Chapter 1. Policy context for employment and skills in Poland
This chapter provides an overview of Poland’s employment and skills system and the economic context. Poland was one of the few OECD countries where GDP growth remained positive during the financial crisis. While it experienced an abrupt slowdown in 2012, growth is now back on a solid path. Compared to other OECD countries, responsibility for labour market policies and vocational education and training are relatively decentralised, and important reforms have been implemented in both policy areas in recent years.
Economic and labour market trends
Since 2000, Poland has steadily caught up with the EU15 in terms of GDP-per-capita and was one of the few OECD countries where growth remained positive during the financial crisis. While growth abruptly slowed in 2012-13 due to a number of factors (a fall in public investment; weak external demand; and rising unemployment and fiscal consolidation that dampened household consumption) (OECD, 2014a), it is now back on a solid path (estimated to be 3.5% in 2016-17) (OECD, 2016a).
Poland’s unemployment and employment rates have improved in recent years, but labour market challenges persist (OECD, 2016a). At 63.0% in the third quarter of 2015 (OECD, 2016b), Poland’s employment rate ranks at the low end of OECD countries. The national unemployment rate slowly increased in the period between 2009 and 2013, although it has since started to decrease again. As of the third quarter of 2015, Poland’s unemployment rate was 7.4%, somewhat higher than the OECD average (6.7%) (OECD, 2016c).
Poor labour market outcomes are particularly marked at both ends of the age spectrum. The labour force participation rate for workers aged 55 to 64 was 45.6% in 2014, compared to an OECD average of 60.5% (OECD, 2016d). At the other end of the age spectrum, youth unemployment increased from 20.7% in 2009 to 23.9% in 2014. This is significantly higher than the OECD average of 15% in 2014 (OECD, 2016e). There is wide regional variation in youth unemployment rates in the same year but even the lowest figure – Mazovia at 17.7% – is higher than the 2014 OECD average (OECD, 2016f).
There are also significant gender differences in employment rates: 69% of the male labour force was employed in Q3 2015 compared to 57% of the female labour force (OECD, 2016a). The OECD has identified poorly designed family and pension policies as key contributors to low female employment rates (OECD, 2014a).
Boosting employment prospects is critical given that Poland will be facing strong population shrinkage. It has low fertility rates and a quickly ageing population structure. Emigration also contributes to demographic change: in 2007 there were an estimated 2.3 million Polish citizens, or 6% of the total population, staying temporarily abroad, compared to 1.0 million in 2004 (OECD, 2014a). Additionally, compared to other OECD countries, Poland receives very few migrants each year, and is thus unable to offset these decreases in the labour supply with increased migration.
Almost one quarter (22.2%) of people employed in Poland worked in the distributive trade, repairs, transport, accommodation and food service activities. Nearly the same share of employed (18.9%) worked in manufacturing, while 20.4% were employed by the public sector in 2014 (OECD, 2014c). Agriculture, forestry and fishing workers only comprised 11.4% of the total, although this is higher than in most OECD countries. These four sectors together give almost 73% of the total employment in Poland.
Poland also has the highest rate of workers on temporary contracts in the European Union, which undermines productivity and well-being (OECD, 2016a). While difficult to measure, it is also worth noting that the size of the informal economy in Poland is probably high relative to other OECD countries (Andrews et al., 2011).
Finally, attainment of upper secondary and tertiary education has been steadily increasing in Poland. First-time graduation rates at the upper secondary level increased from 41% to 86% between 2005 and 2013, with Poland now having one of the highest upper secondary graduation rates in the OECD (OECD, 2015). However, PIAAC results show that Poland’s mean literacy and numeracy scores are low in comparison to other participating countries, although these results may be largely generational, as Poland’s scores are closer to the participating countries’ average for younger adults (16-24 year olds) (OECD, 2013).
