Investor

SEPTEMBER 2011
Vol. XXI, No. 7 ISSN 1506-3240

American

American Chamber of Commerce in Poland 2011

www.amcham.pl

COVER STORY:

Is this sustainable?
To maintain its global edge, outsourcing in Poland must become more competence-intensive
Monthly Meeting: US Ambassador Lee Feinstein
Photo pages: Events in Wrocaw, Krakw and Katowice Monthly Meeting CEO Forum Fourth of July picnic

Experts: Deloitte aszczuk & Partners Salans

Focus: AmCham Membership Survey Antenna Software Chevron Upstream Europe Executive chef Gavin Baxter MBA programs in Poland

AmCham online

Investor COVER STORY:

American
SEPTEMBER 2011 Vol. XXI, No. 7

whats on

Your online guide to AmCham activities

www.amcham.pl

Is this sustainable?

Download this magazine!

American Investor is available in full as a pdf for download from the www.amcham.pl website. Go to "About Us" in the horizontal menu, and choose American Investor Magazine from the pop-up menu. You can download past issues of American Investor dating back to October 2010.

To maintain its global edge, outsourcing in Poland must become more competenceintensive, page 16.

Calendar
By clicking on red links in the Calendar you may visit photo coverage of our past events. Blue links will take you to the announcements of upcoming events.

MONTHLY MEETING Opening a new chapter Polish-American relations have entered new areas beyond energy and defensewith a huge contribution from the American business community in Poland, p. 20 CEO FORUM Business as unusual Innovation is the key to getting ahead and staying ahead when times are tough, p. 22 FOCUS Getting better all the time AmCham continues to improve its efforts to meet the needs of its members, p. 24 A new chef in town In a world where the restaurant business is driven by taste and economy, Gavin Baxter has the right balance of experience to embrace the two domains with quality and condence, p. 26 Mastering a degree in business administration Insiders explain the options for earning an MBA in Poland and offer tips on how to manage the decision-making process, p. 28 Exploring for business American Investors Tomasz wiok talks with John P Claussen, Country Manager for Poland at Chevron Upstream Eu. rope, about Chevron Polska Energy Resources Sp. z o.o., an energy company which recently joined AmCham, and its prospects in Poland, p. 29 Growth on the radar American Investors Tomasz wiok talks with Antenna Software managers James Hemmer, President & CEO, and Mark Watson, EVP and General Manager, shortly after Antenna announced the creation of a technology center in Krakw, p. 30 EXPERTS The problem of grounded ights The liability of air carriers for the consequences of unforeseeable events resulting in ight cancellations, p. 31 Follow the path of world leaders Innovation in business is understood in many different ways, but there are some solid indicators to stick to, p. 32 Catching up with reality Product placement has nally become legal in Poland, conditions notwithstanding, p. 33 EVENTS Sharing diverse approaches to CSR, p. 34 Science and money meet in Wrocaw, p. 35 Golng to help children in need, p. 35 Reinforcing business ties in Katowice, p. 36 Business Mixer out of town, p. 37 Once a year at the Ambassadors place, p. 38 Innovation at the top, p. 39 Celebrating Americas independence, p. 40 DEPARTMENTS Newsline, p. 2, Agenda, p. 8, Content summaries in Polish, p. 44, Guide to AmCham Committees, p. 45.
SEPTEMBER 2011 AMERICAN INVESTOR 1

Events
AmCham Monthly Meetings are one of the agship events organized by the chamber. While American Investor covers each Monthly Meeting extensively, including full-page pictorials, you can search through picture archives of past events that include never previously printed material. Just go to Events and Activities, pick Monthly Meetings and scroll down for links to archived events.

Regions
AmCham may be closer than you think. Apart from Warsaw, AmCham has two regional branches which are active all year long and offer many exciting opportunities to interface with regional business leaders and politicians. To nd out more about our activities in Krakw and the region of southern Poland, and Wrocaw, go to Regions in the horizontal menu bar, and pick your region of interest.

Policy Watch
Intelligence: For AmCham position papers, policy statements, ofcial letters to government ministers and research papers, visit the Advocacy link on the horizontal menu to download the latest AmCham position papers.

