The following are the outputs of the captioning taken during an IGF virtual intervention. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid, but should not be treated as an authoritative record.
>> PRZEMYSLAW KURCZEWSKI: Hello. I'm Przemyslaw Kurczewski, Deputy Director of the National Centre for Research and Development.
We're an agency responsible for distributing European funds for increasing or developing digital economy in Poland. I have the pleasure to present a short summary of analysis that we did over in research and development related to projects that we financed over the last five or six years, starting from 2016. I think it's an interesting data showing what trends are transpiring in Polish digital industry, what projects are being developed by our entrepreneurs, and where the competitive edge potentially will be.
I will start with the short conclusions of the analysis, and then we'll move to our experts who will discuss their point of view on perspectives for Poland in an international context.
We have close to 66 billion Polish ‑‑ over such period of time. That's approximately 16 billion euro. It better develops gross national product and benefits to the result problems which civilization is encountering right now. For example, we're very much keen on developing technologies related to the European Green Deal and all other digital and artificial technologies what are going to be critical to actually compete in the world as it's coming in years.
Projects that were financed over this period of time. Projects for analyzed. Out of this sample population, which was by our experts, the following data and interesting conclusions have stemmed. Close to 60% of these projects which was examined related to projects which worked on digital products within the digital economy.
Out of the 60%, 40% related to development of new software. 32% related to development of new digital processes. 28% to hardware solutions.
Close to 15 billion were actually invested in such projects over this period of time. The interesting part, which was a bit of a surprise to me, were those projects, which were most costly, the largest were projects related to process change. It turns out that innovations related to processes which were intended to increase capacities of companies increasing efficiencies were most complex because they were transparent in terms of numerous areas that were attaching personnel that was involved as well as implementation, it turned out to be the most difficult because often, in a lot of cases, these new solutions, those innovations were applied to living organisms, meaning they were introduced to plans and organizations which were functional and, of course, this had several additional risks related to that. That's why the cost of implementation and development of implementation seemed more significant than it would appear on its face.
The interesting part which came out of these analyses, the findings by researchers in Poland, there were technology that was more often than not financed by our institution, which is artificial intelligence, machine learning, and blockchain. In Poland, that's kind of considered an enabler to mostly finance solutions.
Internet of Things and virtual reality, cereal things related to VR, related to medicine, learning as well as some potential defense applications, and technologies, of course, related to minimization and process automation.
An average investment related to each of these projects amounted to close to 10 million slots. It's hard to say if this is a lot or very little, but that's an average, including investments and development of applications, simple implications, user friendly or funds for consumer goods, therefore numerous projects were above that figure, which shows the level of technology, scientists, and sophistication was significant.
The three main areas of investment analyzed by us showed significant return on investment. Of course, those figures are very attractive. If anyone runs a business, then anyone should be pretty much interested in digitizing their business.
In Poland, some of the prices, the smaller ones, are not keen on investing in digitization. There's a significant amount of family owned businesses that are not really following up on investment in digitization. Maybe this is only a question of volume that given businesses are actually running, but the return on investment shows that this is a very much justified investment.
The sample on what cities were mostly benefitting from, this is from the National Centre For Research and Development, these industries were very attractive. It's probably because of the volume these industries produce. That's any investment that's actually implemented and gives significant returns.
This should be noted, of course, that the data pertains to projects that were financed and successfully completed. Therefore, this data pertains to only those projects that were successfully completed.
This agency take this is into consideration when we make a decision to support, given innovation.
Some general data regarding the central European region, within the period of five, six years, based on the Kenzi analysis, we know business in central or Eastern Europe grew 24% over this period of time.
Poland grew also within that Tempo. 24% of the growth is also coming from Poland. Poland is seventh position in terms of scientists working on the new technologies related to digital. We're number one in terms of number of scientists working on digital economy within the center and European area.
So in many ways, we are very well destined to become a hub for numerous technologies of this type in the central European region, not only because, of course, we have scientists that can be transferred to business, and it becomes more and more the case, but, also, we have the basic markets ‑‑ the size of Polish markets seems fit for these type of solutions. That, in many ways, is the attractive future of Poland.
