Media

7 March 2013

Mr Mieczysław Bąk took part in a debate "Warsaw education towards challenges of internationalization and needs of the job market" opening the 19^th International Education Fair PERSPEKTYWY 2013 on 7 March 2013 at 10 a.m. in the Palace of Culture and Science (Mickiewicz's Hall). The debate has been prepared together by Conference of Rectors of Universities in Warsaw (KRUW), Capital City of Warsaw and Perspektywy Education Foundation.

During the debate, with participation of 30 people, Mr Mieczysław Bąk presented the project RAPPORT, its main assumptions and aims. Press information about the project was distributed during the conference.

Project RAPPORT is realized with the financial support of the European Union.

Barriers to the Knowledge-Based Economy in the Central Europe.
Strategies to Overcome Developmental Barriers.
SHOCKING DIAGNOSIS. CENTRAL EUROPE ON THE SIDELINES OF CHANGES.

Insufficient expenditure on R&D.
The results of independent surveys indicate that the Position of Poland and other Central European countries with regard to the development of e-economy is very disadvantageous compared to other developed countries. The value of expenditure on R&D in the Central and Eastern European countries is far from the average for the OECD countries and for the European Union. The relatively largest share of funds is allocated to research and development in the Czech Republic - 1.3% of GDP. Poland and Slovakia have a similar level of outlays on R&D which is maintained at 0.7% of GDP. In Hungary 1% of GDP is allocated to research and development, whereas in Germany, Sweden and the USA the share of GDP allocated to R&D exceeds 2%.

Small participation of private sector in R&D.
In the Central and Eastern European countries, research and development are financed mainly from public sources. Only Slovakia with its ratio of research financing by private sector at 67.3% is above the OECD average, and the Czech Republic, with the ratio of 60.5%, close to that average. One should remember, however, that this is also a consequence of the generally low expenditure on research in those countries. Poland, besides Turkey, Portugal and Greece, is among countries with the lowest share of companies in the financing of research. The low ratios in the case of Poland and the Czech Republic also result from the low share of expenditure on R&D in IT. For Poland this share is 10%, and for the Czech Republic - 6%, whereas it is 60% in Finland, 40% in the USA, and 35% in Sweden.

Insufficient exports of high-tech products.
In the group of OECD countries, Ireland is the leader in the share of high-tech products in exports, with its 40% share of ICT products in exports. The high third place of Hungary is worth noticing, with its 30% share of ICT products in exports. Hungary, as one of few countries, also has positive foreign trade balance in innovative products, together with Ireland, Korea, Finland, Japan and Mexico. The share of high-tech products in exports for Poland and the Czech Republic was relatively low, less than 10%, but there has been a distinct improvement in that area in the last ten years.

Monopolised telecommunications and difficult access to the Internet.
The Central and Eastern European Countries are among countries with the lowest number of telephone lines per 100 inhabitants in OECD, together with such countries and Turkey and Mexico. However, unlike the latter countries, the rate of growth of telecommunications sector in Poland, the Czech Republic and in Slovakia has been among the highest, reaching 23-25%. In the European Union only two countries, Portugal and Ireland, developed their networks at a similar rate, at an average of 22% per year. The most recent data indicate that the distance to the 15 EU countries has been reduced only slightly. There are 31 stationary lines per 100 inhabitants in Poland, 38 in the Czech Republic, 37 in Hungary, 32 in Slovakia. The average for the European Union is 56 lines. The access to broadband Internet connections (DSL lines or fixed cable connections) is also developing very slowly in the Central European countries. In Poland, the Czech Republic, Hungary and Slovakia less than 1% of the population had such access in 2001, whereas in Sweden - 4%, in Denmark 2%, in the USA - 3%, and in Korea as much as 14%.


STRATEGY OF CHANGES. CENTRAL EUROPE MAY BECOME THE LEADER.

The Central European countries may improve their competitiveness considerably and develop their e-economy, as well as high-tech industries, but this requires actions to deregulate the telecommunications market, change tax policy and apply instruments supporting knowledge-based sectors.

