Another business-related risk can occur whenone of the company’s employ-

ees gets infected and, due to alack of sanitary procedures, hasbeen in contact with other peo-ple. In such a case, the wholecompany may have to be quar-antined, making it impossibleto continue business activities.

RISK ASSESSMENTNo less important is assessingthe risk that the managers andthe company could incur as aresult of their non-compliancewith sanitary standards, andhow to eliminate possible gapsin this respect. An appropriatepolicy related to applicableCovid-19 requirements, limitingthe risk of liability of the com-pany and its managers, shouldbe considered a remedy forsuch threats. This documenthelps to control, monitor, andreport the risk of non-compli-ance with sanitary standardswithin the company. A compre-hensive policy and relevant riskregister should help demon-strate that the company hasexercised reasonable care withrespect to compliance withsanitary standards.

PUBLIC ANNOUNCEMENTSCompanies need also to pay at-tention to orders issued bylocal and central governments.Under the new legislationadopted during the pandemic,the Voivode (the region’s gov-ernor appointed by the primeminister), the Minister ofHealth, and the Prime Ministerhave been empowered to issuebinding orders to entrepre-neurs. In turn, the sanitary inspectorhas been authorized to issuedecisions imposing obligationson entrepreneurs. Due to thebroad discretion of the authori-

ties mentioned above, it is rea-sonable to adopt a policy to as-sess the legitimacy of a givenorder. Importantly, orders maybe issued in oral form. There-fore, it becomes crucial to doc-ument the fact of its executionproperly. This protects thecompany and the managersthemselves against possible al-legations of failure to executean order.

SANITARY CONTROLS The imposition of parallel con-trol procedures usually comple-ments new obligations. Withregard to Covid-19 regulations,the imposition of sanitaryregimes, as well as tasking ex-isting sanitary authorities withtheir enforcement, internalguidelines for controls by pub-lic authorities should also in-clude provisions for sanitarycontrols. A structured approach to in-spections or investigations byauthorities is crucial to ensureprocedural fairness, quick iden-tification, and effective imple-mentation of corrective meas-ures. It is best when proce-dures are in writing. Such adocument should assign basicresponsibilities to employees,educate on their rights and ob-ligations during such controls,and outline the range of ac-tions or tools available to thecompany.

DATA PROTECTIONMany activities that companiesundertake to counteract Covid-19 are in collecting and process-ing personal data, including onrecent personnel travels or per-sonal data, including healthdata, temperature readings,and others. Therefore, to en-sure compliance with Covid-19requirements, every companyshould also bear in mind thatpersonal data protection law,especially the EU General Data

Protection Regulation, still ap-plies, and potential deficienciesin this regard could still result inthe organization’s liability. The main concerns in this areaare related to investigating po-tential Covid-19 infection casesin the company’s facility andthe process of people trafficcontrol, including taking tem-perature readings. The Polishsanitary authorities are contin-uously issuing new guidelinesand individual decisions on howto ensure sanitary protection inorganizations and conduct aproper investigation on Covid-19 infection cases. Therefore,any procedure implemented inresponse to the Covid-19 threatwill affect other processes re-lated to personal data, includ-ing information obligation anddata inventories.

SUMMARYThe pandemic is a threat to allorganizations which run busi-ness operations using humanresources. Those organizationsthat will not identify suchthreats, assess the risks, andimplement appropriate mitiga-tive measures will be vulnera-ble to legal consequences. Themanagers will potentially haveto face a criminal or civil liabilityfor possible deficiencies in thesanitary protection system. To limit such risk, companiesneed to identify the pandemicas a threat to their business op-erations and their employees.With that, every organizationshould analyze its business op-erations vis-a-vis all possibleCovid-19 and data protectionrisks to find gaps and then in-troduce proper compliance so-lutions.

A ROADMAPTO SAFETYOrganizations need Covid-19 risk checklists.

By Paweł Dudojc, Counsel,

PwC Legal; and MichałRams, Counsel, Advocate,

PwC Legal.