We think we will be an attractive place for placing business within the digital economy in the near future. The question is how can we make Poland more attractive, and how can we increase the cooperation between Polish scientists and Polish businesses in the future?
If you look at Polish transformation, 10, 20 years ago, cooperation between Polish science and Polish business was very limited. Polish business was very much inclined to purchase simple plug‑and‑play solutions. Not only because it was simple but because Poland was slipping behind in many ways.
Now, Polish businesses are discovering, noticing ‑‑ not necessarily discovering but noticing and seeing innovation of their own as an opportunity to not only conquer Polish market but also conquer European and world market.
My personal experience, talking to some of the younger inventors and innovators, when they start their start‑ups, they think about the Polish market as a step stone or a certain stage of development of their products.
They do think of conquering Europe immediately. It's almost a direction for them immediately.
Conquering the world is the next step.
On the other hand, of course, you have Polish business, which is often qualified as Poland being a significantly large market.
One of the dilemmas we have working on our new strategy, we have developed a new strategy within the NCBR.
This is what Polish businesses should be supported and what should we focus on regarding the euros that are allocated for Poland in the most efficient way.
Whether we should produce everything, should we concentrate on having a competitive advantage of something or try to do everything on our own? That's some of the issues I would like to discuss.
And, of course, a short pitch, publication, according to our new strategy, we will like to be providing Polish business institutions with data we found in the past years to give a better view of what potential it has and what technologies and what areas of the market Polish business is seeing as their future in conquer ing markets because, at the end of the day, it's the business that knows better, outside of some of the critical technologies that the public should support, like artificial intelligence. Not only because we want to develop artificial intelligence in Poland and be a player in this market but, also, a as public institution, we need to know how it works related to cyber threats and other things.
I need to apologize that two guests had exposure to COVID, and they decided not to come.
But I think we'll do fine.
With me is Izabela Banas, Deputy Director, Analysis and Strategy Department, Polish Agency for Enterprise Development.
>> IZABELA BANAS: Good afternoon. It's nice to be here.
>> PRZEMYSLAW KURCZEWSKI: Marcin Kraska, Vice President of Lukasiewicz Research Network for Research and Development.
>> MARCIN KRASKA: Good afternoon.
>> PRZEMYSLAW KURCZEWSKI: And Dawid Solak, president of management board of the Future Industry Platform Foundation.
Should we have any areas of expertise, in an area which you think today we have a potential for competitive advantage?
>> ROMAN SZWED: Of course, one has to use the money because if you use it secretly for everything, it will not work. I have such a saying that if you improve everything, repeat, you know, everywhere, the result is so good. So one should balance. So we should not concentrate on one or two branches and only develop this. We should try to keep going with everything. Of course, we should select these few branches, these few industries, and should try to develop faster.
Before, let's say, coming to this, I would like to make some comment that, you know, usually we see such industry and good success of industry to produce something big, some big products, products which are heavy, products that can cause a lot of money, et cetera. Because I am representing IT industries, you look at which companies in the world are biggest. They have the biggest capitalization. If you look now, you will see the largest companies, the biggest companies, like Facebook, Google, Amazon, they do not produce big and heavy things; yes? Simplify the subject, they specialize in property and services; yes?
So we should not only remember that it's not so easy to choose this one ideal subject or one ideal branch and develop this one, but we should also remember that there is a transition that's not product. It may be services. I think a very good example for this is the transportation industry. Poland is very developed.
Coming back to NCBR ‑‑ I hope my colleagues will do it, but I will stress that I will support very much the IT industry because we are, ideally, in very good position. We have a good education. We have good results, like the games. Suddenly, Poland started to be maybe not Italy yet but almost, yes. And getting a lot of money and position. So if we concentrate on it, this is what NCBR is doing. NCBR is supporting education by giving money for what we mentioned but also in many other aspects.
