Sub-sector best prospects: Include the sub-sectors in which U.S. companies would have the best opportunity of exporting.
Last Published: 8/1/2018

Overview

Industry 4.0 refers to the adoption of automation and data exchange in manufacturing technologies.  It includes cyberphysical system, the Internet of Things (IoT), cloud computing, and cognitive computing.   Industry 4.0 is commonly referred to as the fourth industrial revolution. 
Industry 4.0 creates what has been called a “smart factory.”  Within the modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world, and make decentralized decisions.  Over the IoT, cyber-physical systems communicate and cooperate with each other and with humans in real-time both internally and across organizational services offered and used by participants in the value chain. 
Manufacturing accounts for 27% of Poland’s GDP, and the country is the sixth largest manufacturing country in the European Union.  In 2017, manufacturing grew by 6.2%, outpacing the country’s overall 4.6% GDP growth rate.   Manufacturing of machinery and equipment (not specified) and electrical equipment experienced a significant increase. The Purchasing Managers Index (PMI), an indicator of the performance of the manufacturing sector, reflects this growth, showing an annual average of 53.6 points. Poland’s Central Statistical Office (GUS) further confirms the positive outlook for Poland’s manufacturing sector, reporting that 66.3% of industrial companies were planning substantial investments in 2017.  This compares with 45.6% in 2016. 
In 2016, Poland’s manufacturing sector included 217,700 industrial enterprises with roughly 3 million employees.  Approximately 2,000 companies are state-owned and are 215,600 privately-owned, 3,360 of which are foreign-owned.  State ownership of manufacturing enterprises decreased from 600 in 2005 to 168 in 2016.
The leading manufacturing industries in Poland include: food and beverages; automotive; metal products; rubber and plastic; coke and refined petroleum products; chemicals and chemical products; electrical equipment; non-metallic mineral products; basic metal products; miscellaneous machinery and equipment, and furniture.  The automotive industry itself accounts for 8% of GDP, generates 13% of Polish exports, and accounts for 10% of all workers employed in manufacturing.
Polish manufacturing is beginning to make the move to Industry 4.0.  The amount of automation in Polish factories is low.  Six percent of manufacturers report making moves towards Industry 4.0.  Only 15% of Polish manufacturers are fully automated, while 76% have yet to complete the automation process, and 14% of Poland’s manufacturing remains wholly manual. According to the International Federation of Robotics, Poland’s level of robotization; at 22 robots per 10,000 industry employees; is far below both the EU and Central European average.    In addition, the European Commission ranks Poland as 24th among the 28 EU countries in its digitization assessment released in early June.  This is the same position as in 2017.  To move up, Poland needs to expand its broadband coverage, improve overall digital literacy, increase the number of Poles who are regularly use the full range of Internet services, encourage digital integration of industry, and increase the number of Poles using digital public services. 
 
However, Poland is making progress.  It continues to invest in and develop its 4G network, as well as increased integration of digital technologies and cloud development.  The government sees expanding this infrastructure as key to making the transition to Industry 4.0; and has declared it will make further investments in a fiber optic and faster internet infrastructure.  5G development will begin in 2020, with the 5G network becoming available in most large Polish cities by 2025. 
Industry experts see extensive investments in digital technologies as inevitable as they are the only way to allow Polish manufacturers to stay competitive on the domestic and international markets, especially as labor costs rise.  A recent PwC report indicated that manufacturers experience an income increase of 2.9% while experiencing a decrease in costs of 3.6% in the five years following their investments in digital technologies.  Such investments allow the use of simulations that shorten the time needed to begin or change production; increase energy efficiency; optimize material usage; and facilitate communication with suppliers and customers.  IoT sensors would enhance production with monitoring and maintenance services. 
According to McKinsey, over the next ten years the digitization Polish industry could increase the value added of Polish manufacturing by 11% to 19%, bringing an additional USD 6 - 10 billion to the country’s economy.   Investments in advanced management of manufacturing and logistics; the use of predictive models; and intelligent quality processes will help Polish manufacturers meet the challenges posed by rising labor costs as well as hiring and retaining qualified workers. Industry experts predict that IoT and artificial intelligence (AI) will be the two main factors driving the digital transformation in Poland over the next three years, especially in the media, transportation, automotive and retail industries.
      
