Evolution of public policies towards automotive industry in Poland

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Abstract:

The European automotive sector faces multiple transitions related to technological changes broadly described as industry 4.0, introduction of alternative powertrains, greening policies, changing social attitudes towards car use and ownership, demographic trends and market shifts to Asia and America. From the point of view of the semi-peripheral economies of Central-Eastern Europe this may appear either as a threat to the position they achieved in the European division of labour in the two previous decades or rather as the window of opportunity for their enhanced role. The question is to what extent public policies may affect these processes of change. The authors attempt to provide a preliminary assessment of the possible impact of the meandering policies of the Polish government on the upgrading of Poland’s position to higher value-added functions in global production networks in the future. The study is based on the critical analysis of various policy documents together with several interviews with key informants in the sector, policy-makers and experts.
The paradox is that for a long time there was no specific policy towards automotive industry in Poland in spite of the spectacular growth of the sector in the country. Transnational corporations benefited from general incentives for large investors, special economic zones in particular, which offered tax exemptions. At the same time the limits of state aid for the automotive firms were significantly lower than for other sectors. In 2017 two major governmental programs dedicated to the automotive sector were announced: The Sectoral Program of Scientific Research and Development Innomoto and The Electromobility Development Plan. The former supports the implementation of R&D projects which are crucial for the advancing of the position of the automotive sector in Poland. Co-financing of projects can help the entrepreneurs to create new or expand existing R&D centers as well as develop innovative technologies and products. The Innomoto program also encourages companies to extend their cooperation with national research centers. In 2017 and 2018, 57 automotive projects were co-financed by The National Centre for Research and Development under the Innomoto Program. Furthermore, there are some broader central and regional government initiatives aimed at improving the position of Polish industry, from which automotive sector may benefit, such as The Platform of the Future Industry (4.0) or Competence Center. The Electromobility Plan is geared toward creating the conditions for the development of electromobility in Poland through several regulatory, both demand and supply-oriented instruments. They include mandatory fleet replacement by public administration, incentives to private purchase of electric vehicles, the construction of the network of charging infrastructure as well as substantial financial support for the electromobility industry with an ambition to launch a Polish electric vehicle brand. The official target is one million electric vehicles driven on Polish roads in 2025. The success of this plan will also be contingent on broader environmental policies of the national government and local authorities. A shift towards electric vehicles can be facilitated by both the introduction of more stringent emission standards at the national level and green zones with restrictions for internal combustion vehicles in major cities. In addition, we cannot ignore the importance of the national energy policy and the possible insufficient electricity supply in the case of a vast increase of its consumption in the next decade in the country. Last but not least, the lack of consistent government migration policy has to be emphasized; at the moment it does not encourage the stabilization of foreign workers, who became the significant component of the Polish labour market in the situation of demographic crisis. All in all, the coherence and complementarity of various public policies seem to be a major challenge and vital determinant of their effectiveness in the long run.