Overview of employment policies and programmes1
PES have a long history in Poland. After 1989, a system of public employment services was established with three operational levels: the national Labour Office, regional labour offices and poviat (local) labour offices. In 1999, Public Employment Services in Poland were decentralised. The National Labour Office was liquidated and some of its responsibilities were transferred to the Ministry of Labour and Social Policy. Poviat labour offices became part of local government at the district level (poviat), while regional labour offices became part of the regional government (voivodeship). As a result, there are now three level of PES in Poland:
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Poviat labour offices – responsible for providing benefits to unemployed persons and implementing active labour market policy instruments;
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Regional labour offices – responsible for analysis, strategic planning, and services for specific groups; and
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Ministry of Family, Labour and Social Policy – responsible for the legislative framework, national strategy, managing the Labour Fund, and financing active labour market policies.
These three tiers are independent, with no hierarchical relationship between them. Local government is responsible for financing the operational costs of poviat labour offices, while benefits for the unemployed and active labour market policy measures are financed by the Labour Fund. This Fund is part of the national budget, which is distributed by the Ministry of Family, Labour and Social Policy to regional labour offices and then distributed to poviat labour offices. Labour market councils operate at each governance level, although they largely play an advisory role and their actual influence on programme and policy decisions varies.
The 1999 reform gave more autonomy to poviat labour offices and more opportunities to coordinate actions related to the local labour market, as local authorities at the poviat level are also responsible for other policy areas relevant to the labour market (e.g. secondary education, including vocational education; more specialised social assistance services, including support for disabled persons). While this reform was intended to result in a higher level of co-ordination between labour market policies and other locally managed policy areas, not all local authorities have taken advantage of these opportunities. According to research conducted in 2008, a significant proportion of local authorities did not engage in solving labour market problems and treated PES as separate offices, not as an important element of a comprehensive development policy (MLSP, 2008).
The financial crisis brought about significant challenges for public employment services. The number of unemployed persons started to grow. At the same time, the Government decided to significantly reduce funds for active labour market policies due to fiscal constraints. This temporarily decreased the PES’ ability to respond to the crisis on the labour market.
In 2012, the Ministry of Labour and Social Policy proposed significant reforms of the PES. The main objectives of the reform were to improve the effectiveness of active labour market policies; improve the quality of services provided by PES; and improve the targeting of active labour market policies. The reform was introduced in 2014, with the following main changes:
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The distribution of the Labour Fund will now partially depend on the effectiveness of labour offices. The effectiveness of the labour office was added as a new variable to the algorithm defining the allocation of financing from the Labour Fund.
Additionally, staff of poviat labour offices who achieve targets above the average for all labour offices will receive bonuses financed from the Labour Fund. Up to 2% of the Labour Fund will be allocated to this mechanism. There are three main indicators taken into account:
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Number of client advisors working with the unemployed;
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Effectiveness – percentage of unemployed taking part in active labour market policy measures and/or placed in employment; and
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Efficiency – the unit cost of active labour market policy instruments.
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Profiling to target support for the unemployed has been introduced. This measure was intended to help better target services. In this context, it is worth noting that a large concern in Poland is that some people registered as unemployed are in fact not really interested in actual assistance.2 In an internal publication, the MLSP estimates that such persons account for 30-40% of all registered unemployed. As a result – according to the Ministry of Family, Labour and Social Policy – labour offices devote insufficient resources to working with an improperly defined target group (MLSP, 2014). Therefore, three profiles were introduced to better target active labour market policies. These profiles were based on two variables: availability of the unemployed for work and distance of the unemployed from the labour market.
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Profile I – a person close to the labour market and ready to return to work;
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Profile II – an average willingness to work and an average distance away from the labour market; and
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Profile III – persons far away from the labour market or not ready to become employed.
Profile I persons are perceived as not needing intensive support and able to solve their problems alone or with limited, basic assistance. Therefore, their support is limited to job placement, career counselling and selected labour market services. Reducing support for this group decreases the negative effect of dead-weight (providing assistance to those who would manage to find a job without support).
Persons assigned to the second profile are acknowledged as the key clients of labour offices – persons for whom it would be difficult to become employed on their own, but are motivated enough to change their situation. In other words, the services and labour market instruments are particularly beneficial for them.