Other useful sites

US Chamber of Commerce http://www.uschamber.com American Chamber of Commerce to the European Union http://www.amchameu.be AmChams in Europe http://www.amchamseurope.com

YOUR AMCHAM

The American Chamber of Commerce in Poland

BOARD OF DIRECTORS

Newsline
3M
3M has placed second in the Best Global Green Brands ranking by the Interbrand consultancy. Interbrand studied environmental compliance data from over 3,000 companies and selected the 50 best-performing brands. Consumer opinions from 10 major markets, such as the US, Germany, India and Japan, were also reflected in the ranking. 3M was credited for its pioneering program Pollution Prevention Pays (dating from 1975), as well as its consistency in implementing eco-friendly programs. In one such program in Poland, 3M managed to cut waste production and energy and water consumption by 20% over 5 years. In other news, 3M was named Leader of Sustainable Development in a competition organized by PwC and the Polish edition of Forbes, aimed at identifying best practices in sustainable development and building companies longterm value. As it has accomplished its goals for the time being, the AmCham Telecom Committee has been suspended until a new agenda is formed. The Telecom Committee created a platform under the AmCham umbrella for the exchange of members ideas and views on trends in the telecommunications sector in Poland. The committees main achievement was the publication of a report on telecom infrastructure in 2008, which found Poland slipping behind other countries in the EU. The report gained a lot of attention from the public following the press conference presenting the report, hosted jointly by AmCham and the French and German chambers of commerce in Poland. The committee was most recently co-chaired by Jarosaw Roszkowski from Crowley Data Poland and Piotr Muszyski from Telekomunikacja Polska. Meanwhile, the AmCham Tax Committee and the AmCham Financial Services Committee, which share many synergies, have merged to form the AmCham Tax & Financial Services Committee. The new committee is co-chaired by Piotr Bartuzi from Bank BPH and Andrew Hope, an individual member. The AmCham Council, represented by AmCham Board Member Paul Fogo and AmCham Executive Director Dorota Dabrowski, met in Katowice in May with Mayor Piotr Uszok and representatives of the business community in the area, including AmCham member companies and selected non-members. The US government was represented by Consul General Allen Greenberg and Consul Aaron Daviet from the US Consulate in Krakw. Opening the meeting, Mayor Uszok

News from AmCham and its members

cates problems with public procurement procedures in Poland and their consequences, and recommended solutions. AmCham submitted its catalogue of best public procurement practices to the Presidents Chancellery, the Friendly State Extraordinary Commission and the Ministry of Health, which conducts numerous tenders involving innovative e-government projects. Additionally, as a result of AmChams lobbying efforts, the issue of using price as the main criterion when evaluating an offer in a public procurement tender is currently on the agenda of the Friendly State commission. The commission recently accepted a proposal that would amend the Public Procurement Law by introducing a legal safe-harbor mechanism that allows for selection of an offer taking nonprice criteria into consideration when evaluating an offer, such as quality, technical parameters, and the deadline by which the goods or services will be provided. Subsequently, the commission submitted the legislative proposal to the Parliament for further action. ing on the state of manufacturing in the US, underlying challenges and possible solutions, and annual symposia co-hosted by the chamber and MAPI featuring panel discussions of top experts who will cover the topics highlighted in the research papers. The first symposium is expected to be held this fall at the Washington headquarters of the US Chamber of Commerce. MAPI also said it will make available much of its previously member-only research to senior-level AmCham executives.