So supporting education. Right or wrong, one has to have start‑ups, and NCBR is supporting start‑ups. One can do this even better than now, as I said. Everything we should try to slightly do better.
With some product, usually, if there's not Internet market developed, these products cannot be checked on the Internet market. It's very difficult to go for the global market. I think this I would see where NCBR can help. How to do this, our Internet market is supporting, let's say, (?). If there are programs for those customers ‑‑ not those who deliver these, let's say, services and products, but wants to improve their companies, let's say, in such a way that they have elements of artificial intelligence and money for this, they will be companies providing this because they will have money for it.
If you have such an Internet market and develop this Internet market, the next step is a global market. We will be very successful.
Well, of course, I don't want to omit this business like the it industry, but I think we should really concentrate on it.
>> PRZEMYSLAW KURCZEWSKI: The same question to Mr. Solak. We have a view of what seems to be an interest or a focus area of members of your organization. Can you elaborate?
>> Dawid Solak: Well, one is my formal, professional thought. If my professional life, I used to be, for a few years, a manager in the research‑and‑development center in one of the Polish chemical companies. I was responsible for development in our company. We were using many tools like accelerators. There was no solution that we wanted that we were unable to find on our market. Companies using tools like I mentioned are often looking for innovative services or products that will help them to make our evolution into the market and to become a leader. It improves processes like transport, training, predictive maintenance, or something like this.
I think that our domestic market is quite strong when it comes to the digital technologies. Of course, it depends on the needs and the specificity of the company and the firm. This is my first thought and my first perspective.
The second perspective is perspective from the future industry platform. I think that this is a general thought. I think there are some branches like, perhaps, robotics where we don't have strong service providers, and we shouldn't even think to chase the leader and to have a domestic producer as leader because it's just a waste of time. And we should work on filling the gaps on our domestic market.
>> PRZEMYSLAW KURCZEWSKI: Thank you.
Marcin Kraska, very agile years ago. Business scientists, things opened up with good reviews. Should we go on with what we have now?
>> MARCIN KRASKA: So in Poland, we have very strong sectors. The problem is we're rather subcontractor, not innovator. This is the main problem of Polish economic businesses. We're very strong in our automotive sectors. We're the major European manufacturer of automotive components and spare parts in Europe.
So we are the third producer of the hydrogen in Europe. We're very strong in aviation and many, many other sectors that we are very big businesses, but a lot of competences. We don't use it to build a leader position in Europe and even in the world.
So the problem is that, in my opinion, there's a lack of specialization in Poland. We invest a lot of money, but we invest this money in many projects.
So we don't concentrate the investments on the specific specialization to build leader position in Europe or in the world.
So we can't reach the scale effect to build this position.
So to use the money from NCBR, we should concentrate this investments to build the specialization in sectors that we're able to become a leader in Europe. It's not the investment and infrastructure, but it's investments in people, in scientists, and also in investments to attract specialists and experts from different countries to come to Poland.
This is what the strongest economies do. I will give you two examples from Germany. They built a very high competence in quantum computing.
There was support from the government of 630 millions of euro. It was just in two years to build the quantum computer and to build the competences. They cooperated with IBM just to build these competences. With such a big amount of money, we can't compete with Germany.
The second example, also from Germany, it's concerning the hydrogen. Germany has been announced as being the leader in hydrogen. They invest €8 billion in this hydrogen sector. This helps to trigger investments of €33 billion. So let's talk about the big investments in Poland and not fragmented investments but very big. We should define what is our specialization? We will not be a leader ins everything. We should concentrate on the specific areas and really invest a lot of money to build the competences, to use the competences which are already in the market and different institutions and businesses to become a leader in one of the areas.
I think we need this activities to define this position.
>> PRZEMYSLAW KURCZEWSKI: So that follows exactly the question because we seem to be doing well, but it's all relative. Maybe we're doing well but just well, not well enough. The potential is there, how to focus the resources we have because they're not unlimited? And can we come up with a national strategy that will support selected industries?