Profile III – distant from the labour market – represents persons whose problems are serious and complex and cannot be solely addressed by the labour office. These persons may need more intense and long-term support (e.g. counselling and support). Labour offices may not have the tools or resources to carry out this type of intensive and personalised support. Therefore, the activation of these persons is outsourced to external groups (employment agencies, social assistance centres or NGOs) working within the framework of a new instrument: the Activation and Integration Programme (PAI).
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Outsourcing activation services. From a legal point of view, poviat labour offices have been able to outsource activation measures for many years, but the regulation has not been applied. This is mostly due to a lack of interest on the part of poviat labour offices, as well as the unattractive contractual terms for potential service providers. Currently, according to the amendment to the law, outsourcing is able to take place at the regional level. The remuneration for the contractor depends on its performance (number of unemployed placed in jobs and employment retention rates).
The new regulation on outsourcing is intended to improve the effectiveness of employment services (based on the assumption that specialised institutions are more effective at working with the “most difficult” cases), as well as strengthening regional partnerships. It should promote better co-ordination of activities for the unemployed in the region.
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Changed organisation of work in poviat labour offices. This includes the introduction of a new position: a client advisor who is responsible for managing the whole process of activating the unemployed. A similar mechanism was created for employers through the introduction of an institutional client advisor position.
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National Training Fund. This fund is a new instrument (financed by the Labour Fund), that supports the development of employees’ skills. The instrument is addressed to small and medium enterprises. During 2014-15, this support will be targeted to employees over 45 years of age.
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New instruments of active labour market policies. The new legislation introduced a number of new instruments, widening the scope of services provided by PES.
It is too early to assess the results of the reforms, although some elements have been already discussed. More in-depth analyses of particular elements of the reform are presented in a further section of this report. It is worth mentioning here, however, that the most controversial change is the profiling. This mechanism, designed by the Ministry of Family, Labour and Social Policy, significantly reduces the autonomy and flexibility of the professionals at poviat labour offices. This results in increased resistance to the change. Another controversy concerns the third profile – even though it was assumed that assistance centres would provide services to the person categorised to the third profile, most assistance centres are not interested in implementing PAI due to a lack of resources. As a result, persons who are placed into this profile in fact have limited access to the appropriate support.
Public Employment Services are not the only actors in the field of labour market policies. Although Public Employment Services play a central role, other institutions are also active in this area, such as:
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Voluntary Labour Corps – part of the government administration, responsible for supporting adolescents over 15 years of age and unemployed persons under 25 years of age to prevent them from dropping out of the educational system and becoming unemployed;
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Employment agencies – non-public institutions, responsible for recruitment, including recruiting for work abroad with foreign employers, vocational guidance, counselling, and temporary employment;
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Training institutions – institutions providing training and education (outside of formal education);
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Institutions of social dialogue – trade unions, organisations of employers, non-governmental organisations working in the field of the labour market;
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Local partnership institutions.
Another relevant institution in Poland are social assistance centres. Social assistance centres operate at the lowest level of local government (gmina – community). Social assistance centres provide social benefits, social work and social services for people facing the most difficult life situations. However, the largest group of its clients are unemployed people. Thus, in practice, the social assistance and poviat labour offices often work with the same clients.
Finally, since 2004, the European Social Fund (ESF) has significantly supported labour market policies in Poland. Each ESF budget has a considerable allocation of funds available to poviat labour offices. As a result, each poviat labour office implements projects financed by the ESF. In practice, the ESF finances the regular activities of local offices; however, additional funding allows the scope of active labour market policies to be extended.
The ESF also finances projects implemented by other organisations working in the field of labour market policies: social assistance centres, NGOs, private companies, social partners, and social enterprises. Projects must be addressed to specific target groups and achieve the aims set by the Ministry of Economic Development (the Managing Authority for ESF). Since 2015, ESF support addressed to individual persons is implemented mostly at the regional level and managed by regional authorities with the Ministry of Economic Development playing a coordinating role.
Overview of vocational education and training policies
Vocational education and training (VET) has a long tradition in Poland. Before 1989, it was the main type of secondary education. However, in many cases, the quality of this education was considered unsatisfactory. In the 1990s, alongside the collapse of many industrial enterprises and the development of other sectors of the economy, the popularity of vocational education declined and increasing numbers of youth began to choose general secondary education. Additionally, VET did not receive heavy investment, further intensifying the challenges faced by the sector.