Joseph Wancer Deloitte

Chairman

Judith Y. Gliniecki Wierzbowski Eversheds

Vice Chair

richard lada Telesto

Vice Chairman

peter kaY KPMG Polska

Secretary

stan popoW Finacorp

Treasurer

MEMBERS Tony Housh

APCO Worldwide

John Lynch
Lynka

Paul Fogo
Miller Canfield

Mac Raczkiewicz
Ex officio

Piotr Jucha
McDonalds

Roman Rewald
Ex officio

Thomas Kolaja
Alvarez and Marsal

Anna Sienko
IBM

Robert L. Koski
Kulczyk Investments

AmCham Committees

SPONSORS

said that Katowice is very happy with its cooperation with AmCham on many conferences, which are important for business in the region. Uszok discussed the scope of infrastructure projects undertaken by Katowice to emerge as a modern city with a good environment for international business. Pawe Tynel, a senior manager at Ernst & Young, gave a presentation about Katowices strengths for investors. He praised the work ethic of staff in Katowice and Upper Silesia. Marcin Nowak from Capgemini discussed examples of the effectiveness of the work performed by staff at Capgeminis Katowice office. David Gibson, president of project management company Fluor, said that workforce turnover at the Fluor location in Gliwice is much lower than in such locations as Delhi, where Fluor also has operations, because staff in Upper Silesia tend to progress within the company instead of leaving after a few years of experience. Andrzej Korpak of General Motors Manufacturing Poland stressed that there is a huge talent pool available in Upper Silesia, thanks to the quality education offered to students in the area. He noted that while there is room for improvement in such aspects as managerial skills, almost all university graduates are now fluent in English.

Baker & McKenzie

Law rm Baker & McKenzie generated recordhigh per-partner prot of USD 1.2 million in the nancial year that end on June 30, 2011. With a total of USD 2.27 billion in global earnings, the law rm saw its best nancial performance in history. The most prot-generating ofces were in Latin America, Asia/Pacic, the UK and the US. In other news, Baker & McKenzie advised Ovostar Union NV, a dairy producer with opera-

AmCham Wrocaw

AmCham USA

AmCham Research

AmCham Council

AmCham did a study of competencies and skills required from IT employees in Poland. The study, conducted in March, was designed to identify the IT areas where American companies in Poland will have the greatest recruitment needs going forward. The report revealed that database administration is the area where IT staff are most sought-after (identified by 63% of respondents), followed by mobile solutions and quality testing (53% each), business intelligence and user support (47% each), and eCommerce/Web 2.0 and LAN/WAN networks (42% each). Among IT tools and programming environments, the most popular include programs from the C, C# and C++ and Java and Javascript families (63% each), followed by SQL (58%), and ASP and ASP .net and NET and XML (42% each). The most popular database used by American companies operating in Poland is Microsoft SQL (68%). Other popular databases include MySQL (53%), Oracle (37%) and PostgresSQL (26%). Leading American IT companies operating in Poland who took part in the project were Cisco, Dell, HP IBM, Intel and Microsoft. , AmCham has taken initiative to improve public procurement procedures in Poland. Our expert working group, which includes Jolanta Jaworska and Aleksandra Gawroska-Mucha of IBM, Hubert Taski of CMS Cameron McKenna, Jan Wglarz and Dariusz Rulski of Fluor, and Marta Pawlak of AmCham, has developed a catalogue of best public procurement practices. The catalogue is based on information gained from our members and indi-

The US Chamber of Commerce and the Manufacturers Alliance/MAPI announced that they have established a joint initiative to advance awareness in the policy community about the importance of manufacturing to continuing prosperity and economic growth. The chamber is in a unique position to tell the story of US manufacturing to policymakers at all levels of the government, as well as to the entire business community, said Thomas J. Donohue, president and CEO of the US Chamber of Commerce. This is the beginning of a great collaboration, and together we can play an important role in helping create a more conducive environment for Americas manufacturers. Stephen Gold, president and CEO of MAPI, said, The manufacturing sector plays a vital role in boosting economic growth, and we need to get our message out to as wide an audience as possible. The chamber offers a broad network and is a credible partner to share the story on how manufacturing can create jobs and economic growth. The new initiative will include several components, including a research paper from MAPI each year for chamber members focus-

Members on the move

Acxiom
Agnieszka Jaworska has joined Acxiom, the database marketing company, as an expert and product manager to help Acxiom tailor its services to suit client marketing strategies. Jaworska will provide strategic advice on product development and manage relations with partners, agencies and media.

