Poland:
Europe's Emerging Tech
and Financial Services Hub
A strategic review of investment and growth potential
Published April 2024
By Caspian One - Financial Services Technology
Poland is rapidly establishing itself as a critical player in the European technology landscape.
With robust economic growth, a rich talent pool, and keen interest from major global tech players, Poland is solidifying its position as a key hub for technological innovation. Particularly attractive to the financial services and technology sectors, Poland offers compelling advantages as a lower-cost centre (LCC), especially in critical areas such as data, analytics, application development, and cybersecurity.
"According to research from HackerRank - Poland has the third best developers globally, behind China and Russia. Outsourcing from Poland has also been found to be 30% cheaper than in the US and 20-25% cheaper than in Western Europe."
For financial services brands looking for an LCC location with a high potential for scale, Poland presents a compelling case. Its strong tech foundation, coupled with a highly skilled workforce and favourable business environment, makes it an ideal location for companies in the sectors of investment banking, wealth management, and complex trading.
In this comprehensive report, we explore Poland's dynamic presence in the global technology landscape. We highlight Poland's rise as a powerhouse in innovation, with a particular emphasis on its growing skills resource pool, cost-effective solutions, and strategic opportunities across diverse domains of technology.
Whether you're considering Poland for expansion, outsourcing, or investment, our report offers valuable data and perspectives to inform your decision-making process. We invite you to contact us directly for further details or personalised inquiries.
In advance of releasing our review of Poland, we conducted a poll to gauge organisational priorities when considering offshore locations for tech operations.
The fact that 50% of respondents identified 'Managing Costs' as their greatest priority underscores the significance of cost efficiency in their decision-making process. It also implies that organisations actively seek solutions that offer financial advantages while maintaining quality and capability, making Poland's cost-effective environment an appealing option for offshore talent acquisition.
Additionally, 40% of respondents emphasised 'Strategic Alignment' as their priority, suggesting an attraction towards locations that align with long-term business goals. Overall, the poll results imply that Poland's combination of cost competitiveness and strategic advantages positions it favourably as an offshore destination for tech operations.
Poland:
Tech Sector Overview
As Poland secures its place in the global arena, its tech sector stands out for its significant contributions to the national GDP, robust growth, and an expanding array of tech enterprises. Here, we delve into the overarching landscape of this dynamic sector, setting the stage for deeper analyses in subsequent sections of this report.
Sector Composition
The tech sector in Poland is diverse, with strong showings in:
Software and IT Services: Serving as the backbone of the tech economy, this segment benefits from Poland's rich educational output in IT and related fields.
High-Tech Manufacturing: Including electronics and hardware, reflecting Poland's integration into global tech supply chains.
Economic Contribution and Growth
Poland's tech industry, accounting for nearly 8% of the national GDP, showcases sustained growth bolstered by local entrepreneurship and foreign investment. The presence of over 60,000 tech entities, including ten valued at over $1 billion, underscores a vibrant ecosystem conducive to innovation and development.
Strategic Importance
Poland's geographic and political stance within Europe enhances its appeal as a strategic hub for tech companies looking to leverage the EU market while benefiting from lower operational costs compared to Western Europe. With its central location and extensive transportation networks, Poland serves as a pivotal gateway for companies seeking access to key markets across the continent.
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Innovation and Entrepreneurship
Innovation is at the heart of Poland's tech ascent, driven by grassroots movements within the startup community and substantial R&D investments from multinational tech giants. This environment fosters a culture of innovation critical for the tech sector's continued expansion and sophistication, further bolstered by proactive government support initiatives.
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Talent Pool Analysis
Poland's tech industry is powered by a remarkably skilled and diverse talent pool, crucial for sustaining the sector's growth and innovation. This section explores the composition, capabilities, and dynamics of this workforce, underpinning Poland's appeal as a tech hub.
Educational Foundation
Poland boasts a robust educational system with a strong focus on STEM disciplines, consistently producing a high volume of graduates equipped with critical tech skills. Polish universities are renowned for their rigorous engineering and computer science programs, which are pivotal in feeding the tech sector with fresh talent.