Recent years have seen a slow revival of vocational education with increasing participation in VET as a secondary education option. The importance of VET has also been emphasised by Polish authorities in many documents and strategies. This change is mostly due to the decreasing advantage (in terms of wages and the probability of finding a job) of general and higher education, especially poor quality higher education; and the shortage of well-educated technicians and skilled workers in some sectors of the economy.
For the past several years, the Polish government has designated vocational education and training as one of its priorities for educational policy and labour market policy. The Ministry of National Education and the Ministry of Family, Labour and Social Policy underline the importance of increasing the quality of VET, its attractiveness to students, and better matching it to the needs of the labour market. The Ministry of Economic Development also supports this approach.
In 2013, the Government approved a document entitled The Prospect of Learning Throughout Life, prepared jointly by all interested parties, described in more detail in the textbox below.
In 2013, the Polish government approved a strategic document, titled The Prospect of Learning Throughout Life, prepared by a team consisting of representatives of the Ministry of National Education, Ministry of Labour and Social Policy, Ministry of Regional Development, Ministry of Economy, (now combined into the Ministry of Economic Development) and other key actors. This strategic document lists key areas of development in vocational education and training, with a special focus on matching VET to the needs of the labour market. The most important areas are listed below:
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Improvement of the education of key VET competences;
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Improvement of the attractiveness and flexibility of VET – development of flexible forms and improvement of the content of VET, enabling flexible mobility between different forms of VET, including vocational schools in the system of adult education, improvements in publicising vocational education, and developing mechanisms of quality assurance in VET;
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Reinforcing the involvement of employers in VET, with particular emphasis on improving practical training, adapting the content of education and training to employers’ expectations, and creating sectoral centres of vocational and continuous learning;
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Development of work-based VET;
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Improving the competences of teachers working in VET;
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Development of mechanisms to validate the effects of learning; and
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Development of lifelong educational and vocational guidance.
The system of VET, and especially initial VET, is regulated by the Law on the Education System. The entire system is managed by the Ministry of National Education, which specifies a number of critical education issues for the system, such as: forms of learning, including forms of practical vocational learning; expected results of learning; external vocational exams; requirements for teachers, including their preparation and continuing education and mechanisms of professional promotion; and mechanisms and forms of the pedagogic supervision of schools.
In Poland, there are several VET schemes, enabling flexible movements between different levels of education. These are described in more detail below.
Initial vocational education and training (IVET)
Upper secondary (general and vocational) education starts at the age of 16. It lasts 2‐4 years depending on the type of school, and most vocational students complete their IVET at the age of 19-20. There are three types of IVET schools:
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Technical upper secondary school – the education lasts four years, after which students can proceed to take vocational exams, as well as the general upper secondary school education exam (matura), which, if passed, provides entry into university.
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Basic vocational school – the education lasts three years and students proceed to take the vocational exam. An education in this type of school does not enable a pupil to take the general upper secondary education exam (matura).
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Supplementary technical upper secondary school – the education last two years, and is offered to graduates of basic vocational schools.
Another important type of initial VET is the apprenticeship scheme. This type of IVET, accessible to students at the age of at least 16, combines vocational education in the work place – usually a craft trade – with theoretical education, where the student acquires general education and the theoretical preparation for the occupation. The latter type of education may be provided in basic vocational school (for the vast majority of students) or in courses. Table 1 presents the number of students in different types of IVET.
Students who have completed upper secondary school (general or technical) are allowed to enter a post-secondary vocational school. In some cases, the general upper secondary education certificate (matura) is required. The education lasts usually two and a half years. Post-secondary schools are divided into vocational schools, colleges of social work, and teacher training institutions (foreign language teacher training colleges and teacher training colleges). Post-secondary schools are also divided into schools for youth, special schools, and schools for adults.
VET for adults
VET for adults is an area mainly regulated by two ministries: the Ministry of National Education is responsible for the vocational education of adults for the occupations listed in the classification of occupations for education (about 200 occupations); and the Ministry of Family, Labour and Social Policy is responsible for other forms of training and courses for adults. There are also other ministries involved in vocational education and training of adults (e.g. Ministry of Economic Development).