AmCham Policy Watch

AmCham Auditor:

AmCham in Wrocaw, in cooperation with the Polish-German Chamber of Industry and Commerce, the British Polish Chamber of Commerce and the Scandinavian-Polish Chamber of Commerce, held a joint workshop on corporate social responsibility in June. The main business partner of the event was IBM, which hosted the event at its Wrocaw delivery center. The meeting in Wrocaw was designed to introduce skill-based volunteering, which is one of the major areas of CSR, as well as to highlight cooperation between private companies and the public administration in CSR initiatives and provide examples of best practices in CSR used by international companies. Over 50 invitees, including Deputy Governor of Lower Silesia Ilona Antoniszyn-Klik, Anna Panasiuk from the Ministry of Labor and Social Policy, and representatives of Polish and international companies, shared the opportunity to discuss various approaches to CSR policy in local and multinational enterprises operating in Poland. The main business speakers at the event were from IBM, Siemens, Kraft Foods and Volvo. Guests also learned about the governments preparations for the European Year of Volunteering, which is being coordinated in Poland by the Ministry of Labor and Social Policy. In other news, in June AmCham Wrocaw hosted a breakfast meeting for member companies in Wrocaw, which was a perfect opportunity for face time with Prof. Jerzy Langer, Foreign Secretary of Academia Europaea and former Deputy Minister of Science and Higher Education. Langer is also a science and innovation adviser to the Mayor of Wrocaw. The European Commission recently published a Green Book on R&D and innovation, which launched a public debate devoted to the need for a common strategy and better synergy in the knowledge triangle (research, education and innovation), to create new mechanisms and better coordination of financing for R&D and innovation projects. At the event Prof. Langer spoke about financing large-scale R&D initiatives using EU funds and introduced the early stages of the concept of Wrocaw Research Centre EIT+, the institutes current activities and its future development plans. He pointed out that the centers current budget of about PLN 700 million may be boosted thanks to a redefined cohesion policy, earmarking up to 20% of structural funds (instead the current 5%) for the best pro-innovation projects in less-developed regions of the EU.

Members on the move

Baker & McKenzie
Dorota Dubyk of Baker & McKenzie has qualied as a legal adviser. She specializes in banking and nance law. Dubyk joined Baker & McKenzie in 2007 with 10 years of professional experience. She holds degrees from the Warsaw School of Economics and the Polish Academy of Sciences. Piotr Rawski, a partner at Baker & McKenzie, has become the head of the rms labor law practice in Warsaw. Rawski has 15 years of experience in labor law and commercial law, as well as M&A and corporate nancial realignment procedures. Rawski has been recommended by Chambers Europe, the Legal 500 and PLC Which Lawyer? Bartosz Romanowski of Baker & McKenzie has qualified as a legal adviser. He specializes in corporate law, business insurance, civil law and M&A. Romanowski is a graduate of the University of Warsaw. Ireneusz Stolarski has become an international partner at Baker & McKenzie, as head of the banking and nance practice in the Warsaw ofce. He specializes in M&A, high-risk investments, and insolvency law. Stolarski has been recommended by Chambers Europe, the Legal 500 and PLC Which Lawyer?

Bristol-Myers Squibb Poland

Gianluigi Lisi has been appointed general manager of Bristol-Myers Squibb Poland. Lisi joined Bristol-Myers Squibb in 1999. He has 26 years of experience in the pharmaceutical industry, 18 of which have been on international assignments.

AMERICAN INVESTOR

SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

YOUR AMCHAM

Newsline
tions in Ukraine, in its IPO on the Warsaw Stock Exchange. Ovostar sold 25% of its shares for a total of PLN 93 million. Other companies from Ukraine that Baker & McKenzie has advised on recent IPOs in Warsaw include battery manufacturer Westa, which sold 25% of its shares for PLN 130 million, and Coal Energy SA, the third-largest coal producer in Ukraine, which sold 25% of its shares for PLN 225 million. Baker & McKenzie partner Magorzata Pietrzak-Paciorek, who heads the real estate practice in Warsaw, has been named Best in Real Estate in Europe in the annual Women in Business Law Awards from Euromoney Legal Media Group.