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Developer Proficiency
Polish developers are widely esteemed globally for their exceptional proficiency and practical expertise across various programming languages and technologies. This recognition is reflected in the growing demand for tech professionals in Poland, as evidenced by hiring trends reported by CRN Poland and Just Join IT, indicating sustained growth in the talent pool and continued industry recognition.
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“According to Just Join IT data, in the first six months of 2023, candidates for positions such as Java Developer, Front End Developer (JavaScript), DevOps Engineer or PHP Developer could count on the most job offers.
In total, in the first half of 2023, more than 81,000 job offers were published on Just Join IT, which means an increase of 43% y/y. Companies from Warsaw, Wrocław, Kraków and Poznań recruited the most intensively.
JavaScript, Java, Python, .NET, and PHP specialists are the most sought-after. Among the most sought-after skills were those related to the use of SQL, GIT, Docker, and AWS.”
Diversity of Skills
Beyond coding, the Polish tech workforce excels in several high-demand areas, including cybersecurity, data and AI/ML.
Cybersecurity and Data Protection: With increasing digital threats, a growing segment of cybersecurity professionals reflects the sector's adaptability to global tech challenges. Reports from cybersecurity-focused publications highlight the rising demand for cybersecurity professionals in Poland, showcasing the industry's readiness to tackle digital threats. “The Poland Cybersecurity Market size was estimated at USD 1.52 billion in 2024, and is expected to reach USD 2.02 billion by 2029, growing at a CAGR of 5.85% during the forecast period (2024-2029)” - source
AI and Machine Learning: Specialists in AI and ML are on the rise, driven by academic research and sector needs, positioning Poland as a leader in these cutting-edge fields. Academic reports and industry studies demonstrate the growth of AI and ML specialists in Poland, underscoring the country's leadership in these crucial domains.
“When it comes to the number of experts working on the development or implementation of AI, Poland ranks 1st among the countries of Central and Eastern Europe and 7th in the European Union. It is, among other reasons, thanks to the quality and high level of services provided, that the country has become a trustworthy place for investors.“ - source
Workforce Mobility and International Appeal
The mobility of the Polish tech workforce is enhanced by English proficiency and familiarity with international business practices, making it easier for foreign companies to integrate Polish talent into their operations.
According to the EF English Proficiency Index, Poland ranks 13th out of 111 countries in terms of English proficiency.
Moreover, when skilled expatriates return, the reverse brain drain phenomenon enriches the local talent pool with international experience and expertise. The book chapter “Regional Selectivity of Return Migration: The Locational Choice of High-skilled Return Migrants in Poland” discusses the regional pattern and selectivity of high-skilled return migration.
Another study titled,
discusses the role of high-skilled return migrants for knowledge transfer and institutional change.
Gender Equality & Competition
Despite its strengths, the sector faces challenges like gender disparity in certain tech domains and competition for top talent from global tech giants. A report by Hays Poland, Geek Girls Carrots and Biuro Podróży Reklamy sheds light on Polish women within the IT sector. It shows that the field is dominated by male workers, which is not uncommon around the world, despite the constant rise of women joining the business.
Another report titled, “Tapping the Poland IT talent market: Tips, trends and challenges” discusses the highly competitive battle for top-quality professionals in the IT sector in Poland. Addressing these issues through targeted educational programs and inclusive hiring practices, as highlighted by reputable organizations promoting gender equality in STEM fields and reports on skills acquisition trends, can further enhance the talent pool’s diversity and capacity. For instance, UNESCO has been working on several initiatives to promote gender equality in STEM education. Similarly, the EU has been funding projects that strengthen women’s participation in research and innovation.
Investment Climate:
Economic Overview & Government Initiatives
Poland's investment climate is robust, underscored by a GDP growth of 4.9% in 2022, significantly outpacing the EU average. The resilience of the Polish economy is further highlighted by its ability to navigate high inflation and global economic slowdowns.
Government efforts to streamline business operations and reduce bureaucratic hurdles have made Poland more attractive to foreign investors. Notably, Poland is set to be the largest beneficiary of the EU funds aimed at development projects until 2020, providing substantial financial resources for infrastructure and technology advancements.