VET for adults in occupations listed in the classification of occupations for education
A reform of the vocational education system was implemented in 2012. One key objective of the reform was to establish a more flexible system of VET education for adults. Before the reform, vocational schools (basic and secondary) existed for adults in Poland. The main weakness of these schools was the long duration of adult education, discouraging many from participating. Thus, the reform introduced a new, shorter form of learning – vocational qualification courses. Vocational qualification courses can be full-time (learning activities taking place at least three times a week) or part-time (learning activities take place at least once every two weeks for two days). Except for practical and laboratory training, which has to be organised in a traditional way, the methods and techniques of distance education can be used. Vocational qualification courses can be offered by:
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Centres of vocational and continuing education (offering vocational education for youth and for adults),
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Centres of continuing education (offering vocational education for adults),
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Centres of practical education (offering practical vocational education for youth and vocational education for adults),
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Vocational training institutions (offering vocational qualification courses and other vocational courses for adults).
The classification of occupations was recently changed in 2012. Although the classification is not closed, the introduction of a new occupation is usually a lengthy process (taking at least a year); thus, adapting a qualification to the changing situation on the labour market is rather slow. However, during panel discussions for this OECD study, participants recalled examples of new, successful occupations introduced recently. In 2015, three new occupations were launched. In forthcoming years, the Ministry of National Education plans a complex review of the classification in close co-operation with social partners to make it more consistent with the needs of the labour market.
The Ministry of National Education also prepared a list of qualifications for each occupation. One occupation may consist of several qualifications, which should make the education system more flexible and accessible. Each qualification is an independent, complete whole that feature learning competences such as specific knowledge, skills and personal and social competence. These are described as learning outcomes in the core curriculum and may be separately confirmed in the system of national vocational exams. As a result, most of the skills can be taught as qualifying vocational courses (LCO) in the system of lifelong learning for adults.
Other forms of training and courses for adults
Private institutions, non-governmental organisations, as well as public institutions offer a very broad scope of training and courses in vocational education, general education, personal development, etc. Some of them are regulated by law (e.g. driving licences), others are regulated by sector boards (e.g. qualifications standards for the banking sector, developed by the Association of Polish Banks), or based on international standards (e.g. the European Computer Driving Licence).
These programmes and courses may be subsidised or financed from public sources, e.g. the European Social Fund or the National Training Fund (managed by poviat labour offices). The main institution responsible for this area of public policy is the Polish Agency of Enterprise Development (supervised by the Ministry of Economic Development and the Ministry of Family, Labour and Social Policy).
Recently, public authorities have made the effort to regulate the market in order to ensure better quality training (at least the training financed by public sources). To do so, a new mechanism has been recently introduced: the Register of Development Services, managed by the Polish Agency of Enterprise Development. Each provider of training or courses, who would like to provide skills development services, should fulfil criteria and register in the Register.
While the register does not include all institutions, a number of conclusions can be drawn from analysing the providers on the register. Around 95% of these institutions are private, and almost 55% represent an individual person who has registered as a business entity. There is a large variety of companies, NGOs, educational institutions and private persons that provide training and education, although in many cases, the quality of training is not considered to be satisfactory.
Other mechanisms of quality assurance are the Polish Qualifications Framework (PQF) and the closely related Register of Qualifications. In order to be registered and referenced to the PQF, each qualification must meet quality requirements. The new system is still under construction and is not fully functional yet.
Overview of economic development policy
Economic development policy is managed by the Ministry of Economic Development; however, a number of actors are involved. The most important fields of activities are support for small and medium enterprises, special economic areas, support for research and development and innovation, promotion of Polish enterprises and the support of exports.
There are a number of instruments and institutions that support economic development and act at the national, regional and local levels. Many of them are interconnected and co‐operate with each other. Support for economic development is financed mostly by European funds. Thus, most of the actors operate within the framework of operational programmes, financed by the European Regional Development Fund or the European Social Fund.
