The Polish economy is undergoing a transformation, with the service sector growing faster than industry, which is leading to a change in the structure of employment and production. The development of the service sector is supported by factors such as a favorable location and regulations, but is associated with slower productivity growth and potentially higher inflation. Technological progress and education will be key to future economic growth, as they can increase the productivity of services.
Spot "30 Years of the Polish Economy" (screenshot from the Ministry of Development and Technology / Youtube)
Eurostat reports that the business services sector includes almost all services except education, healthcare, finance and insurance. In recent years, activity in the hotel and catering industry has increased significantly - by over 70%. Information and communication, real estate services and professional, scientific and technical services recorded increases of around 35-39%.
Poland in the European context
In most European countries, activity in the service sector is growing faster than production in industry. Despite its growth, Poland has a relatively underdeveloped service sector, accounting for less than 44% of the added value compared to the EU average of 54%. Faster development of the service sector can accelerate the process of Poland's economic convergence.
The reasons for the changes
The shift from industry to services is a natural stage of economic development. Factors conducive to the development of the service sector in Poland include: good location for export of services, common time zone with most of Europe and favourable regulations regarding data protection.
Consequences for the economy
Structural changes have an impact on employment. In Q1 2024, 3.3 million people worked in manufacturing, 60 thousand less than a year earlier. Employment in the services sector increased by 130 thousand people. However, the growth of the services sector is associated with the Baumol effect - slower productivity growth and potentially higher inflation.
The role of artificial intelligence
Technological progress, including the development of artificial intelligence, may change the dynamics of productivity growth in the services sector. Services such as education, medicine and creative work may benefit from automation, which will affect the future rate of economic growth.
The Polish economy is undergoing a transformation, shifting towards the services sector. These changes present challenges and opportunities, affecting employment, productivity and inflation. Technology and education, which can accelerate productivity growth in the services sector, will play a key role in future development.
Source: money.pl
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