68 69

Commercial real estate

Sale and leaseback transac-tions (SLB) are expected topick up post-Covid-19 inPoland. Occupiers may seethe SLB option as a financialopportunity to take capitalout of real estate assets. Thismoney could be used to ex-pand their core business or in-vest in improving their busi-ness line strategy to alignmore with e-commerce, forexample.

ANTICIPATING RISE IN SLBsSLB transactions offer signifi-cant advantages for both busi-ness owners and real estateinvestors, which creates awin-win scenario for both par-ties, providing liquidity and in-vestment capital in exchangefor a long-term rental incomewith no leakages.The large corporate occupiedbuild to suit facilities found inPoland, often modern keyproduction facilities or logisticdistribution centers for multi-

national companies, from aninvestor point of view, pro-vide an opportunity to sourceproperty and to invest largeamounts of capital that canprovide long lease triple netincome streams.I expect to see more corpo-rates seeking to unlock capitalfrom owned headquarters of-fice buildings and, more im-portantly, from the distribu-tion center and supply chainproperties as the pandemic’strue impact influences compa-nies’ business models. 2020may be too early in the cyclefor some companies to adoptSLB strategies, but this willundoubtedly accelerate inearly 2021.

THE PROSThe definition of a sale andleaseback from the Royal In-stitution of Chartered Survey-ors is an arrangementwhereby an owner sells his orher interest in a property or

piece of land for an agreedsum and takes back a leaseon the property or land, ei-ther at a rack rent or someother rent related to price-paid for a fixed period.The typical market conditionsfor an SLB mirror the currentmarket stress situation, andtherefore, this trend shouldincrease in the short term.From a company perspective,these factors include:• When alternative financingis advantageous compared totraditional or mezzaninedebt;• When capital is needed forthe growth of the business,expansion or acquisition of

another company;• When the company needsreorganization or restructur-ing;• When the business is beingprepared for sale.SLB transactions allow theseller to raise capital and re-in-ject it into their core businessto expand, purchase newequipment, or invest in newopportunities. A sale andleaseback enables access tomore capital than traditionalfinancing methods, as whenthe property is sold to an in-vestor, the seller receives 100percent of the property value.In contrast, traditional financ-ing is limited to a loan-to-value ratio or debt-coverage-ratio.

TYPES OF AGREEMENTSSale and leaseback investorscan work to meet tight timeframes. If a potential seller is

able to provide historical fi-nancial statements, a businessplan, projections, and a de-scription of the planned useof proceeds, investors canmake rapid investment deci-sions.In SLB transactions, typicallyleases are agreed on a triple-net basis, meaning that thetenant will be responsible forthe taxes, insurance, and com-mon area maintenance. Along-term, ‘hands-off’ leasefrom the investor providesthe tenant similar control overthe property, as was when thetenant owned the property.The tenant can also agreewith the investor options thatwill provide for future expan-sion of the property that isoften required in growingmarkets such as Poland.

CONCLUSIONWith the appetite for buyingindustrial and logistics prop-erty at a record high from in-vestors, record pricing can beachieved for sale and lease-back transactions in Polanddespite the current pandemic,and it is the best time for com-panies to consider such an op-tion.

Some opportunities for investment financing incommercial real estate

By John Palmer, FRICS,

Director of Industrial

Investments,

Savills in Poland.

With the appetite for buying industrial

and logistics property at a record high

from investors, record pricing can be

achieved for sale and leaseback

transactions in Poland.

SCRIPTINGA WIN-WINSCENARIO

EXPERT Foreign Direct Investment

Poland has adopted a new actintended to screen foreign di-rect investments in Polish com-panies. The new law (the“Amendment”) amends the Acton Control of Certain Invest-ments of 2015 (the “Act”) andextends control over mergersand acquisitions. The new provi-sions entered into force on July23, 2020 and will expire in 24months. In justifying the Amendment,the government referred to Ar-ticles 52.1 and 65.1 of the Treatyon the Functioning of the Euro-pean Union, invoking the pro-tection of public order, safety,and health as the main groundsjustifying imposing the new limi-tations. Noteworthy is thatmany member states and theEuropean Commission have em-phasized the need for regula-tions protecting valuable coreEuropean assets from takeoverat lower prices in the wake ofthe COVID-19 epidemic.

