Poland hopes....

Poland hopes Brexit guides star natives home

It probably won’t work.

By JOANNA PLUCINSKA

New Polish Prime Minister Mateusz Morawiecki is using Brexit to fuel his efforts to move Poland’s economy from the back office to the front.

Morawiecki hopes foreign-educated Polish millennials, in residential limbo in the U.K., will be drawn home by the fast-growing Polish economy, startup cash and a growing community of entrepreneurs. The more business talent that returns, the faster Poland’s economy can mature and compete with Western Europe.

Already, as finance and development minister before and after the Brexit referendum, Morawiecki used Poland’s large digital skill pool to help lure big banks like Goldman Sachs and J.P. Morgan to open offices in Warsaw. The country lags behind only the U.K., France and Germany in the EU when it comes to the size of its IT graduate network, according to a recent report by McKinsey & Company.

“We are drawing jobs away from London towards [Poland], so that people can stay here, and our programs are helping emigration [from Poland] to fall to record lows,” Morawiecki said last year, adding that many of these spots were filled with highly skilled labor.

In spite of the turmoil caused by Brexit, comfortable lives and salaries in London and what is seen as an unprogressive Polish government are holding back the people Poland most wants to return: high-level bankers, executives and managers. Poland’s international image remains that of a deeply Catholic, conservative country under the ruling Law and Justice party, especially following controversial judicial reforms. The EU’s vocal condemnation of the changes, which could eventually culminate in sanctions, has further worsened the country’s image abroad.

For progressive, business-minded Poles living abroad as well as other successful Europeans, Poland may hold little appeal.

“The majority of people here [in London] still say, ‘We’re not moving. It’s the place to be,’” said Marcin Zientek, a Polish entrepreneur and the head of London-based business consultancy firm Zientek Global.

The campaign

Morawiecki, the multilingual former head of Banco Santander’s operation in Poland, embodies a new era. He speaks German and English fluently and can maneuver global business leaders while keeping loyal to the party line.

As finance minister, Morawiecki put in place new funding programs, like Start in Poland, to encourage digital innovation and support accelerators looking to fund businesses. Morawiecki has visited London several times, including this summer, and trekked to Washington this fall.

Michael Dembinski, the chief adviser to the British Polish Chamber of Commerce, said many of the group’s members were impressed with Morawiecki’s pragmatic approach to taxation and the business community. “He knows what he’s doing.”

Poland isn’t the backwater that joined the EU over a decade ago, Morawiecki and the Polish government note in their sales pitch. It’s considered one of the safest countries in Europe, according to the U.S. Department of State. EU funds improved infrastructure, including public transit and highways, transforming the country into a more modern and well-connected place.

The country can brag that tech companies saw the appeal of Poland long before Brexit. Google, often a vocal advocate for entrepreneurial innovation, decided to host its startup campus for Central and Eastern Europe in Warsaw’s hip Praga district in 2015.

The Polish government hopes all of that, combined with competition for jobs, sky-high rents and questions about EU citizens’ rights in London, will help Poland’s quest for talent.

Yet it may not be enough.

“All the Poles I know in tech … have a different orientation politically from [the ruling Law and Justice party]. I don’t know any people who are impressed by Morawiecki. People don’t care that there are funds,” said Paweł Chudzinski, a Polish partner of Berlin-based venture capital fund Point Nine Capital.

The U.K.’s talented Poles seem more likely to decamp to Berlin or Amsterdam, if they leave at all.

Tech entrepreneurs based in London argue the U.K. has a far more global network than Poland. On top of that, Poland’s regulatory environment is unpredictable relative to London’s business-friendly environment.

“You don’t want to operate in a country where the next day you can have a change in law which makes your business illegal,” said Paweł Kuskowski, the head of Coinfirm, a blockchain firm.

Labor woes

The government is desperate. After Poland joined the EU in 2004, ambitious Poles suddenly had relatively easy access to higher salaries and more competitive labor markets in Western European countries, especially in the U.K. Since then, the population dropped by more than million, or approximately 5 percent, as many Poles fled the country.

In the early years of the migration Poland still had fairly high unemployment, but the labor market has tightened sharply — it was 6.5 percent in November. That’s creating a labor gap.

Banks and multinational companies moved their offices to Poland’s biggest cities under the lure of previous governments like the centrist Civic Platform, a trend continued by Morawiecki. But there simply aren’t enough people to fill the new job openings. As it stands, Poland needs about 5 million additional workers to sustain economic growth, according to the Union of Entrepreneurs and Employers.

“There’s too much demand for the talent,” said Andrew Gauvin, who runs his own IT company Freeport Metrics partially based in Warsaw.

More than half a million Ukrainian immigrants, looking for better opportunities in an EU member country, have come to Poland in the past five years. Initially, they took jobs in construction and agriculture, but they are now moving up the skills ladder‚ in much the same way that Poles did when they moved west after 2004.

But Ukrainians can’t yet fill many of the higher-level openings. And this is where Poland is looking west.

“We need skilled people,” said Paweł Panczyj, the managing director of business services association ABSL, which represents Google, Deloitte and Orange, among others. “There’s a shift from the back office … [we need someone] who is not a graduate but someone with 10 to 15 years of experience.

“And it’s hard to find that experience.”

The future is young

There may be hope in attracting younger professionals, who may grow into more experienced workers, back to Poland. More than 5,000 Poles are studying at universities and colleges in the U.K., according to the U.K. Council for International Student Affairs. And with the U.K. expected to crack down on visas for foreign students, especially after Brexit, they’re looking for alternate ways to build their career.

Mikołaj Firlej, a 2016 Oxford University graduate in his twenties, looked homeward for opportunities.

“We have access to a global network,” he said, adding that venture capital funds appear to be showing more interest in the region.

And Warsaw seemed more comfortable than the bustling streets of London. “It’s safer, it’s cleaner, there are small crime rates,” Firlej said, who is currently an investment manager with Kluz Ventures and spent part of 2017 based at the Google campus in Warsaw working on investment projects.

Joanna Fedorowicz, the San Francisco-educated CEO of fertility and pregnancy advice app OvuFriend, agrees.

She credited her decision to return to Warsaw with funding and mentorship programs, as well as good coders. “It’s a good time to run a business here. There’s lots of support and talented people,” she said.

When asked if Warsaw or Poland could become Europe’s next global business or startup center, Firlej answered simply, “Why not? The entrepreneurs’ world is about selling dreams.”