PESTEL analysis of Poland (Poland country profile)
This detailed ‘PESTEL analysis of Poland (Poland country profile)’ aims to examine some of the macro factors that impact on Poland. Poland is a powerful country in Central Europe. It is officially known as the Republic of Poland.
Political environment and its impact on Poland
Poland is a representative democracy where the president is the head of state. It comprises of sixteen administrative provinces. It is an important member of the EU. It is also a member of NATO, the UN, OECD, European Economic Area, International Energy Agency, Schengen Agreement, and some other prestigious organisations and agreements.
Poland maintains very good relations with the United States. Likewise, its relationship with the United Kingdom is noteworthy as well with trade between the two being worth over £22 billion in 2019. It is a politically stable country and has become a success story in Europe.
However, CIVICUS, an NGO, has put Poland on its human rights watchlist as the former accuses the latter of cracking down on media, local government, peaceful protests, and freedom of expressions (Euronews, 2021).
Economic environment and its impact on Poland
The next issue in the PESTEL analysis of Poland is the economic environment. Poland is a major economic power in Europe. Its GDP in 2019 was worth $592.16 billion which is likely to reach around $675 billion in 2023 (Trading Economics, 2021). It is one of the countries in the EU which was least affected by the global lockdowns in 2020/21.
The Polish economy is well diversified. Agriculture, energy, manufacturing, and tourism are some of the top industries. Farming takes up over 60% of the total land, and the country is largely self-sufficient in the matter of its food supply (Santander, 2020). Telecommunications, transport, construction, IT, and financial services are some of the sectors that have been booming for quite some time.
The Polish economy benefits very well from the EU subsidies, remittances from the expatriates working in the EU, and a strong economic environment. For example, it received 13.1 billion euros from the EU budget in 2020 (Sas, 2021).
In terms of labour costs, Poland is still one of the cheapest countries in Europe. Minimum wages were 583.48 euro per month in the third quarter of 2020 which increased to 614.08 euro per month in the first quarter of 2021 which equals to 7368.96 euro per year (Trading Economics, 2021). Similarly, the standard corporate income tax (CIT) rate is 19% and a lower 9% rate for ‘small taxpayers’ with revenues of up to 1.2 million euros a year (PwC, 2021).
The Polish economy can improve further if the country can further develop its infrastructure. Likewise, developing and strengthening relevant institutions, increasing labour supply, and increasing opportunities for women should also play a big role.
Social environment and its impact on Poland
Poland is a developed country. Its current population is around 38 million (Worldometer, 2021). Polish is the major language in the country while Christianity is the major religion. Life expectancy is 74 years for men, and 82 years for women.
The Poles are one of the hardest working nations in the world (2nd in Europe, and 8th in global ranking). Though the average working week is 40 hours, around 10% of working men work more than 50 hours a week (World Population Review, 2021). Poland has greatly benefitted from the open borders of the European Union. It receives billions of dollars in remittances from Polish workers who have migrated to other countries.
However, ironically anti-migrant sentiment is high in some parts of the Polish society. The country faces labour shortages; however, it is largely failing to entice the diaspora to return there. Likewise, its political stance against migrants from other countries is also a barrier to resolving the problems of labour shortage (Santora, 2019).
There are some other social challenges that Poland needs to consider. The population is aging very swiftly and creating massive shortages in the labour market. Likewise, housing crisis, economic inequality, and youth unemployment rate are some other social challenges for the country.
Technological environment and its impact on Poland
Technological environment is an important issue of discussion in the PESTEL analysis of Poland. Poland has a massive broadcasting market. It has a huge potential to become a leading player in the export of new technologies. There are over 50 thousand software companies, and 18 technical universities in the country.
Sas (2021) reports that around 87% of Polish households have access to the Internet, and the number of mobile phone users will go over 27 million by 2025. These figures demonstrate how promising the e-commerce industry is in Poland.
Many Poles speak English well, and have excellent technical skills. Consequently, many overseas companies outsource software development to Poland (Kulig, 2021). However, one of the biggest challenges for the country is how to encourage Polish engineers and IT experts to stay in the country, as many of them go abroad for better opportunities.
Environmental and its impact on Poland
Poland is a beautiful country. It has a rich history, succulent local cuisine, and a great number of visitor attractions such as mountains, beaches, and forests. Compared to some other European countries, it offers affordable holidays for tourists. However, air pollution, waste management, water pollution, poor quality drinking water, emissions, and flooding are some of the environmental challenges facing the country.
Legal environment and its impact on Poland
The last issue to dissect in the PESTEL analysis of Poland is the legal environment. The constitution of Poland assures the independence of the judiciary. Any foreigners wishing to work in Poland must obtain a work permit; however, it is not a requirement for the citizens of EU, EEA and Switzerland. Employees are entitled to 20 days annual holiday if they have been employed for less than 10 years, and 26 days if employed for 10 years.
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Last update: 18 April 2021
Euronews (2021) EU must take ‘urgent’ steps over Poland’s human rights violations, says NGO, available at: https://www.euronews.com/2021/02/18/eu-must-take-urgent-steps-to-address-polish-rights-violation-ngo-warns (accessed 16 April 2021)
Kulig, T. (2021) Poland’s IT industry is booming. How can you benefit from that? available at: https://tsh.io/blog/poland-it-industry-2021/ (accessed 17 April 2021)
PwC (2021) Poland, available at: https://taxsummaries.pwc.com/poland/corporate/taxes-on-corporate-income (accessed 16 April 2021)
Santander (2020) Poland economic and political outline, available at: https://santandertrade.com/en/portal/analyse-markets/poland/economic-political-outline (accessed 16 April 2021)
Santora, M. (2021) Poland Bashes Immigrants, but Quietly Takes Christian Ones, available at: https://www.nytimes.com/2019/03/26/world/europe/immigration-poland-ukraine-christian.html (accessed 17 April 2021)
Sas, A. (2021) Poland’s contributions to and receipts from the European Union budget from 2004 to 2019, available at: https://www.statista.com/statistics/1135294/poland-s-contributions-to-and-receipts-from-the-eu-budget/ (accessed 16 April 2021)
Trading Economics (2021) Poland GDP, available at: https://tradingeconomics.com/poland/gdp (accessed 15 April 2021)
Worldometer (2021) Poland population, available at: https://www.worldometers.info/world-population/poland-population/ (accessed 17 April 2021)
World Population Review (2021) Hardest working countries 2021, available at: https://worldpopulationreview.com/country-rankings/hardest-working-countries (accessed 17 April 2021)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.