WHAT’S NEW?The Amendment extends thecatalog of so-called “protectedentities” by stating that all com-panies with registered offices inPoland that are public compa-nies listed on the stock ex-change, own critical infrastruc-ture, or conduct commercial ac-tivity in a specific sector of in-dustry are “protected entities”subject to control under the Actunless the Polish revenues ofsuch entity did not exceed EUR10 million in any of the two pre-ceding years. These specific in-dustry sectors include oil andgas, telecommunications, phar-maceuticals, medical devices,energy, developers of specificsoftware, and food processing.Intra-group transactions are notexplicitly exempt under the

Amendment.Any acquisition of dominance,whether direct or indirect, of aprotected entity or a materialstake in such entity is subject tocontrol by the UOKiK, the PolishOffice of Competition and Con-sumer Protection. Dominance isunderstood as holding the ma-jority of votes or capital, theright to appoint the majority ofdirectors, but also as the right toreceive more than 50 percent ofrevenue or the right to decide,on the entity’s course of actionon a contractual basis. A mate-rial stake is defined as holdingmore than 20 percent of thevotes, income, or capital of aprotected entity.The Amendment not only cov-ers direct acquisitions, but alsoincludes many cases of indirectacquisition, such as throughsubsidiaries, entities acting onbehalf of other entities, or byentities acting in concert. Fur-ther, the Amendment also ap-plies to the so-called secondaryacquisitions (nabycie następcze),which occur when dominanceor a material stake is acquiredthrough redemption of a pro-tected entity’s shares, by way ofdemerger or merger of a pro-tected entity with other entities,or through actions not aiming atsuch acquisition—for instance,a merger of companies outsidePoland resulting in the indirectacquisition of dominance.

NO TRANSACTION WITHOUTNOTIFICATIONAcquisition of dominance or amaterial stake in a protected en-tity must be preceded by notifi-cation to the UOKiK if the director indirect potential acquirer isnot a national of the EU, a mem-ber state of the European Eco-nomic Area, or the Organisation

for Economic Co-operation andDevelopment. Companies mustnotify the UOKiK if they havenot been based in the abovementioned states for two years.Investors from the US are ex-empted from the Amendment,though. Any branches or sub-sidiaries of a non-exempted en-tity will be treated as non-ex-empted entities themselves.The Amendment also attemptsto close a potential loophole toavoid the Act by stating that ifan exempted entity contem-plates the acquisition, such en-tity may be treated as a non-ex-empted entity if it does not doreal business other than thecontemplated acquisition, or if itdoes not have substance (enter-prise, office, employees) withinthe EU/EEA/OECD.Subject to several exemptions,the notification needs to befiled before executing anyagreement resulting in the obli-gation to acquire a stake in theprotected entity. Within 30days, the UOKiK will be obligedto decide either that there areno objections in respect of theacquisition or to launch a full in-vestigation. In the latter case,the UOKiK must issue a decisionwithin 120 days either approvingthe notified transaction or ob-jecting to it (this deadline maybe longer because the clockstops any time the UOKiK re-quests additional documents orinformation). The parties in-volved may not proceed withthe contemplated transactionuntil the UOKiK’s decision hasbeen issued. The UOKIK may object to the ac-quisition if it determines thatthe proposed transaction maycause potential danger to publicorder, safety, or health, basedon the Treaty on the Function-ing of the European Union.An acquisition completed with-out notification or that has beenobjected to becomes null and

void. If shares have been indi-rectly acquired as a result of sec-ondary acquisitions, the votingrights vested in such shares maynot be exercised. The Amend-ment also provides for financialpenalties of up to PLN 50 mil-lion, criminal sanctions for act-ing without notification or fail-ing to file a notification, or bothfinancial penalties and criminalsanctions.

