Record growth in the value of business services provided in Poland
Data from ABSL's latest report, Business Services Sector in Poland 2023, confirms a shift in the sector's growth areas. The industry created 32,000 new jobs during the year, expanding the sector's share of total business employment to 6.7 percent. The largest increases were in highly specialized services, which translated into an increase in the value of services provided. More than 85 percent of the newly created jobs are in services requiring advanced skills, most often in the field of technology.
Poland remains one of the world's most attractive markets for the business services sector. Despite global challenges, Poland has added nearly 100,000 jobs in the industry since 2019. Currently, the number of employees exceeds 435,000, an increase of 8% year-on-year. As a consequence, the industry's share of total employment in Poland’s overall business sector increased from 6.2 percent to 6.7 percent.
The latest data from the Association of Business Service Leaders (ABSL) indicate that highly specialized services are becoming the main driver of growth. Last year, for the first time, their market share exceeded 50 percent, and this year has already increased to 57 percent. Last year also concluded with another record increase in the value of service exports, reaching $30 billion (up 13.7 percent year-on-year). The value of exports per employee exceeded $53,000, an increase of 21 percent over 2016. The export surplus in knowledge-based services trade (KIBS), has been growing steadily since 2008.
- For years, the Association of Business Service Sector Leaders has been working to ensure that Poland plays an increasingly prominent role on the global market. Data and analysis confirm that we are making excellent use of global trends, which is crucial in the international market. This utilization is due to the very high level of internationalization of the Polish sector. Our activities are reflected in the constantly increasing value of service exports. Last year we registered record numbers, and this year's report confirms that the pace of export growth has been maintained. Once again, the flexibility and speed of adaptation to change have allowed the sector to grow spectacularly. A major factor for this growth stems from the acquisition of highly specialized services involving complex processes and often global roles," says Janusz Dziurzyński, President of ABSL.
The modern business services sector in Poland comprises a total of more than 1,800 business process outsourcing (BPO), shared services (SSC/GBS), IT as well as research and development (R&D) centers. The share of IT centers in the sector now stands at more than 45 percent. At the same time, IT services account for 50 percent of new investments, with significant growth in highly specialized services. The pandemic has accelerated the sector's evolution towards IT, with the growing role of artificial intelligence, robotization and big data and even ocean data. All this is leading to a systematic increase in the demand for professionals with the technological skills of the future. Seventy-four percent of respondents confirmed plans for IT job growth in the first quarter of 2024.
- The increasing demand for highly specialized services primarily requires advanced technological skills. This in turn implies the need for strategic talent management, including the implementation of upskilling and reskilling programs. It should also be noted that Poland has the greatest growth potential in KIBS compared to the rest of Europe. In order to catch up with the European average, we should create another 250,000 jobs in knowledge-intensive services. This potential is our very significant competitive advantage and allows us to adopt optimistic scenarios for the development of the sector. We can already see that the growth area is changing. In the long term, the dynamics of growth in the number of new jobs will be maintained, with a much faster demand for highly specialized services, and which translates into the value of the services provided," emphasizes Dariusz Kubacki, Vice President of ABSL, Business Intelligence.
Krakow in leading position
Modern business service centers are located in 87 cities. In 18 cities, the total number of jobs in the sector exceeded 1,000 people, and in eight cities it exceeded 10,000. Krakow remains the leader in terms of the number of employees. Krakow’s centers employ around 98,000 people, accounting for 22.5 percent of the sector's workforce in Poland. Warsaw (95,300) and Wroclaw (63,400) completed the top three Polish destinations. The largest increases in employment over the past year were recorded in Poznan (19 percent), Warsaw (13.6 percent) and the Tri-City (12.6 percent). At the same time, Krakow maintains its leading position in the category of highly qualified human resources, which is crucial for the development of the sector based on highly specialized services.
- Krakow's universities play an important role in the development of the service sector, providing a human resource base that is highly valued by foreign investors," points out Jerzy Muzyk, Deputy Mayor of Kraków. The deputy mayor adds - In the context of the internationalization of the sector, the location of the investment must also be assessed in terms of its attractiveness both for the investor and for employees, including foreign workers. Therefore, it is worth recalling that Krakow was selected by fDI Magazine as one of the top ten major European cities of the future in the following categories: friendliness, human capital and lifestyle, economic potential, overall classification, and strategy for attracting foreign direct investment.
US investments dominate
The number of centers (1,250) in Poland owned by foreign companies increased by 9.1 percent year-on-year, with the number of employees reaching 363,900 and accounting for 83.6 percent of the total workforce. During the year, 47 centers owned by foreign investors were added. Most of the new jobs were created by companies from the US (26.6 percent), UK (21 percent) and France (12.1 percent). Centers with Polish capital created 5.2 percent of all new full-time jobs during the year.
The ABSL report Business Services Sector in Poland 2023 was released at ABSL Summit 2023 - one of the most important events of the sector in Europe. The full material can be downloaded here.
The host city for ABSL Summit 2023 is Krakow - one of the key locations for business service sector projects in Europe.
For more details, visit www.absl.pl
Association of Business Service Sector Leaders - brings together more than 240 of the world's largest companies, representing a sector that currently employs more than 435,000 people in Poland. The 1,800 service centers, scattered in more than 80 locations, form a thriving sector supporting economic development through, among other things, innovative solutions implemented by multinational corporations. The goal is to build attractive and sustainable ecosystems that will create new jobs through positive engagement and responsibly grow investment and business in local communities.