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The Warsaw Voice » Business » July 30, 2008
INTELLECTUAL CAPITAL
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Investing in People
July 30, 2008 By Andrzej Ratajczyk   
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The Polish government plans to assign zl.20 billion for investment in human capital by 2014.

Intellectual capital is one of Poland's greatest assets that gives it a competitive edge over many other countries, said Prime Minister Donald Tusk while presenting the findings of a government report entitled Poland's Intellectual Capital at the Warsaw Stock Exchange July 10.

"If we recognize human capital as Poland's greatest strength in the development race, the conclusion is simple: people need to be armed with all kinds of instruments so that their lives, activities, work and careers contribute to a great national success story," Tusk said.

Efforts in the area of intellectual capital should focus on improving the standards of education and creating conditions for young people to be able to develop their individual talents, Tusk said. "The government is determined to invest in human capital. By 2014 we plan to assign about zl.20 billion for this purpose," Tusk added.

The report on intellectual capital, prepared by a team of the prime minister's strategic advisers led by Michał Boni, together with experts from various other fields, assesses Poland's potential in this area and offers recommendations for the country's future development. The report says that a large part of Poland's intellectual capital is not being utilized or is being used inefficiently.

Several components make up intellectual capital, according to the report. The first component is human capital, embodied in factors such as education, life experience, attitudes and skills. The next component is structural capital, or the national education system-including schools, research and development centers, and IT and telecommunications infrastructure. The third component of intellectual capital is social capital, which includes the norms of conduct followed in a given society and activities that support cooperation and exchange of knowledge. The final component is relational capital, related to a country's image on the international arena and its economic ties with other countries.

The distance separating Poland from more developed European countries in terms of intellectual capital is still significant, the report says. Until recently Poland's shortcomings in the area of intellectual capital were not a barrier to economic development because the country's competitive advantage was based on other factors, such as low labor costs, a relatively big market, and its location in the center of Europe, the report says. In the coming decades, maintaining the same pace of development will not be possible without strengthening the country's intellectual capital, which is the foundation of a knowledge-based economy, according to the report.

The key challenges that Poland faces in the coming years in connection with intellectual capital include "demographic regression" and the need to keep up with the increasing pace of technological change around the world, the report says.

To increase Poland's intellectual capital, pro-family policy measures are needed, experts say, combined with a more efficient education system to meet labor market needs, the report says. It is also necessary to increase the professional activity of senior citizens, develop cooperation between the science, business and culture communities, and simplify laws, procedures and taxes.

Even though a lot has changed for the better in Poland over the past 20 years-the Polish population is now more affluent, better educated and more open to the world-there are many areas where a lot still needs to be done, the report says.

"The worst thing we could do now is rest on our laurels," the report concludes. "It's enough to compare the pace of economic growth in Poland and other countries from the former communist bloc to see that Poland is clearly not taking full advantage of its potential; it is not developing as quickly as other countries in our region-such as Slovakia, Estonia or Lithuania."
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