Brussels to unblock €137 billion in EU funds for Poland. [source]
Poland’s GDP growth of 4.9% in 2022 significantly outpaced the EU average. [source]
The EU allocated EUR 82.5 billion to Poland over the 2014–2020 period to increase the competitiveness of the Polish economy. [source]
In 2023, almost EUR 29.3 billion, of which EUR 24.2 billion of EU funds were allocated for investment and projects in the European Funds for Infrastructure, Climate, Environment programme. [source]
Foreign direct investment (FDI) inflows to Poland reached USD 29.4 billion in 2022. [source]
Poland currently has 60,000 tech companies, including 10 of its own— companies that reach a value of $1 billion without being listed on the stock market. IT and tech currently accounts for 8% of the Polish GDP. [source]
Foreign Direct Investment and Sectoral Growth
Foreign capital continues to flow into Poland, with the tech and financial services sectors experiencing notable growth. The government's progressive policies have fostered a favourable environment for these investments. The Poland 2025 report anticipates dynamic growth in high-tech industries, including advanced manufacturing and pharmaceuticals, driven by domestic and international capital. This investment is supported by public policy measures that enhance the high-tech ecosystem, such as creating industry clusters and strengthening ties between academia and business.
Technology Sector and Advanced Business Services
Poland's tech sector is a critical component of its economic landscape, supported by over 430,000 professionals. The country boasts the highest concentration of software and technology talent in the region, making it a leading destination for outsourced and offshored business services. Growth in this sector has been rapid, outpacing that of other regions in Central Europe and even traditional hubs like India. Plans are in place to further scale this sector, potentially creating up to 600,000 jobs by focusing on sophisticated services like big data analytics and remote diagnostics.
Challenges and Strategic Outlook
While Poland's investment climate is predominantly positive, challenges such as a polarised political environment and impending reductions in EU funding post-2020 could affect future investments. However, strategic measures like adapting educational curricula to meet industry needs and promoting Poland internationally as a centre for advanced business services are expected to mitigate these risks and bolster economic growth.
Case Study | Caspian One
When you have complex trading-tech challenges to overcome, it's critical that you attract the 'right' people. Those who bring diverse ideas, ways of thinking and niche capabilities... if you want to retain a competitive advantage.
In Poland, a globally acclaimed investment bank, one of our clients needed to address a niche engineering skills gap nationwide while securing talent to diversify its technology teams better.
To help them navigate these challenges, we provided the Technology C-suite with an insights report covering relevant technology trends, current market skill availability levels per region and pricing. This report also included a transparent competitor analysis of sourcing and vendor firm margins and average SLAs.
Outcomes
Rapid Scaling: Within four months, the initiative successfully scaled to include 45 resources across the UK and Poland, covering various complex trading technologies such as Java, .Net, C++, Python, and Cloud DevOps.
Diversity Goals: Achieved a 20% diversity ratio with a 70% staffing allocation in Poland, reflecting significant progress in team diversification.
Extended Impact: Due to the project's success, the agreement was extended to include other regions like Asia and the USA.
Using this as a base, we were able to collaboratively build a pricing model for resource augmentation that would drive out a competitive advantage for both them and Caspian One. We worked with the Chief of Staff to sign a global vendor MSA with regional-specific supply orders and invested in a hybrid remote/on-site account management team to support him in this build-out.
Each supply order works to a multi-million, multi-year budget, but the funding is only drawn down once requirements are gathered and technology consultants are identified. This allowed the client to quickly manage their spending and onboard talent based on flexible demand. Within the MSA, there is an overriding total charge rate card per level and skill used across the organisation.
We work to overall and specific Service Level Agreements per supply order, which are reviewed every three months with relevant stakeholders. For example, we have been measured against Poland scale targets, Diversity ratios within the scale and the percentage of future diversity conversion.
Challenges vs Opportunities
Challenges:
Operating in lower-cost centres like Poland presents several challenges for financial institutions that can impact operations and strategic goals:
Language and Cultural Barriers: Differences in language and culture can lead to misunderstandings and complicate communication.
Quality of Work and Service Delivery: Maintaining consistent quality across geographies, especially in complex financial services, is critical but challenging.