News from AmCham and its members

AMCHAM STAFF
Executive Director director@amcham.pl

Dorota Dabrowski Marzena Drela

Chadbourne & Parke

Deputy Director marzena.drela@amcham.pl

Dorota Szubielska, a partner at Chadbourne & Parkes Warsaw ofce, was honored as Legal Adviser of the Year 2011 by the National Council of Legal Advisers. The award was granted for the rst time in the history of the Polish legal advisers bar association.

Events & Media Manager anita.kowalska@amcham.pl

Anita Kowalska

Cisco

Office Manager robert.kruszyna@amcham.pl

Robert Kruszyna

Membership and Committees Coordinator barbara.pocialik@amcham.pl

Barbara Pocialik-Malinowska Marta Pawlak

Boeing

Research and Policy Coordinator marta.pawlak@amcham.pl

Project Assistant robert.chomik@amcham.pl

Robert Chomik

AmCham in Krakw
krakow@amcham.pl

Monika Pilarska

Boeing has completed ight tests of the 787-8 Dreamliner, equipped with Rolls-Royce engines. The tests are required to obtain ight certication. Thanks to new technologies such as composite materials and additional electronic systems, the latest Dreamliner is more fuel-efcient and complies with the toughest environmental standards in the industry. By the end of 2Q 2011, Boeings order backlog stood at USD 323 billionover four times the companys revenue projections for 2011.

AmCham in Wrocaw
amchm.wroclaw@pmg.pl

Joanna Bensz

CB Richard Ellis

Published by the American Chamber of Commerce in Poland EDITOR-IN-CHIEF, ART & DTP tomasz Wiok
tomasz.cwiok@amcham.pl

Investor

American

christopher smith
christopher.smith@neostrada.pl

EDITOR-AT-LARGE

Printing

Q Invest Ltd +48 22 424 6600 To contact AmCham please write or call: ul. Emilii Plater 53, WFC 00-113 Warsaw tel: +48 22 520 5999 fax: +48 22 520 5998 e-mail: office@amcham.pl www.amcham.pl

American Chamber of Commerce in Poland 2011. All rights reserved.

American Investor is the official publication of the American Chamber of Commerce in Poland. It is a voice for foreign investors and the business community in Poland. The magazine strives to keep our members and other readers up to date by following chamber news and reporting on the leading trends in business and policy. letters to the editor should be e-mailed to tomasz.cwiok@amcham.pl

Commercial property services company CBRE has been included on the Fortune 500 list of the largest US-based companies for the fourth straight year. CBRE is the only commercial real estate services rm to be included in the Fortune 500 list. The Fortune 500 ranks US-based companies by total revenue. CB Richard Ellis was ranked 440th. CBRE was also recognized as the No. 6 provider of outsourcing services across all industries, according to the annual Global Outsourcing 100 released by the International Association of Outsourcing Professionals. This is the highest ranking for any commercial real estate services rm on the 2011 list. Warsaw was ranked as the 5th-most attractive business location across all emerging markets in a study by CBRE. Business Footprints, published in August, compares the ofce presence of 280 major companies across 101 countries and 232 cities. Of the 30 most popular company ofce locations, 17 are in emerging markets. Overall Warsaw ranked as the 12th-most popular business location, behind New York (11th) and Paris (10th). The study also revealed that many cities in emerging markets are attracting a similar number of international ofce occupiers as established business centers. In other news, CBRE has bought Euro Mall Centre Management, a specialist in the management of shopping centers and malls across Central & Eastern Europe. Founded in 2002, EMCM offers property and asset management services in the Czech Republic, Latvia, Lithuania, Poland and Slovakia. Its clients include Invesco, ING Real Estate Investment Management, and Carpathian Asset Management. EMCM manages over 40 properties, with over 658,000 sq m and over 2,400 tenants.