EFFECTSThe Amendment will materiallychange the market of mergersand acquisitions as well as pri-vate equity for Polish compa-nies. First, it adds another hurdle tothe acquisition process. The par-ties involved must file the re-quired documents and wait forthe outcome of these proceed-ings before the UOKiK. Further-more, the notified transactionwill now be analyzed from thepoint of view of public order,safety, and health. Since there isare not many existing case lawsregarding these issues inPoland, the parties to the trans-action may be uncertain as tothe outcome of a UOKiK review,adding another layer of com-plexity. Finally, there may alsobe anxiety concerning too muchdiscretionary power vested inthe UOKiK in potentially block-ing transactions concerning pri-vate companies.The Amendment also sets forththe rules of exchanging informa-tion and cooperation betweenPoland, the European Commis-sion, and EU member stateswith respect to foreign invest-ments. The new provisions mayrequire investors to provide in-formation about the contem-plated investment or the invest-ment which has already beenput in place after April 10, 2019.

REINFORCINGTHE NETNew rules for scanning FDIcoming to Poland

By Marcin Wnukowski, Partner, Squire Patton

Boggs; and Karolina Łasowska, Associate,

Squire Patton Boggs.


70 71

Labor Code

The rapid spread of the coron-avirus has led employers to im-plement remote work for all orsome employees.However, the labor law's cur-rent provisions provide for onlyone form of remote work—tele-working. This is defined in Arti-cle 67(5) et seq. of the PolishLabor Code as the regular provi-sion of work outside of the em-ployer's headquarters via elec-tronic communication. Until re-cently, remote work was seenas an employee benefit. It wasconsidered the occasional provi-sion of work at a location differ-ent from that specified in theemployment contract, re-quested by the employee, andrequiring approval by the em-ployer or superior.

NEW SOLUTIONSThe widespread quarantine dur-ing the coronavirus pandemichas forced new solutions forhow work is performed outsidethe company's headquarters.Given that telework was not anideal solution for employerswanting to introduce flexiblehome office options, it becamenecessary to regulate remotework. The provisions of the gov-ernment program, the Anti-Cri-sis Shield, were created to sup-port employers, offering themtools for more-flexible teammanagement and workplace or-ganization. Article 3 of the Anti-Crisis Shield Act provides a spe-cial regulation through whichemployers may instruct employ-ees to carry out the work speci-fied in their contract of employ-ment in a location other thanwhere it is usually carried out(remote work) for a specifiedperiod. In light of the new provisions,

remote work is ordered at theemployer's discretion, whichmay be only preventive, and isbinding upon the employee. Em-ployees are required to followthe employer's instructions inaccordance with the PolishLabor Code as long as the in-structions are not contrary tothe law or their employmentcontract. Refusal to follow theemployer's instructions may re-sult in the employee beingfined, warned, or reprimandedfor not complying with agreedorganization, order at work, aswell as with occupational healthand safety rules.

THE CONDITIONSRemote work may be ordered ifthe employee has the skills andtechnical and accommodationcapacity to perform such work,and the type of the employee'sresponsibilities allows for this.Remote work may be per-formed in jobs using direct re-mote communication, or evenin those making manufacturingcomponents or material serv-ices, for example. The employerprovides the work equipment,materials needed to performthe remote work, as well as lo-gistics support. It is worth not-ing that the provisions of thespecial act do not refer to theemployee's housing or familyconditions in relation to beinginstructed to work remotely.Thus, if the employee reportsthat they are unable to workfrom home, the employershould designate another loca-tion for the remote work.The new provisions do not clar-ify the maximum period forwhich remote work may be per-formed. This is at the em-ployer's discretion and can be a

set period justified by the Covid-19 pandemic. However, it shouldbe noted that Article 3 of the actwill expire 180 days from whenit entered into force on March8. Therefore, it can be assumedthat the duration for which theemployer may instruct an em-ployee to work remotely maynot exceed this period. In addi-tion, the special act does not in-clude any information on short-ening or extending the periodof remote work. It should be as-sumed that shortening or ex-tending the duration of remotework due to the pandemic ispermissible, but only within theperiod mentioned above unlessthe special act is updated toamend the period of validity ofthe provisions.

