Poland stumbles on journey from low-cost to hi-tech

Sun Oct 28, 2012 1:19pm EDT
 
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By Marcin Goettig

WARSAW, Oct 28 Reuters) - Polish scientist Miroslaw Grudzien built the infra-red detectors that NASA uses to explore Mars, but getting a business development loan nearly defeated him.

His firm, which made sensors on the U.S. space agency's Mars rover Curiosity, sought financing from banks for a new production facility. Because the loan was to be partly paid back from European Union funds, the government had to sign off on it.

In the end, Grudzien got his money, but it took a year, forcing his company, VIGO System, to delay the launch of a new range of high-technology sensors.

"Civil servants do not care if I get the credit today, in a year or in three years. They do not have a clue that in modern technologies one year of delay in financing can mean defeat," Grudzien, the firm's chief executive, said.

Such stories are common in Poland. The biggest economy in eastern Europe, it has seen two decades of vigorous economic growth and yet -- based on several different measurements -- is one of Europe's least innovative economies.

Up to now, that has not been a problem. It has thrived on attracting low-value-added businesses such as television assembly plants and off-shore accounting- and call-centers.

However, that type of economy depends on low costs. This advantage is being eroded by rising living standards which last year reached 65 percent of the EU average.

Long-term, underlying growth, meanwhile, has already slowed to 3 percent from 6-7 percent four years ago, the central bank estimates.   Continued...

 
Senior technologist Dariusz Czolak prepares to present the process of epitaxy in the Institute of Electronic Materials Technology (ITME) laboratory in Warsaw October 23, 2012. Poland, the biggest economy in eastern Europe, has seen two decades of vigorous economic growth and yet -- based on several different measurements -- is one of Europe's least innovative economies. To compete in the future, the country will need to replace its low costs with innovation. Shortcomings in the education system are a big part of Poland's lack of innovation. Moreover, universities do not cooperate well with business, the state does not encourage companies to take risks by developing their own technology, and thickets of red tape stifle activity. REUTERS/Kacper Pempel