New trends are emerging in cybercrime, as hackers gradually abandon spam as a means of attacking companies and prepare attacks tailored to specic corporate targets. A Cisco Security Intelligence Operations study shows that cybercrime tends to focus on hand-picked users or user groups, and focuses on the theft of intellectual property. Cisco said that as a result, the number of spam e-mails dropped from 300 billion a day in June 2010 to 40 billion a day in June 2011. Another report, the Cisco Visual Networking Index 20102015, has found that the number of devices connected to the Internet will reach 15 billion by 2015twice Earths human population. Meanwhile, online trafc is expected to quadruple between 2010 and 2015. Cisco has released new hardware for Wi-Fi Internet access to crowds at sport arenas. Wi-Fi Cisco Connected Stadium is available to venue operators as well as phone companies. It supports heavy-duty wireless connectivity to enable thousands of users in one area to access applications online at the same time from their smartphones. The system is built around Aironet 3500p hardware, which supports the

work of access hot spots. In the Cisco Networking Academy, three Polish participants in the NetRiders network engineering competition, held online in June, made it to the top 10: Maciej Deryng of Wrocaw University of Technology (4th), Rafa Klupa of the School of Banking and Management in Krakw (6th), and Gabriel Szuter of the Institute of IT Technologies in Wrocaw (7th). There were 150 contestants in NetRiders, from 49 countries.

Enterprise Investors

Cushman & Wakeeld

For the 10th consecutive year, private equity and venture capital fund Enterprise Investors has announced the Ventura 2010 awards for its best managers and companies. The Most Dynamic Company title went to Kruk, the largest receivables management company in Poland and Romania. In 2010, Kruks sales increased by 28% and its net prot by 64%. AVG Technologies, an Internet security software producer with 110 million users worldwide, won the award for Most Efcient Company. AVG outperformed its rivals with a 28% net prot margin and an EBITDA to total assets ratio of 48%. AVGs cooperation with the most popular web browser, Google, was recognized as the Event of the Year and won AVG its second Ventura for 2010. Manager of the Year was Krzysztof Kawalec, the president of Magellan, a nancial institution listed in Warsaw which serves the medical sector in Poland, the Czech Republic and Slovakia. GE Hitachi Nuclear Energyhas signed a letter of intent with Energoprojekt Warszawa, a project management company specializing in the energy sector, for potential cooperation in the construction of GEH nuclear reactors. The deal comes as PGE, the Polish energy company building Polands rst nuclear power plant, is looking at GEH technology to use for the project. GEH employs over 10,000 people in Poland. Eight students from universities in Poland were among 32 students who received scholarship in the 8th edition of the Scholars-Leaders Program, conducted by the GE Foundation and the Institute of International Education. Along with nancial aid in the form of EUR 3,000 each for the next two years, the winners will participate in the GE Foundations Leadership Development Program as well as volunteer programs.

of the staff, including English language courses. One of the programs involves informal face time with the hotels general manager for employees at all levels to share views and exchange ideas.

Hewlett-Packard

General Electric

Members on the move

CB Richard Ellis
Piotr li has been promoted to associate director in the CBRE Valuation Department. His primary focus is on valuation of commercial and residential properties. He graduated from the Silesian University of Technology in Gliwice. He is a member of the Royal Institution of Chartered Surveyors and a licensed appraiser in Poland. Kamil Tyszkiewicz has joined the Warsaw Ofce Team of CBRE as a senior property negotiator. Tyszkiewicz earned a joint law degree from the University of Warsaw and the University of Florida and completed further studies in real estate. Mariusz Winiewski has been appointed senior property negotiator in the Ofce Agency Team of CB Richard Ellis in Gdask, where he will focus on leasing ofce properties in the Tricity area. Winiewski holds a degree in foreign affairs from the University of Gdask.

