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Dr. Malgorzata Bonikowska India EU Council

Eastern Europe and Poland new opportunities for Indian Business INDIA EU BUSINESS SUMMIT EU-India Trade Rel a tions and Beyond: Dynamics of Mergers & Acquisitions and the Role of Corporate Governance. Dr. Malgorzata Bonikowska India EU Council. EU NEW MEMBER STATES. EU Enlargement :

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Dr. Malgorzata Bonikowska India EU Council

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  1. Eastern Europe and Poland new opportunities for Indian BusinessINDIA EU BUSINESS SUMMITEU-India Trade Relations and Beyond: Dynamics of Mergers &Acquisitions and the Role of Corporate Governance Dr. Malgorzata BonikowskaIndia EU Council

  2. EU NEW MEMBER STATES • EU Enlargement : • 1 May 2004 : accession of 10 new member states, 8 from Eastern Europe (Poland, Check Republic, Slovakia, Hungary, Lithuania, Latvia, Estonia, Slovenia). • 1 Jan 2007 Bulgaria and Romania • Full participation in the Single Market and EU common trade policy • Relatively cheap labour force • High interest in attracting foreign investors • Dynamic economic growth (bigger than in old member states) • Good contacts with India in the past (60-ties, 70-ties) • Presence of several Indian companies already.

  3. EU FUNDS FOR EASTERN EUROPE • Considerable amount of EU funds for Eastern European countries for the next 7 years 2007-13. • EU funds for Poland (2007-13): • 68 billion Eur - structural funds for infrastructure, companies investments, human capital, environment etc.) • 20 billion Eur funds for agriculture and fisheries • EU funds for Bulgaria (2007-13): • 8 billion Eur

  4. WHY POLAND? • GDP growth twice than of Western Europe • 6,3% in 2007 • 5,0% in 2008 (forecast) • The highest foreign investments inflow : 16.2 billion USD • 2nd place: Hungary, 6.2 billion USD. • 80% companies that have invested already in Poland are satisfied and ready to invest again. Source: KPMG, report 2006

  5. POLAND AS INVESTMENT LOCATION 7th position in top 10 global investment destination • China48% • USA 33% • India26% • Germany18% • Russia12% • United Kingdom 11% • Poland11% Source: European Attractiveness Survey 2007, Ernst&Young

  6. POLAND AS INVESTMENTS LOCATION - sectors • First place as most preferred location for investment in the communication sector. • Second place as most preferred location for investment in the electricity and gas sector. • Third place as most preferred location for investments in agricultural, forestry and fishing sectors. • Growing potential as a location for service centers such as financial or call centers. Source: AT Kearney report 2006

  7. EASTERN EUROPE HUMAN CAPITAL Percentage of population in higher education in the 20-29 age group CountryPercent of the students Poland30,2 Germany 27,9 Netherlands 25,5 Hungary 23,7 USA 23,4 Ireland22,6 Czech Republic18,9 Slovakia 14,5 Source: Education at a glance, OECD 2006

  8. POLAND – HUMAN CAPITAL • 20 million young, highly educated, multilingual people. • The youngest population in Europe: • around 47% under the age of 35 years  • 32% under 25 years of age.  • The young generation of Poles is one of the best educated in Europe: • over 55% citizens between the ages of 20-24 attend higher education courses. • 2 million citizens attend higher education courses

  9. EASTERN EUROPELABOUR FORCE CountryAverage number of hours actually worked per person annually South Korea  2351 Poland 1970 Czech Republic 1923 Mexico 1920 Japan 1829 Greece1811 USA1809 Hungary1802 Slovakia1791 Source: OECD Employment Outlook 2006

  10. POLAND - LABOUR FORCE • The largest working population in Central Europe • 24 million people in working age group (61% of the population). • The hardest working people after Koreans. • Poles work 600 hours more than employees in France and Germany. Source: OECD Employment Outlook 2006 • In the same time - Europe is getting older. By 2030, the number of working-age Europeans will decline by 7%, while those over 65 will increase by 50%.

  11. POLAND - EDUCATION • Over two million young people currently study at the higher education institutions (half of the student age population). • About 390.000 students graduate every year: • about 240.000 in social sciences, business and law, • almost 44.000 in engineering, manufacturing  and construction, • 20.000 in science, maths and computing; • over 3.000 in specialized language studies. • A nationwide network of 448 centres of higher education. • 130 state higher education academies including 17 universities and 18 universities of technology, • 318 private schools of tertiary education. • They employ over 100 000 academics; half of them hold a Ph.D. degree.

  12. POLAND – FOREIGN LANGUAGES • 44% of Polish society is able to communicate in a foreign language. • 33% speak two foreign languages. • 96.3% of students speak English. • The most popular foreign language is English, followed by German and Russian. 

