Abstract: Torn by internal conflict between democratic opposition and Lukashenko’s regime, Belarus experienced a massive withdrawal of one of its most valuable resources – the Information and Communication Technologies (ICT) sector. Specialists, start-ups and SME as well as large enterprises moved towards safer business environments in the neighbouring states and Western countries. In the worldwide struggle for ICT resources between states, Poland announced its original economic diplomacy program to attract the ICT specialists, start-ups and enterprises. The program, entitled “Poland. Business Harbour,” offers a full range of services helping IT specialists, start-ups and established companies relocate easily to the Republic of Poland. The author will present this program in the context of the global economic diplomacy struggle for ICT resources.
Bottom-line-up-front: In the global struggle for ICT resources, states compete to attract IT specialists, start-ups and established companies from other countries. However, not only a friendly business environment within a country is the key to interest potential shareholders, but also a thoughtful and tailored incentive package.
Problem statement: How to attract the valuable regional ICT sector withdrawers, mainly from but not limited to Belarus, and provide them with a “safe IT haven” from a polish perspective?
So what?: To attract investments and acquire ICT resources, a complex strategy of the governmental, business, and non-governmental sector is needed, along with careful selecting and direct targeting. Poland originated this idea and has advanced ahead of the global race for ICT resources.
Source: shutterstock.com/ilikestudio
The “Brain-Drain” of ICT Industry
As defined by the OECD, the “ICT [Information and Communication Technologies] sector refers to equipment and services related to broadcasting, computing and telecommunications, all of which capture and display information electronically.”[1] According to the Gartner, an analytics company, the value of the global IT market in 2019 was slightly over USD 2.4 trillion. Ranking as one of the world’s largest industries, the ICT market is forecasted to reach over six trillion US dollars by 2022.[2] The ICT industry is, undoubtedly, the industry of the future.
According to the Gartner, an analytics company, the value of the global IT market in 2019 was slightly over USD 2.4 trillion.
Shifts in ICT resources (human and business capital and knowledge) also support shifts in geopolitics trends and support each country’s strength. The so-called “brain-drain” of ICT industry between states is thus inevitable – it is a pragmatic, realistic approach of every country. States compete globally, using economic diplomacy especially, to attract ICT investments and potential ICT enterprises to relocate within their borders. These resources give added value to the domestic market, increase the market’s value and built both the country’s strength and its image as an ICT market leader. Countries take a range of approaches to gain investments and ICT resources.
Poland is not immune to the systemic issue of ICT “brain drain”. However, unlike other countries, Poland has worked to make itself an attractive destination for further ICT resources. It has been the chosen destination for almost half out of all ICT Belarusian specialists who left Belarus.[3]
Comparison of countries
Although almost ten times smaller than that of Poland, the Belarusian IT sector has a significant number of highly qualified specialists from various IT areas. In 2019 54,200 IT specialists and about 1,500 IT companies were active in Belarus. In 2018, IT accounted for 5.7% of Belarus’s GDP, which is comparable to agriculture and forestry (6.4%), construction (5.4%) and transport (5.8%).. Today, the IT sector in Belarus generates up to 6.1% of Belarus’s GDP. In 2018, IT made up 2.2% of all employment in the country, and accounted for 14.5% of all new jobs. In 2017-2019, exports of Belarus’s IT services increased by almost 150 percent to USD 2 billion. Technology companies also accounted for almost 50 percent of the country’s GDP growth. Belarusian IT companies have clients from more than 50 countries worldwide; about 45% of this international business has come from the USA and Canada, and 30% has come from Europe. Total IT manufacturing and sales revenue amounted to 3.1 USD billion in 2018.[4] Belarus is also well known in the ICT world, mainly thanks to Wargaming and their online multiplayer hit “World of Tanks” which currently has more than 150 million active players worldwide, and has made its CEO Victor Kislyi a billionaire. As can be seen before, the data shows that Belarus has a strong IT sector that is growing stronger every year.”
According to the Emerging Europe report[5], Poland, also has a strong IT sector, in fact, the most competitive in Central and Eastern Europe. Belarus was ranked 14th in the IT Competitiveness Index within the same report. In 2019, Poland reported 7.7 billion euros in ICT export revenues. Poland now has the highest number of ICT specialists in the region – employing 430,500 people in 2019. According to the online community for software developers “Stack Overflow,” there were some 295,300 developers in the country in 2019. The IT/ICT sector is one of the growth engines of Polish economic development. Statistically, this sector is responsible for generating 8% of the country’s GDP. In 2018, the domestic IT/ICT market grew by 7.2%, which generated EUR 16 billion of revenue.[6]
Poland now has the highest number of ICT specialists in the region – employing 430,500 people in 2019. According to the online community for software developers “Stack Overflow,” there were some 295,300 developers in the country in 2019.
