25 years of a free Poland means also a quarter of a century of American investments on the Polish soil. Almost 800 companies originating from the USA have left PLN 91 billion in Poland in the form of investments.

The USA offered Poland economic help already in the first months after the fall of the communist regime, and the American companies decided to invest in Poland, often with help from the government. Now the companies from the USA are one of the main groups of investors. Although officially they are 8th among the foreign investors in Poland with a total investment value of  PLN 33 billion (2012), the real value of the American investments reaches PLN 91 billion, PLN 58 billion of which are indirect investments, mostly through companies registered in the Netherlands and Luxemburg, according to the report "Successful Together! 25 years of Polish-American Business Relations" prepared by KPMG and the American Chamber of Commerce in Poland (AmCham).

“The American Companies are particularly important for us. They have been with us since the beginning of the economic transformation. They have provided us with valuable know-how in the area of production, management and modern technologies,” says the Vice President of the Polish Information and Foreign Investment Agency, Anna Polak-Kocińska.

Americans bet on Poland

Poland is the country with the largest concentration of American investments in the Central and Eastern Europe. Since 2004 the cumulative value of those investments in Poland has doubled, and a significant part of it was the money re-invested by such companies as 3M or Procter&Gamble. This means that Americans feel very comfortable in our country. And they have a good reason too, because their return on investment reaches 13.9% (2012), which is better than that of any company from Europe or the rest of the world.

“Most companies with American capital appeared in Poland in the first half of the 90s. Those companies have also been re-investing for the past ten years. KPMG Poland estimates that approximately 69% of medium-sized and large American companies re-invested in Poland by for example opening another branch, factory, a business or R&D center. Most of those companies re-invested in the automotive industry,” says Stacy Ligas, Partner and Head of Financial Services Audit at KPMG Poland.

“General Motors has been investing in Poland for over ten years. Its attractive geographical location, qualified personnel, high quality and industrial culture, as well as competitive costs and good prospects for economic development made Poland the right place for General Motors to produce its cars in Żerań, and then start the construction of a new production facility in Gliwice in 1996. This factory is now one of the best in GM in terms of quality, competitive advantage, occupational safety, and innovation,” adds Wojciech Osoś, Public Relations Director at General Motors Poland.

In Poland there are almost 800 businesses with American origins, which employ approx. 200,000 employees. 60% of those companies employ fewer than 9 people. Most Poles work for American manufacturers (51%) and businesses offering services (36%). The American investors most often establish their businesses in the Mazovia region; it was chosen by 42% companies. The next favorite location is Silesian (14%) and Pomeranian Voivodship (12%).

“Poland offers favorable conditions for running a business, which is why we have built here and modernized our four production facilities in Michrów near Grojec, Żnin, Grodzisko Mazowieckie and Tomaszow Mazowiecki. By doing so we have helped to reduce the unemployment significantly and improve the economy in those villages and towns,” comments Christophe Guille, President of PepsiCo Central Europe.

USA invests in innovation

It is crucial for the Polish economy that 1 in 3 business and R&D centers with foreign capital are American.

“The presence of American investors in Poland means not only the inflow of capital, but also experience and know-how. The Polish market is still regarded as relatively lacking innovation, which is why the American investments in R&D centers are particularly important. At present every other employee in the R&D centers with foreign capital in Poland works for an American company,” says Stacy Ligas, Partner and Head of Financial Services Audit at KPMG Poland.

The R&D centers with American capital employ 10,600 people, which is almost half of the personnel employed in all the foreign R&D centers in Poland. Among the companies that have decided to open R&D centers in Poland there is 3M with its Innovation Center in Wroclaw, Hamilton Sundstarnd - an aeronautics company, also in Wrocław, and BorgWarner - a company from the automotive industry.

“Poland is a great country for investing and development and we have been here for 23 years. We see great opportunities for further development of our business in Poland. We have several priorities for the coming years. The first one is to continue our growth on the local market. Secondly, we are planning to invest in our factories, not only to produce more for the local market, but also to export to the whole world. Thirdly, we want to invest in innovations in Poland,” says Sebastian Arana Araya, Managing Director of 3M Poland.

The American companies usually started by setting up production facilities in Poland, and then went on to more advanced investments including R&D branches. This shows that Poland offers American investors well educated and available workforce and enables cooperation with highly specialized research centers.

“We notice great potential for expansion in this area in the coming years, because we can cooperate with over 200 excellently prepared research centers, which offer highly qualified scientists who are ready to conduct research in many areas of therapy. Our decision to invest in the Clinical Trial Data Management Center was a good one due to excellently prepared employees. We see other companies also invest in this service segment in Poland. MSD also intends to create new jobs in this area,” comments Karol Poznański, the spokesman of MSD Poland.

BPO under the Star-Spangled Banner

The USA are the largest foreign investor in the sector of business services and R&D in Poland. According to the data provided by ABSL (Association of Business Service Leaders in Poland), in 2014 there have been 156 business and R&D centers with American capital in Poland, employing 46,000 people. Most of them (17,300) work in shared services centers (SSC), which is almost 40% of the total number of the employees in the SSCs in Poland. The second largest employer are American BPO and ITO, which employ 15,600 people, who make 28% of all the employees in those sectors.

“American companies are one of the most active groups of foreign investors in Poland. They are the pioneers and leaders in many sectors on the Polish soil. One of those sectors is services, especially outsourcing, where the American companies, among others through Polish specialists, advise the largest global corporations,” says Józef Wancer, the Chairman of the Board of Directors of the American Chamber of Commerce in Poland.

The biggest advantage of Poland is the large number of university-educated people, including numerous specialists speaking many foreign languages. Most companies decide to relocate their IT, accountancy and data management services to Poland. The development of BPO has also contributed to the expansion of the office market, both in the capital and regionally.

“MSD has been investing in the development of the Clinical Trial Data Management Center in Poland. The Data Management Center (DMC) in Warsaw employs over 100 people and is one of three (apart from China and Colombia) such centers belonging to MSD. They support not only the management of the clinical trial data carried out all over the world, but also the data on the supervision and safety of the therapies in which the pharmaceuticals and vaccines manufactured by MSD are used. Although the Center in Warsaw supports the global operations of the company, its location in Poland was favored by the deep involvement of MSD in clinical research in Poland and the wide access to excellently prepared specialists. Only in 2013 MSD spent over PLN 50 million on the clinical research in Poland, which makes 14% of the turnover,” says Karol Poznański.

Bright future?

For the past 10 years the value of the American investments in Poland has doubled. Can it be even better? In November 2014 54 in 179 projects handled by the Polish Information and Foreign Investment Agency were American investments. Currently the European Union and the United States are negotiating the Transatlantic Trade and Investment Partnership (TTIP). When this agreement becomes effective, it may simplify the investment process also in our country.

“Since 2012 the Polish-American business relations have been intensified. Although in recent years the number of American companies investing in Poland has not changed, the number of their employees has been increasing. The TTIP is another big step towards the improvement of the business relations between the EU markets, including Poland, and the USA, mostly by eliminating non-tariff barriers. It should also be emphasized that Polish investors are also increasingly interested in the United States,” says Józef Wancer.

Another impetus for American investments, especially in the area of armament and aeronautics, is the construction of the missile shield. The American armaments companies are tendering for the contract, claiming that they will use the Polish know-how and cooperate with the Polish research centers. We will also see further development of BPO sector. As the last report from the ABSL on the development of the shared services sector indicates, by the end of 2015 it could employ 150,000 people.