At the national level, the most important actors are the Polish Enterprise Development Agency and the National Centre for Research and Development. The Polish Enterprise Development Agency (PAED) is a central agency, supervised by the Ministry of Economic Development and Ministry of Family, Labour and Social Policy. The Agency supports mostly small and medium enterprises and focusses on areas such as innovation and e-business.
Another important governmental agency is the National Centre for Research and Development, supervised by the Ministry of Science and Higher Education. The Centre carries out programmes that support innovation, research and development, as well as the implementation of innovative solutions both at research institutions and enterprises. The Centre especially focuses on co-operation between scientific entities and enterprises. Programmes are financed from both national and European funds. Support for enterprises, especially industrial ones, is also provided by the Industrial Development Agency.
At the regional level, the most important actor is the regional government (voivodeship). It can act directly or through specialised agencies. The most important regional instrument for economic development is the regional operational programme, financed by European funds and managed by regional authorities. The new wave of programmes covers the period of 2014-23. The programmes include direct support for small and medium enterprises (in the form of grants, loans, services), as well as investments in business development (investment areas, institutions supporting business, co-operation between businesses and research units, and the development of business clusters).
In Poland, there are also about 60 regional development agencies. Most of them were established in the 1990s as instruments supporting local and regional economic development, with the support of development aid from foreign sources. Agencies usually act in the form of a company, owned or co-owned by regional and local authorities, enterprises or associations of employers, or the Industrial Development Agency.
After 2004, many agencies in Poland became part of the system of European Fund implementers that provide support to enterprises. Currently, many of them implement projects addressed to new or existing enterprises, providing funds (grants for start-ups, loans for existing enterprises), and services to business. The agencies also support innovation in enterprises (providing grants, support, and enabling contacts between actors). Some of them also invest in infrastructure for business, establishing technology parks and business incubators. In some cases, agencies implement projects related to the labour market, including supporting start-ups, providing training for employees and employers, or supporting non-governmental organisations.
At the regional and local levels, technology parks are important incentives for economic development. These institutions usually operate as companies and provide space, infrastructure and support for enterprise development, especially innovative ones. Although their capacity is growing in terms of the number of companies operating in parks, it is still challenging to attract enterprises which are the most innovative, invest in new technologies, co-operate with research and scientific entities, and implement projects with international partners (PAED, 2012). This shows that technological parks have only partially achieved their goals.
Another important instrument is the Special Economic Zone (SEZ), established primarily to accelerate regional economic growth, utilise greyfield infrastructure and assets, and create new jobs (KPMG, 2014). SEZs were established primarily in areas with significant structural problems (low employment, low level of economic activity) in inhabited areas. The main aim of the SEZ was to attract investors (Polish and foreign) by offering incentives such as tax exemptions and access to infrastructure. Currently 14 SEZs operate in Poland, however their borders are flexible and can be adjusted to the needs of the local economy and interest of investors. In practise, the area of the zones is currently much larger than when they were established, and in many cases, has extended far beyond their original boundaries, often covering two or three provinces. According to analyses, SEZs proved to be an effective instrument supporting economic development and increasing employment. According to estimates at the end of 2012, 1 million PLN of state aid for enterprises operation in SEZs generated 6,95 million PLN of investments generated by those enterprises, 4,5 million in taxes paid by those enterprises, 31 jobs in enterprises operating in SEZs, including 17 new job positions (Pastusiak et al., 2012).
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KPMG (2014), 20 years of Special Economic Zones in Poland A Guide to SEZs, www.kpmg.com/PL/en/IssuesAndInsights/ArticlesPublications/Documents/A-Guide-to-Special-Economic-Zones-in-Poland.pdf.
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Notes
← 1. In 2015, the Ministry of Labour and Social Policy was reconfigured as the Ministry of Family, Labour and Social Policy and the Ministry of Infrastructure and Development and the Ministry of Economy were joined to form the Ministry of Economic Development. The ministries are referred to by their new names throughout this publication except in reference to actions taken prior to 2015.
← 2. One explanatory factor may be that unemployed people must register at poviat labour offices in order to receive health care coverage for themselves and their families. This can lead to situations where people not actually looking for work or already working informally register without having real intentions to look for work. See OECD (2014a) for more information.