>> IZABELA BANAS: I would like to talk about the technologies, but if I comment in the context of digitalization technology, it seems secondary for me. I totally agree with you, the people are the most important, the knowledge and the competences.
We're in a moment where the world, the whole world is struggling with experts. In Poland, we have a high level of education, technical educations. There's a lot of kinks to improve, but, anyway, every year, we educate quite a high number of specialists and engineers.
If we're talking about export and import, definitely, we should import them. What we have to focus on is good work life, business condition to make our market more and more attractive, not only for the young professionals from Poland, young and old ‑‑ it doesn't matter ‑‑ but also from creative people from the whole world.
This is what we try to do for enterprise development. I have to admit that the first results are quite promising. In our pilot programs, more than 100 SMEs were established. In current programs, we are expecting even 400 more. So we should differential import people with the knowledge, and things will come with them.
>> PRZEMYSLAW KURCZEWSKI: The question is how to make SMEs invest in digital, how to make them interested in developing their business into something bigger than SME? How do we make those places an attractive place to work for our scientists?
In your experience, in your programs, do you foresee any of the type of programs in the future? Do you see a need for that kind of support? How do you see that in the future, from the next European perspective?
>> IZABELA BANAS: We talk about acceleration programs. So we have to remember about advisory services, about financing what we see. It's most important for our clients in the start‑up ecosystem. It's to connect them with the clients.
So what do we do in our programs? We connect start‑ups with big companies. The first client that is able to help them to develop the product.
>> PRZEMYSLAW KURCZEWSKI: So the basic thing that's needed is the cash flow to check with the market what the result of their innovation is?
>> IZABELA BANAS: Yeah, I think so.
>> PRZEMYSLAW KURCZEWSKI: Again, Marcin, there's the collaboration of science with business. Things were very limited. It's improving. Again, your institution has created a special program, challenge, where a business can turn to your institution, to your scientists, with a question, and you come back with a proposal of a solution within two weeks. It's very agile. You have hundreds of projects like this.
Can you elaborate how you see a way of existing between science and business in Poland, and how can we improve this? If we actually do have these level of expertise that we determine we're going to do, then those collaboration of two different worlds, then things should be strengthened, improved, supported.
>> MARCIN KRASKA: Okay. With the network, it's a very young network, the Lukasiewicz. We're only two and a half years old, but it's built with the very experienced institutions, research institutes.
Now, with the network, there's 32 institutes with a very, very wide range.
With Lukasiewicz, we focused very strongly on the corporation with the business. We don't want corporate. We want to make a business with the business. That's why we analyzed the problems in corporation and making the business with the business.
The first thing before Lukasiewicz, the problem was finding the competent scientists and institutions that can help in solving the problems of the businesses. Before Lukasiewicz, we had 38 because we started with 38 institutes. So businesses should find the competent scientists in these 38 institutes.
The businesses don't care about where is the scientist.
It's our role to find the competent team and design the challenge that the business designs for us.
It's a basic thing. Thanks to this assumption, we created the challenge system. It's, of course, supported by the IT. So business can send us the challenge, and Lukasiewicz, within 15 days, can give the team, the competent team, and also the answer for this challenge, the initial answer, of course. But it's the answer that we show that we are able to solve the business problems.
So until now, we had the anniversary of the system. It was two years ago. Until now, we had 1,000 challenges with over 400 companies in Poland. So it's quite a big number of companies which already cooperate with Lukasiewicz.
It's a few things. Lukasiewicz has over 4,000 scientists. It's not possible to build Such a competence in businesses and also very, very wide range of infrastructure ‑‑ research infrastructure, which is not possible to build In a single component. So it's the strength of Lukasiewicz in partnership with the businesses.
Also, the subject of international cooperation, it's important in research, of course. To our aim, it's increasing the corporation because the biggest research projects are with the different partners, not only national but international.
So we want to build the corporation with many institutions, international institutions. That's why we created a centre for foresight. One of the directors is from one of the research networks in Europe, the biggest institutions in the horizon of 2020. So we also attract people from abroad to work at Lukasiewicz to build the competences and to build the very strong entity in Europe and farther, maybe, in the world.