 
Reindustrialization is a priority for the Polish government, which has recognized that it needs to better prepare for Industry 4.0 to avoid the marginalization of Polish industry. The Ministry of Entrepreneurship and Technology envisions intelligent reindustrialization that will streamline the development of industries based on digital technologies, 3D printing, innovation, and a highly skilled workforce.  In a horizontal approach, the Ministry has identified technologies and processes that are most important to the development of industry: advanced materials and composites; automation and robotics; sensors and intelligent sensor networks; intelligent networks and information; and communication technologies.      
The government provides funding for innovative projects that address issues with national intelligent specializations, industry research, and experimental means of production that are likely to be implemented in manufacturing. These projects, with a budget of USD 200 million, are supervised by the National Center for Research and Development (NCBiR) and the Agency for Industry Development (ARP).
A key element of Industry 4.0 is the “Platform for the Industry of the Future” (Platforma Przemyslu Przyszłości) to be launched in 2018.  The Platform will integrate the efforts of both public and private organizations to improve industry using data, technological support, streamlined efforts to access new technologies, and general know-how. The Platform will specifically focus on standards; specialization; digital industry support; software and data processing; education and staffing; legal framework; and ICT sector activity.  The Platform will also incorporate Industry 4.0 competence centers for vertical industries, established as joint ventures among industry, business, and science organizations.
A recently introduced Innovation Law seeks to stimulate Poland’s digital transformation through tax incentives and a robust grant system to support research and innovation surrounding manufacturing. 
Polish companies can also compete for funds from the European “Horizon 2020” program, which awards Euro 500 million to organizations until 2020.  The funds are available for digital innovation centers and free flow data projects in six industries: automotive, space, defense, textiles, maritime technologies, and tourism.
According to a recent study by KPMG, some factors holding back Polish industry are specific regulations and a lack of technological standards, shortages of experts in the field, limitations of existing digital technologies, and a reluctance to adopt new solutions.  The use of AI to optimize production processes represents only 4% of the economy and accounts for just 0.1%-0.2% of the GDP growth. As a result, the government has made plans to develop a national AI strategy.   There is also a need to introduce ethical and legal standards for the use of AI and robots, which is being discussed at the EU level.
 

Leading Sub-Sectors

New technologies will be especially important in the aviation, defense, and automotive industries. Polish suppliers are already a large part of the manufacturing process  in these industries, and manufacturers must meet the technological standards of their suppliers.  Industry 4.0 is also spreading to logistics and storage operations.
In terms of Industry 4.0, the most promising sectors are automotive and aviation, followed by pharmaceuticals and household appliances. 
 

Opportunities

Recent analyses of the competitive global industry markets indicate Poland is in a strong position for and has good prospects of  future investments in industrial automation and manufacturing technology.  Good opportunities for U.S. exporters  include:
•              Sensors and instruments
•              Electric motors and actuators
•              Electrical relays and industrial control equipment
•              Material handling equipment
•              Industrial robots, including those used in spot welding, sorting, palletizing, and painting
•              Machine tools for cutting metal and forming metal pieces
•              Machine tools parts, both OEM and after-market
•              Tools, dies, jigs, and fixtures for manufacturing applications
•              Welding and soldering equipment
•              Plastics and rubber manufacturing equipment
•              Industrial molds
•              Additive  manufacturing equipment. 
There are also good prospects for IoT, advanced analytic, virtual reality, augmented reality, and general innovative solutions as the key elements toward the development of Industry 4.0 in Poland.

 

Web Resources

Organizations:
Ministry of Entrepreneurship and Technology
NCBiR - The National Center for Research and Development
ARP – Industry Development Agency
 
Trade events:
Robotech Robotics Technology Conference, Wroclaw, September 18, 2018
 
New Industry Expo, Katowice, September 26-28, 2018
 
Toolex International Fair of Machine Tools, Tools and Processing Technology
Katowice, October 2-4, 2018
 
Automaticon International Fair Industry Automation, Warsaw, March 26-29, 2019
 
Przemysł 4.0 Conference, Warsaw, April 9, 2019
 
ITM Polska Innovation, Technologies, Machines, Poznan, June 4-7, 2019
Mach-Tool, International Machine Tool Exhibition, Poznan, June 4-7, 2019
 
Publications:
Magazyn Przemysłowy
AutomatykaB2B
Industry 4.0 information portal
 
For more information about Advanced Manufacturing, please contact:
 
U.S. Commercial Service Poland
Commercial Specialist: Maria Kowalska
E-mail: Maria.Kowalska@trade.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Poland Trade Development and Promotion