The downfall of communism in Poland cried for the rebirth of entrepreneurship, believed to be one of the tools for rebuilding civil society. With time passing by faith in entrepreneurship has brought it to schools as a subject taught to young people on the threshold of adulthood. Accession to the EU mainstreamed the term, which together with “innovation” and “creativity” settled for good in the modernization newspeak. And entrepreneurship has become a remedy for financial crisis, that finally flooded the green island of Poland, proclaimed by Prime Minister Donald Tusk in 2010. The concept of entrepreneurship has adopted a very peculiar form though.
According to a GfK survey from 2012, the young generation of Poles is the most enthusiastic about entrepreneurship in Europe. What’s more, Poles practise high levels of entrepreneurship as measured by the percentage of self-employed in the total workforce. They represent 23% of all employed, which is a stunning number compared to the EU27 average of 15%. One can presume that both creative attitudes and innovative actions have been released. However, of almost 3 million self-employed only 1/5 are employers. The remaining 2,25 million other entrepreneurs only employ themselves. As a study of the Polish Agency for Enterprise Development showed, the micro sector in Poland is less stable than in other EU countries.
Even though the total market share of micro, small and medium-sized enterprises is similar in Poland and EU as a whole, the internal proportions are different. The sector is dominated by micro-entrepreneurs: 92% of all are individuals engaged in business activity and 90% of all newly established enterprises consist of the self-employed and supporting family members. Micro-enterprises in Poland do not form a competitive sub-sector as – when compared to EU overall – their gross added value is three times lower than average. Secondly, their survival rate is relatively low: three out of four companies survive first 12 months and the rate is declining in subsequent years – to 54% after two years and 31% after five years. Due to the national insurance system out of 3,7 million registered companies only 2,1 million do perform financial operations. Geographical diversification is also visible as the biggest dynamics of SMEs are observed in urban areas. At the same time, a steady half of the self-employed are small farmers. So, does the entrepreneurship strategy really work? Yes, for the liberal governments.
Only a few days ago, the Minister for Regional Employment Elzbieta Bienkowska announced a plan to rededicate 50 million Euros within one of the EU-funded operational programmes to strengthen the support for self-employment in 2 workforce categories facing difficulties in the labour market: young people and the so called “50+” category. Clearly, promotion of self-employment has become a method of combating unemployment in Poland. It seems a continuation of a neoliberal drive manifesting itself in the withdrawal of the state from its social responsibilities. Since the political transformation no efficient job creation strategies have been developed. The best results in lowering the unemployment rate showed up with labour migration after 2004. Thus, promoting self-employment seems like a strategy of shifting the effort of improving employment rates from public institutions to individuals.
Numerous projects offer support for start-up initiatives. Self-employment is also promoted by the Government Plenipotentiary for Equal Treatment as a solution for low female labour participation rates and for combating gender discrimination in the labour market. Students are encouraged to start up their own businesses too, assisted by the so-called academic entrepreneurship incubators. Alumni employment programmes and even free internships are now complemented by first self-employment experiences. Moreover, significant ESF funds for improving social cohesion and labour market inclusiveness have been spent on grants for the unemployed to set up their own companies. This fake boost of entrepreneurship ends in self-employment, artificially supported by free consultancy and preferential loans in the first 12 months of operation, which is also the obligatory period for eligibility for EU funding.
However temporary, it is an exit from unemployment and exclusion from social protection system. On the other hand, evidence shows a growing number of newly established entrepreneurs, who are in fact are self-employed people providing services to employers. This transformation of labour relations derives from the fictional savings exercised by Polish employers. In 2012 non-wage labour costs in Poland equaled the European average, reaching 22% of all costs. However, it is widely claimed that labour costs in Poland are too high and stifle job creation in the private sector. Thus, enforcing self-employment relieves employers from labour costs, shifting the burden to their contracted self-employed ex-employees, as through self-employment the entrepreneur individually covers 100% of social insurance contributions.
Starting an own business is not always a result of an economic calculation or a psychological motivation. In Poland it happens to be a result of negative selection when facing economic coercion and inability to find a different job. The current popularity of self-employment reminds of another labour market revolution that occurred few years ago when the flexibility concept was en vogue. The de-standarization and flexibilization of labour contracts started shortly after entering the European Union riding on the wave of ‘work-life balance’ slogans. Full-time labour code contracts were substituted by civil contracts, beyond any workers rights and partially without social protection too. These days we observe another step forward. The process is additionally eroding the solidarity of working people from the inside as neither the civil contracts holders, nor the self-employed are represented in the social dialogue. Trade unions are not capable of defending their interests officially as the law does not keep pace with changes in industrial relations. Meanwhile, the labour force is permanently under pressure to resign from secure working standards, enforced by arguments of crisis. It seems to be forgotten that austerity has not yet helped any country to overcome crisis.
All data mentioned come from following sources:
Eurostat Databases: http://appsso.eurostat.ec.europa.eu
Małopolskie Obserwatorium Rynku Pracy i Edukacji/Wojewódzki Urząd Pracy w Krakowie, Kraków 2011
Brussa A., Tarnawa A. „Raport o stanie sektora małych i średnich przedsiębiorstw w Polsce”, Polska Agencja Rozwoju Przedsiębiorczości, Warszawa 2011