>> PRZEMYSLAW KURCZEWSKI: So science in the service of business, and that's something that is absolutely critical for the development of a Polish future in new technologies. It may seem obvious to a lot of people that this is how it should be done. Please remember that in Poland, we have a very short way ‑‑ (chuckling) ‑‑ we have only a few years to prepare ourselves for the free market economy. The tradition between working with science and business in Poland is relatively knew considering the transformation that happened toward the end of the 1980s. That's why this, in many ways, is very critical for us to foster this type of corporation.
Now, the question to Mr. Solak and to Roman, there's a question of whether or not business likes to work with scientists. A lot will tell you that corporation with scientist is difficult. How does that look from your point of view? Members of your organization, do they see a future in working with Polish scientists and institute like Lukasiewicz?
Would you suggest some changes in the way this corporation is being done today? I'm sure there's plenty of suggestions. How can we change our institutions to make your life better?
>> DAWID SOLAK: Well, I think we're doing more to make the cooperation between business and science better, more effective, and easier. There's more and more tools, even the financial tools, that are helping transfer technologies from the world of science to the world of business.
I have a lot to do with both, with science and with business in my professional life and in my past. I think that one of the very important things is to work on awareness. Awareness in the world of science and in the world of business, we should convince ‑‑ like the research institutes and people from the higher scholarship that they should move their innovative products and services to the market faster and faster. We also need work on business, that it's worth it to invest in the digital technologies, in innovations. These are two quite important tasks.
This is one of our major tasks that we're doing in our daily work. My predecessor says his institution is quite young. The industry platform is even younger because we have only ‑‑ because right now, we have only two years. It's great work before us en route.
>> PRZEMYSLAW KURCZEWSKI: So we can help us in preparing future programs to help support ‑‑
>> DAWID SOLAK: Exactly.
>> Roman Szwed: It's okay to help science emerge. I think this is number one. I mean, it's a going component. A lot of small groups may be and even not small but involved in some projects, and they just help to understand, to solve some problems.
But this is not the same, to do business together.
So doing business together is almost impossible. Not because people don't want because we have such a lack of infrastructure. We have lows. It's very difficult because it's government. This is provide. This international property, to whom does it belong in the end?
Business is not going to do it because they will have problems like their own. Also, from the scientific side, it's the same. It's much easier to get money ‑‑ 100% funds for what I do than to go together with some business and get only 40% and have problems with it. I think we have a real up cycle in just our structure, how to really cooperate. This does not mean that we do not cooperate. We cooperate on a different way.
We have developed nice examples. Corporations that say, We're so technical, a technical ‑‑ it's not that we don't cooperate. We help solve problems. We try to ask them to even promote certain of our solutions, like teach their students which is something really needed for us but not only for us, for any business in Poland and later on.
A lot of aspects of this corporation is going okay, but not everything. We have such a structure, and we cannot just forget about this.
>> PRZEMYSLAW KURCZEWSKI: I suspect Marcin has a proposal for you.
>> MARCIN KRASKA: We try to change the mind of scientists because before, the scientists did not listen to the business. We prefer projects with businesses, not only taking the money from NCBR, for example, for research projects but to do the project with real business because the business is able to define what is needed by the market. I think that we spent too much money just for research.
So that's why we say that we prefer business with business, not corporation because, for example, in the research institutes, we create also the new technologies. This technology could be commercialized with the business.
We want to create the technologies which are needed by the business, by the market. So were very, very business oriented in our activity. This is doing the interesting thing, which are needed by the market. This is our goal and our direction of developing the scientists and developing the activities.
So very, very concentrated on the businesses.
>> PRZEMYSLAW KURCZEWSKI: I think the two of you should meet offline and your CEO.
