The business services sector is evolving in a direction oriented toward the greater use of technology, including automation, which requires a focus on providing innovative solutions and developing digital competencies. The industry's innovation potential reached 74.4 percent in Q1 2024, strengthening the sector's position as one of the innovation leaders in the Polish economy. The high automation rate is due to the sector's increasing specialization and its shift away from simple transactional processes.

Data from the Association of Business Service Leaders (ABSL) confirm that the business services sector is undergoing an accelerated transformation. The increasing sophistication of services provided by centers in Poland has led to changes in the most important indicators of the sector's development. In addition to an increase in the sector's share of Polish GDP and exports, the most important trends include innovation potential and automation levels.

Leaders of innovation

According to ABSL's report “Business Services Sector in Poland 2024,” 74.4 percent of companies declared that they had introduced innovations understood as integrated products or services in the last three years, putting the sector among the top innovators. Once again, this was significantly higher than the average for the entire economy. According to the Central Statistical Office (GUS), 36.1 percent of industrial companies and 34.2 percent of service companies (previously 22.2 percent) showed innovative activity in 2020-2022. In service companies with 250 or more employees, the share of companies that introduced product innovations was 23.8 percent, with business process innovations standing at 59.9 percent.

Increasing innovation is part of transformational strategies. The sector in Poland is evolving away from simple transactional services towards mid-office processes with their share in the sector exceeding 50 percent for the first time in Q1 2024. Poland is no longer considered a low-cost location in global terms. Over sixty percent of respondents surveyed by ABSL stated that the country was perceived to have a high level of innovation and was regarded as a location that delivers good quality at a reasonable price. Bringing innovation at a reasonable cost is one of Poland's main advantages over Western countries.

The revolutionary impact of Gen AI

The growing role of generative artificial intelligence is one of the most important factors accelerating transformation in the business services sector. According to the ABSL report, 85.6 percent of respondents saw the development of this technology as an opportunity or significant growth opportunity. GenAI is beginning to have an impact on all of the industries that make up the sector, finding applications in the automated execution of simple and repetitive processes, as well as in increasing productivity and performing advanced tasks. This change is essential to attract and retain skilled workers, foster innovation and remain relevant in a rapidly changing market. Generative artificial intelligence is forcing companies to adapt by fostering an environment that prioritizes rapid response, creativity and strategic development.

Agnieszka Belowska-Goslawska, ABSL Vice President for Digital & Technology points out: "GenAI, which of course represents a major breakthrough, is already in businesses and will remain in businesses. If you do not recognize and implement it, you run the risk of quickly falling behind the competition. However, we must remember to implement these solutions where they are really needed. We tend to get swayed by new technologies and seek to implement them in every process. The introduction of solutions based on artificial intelligence must coincide with a clearly defined business goal - introducing technology for technology's sake will only generate unnecessary costs."

Automation in progress

The average ongoing process automation rate in business service centers in Poland in Q1 2024 was 21.2 percent – a year-on-year increase of 1.8 percentage points. ABSL analysts forecast that the rate will reach 38.7 percent in five years.

The development of automation is one of the major trends in the global economy. In the first quarter of 2024, 65.2 percent of companies had implemented intelligent process automation (IPA), and another 24.1 percent planned to do so in the coming years. Among the main goals of IPA deployment were cost automation (61 percent), faster delivery of services (17 percent), and improving the quality of services provided (16 percent).

Similar to last year, the most commonly used smart process automation technologies include robotic process automation and workstation automation, application programming interface, ordinary and intelligent optical character recognition technologies, and chatbots (used by more than half of respondents). At this stage, voice bots and computer vision are the least popular. Process and task mining technologies, as well as BPMS (business process management system) are likely to gain in importance in the coming years.

Impact of technology on employment

“Investors are locating more and more advanced processes as well as specialized projects which create products and services that require appropriate competencies in areas related to digitization and soft skills. One of the characteristics of knowledge-based service centers is both higher productivity and the innovation of the solutions offered. Data from ABSL reports confirm that, as a rule, such units have a higher innovation rate than traditional manufacturing companies, higher spending on employee training, innovation and R&D,” reports Dariusz Kubacki, ABSL Vice President for Business Intelligence.

As companies rapidly deploy artificial intelligence and other advanced technologies in their operations, there is a growing demand for qualified specialists in data analytics, artificial intelligence and cloud management. Normalizing the status of remote work after the COVID-19 pandemic allows companies in Poland to compete for talent in the global labor market. The pandemic proved that virtual teams can be a viable alternative to physical office spaces, allowing for a more flexible approach to team composition and talent recruitment.

Download the report: Business Services Sector in Poland 2024