Time Zone Differences and Communication Issues: Synchronising operations across different time zones can delay decision-making and affect responsiveness.
Data Security and Privacy Concerns: Ensuring compliance with international data protection regulations (like GDPR) is crucial and complex, given varying local laws.
Skill Talent Acquisition: Finding and retaining local talent with the required skills and expertise remains a significant hurdle.
Opportunities
Despite these challenges, the strategic use of offshore centres offers compelling opportunities that often outweigh the potential drawbacks:
Cost Efficiency: Substantial savings on operational costs, including salaries and infrastructure, can be achieved without compromising quality.
Access to a Broader Talent Pool: Poland, in particular, offers access to a large, well-educated workforce with strong technical skills and growing expertise in financial services.
Enhanced Global Reach: Establishing operations in diverse geographic locations facilitates round-the-clock service capabilities and a more substantial global presence.
Innovation Through Diversity: Cultural diversity can bring fresh perspectives and innovation, driving creative solutions and services in the financial sector.
Scalability: LCCs enable organisations to scale operations flexibly and efficiently in response to business needs.
Mitigating Challenges
To capitalise on these opportunities, companies can implement strategic measures. Cultural training and language education can bridge cultural gaps, enhancing communication. Rigorous quality controls, including standardised processes and regular quality checks, can ensure consistency across all locations. Advanced security protocols, such as adopting state-of-the-art security measures and providing continuous training on data privacy, will help mitigate risks associated with data security. Additionally, strategic hiring and development programs, coupled with investments in local talent development and the creation of attractive career paths, can alleviate skill shortages.
On the ground in Poland
Our journey in Poland epitomises Caspian One's commitment to being more than just a participant in the tech sectors where we operate. Our strategic involvement in Poland, led by Key Account Managers, highlights our dedication to cultivating strong, localised relationships and a deep understanding of the tech landscape.
Recently, during a pivotal week-long trip, our team visited Wroclaw and Krakow, key cities in Poland's tech revolution, where we've enabled access to over 60 technical specialists skilled in Java, React, C#, Azure, DevOps and more. This trip wasn't merely about oversight; it was about embedding ourselves within the fabric of the local market, meeting face-to-face with our clients and partners. These interactions were instrumental in fostering collaborations that go beyond mere service provision, delving into strategic tech solutions that drive forward both our client's objectives and the broader tech ecosystem in Poland.
Client feedback from our operations in Poland has been overwhelmingly positive, reinforcing our reputation as a premium provider that surpasses local competitors in delivering high-quality resources. One client notably expressed deep gratitude, stating, "Caspian One saved me," after a previous technology partner failed to meet their needs, highlighting our ability to successfully deliver where others have not. Despite challenges such as a strong preference for remote work and navigating high inflation, our clients remain exceptionally satisfied with our quality and service level.
Our presence in Poland is marked by a responsive approach to client needs, exemplified by our ability to swiftly scale operations and integrate a diverse range of tech talents into significant projects. Establishing a multi-year, multi-million budget framework under a global vendor MSA has allowed us to dynamically manage resource allocation and spending, adapting swiftly to the evolving tech demands.
In conclusion
As we conclude our exploration of Poland's dynamic role in the global tech landscape, it's evident that Poland not only holds a pivotal position due to its economic vitality and tech savviness but also offers substantial opportunities for financial services looking to leverage lower-cost centres.
Our findings underscore Poland's advanced capabilities in fields such as Data & Analytics, Application Development, Cyber Security, and more, bolstered by a talented workforce and competitive cost structures.
For organisations looking to explore Poland's tech landscape's potential, Caspian One offers detailed consultations and strategic planning services. Our expertise in navigating this market ensures tailored solutions that align with your business objectives, providing a clear pathway to successful expansion and operational excellence in Poland.
Please contact our team to discuss how Caspian One can support your business in harnessing Poland' as a tech hub and lower-cost centre. We are ready to help you integrate Poland's capabilities into your growth strategy and ensure you gain maximum advantage from this emerging market.
This report aims to help your organisation make informed decisions and seize the opportunities presented by Poland in the evolving landscape of global technology and financial services.
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