how to choose an ideal location for investment? where to look for data?

Every single investment requires thorough consideration and collecting key information that will help to make the right decision. Many employers invest each day by hiring new people, offering trainings to employees and expanding production lines or office spaces. In Poland, we are also more and more frequently dealing with investments that consist in developing facilities from the ground up. Greenfield investments are direct investments undertaken by the investors who are responsible for financing the creation of new business entity built from the scratch. On the basis of what information do investors take a decision regarding the investment in a particular region?

employment level and human resources availability

Information regarding employment level and human resources availability is provided by Statistics Poland (Główny Urząd Statystyczny, GUS). The latest report  on employment and salary in Poland in Q1 2021 presents the changes that took place in the labor market in terms of the number of people working, employees or salaries. We know that the number of people working in Poland at the end of March was 9,579.3 thousand. people and it was less by 1.2% than in the previous year. Similarly to the previous year, people working in the private sector constituted the majority, and this is 68.4%. The average monthly gross salary in Polish national economy in Q1 2021 amounted to PLN 5,681.56 and increased by 6.6% in comparison to Q1 2020. The average monthly gross salary remained diversified, depending among others on the sector. In the public sector it amounted to PLN 6,749.78, and in the private sector to PLN 5,276.28.

The above-mentioned Statistics Poland report also provides detailed data regarding the level of employment and salaries in specific sectors. This is crucial information on the basis of which investment costs can be estimated.

On the other hand, data on the number of existing, created and liquidated positions and on vacancies, including newly-created ones, as well as data on vacancies reported to labor offices, help to understand trends and find out what competencies are missing in the given labor market and which employees are needed. Due to the COVID-19 pandemic that started in March 2020, that year turned out to be unusual for the labor market. It is very difficult to talk about observing trends in such a situation; however, knowing specific figures you are able to verify whether an investment located in a particular region is likely to succeed. 

This is how we know that employers operating in the industry sector at the end of 2020 had the largest number of vacancies – 21.2 thousand, which was about 1/4 of all vacancies in the entire country. 470.4 thousand positions were created in Poland in 2020. New positions that were offered in the industry sector constituted 17.3% of the total number of newly-created positions. Construction was also one of the leading sectors in terms of offering the positions.

available infrastructure

Taking a decision regarding a new greenfield investment is related to the knowledge about employment level and human resources availability, including the education and qualifications of employees, but also depends on the availability of office spaces or production halls in a particular location as well as road and rail infrastructure. Where to search for such information? One of the most interesting sources is the report on investment attractiveness developed by the Institute of Market Economy Research (Instytut Badań nad Gospodarką Rynkową). This is where we will find information, among others, regarding the investment attractiveness of voivodeships and subregions, labor costs, economic and social infrastructure. 

From the above-mentioned report, we know, for instance, that voivodeships that are the most attractive for investors are Śląskie, Dolnośląskie and Mazowieckie. Śląskie Voivodeship, in terms of investment attractiveness, remains to be the undisputable leader. Its biggest strengths are: very extensive labor resources, the second largest market in Poland, very high activity of the region towards the investors, as well as a very well-developed economic and social infrastructure. Dolnośląskie Voivodeship ensures, among others: very high activity towards the investors, as well as the best developed economic infrastructure in Poland. On the other hand, very high transport availability and the largest market in the country are the primary advantages of Mazowieckie Voivodeship. This region position could be higher if not for the highest labor costs in the entire country.

How to define the activity towards investors? It is about offering investors areas for development and actively promoting the region abroad using the Trade and Investment Promotion Departments (Wydziały Promocji Handlu i Inwestycji, WPHiI) of Polish embassies.

What is of extreme importance for each large company, is the transport. Appropriate transport conditions in a given region facilitate direct meetings with suppliers, colleagues, clients and advisors. The network and quality of transport connections strongly affect the location attractiveness and the final choice of the investment place.

People, who constitute social infrastructure, also matter. Beneficial living conditions that attract immigrants, openness that favors creativity and innovations, the activity of culture institutions or services offered – all this matters and is taken into account while making decisions regarding the location of large investments.