Poland also has a stable and democratic government, with the Law and Justice party ruling since 2015. Belarus, on the other hand, has been torn by the internal struggle between democratic opposition and President Lukashenko’s regime since August of , initialized by the fraud in presidential elections. Due to the current political crisis and the authoritarian style of government, Belarus is not perceived as a safe place to invest, nor is it an ideal location for business or career development. Political repercussions and a tense atmosphere are not conducive to running a business. For this reason, the Belarusian ICT sector has started to emigrate or “drain,” often even enforced by the regime’s actions[7],[8]. Furthermore, the IT sector quite openly opposed Lukashenko’s rule, attacking Belarusian government websites, supporting the opposition’s activities or independent Belarusian media. As a result of these factors, Poland’s ICT sector is well-positioned to absorb the emigrating Belarusian ICT workforce.
Poland. Business Harbour.
Witnessing the exodus of the most valuable part of the ICT sector and listening to Belarussian entrepreneurs’ voices, Poland faced quite a big challenge. The withdrawal of specialists and ICT companies from Belarus was inevitable – the remaining question was where they would move? Would they choose nearby Poland, neighbouring Lithuania or the so-called West? The emigration’s destination would gain enormous capital in people and knowledge. Therefore, it was necessary to construct a comprehensive economic diplomacy strategy and approach for the Belarusian ICT sector and take advantage of the country’s economy and positive attitude of Belarusians towards Poland. According to a study published by OSW[9], approximately 74% Belarusians declare a positive and rather positive attitude towards Poland and for Poles – almost 83%. Reluctance towards Poland (a negative and rather negative attitude) is manifested by 18.5% of Belarusians and by 10.9% to Poles .
Nevertheless, despite having political stability, Poland is not seen as the most friendly business environment – Doing Business Index ranks Poland 40th (Belarus 49th), mostly due to extensive tax law and bureaucracy. Poland could not compete in that field with many countries from the Visegrad/CEE region (in. e. Lithuania has 11th place in Doing Business). On the other hand, it has a significant advantage – a huge market (6th largest economy in the European Union) and a permanent need for new employees and jobs due to the country’s rapid development.
In that context, the idea of a strategic approach to the Belarusian ICT sector gathered steam, advancing Poland’s position in the competition for the Belarusian ICT sector. At the beginning of September 2020 the “Poland. Business Harbour” initiative[10] was announced. Behind that name, a complementary set of tools and services was hidden. The “Poland. Business Harbour” (PBH) program is a comprehensive package helping IT professionals, start-ups, SMEs, and large companies relocate seamlessly to the Republic of Poland territory. The program is coordinated by the Ministry of Development (nowadays the Ministry of Development, Work and Technology) and the Polish Investment and Trade Agency, in cooperation with GovTech Poland within the Chancellery of the Prime Minister, the Ministry of Foreign Affairs, the Polish Agency for Enterprise Development and the Startup Hub Poland Foundation.
The “Poland. Business Harbour” (PBH) program is a comprehensive package helping IT professionals, start-ups, SMEs, and large companies relocate seamlessly to the Republic of Poland territory.
The main goal was to “share (Polish economic) success with Belarusians.” PBH is a strategic approach, connecting Polish government and its agencies, as well as the business and NGO sectors. It consists of three dedicated paths towards different people and entities. The first one is dedicated to IT specialists. A special visa policy has been tailored within this branch. To obtain a newly introduced PBH visa, it is required to show one year of experience in the IT industry, technical education or a job offer from one of the Polish companies participating in the program (over 100 Polish companies have prepared special dedicated job offers for those arriving under the visa program). The PBH visa also allows family unification and exempts all its holders from the obligation to obtain a work permit.
The second branch is dedicated to start-ups. The Startup Hub Poland Foundation, one of the well-known and respected institutions supporting start-ups, has launched a unique program that selects teams with the most tremendous potential and supports them in relocation. The Startup Hub Poland program was based on precise recruitment and selection, targeting the most valuable teams with the biggest potential in Poland. As part of the program, each selected team also received one-time support of 5,100 PLN. The Foundation’s activities were supported by, among others, the Orlen Foundation, the ARP Foundation, the KGHM Foundation, the PFR Foundation, the State of Poland Foundation, and Polish Hotel Holding.
The last branch is dedicated to all kinds of enterprises. The Polish Investment and Trade Agency (PAIH) provides ongoing support to companies from the digital sector interested in relocation. PAIH experts guide interested companies through all relocation process elements in a specially designed business concierge formula, i.e. by individual consulting and business development support on the Polish side.