THE IMPLEMENTATIONThe Anti-Crisis Shield Act doesnot specify how remote workshould be ordered, nor does itpropose any rules for how itshould be performed. In the in-terest of both the employer andemployee, remote work shouldbe assigned in an official e-mailor letter, as an example.The employer should ensuresafe and hygienic working con-ditions for employees before re-mote work can be imple-mented. This is the employer'sresponsibility in accordancewith Article 15 of the PolishLabor Code, and the applicationof the provisions of the specialact does not release it from thisobligation. As a personal datacontroller, the employer shouldalso take all necessary measuresto ensure the safety of data ex-changed between the em-ployee who works from homeand the company. All availabletechnical and organizationalsafeguards should be employedto prevent potential breaches.Remote work is only a tempo-rary change of the place inwhich work is performed, and

this is why all other provisionsof employment contracts andinternal regulations remain inforce. The employer should in-clude all the above aspects intheir special-purpose regula-tions for remote work. Such reg-ulations should outline the rulesfor organizing remote work:how it is ordered and how theresult is received, control ofwork, confirmation of com-mencing and ending work,recording working hours, wherethe remote work is performed,ways of communicating with su-periors, and tools required forthe performance of such work,among others.

CONCLUSIONSUntil recently, many Polish em-ployers only agreed to occa-sional remote work. Currently,the wide application of such awork mechanism continues toallow many companies to carryon their operations and keepjobs. According to a study runby Devire, 67 percent of compa-nies surveyed which had not of-fered the option of remotework until recently decided totake this step after the pan-demic started.Given that the pandemic hasnot yet subsided in Poland, itcan be assumed that the specialact's provisions will be ex-tended. Perhaps this form ofwork will soon become perma-nent and regulated in more de-tail in the Polish Labor Code.Employer organizations, includ-ing the American Chamber ofCommerce, Business CentreClub, and Lewiatan Confedera-tion, have recently issued an ap-peal to clarify legislative solu-tions related to remote work, in-cluding in relation to occupa-tional health and safety, andproposing more realistic solu-tions.

IT'S TIME TOGET REALWorking from home duringthe pandemic

By Agnieszka Polańska-Kanka, Director, Client

Services, HR & Payroll,

Vistra Poland.

72

EXPERT Competition law

Contemporary competition lawis built on two pillars: faith inthe liberal market economyand faith in economic analysis.But in many countries in theEU, including Poland, this faithis clearly dying. How will com-petition law look in the thirddecade of the 21st century, andwill the current situation in-evitably lead to changes in theprinciples governing competi-tion law enforcement?There are many indications thatcompetition law will be aimedat protecting the weakest play-ers, regardless of whether aneconomic analysis justifies suchprotection. Economic consider-ations will increasingly giveway to social and political con-siderations.

NOT SO LONG AGOThe dominant economic narra-tive in the 1990s in Poland,which still undergirds our an-titrust law, was based on as-sumptions that are now beingchallenged. For example, it wasclaimed at the time that statedebt should be as low as possi-ble and interest rates should behigh enough to hold inflation incheck. In turn, printing emptymoney was regarded as suicidalfor the economy. Deregulationwas seen as essential and priva-tization as a priority. Long-terminvestments in equity marketswere considered the best secu-rity for the money of future re-tirees. Finally, somewhat later,Poland’s rapid accession to theeurozone before 2015 came tobe regarded as something cru-cial that needed to happen.