Question to Izabela. There seems to be a certain conviction among SMEs. Item higher technologies are large domains of companies like Microsoft and Google. Then, of course, there's a start‑up world where people are high‑tech and tech‑crazy, almost. The small‑to‑medium business is somewhere in the middle. It's not necessarily most proficient in this area. The question is: Do you see a potential for Polish business in digitalization and increasing capacities and conquering the world?
>> IZABELA BANAS: Yes. The situation is not clear. On the one hand, when we implement the activities, when we support the SME in the digitalization or in the transformation, we see a really greater interest. It's enough to say that in our last project, digitalization, we received more than 6,000 applications from SMEs that wanted to digitalize their processes. So it's really a great number. We see a really big interest in the companies.
But, on the other hand, some studies, even the research done together with PARP, it shows that it's almost 50% of small and medium enterprises don't think it's for them. This worries us. It's differential a lesson to do, a lesson to learn, and it's a lot to do for all of us, for all of the institutions.
>> PRZEMYSLAW KURCZEWSKI: Looking at the rates of return on investments, those that we found in our project, anyone reasonably, I think, should expect this interest be supported.
We're starting to come to an end. I have one more question. The pandemic has two effects, of course, the nightmare of being here, but, also, it stirred an interest in digital solutions by the participants, actually by the consumers. The digital market is booming because those of us, including myself, who did not look for digital solutions in the past found that there are solutions existing that helped in certain things, courts, shopping, other things.
There's this other way, this other side of the acceleration. We do not work as teams much. There's an experience of this digital world that we're living in that's not always positive. Can you elaborate on your experience in this area and your membership?
>> MARCIN KRASKA: I agree with what you said. The COVID pandemic has shown us that companies and teams that are using digital technologies are more resistant to the effects of COVID, and it's also strictly connected with what Ms. Izabela Banas said. A lot of people think digital technologies are not for them. I think COVID has shown us that the digital technologies are for everyone because I think that almost every report and every research about the results and about the impact of COVID, companies that used digital technologies dealt with the results of the pandemic better and better.
I very often say one thing at a lot of conferences and in interviews. Luckily, we, as a country, live in times where money is not the biggest problem. While we have more and more financial tools, well, I'm not the proper person to say about them, but I think that also Ms. Izabela Banas is the appropriate person to say what PARP is doing for entrepreneurs and what we'll have in Poland in the next perspective.
These are European tools founded by the European Commission. There are also our national tools, like the tax relief, perhaps, for urbanization. Still, the most important thing for us, as a country, and also for the people who are sitting here right now because we are all participants of one of the most important things in transforming our economy, the ecosystem. We're all trying to create an entire ecosystem that will help us to convince and help entrepreneur and our citizens to transform and to go digital.
The most important thing for us is still to work on awareness, to convince our entrepreneurs, to convince the citizens that the digital transformation is one of the biggest challenges we need to face also, as a country.
But there's other sides. One of the biggest tasks for us is to raise the awareness level and create friendly regulations that will help our entrepreneurs and public institutions to transform and to go digital.
>> PRZEMYSLAW KURCZEWSKI: Well, thank you.
And our time is ending. Maybe a couple of words towards the end.
It seems obvious from what was said here that it's a lot better to be good at a few things than to be mediocre at a lot of things.
In Poland, we have an opportunity, resources, and know‑how to actually be very good at some things. We just need to determine what those things are with some level of probability and certainty, which is also not an easy thing. But we do have scientists that can help us to determine it.
We need to increase collaboration between our scientists and business. I personally met a lot of scientists who want to cooperate with business. They need a little bit of help, that's accelerators and help that we can provide, as public institutions, to provide this ecosystem for scientists to feel comfortable working with business and for business.
And then there's the question of digitalization of the society. It seems obvious that this is something we should do because this is the only way to go into the future, especially facing threats such as pandemic, without digitalization, we would be in a poor position in Poland and the world. Things would stop.
We have to remember that a large part of the world is not digitized and not connected. We also have people here in Poland that are not connected, not because there is no network but because they don't want to be. They don't see a reason why.
Thank you for your participation.
Thank you for your attention.
Thank you very much.