Results
As can be seen, the PBH is a unique program within Polish economic diplomacy. PBH pragmatically and realistically targets the Belarusian ICT sector, providing the emigrating specialists, start-ups and enterprises with complex services and support for their relocation to Poland. The program is not open for all specialists or companies, but rather emphasizes selected strategic areas due to resource limitations.
The results of PBH are more than promising. As reported by the Dev.by portal, about 15% of all IT specialists have emigrated from Belarus since August last year. As many as 43% of them chose Poland. The willingness to come to this country is declared by 64% of IT specialists still residing in Belarus. Approximately 7% of the entire sector has already moved to Poland, supporting the Polish economy and satisfying Polish companies’ growing demand from the digital industry.
As part of the first branch of support, PAIH issued over 2,000 visa recommendations for employees of companies supported by PBH.[11] Visas under the PBH program are issued regularly with the highest priority by Polish consular offices. Thanks to this program, more than 5,000 people have already received visas, and the number continues to grow.[12] As part of the program, 1,250 telephone applications and nearly 2,000 e-mail applications were made (data for mid-February)[13]. Thanks to the Startup Hub Poland’s program, 20 start-up teams were selected for support. In the next steps, the teams will be able to apply for support under the dedicated financing programs. The total number of investment projects of Belarusian companies serviced within PBH is 56, of which 11 companies have already completed the relocation process. Thirty-five out of them are from the IT sector, 13 are manufacturing companies, 3 are companies from the R&D sector, and five companies are from other sectors (data for mid-February).[14]
Thanks to the Startup Hub Poland’s program, 20 start-up teams were selected for support. In the next steps, the teams will be able to apply for support under the dedicated financing programs.
The PBH is thus a good example how valuable a comprehensive, thoughtful strategy in economic diplomacy can be. All of the Belarusian specialists, start-ups and companies now support the Polish economy, strengthening its digital and ICT market. It is one of the first Polish programs of this type, enabling a large scale the acquisition of over five thousand specialists and 56 companies from neighbouring countries. This change builds a positive international image, advances Poland’s position as an economic and ICT regional leader, and boosts Poland’s geopolitical strength.
Jakub Drożdż. Master of law, graduated from the Faculty of Law and Administration, University of Warsaw, Poland. Jakub is currently a student at the Academy of Young Diplomats, by the European Academy of Diplomacy, and a member of the Board of the non-governmental think-tank, the Institute of Economic Diplomacy. He also currently works in the Chancellery of the Prime Minister of Poland, at the Department of Cybersecurity, and has an interest in international cooperation, digital affairs, new technologies and public administration. The views contained in this article are the author’s alone and do not represent the views of the Chancellery of the Prime Minister of Poland.
[1] UN Social Economic Council’s Report of the International Telecommunication Union on information and communication technologies statistics, 2004.
[2] “Global market share of the information and communication technology (ICT) market from 2013 to 2021, by country/region,” Statista, accessed 7 March, 2021 https://www.statista.com/statistics/263801/global-market-share-held-by-selected-countries-in-the-ict-market/.
[3] “Polska wyraźnie najbardziej atrakcyjnym krajem dla białoruskich specjalistów IT,” GovTech Polska, accessed 7 March, 2021 https://www.statista.com/statistics/595182/worldwide-security-as-a-service-market-size/.
[4] Alexandra Murphy, “How can Belarus’s IT sector impact its international standing?,” Backgrounder 10, 2020.
[5] Emerging Europe, The IT Landscape: The Future of IT in Emerging Europe, 2021.
[6] Polish Agency for Enterprise Development, IT/ICT sector in Poland, 2019.
[7] Nikola Đorđević, “ Cyberattacks in Belarus compound discontent in country’s IT sector”, Emerging Europe, 2020.
[8] Ilya Zhegulev, Margaryta Chornokondratenko, Andrius Sytas, “With warm words and fast visas, neighbours woo IT workers fleeing Belarus”, Reuters, 2020.
[9] Ośrodek Studiów Wschodnich, „Białorusini o Polsce, Rosji i sobie. Analiza badania opinii publicznej przeprowadzonego na zlecenie Ośrodka Studiów Wschodnich,” Komentarze OSW nr 373, 2021.
[10] “Poland. Business Harbour,” accessed 7 March, 2021 https://www.gov.pl/web/poland-businessharbour-en.
[11] Access to public information, Polish Trade and Investment Agency, 15 February, 2021.
[12] Idem.
[13] Idem.
[14] Idem.