THE PRESENT DAYThe events of recent yearshave painfully tested these dec-larations. Some experts looking

at them from today’s perspec-tive claim that they were all er-roneous. For over five years,the stimulation of a large seg-ment of Western economieshas been conducted with thehelp of debt drastically exceed-ing any levels deemed accept-able 20 years ago. It is the samewith the printing of fiat cur-rency, with quantities in circula-tion beating all records. We livein a world of negative interestrates that, combined withempty money massivelypumped into Westerneconomies, do not cause anysignificant increase in inflation(contrary to earlier canons ineconomics). The 2008 financialcrisis sparked by the extremelyderegulated American bankingsector, among other reasons,demonstrated that central reg-ulation is nonetheless required.Companies controlled by thePolish government are nowholding their own againstWestern competitors. The War-saw Stock Exchange today isabout 20 percent below itspeak 13 years ago, and hardlyanyone mentions the need toadopt the euro as soon as pos-sible.

WHOM TO PROTECT?Contemporary competition lawis focused on a purely eco-nomic perception ofreality. Sensitivity to social is-sues has been rejected almostby definition, as an economicanalysis suggests that the mostefficient undertakings shouldbe prioritized over their weakerrivals. But the preferences ofvoters in many countries areforcing a change in this direc-tion. It may be said that historyhas come full circle, as competi-tion law was historically a tool

to help combat inequalities—weakening the strong tostrengthen the weak. After all,the protection of small andmedium-sized enterprises isone of the oldest aims of an-titrust law.It may thus be expected thatchanges occurring in manyWestern countries manifest,for example, in the need forgreater social sensitivity. Thesechanges will make the protec-tion of smaller and weaker eco-nomic entities against strongerrivals one of the main aims ofcompetition law. The economicindicators commonly promoteduntil recently to justify antitrustinterventions will probably de-cline in favor of social and polit-ical indicators.

LEGISLATIVE CHANGESFaith in the liberal economy isweakening, and has alreadypractically collapsed in somecountries. Poland is no excep-tion in this regard. We see thata social perspective is graduallyreplacing an economic perspec-tive in the field of the Polishlaw of competition and con-sumer protection. For example,the Contractual Advantage Actwas adopted with the particu-lar aim of protecting small agri-cultural producers against re-tail chains, even though suchretailers do not have marketpower from an economic pointof view. In turn, the amendedAct on Delays in CommercialTransactions gives the presi-dent of the Office of Competi-tion and Consumer Protection(UOKiK) the administrativemeans to prosecute the latepayment of trade debts—something having nothing todo with competition, butnonetheless needed socially.Another important change isthe amendment to the CivilCode, which became law inJune and extends to sole

traders the type of protectionpreviously reserved for con-sumers. Other changes beyondthe purview of the UOKiK butimpacting the competitive posi-tion of undertakings includethe Sunday Trade Ban Act, andplans to restore the tax on re-tail chains. These are solutionssupporting small shops at theexpense of large competitors.

ANOTHER WAY?One approach to resolving thisproblem is to refresh the con-cept of national championsthat was launched in the Westand particularly prevalent inthe 1960s and 1970s. These“champions” are companies in-dividual governments favor sothe companies can competemore effectively with global ri-vals, or for other social or politi-cal reasons. But this would re-quire competition law to be ap-plied with two standards.The first (baseline) standardwould assume that antitrustauthorities can protect weakerfirms at the cost of strongerones by following an economicanalysis and being guided bysocial and political considera-tions.The second standard wouldlimit how the first standard isapplied to national champions.For example, a merger of twostate-owned giants would beaccepted even if it could injureweaker national competitorsand consumers, as long as themerger furthered the nationalchampion’s chances in global ri-valry.It is hard to resist the impres-sion that the next decade, nodoubt revolutionary for human-ity in fields like artificial intelli-gence, biotechnology, and theInternet of Things, will bring acombination of decades-oldideas and concepts back theregulatory and legal world.

GOING INCIRCLESCompetition, protection,and different standards

By dr Antoni Bolecki, Attorney-at-Law,

Competition practice,

Wardyński & Partners.


3/2020 - AmCham Quarterly

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