Tax instruments. We are proposing the application of solutions which will significantly improve the attractiveness of implementation of R&D in Poland and in the Central European countries. They include:

• Application of immediate depreciation of current (e.g. payroll-related) expenditure on R&D (following the example of Spain, Ireland and UK)
• Application of a tax option concerning the selection of one of the following solutions by the enterprise:
• Deduction of up to 150% of the amount of expenditure on R&D from the CIT tax base (a solution applied in the UK), or
• Deduction of 20% of R&D costs from CIT (Italy - 30%, Canada - 20%, Norway - 20%) with a limit of deductions
• Introduction of a technological tax credit
• Maintaining tax preferences for authors
• Application of schemes of tax allowances for capital contributions to shareholders' equity of SMEs with technological orientation (as in the UK or France)
• Introduction of a uniform rate of PIT, CIT and VAT at the level of 19% (Slovakia) with a plan to reduce the rate to 15% as public finance situation improves.

We are convinced that the introduction of this type of instruments will result in a large inflow of foreign investments in R&D to Poland and the Central European countries and will stimulate significantly the domestic enterprises to become more involved in R&D. We also believe that the countries in our region should cooperate more in creating policies for attracting investments in R&D.

Deregulation of telecommunications.
We believe that the main barrier stopping the development of e-economy and Internet economy is the existence of faulty concepts of privatisation of telecommunications sector and, as a consequence, the functioning of strong telecommunications monopolies. Those factors increase the prices of services and make the access to Internet physically difficult. Therefore, we would like to propose:

• Creation of a telecommunications and ratio/television broadcasting regulator, independent from executive authorities, modelled on the US Federal Communications Commission (FCC) - the National Communications Commission, with the degree of independence close to the Monetary Policy Council, with extensive governing competencies. At the same time, we would like to propose the liquidation of URTiP (the Office of Telecommunications and Post Regulation) and KRRiTV (the National Broadcasting Council).
• Introducing significant changes in telecommunications law, enabling the proposed National Communications Commission to carry out its competencies effectively (they should correspond to the competencies of the US FCC).
• Separating the Telecommunications Court from the current Anti-Trust Court in order to improve the resolution of legal disputes and speed up the procedures.
• Reducing considerably the deadlines for all activities undertaken in telecommunications and broadcasting business, and increasing the authority of the market regulator.
• Introducing honest and transparent procedures for considering all matters in a manner allowing for the right to present one's opinion in public, for public hearings and other competencies of the parties under reliable procedures, modelled on the US Federal Communications Commission.

In all of the areas mentioned, the Central European countries may count on the technical assistance from the US Federal Communications Commission. The hope that EU will facilitate the competition policy in that area may be misleading.

Support for innovations.
The sector of knowledge-based industries requires active policies of the Central European governments, aimed at stimulating innovativeness and implementing new solutions. We would like to propose:

• Separating a Government agency from PARP (the Polish Agency for Enterprise Development) to deal with innovations for better control of innovation-supporting process and monitoring of technology development. In retrospect, we believe that the liquidation of Technology Agency was a mistake.
• Implementing information and training programmes for inventors, modelled on the Danish Innovation Centre.
• Providing assistance to SMEs in the utilisation of the intellectual property protection system as well as offering advisory services and financial assistance for SMEs related to the commercialisation of inventions.

The following are key to the development of knowledge-based industries in the Central Europe:

• Introduction of transparency in the telecommunications licensing and permit policy.
• Elimination of education barriers both for e-economy customers as well as for entrepreneurs and employees of enterprises.
• Support for international cooperation in the field of technology transfer (e.g. by appointing bilateral or regional technological cooperation foundations supported by Governments - modelled on Israel).
• We believe that plans of scientific policy of the state should be constructed in such a way to meet the requirements of enterprises, and not without any reference to the national economic development requirements as is the case today.
• We propose that the SME and knowledge-based industry development policy is co-created with the participation of groups interested: entrepreneurs, authors and inventors, and not cooked up by KBN (the State Committee for Scientific Research), and only then consulted with the interested parties as has been done so far.

Administrator portalu: CPB