  13. POLAND AND ICT • Polish Information and Communication Technologies (ICT) education centers and specialists are highly recognized worldwide.  • Poles are winning in the prestigious Top Coder ranking and also achieving high positions in the worldwide Google Code Jam Competition and the IBM Linux Scholars Challenge. • Polish IT specialists are employed by the largest IT companies in the world • They constitute an important share of managers responsible for research and development (R&D) activities in multinational corporations such as Microsoft and Nokia. • In Sillicon Valley there are 300 Polish computer scientists. • There are 20 information and telecommunications (ICT)  academic centers with more than 2500 students each and 150 000 IT, computer science and telecommunication students overall.

  14. EASTERN EUROPE BEST CITIES RE: QUALIFIED STAFF PlaceCityScore 1 London 1,44 17 Warsaw 0,21 23 Prague 0,15 25 Budapest 0,13 Source: European Cities Monitor 2006, Cushman &Wakefield

  15. EASTERN EUROPE LABOUR COSTS Labour costs per hour in EUR CountryPrivate sectorProduction sector Poland 5,9 5,2 Hungary 6,7 6,1 Czech Republic 7,4 6,7 Slovenia 11,9 10,8 UK26,5 26,6 Germany 28,7 32,0 Denmark 33,8 32,3 source: Eurostat, 2007

  16. EASTERN EUROPE - MARKET

  17. POLAND - MARKET • Population of 38,16 mln: • the largest market in Central Europe • the eighth largest on the Continent, • 30th in the world. • Poland’s  market is larger than the combined markets of all the other nine accession countries that entered the EU together with Poland in May 2004.

  18. POLAND SPECIAL ECONOMIC ZONES • 14 Special Economic Zones created until 2015-17. • designated areas in which investment activities can be conducted on preferential terms. • Investors permitted to operate in the SEZ can benefit from the following: • income tax exemption – a form of regional aid • land at competitive prices • free assistance in dealing with formalities relating to the investment project • exemption from real estate tax • grants for employee training programmes • grants for the creation of new jobs

  19. INDIA AND EASTERN EUROPE • Economic growth transforms India into one of Asia's star economies. • The new member states are slowly waking up to the vast business and cultural potential of India. • However, India is still seen by most people in Eeastern Europe as an underdeveloped countrysource of cheap and non educated labour force.

  20. INDIAN INVESTMENTS • Over 90% of the funds of Indian companies are invested inother parts of Asia and the developing world. • The rest is invested in Europe the United States. • Eeastern Europe has started to be popular after 2004 (the EU enlargement).

  21. EASTERN EUROPE - PROBLEMS FOR INDIAN COMPANIES • Not stable political system • Unclear law environment • Restricted domestic policy towards Asians • Visa problems • Crossing borders • Public opinion against cheaper labour force from Asia. • Stereotyped perception of Indians in business.

  22. INDIA EU COUNCIL • The India EU Council was established to facilitate contacts between India and Eastern Europe, also in the field of business cooperation. • It is registered under the European law, as an NGO in Poland. • It operates from Warsaw but has representatives in Sofia, Vilnius as well as in New Delhi. • It acts through its partner companies.

  23. OFFER FOR INDIAN BUSINESS • business and investment assistance (legal, taxes, social dialog etc.). • Representation offices management. • Public affairs (central and local government) • Training and coaching programs re: cross-cultural relations and human resources management in a different cultural background. • business trips and workshops. • Feasibility studies and business plans. • Financial consultancy (EU funds included). • Research, analysis and sector dossiers on request (environment, energy, tourism etc.) • Business news and features e-services delivered by email • Business press and internet monitoring.

  24. LODZ CHAMBER OF COMMERCE • Reactivated in 1990. • Its the biggest organisation of economic government, associating more than 400 enterprises in Lodz region. • Its associates companies of all trades • Mainly textiles, construction and farmaceutical companies • 85% SME • It is a member of Polish Chamber of Commerce.

  25. OFFER FOR INDIAN BUSINESS • Representation of business interests in front of the governmental and local administration, • Participation in governmental and EU programs supporting business development, • Contribution to the member companies development and support to their activities, • Assistance in court cases, • Organisation of trade missions for companies. • Information services.

  26. IMPORTANT EVENTS FOR INDIAN BUSINESS IN POLAND 2008 • INDIA EU business workshops in Lodz, spring 2008 (Lodz Chamber) • India EU business workshops in Gdansk, May 2008 (India EU Council) • India Days (Indian Embassy to Poland).

  27. INDIA EU COUNCILoffices in:Warsaw (Central Eastern Europe) Sofia (South-Eastern Europe)Vilnius (Nord-Eastern Europe)www.indiaeu.euemail: info@indiaeu.eu

  28. ŁODŹ CHAMBER OF INDUSTRY AND COMMERCE30 Tuwima str.90002 Łódźphone: +48 42 250 5450fax: +48 42 630 3979email: liph@liph.com.plwww.izba.lodz.pl

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