Commercial real estate expert Cushman & Wakeeld has represented three tenants in recent ofce leases in Krakw. The Academic Business Incubators Foundation, a network of institutions to support and advance entrepreneurship, has become a new tenant at the M65 Meduza ofce building (pictured above). The same building is now home to Panorama Finansw, a lease service provider. M65 Meduza, delivered in 2009, is a 9-story building with 4,600 sq m of ofce space. Amer Sports Poland, the distributor of Salomon products in Poland, has leased ofce space at Etiuda, a 5-story Class A ofce building in Krakw. C&W advised Mark-7, a wholesaler of food products, on a tenant contract at the MARR Business Park in Krakw, where Mark-7 will occupy over 1,700 sq m of warehouse, ofce and social space. C&W also represented TPA Horwath, a tax consultancy, in its lease of 700 sq m at Murawa Ofce Park in Pozna, with a further 200 sq m in 2013. In sale transactions, C&W advised private equity rm Rotaria in its acquisition of the Alma ofce building in Warsaw from Invesco Real Estate. Alma is a fully leased property of about 6,000 sq m. Ofces have taken the lead among commercial property markets in Europe in 2Q 2011, against retail and at the expense of peripheral markets, according to a market update published by C&W in July. The report found that investment activity in Europes commercial property markets slowed in the 2nd quarter, with EUR 26.2 billion traded, 11.5% less than in 1Q 2011. The ofce sector saw its share of activity rise from 36% in 1Q 2011 to 46% in 2Q 2011, with trading up 10%, compared to declines of 35% for retail and 46% for industrial.

Costs related to cybercrime increased 56% this year, HP announced in its 2nd annual Cost of Cybercrime study. The study, compiled by the Ponemon Institute, compared costs shouldered by private companies and public institutions in the US due to after-crash data retrieval and computer threat scanning in June 2010 and June 2011. One of the ndings is that the average time for solving problems after a cyber attack was 18 days, while the average cost for xing problems was USD 416,000. HP has launched Always On personalized technical support, which adjusts the extent of the assistance to the individual needs of HPs customers and partners. Part of the service is an application which enables Always On to be used on mobile devices. HP said that the new service will boost customer satisfaction and increase the efciency of HPs technical support. A new platform from HP Vertica Analytics , System, which is derived from the HP convergent system architecture, was made available to customers in June. It enables much faster data input compared to older-generation record-based systems. The new platform boosts the cost efciency of IT systems for companies.

Members on the move

Cushman & Wakeeld
Aleksander Loster has been named a senior surveyor in the Capital Markets Group at C&W. Loster earned a law degree at Adam Mickiewicz University and business degrees at the Pozna University of Economics, Szczecin University of Technology, and Shefeld Hallam University. He joined C&W in 2002. Anita Rajchelt has been named an associate at Cushman & Wakeeld. She joined C&W in 2000 and worked for six years as a property manager in C&Ws Asset Management Department. In 2007 she joined the Capital Markets Group as a senior surveyor. She holds a business degree from the University of d. Aneta Rogowicz-Gaa has been named deputy head of C&Ws Asset Management Department. She is a graduate of the Warsaw School of Economics and Shefeld Hallam University. RogowiczGaa joined Cushman & Wakeeld in 2004.

Hilton Warsaw

The Hilton Warsaw Hotel & Convention Centre has been named Reliable Employer 2010 by Rzecz o Biznesie, a Katowice-based organization promoting high standards in business. The Hilton Warsaw offers a variety of employee motivation programs to support the everyday work

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

Newsline
Members on the move
PwC
Tomasz Bejm has become a partner at PwC, responsible for the Technology Advisory Team. Bejm specializes in banking, insurance, telecoms, energy and fuel, and the public sector. He is a Certied Information Systems Auditor and a Certied Information Systems Security Professional. Marcin Chomiuk is a new PwC partner and will co-lead the Indirect Tax Team. Chomiuk has published numerous articles concerning VAT.

HOT DATE

Sep.29.11
Members on the move
Sheraton Sopot
Tomasz Szyszka has been appointed sales and marketing director of the Sheraton Sopot Hotel, Conference Center & Spa. His responsibilities will include handling sales strategy and coordinating marketing and PR. Szyszka has 10 years of experience in the hospitality industry. He graduated from the University of Business in Wrocaw.

News from AmCham and its members

Conference: Clean, Green and Talent-Driven BPO/ITO Hub in Central Europe Place: Katowice Time: 9:00 A.M.

KPMG

Pawe Durak has been named a partner in PwCs Advisory Department, where he will lead the Operational Excellence Team. He specializes in M&A, corporate structural realignment, and building business value in management systems. Durak holds a PhD from the Warsaw School of Economics. Andrzej Jacek Jarosz has become a partner at PwC, where he heads the Tax and Legal Department in Pozna and Gdask and will continue his management role in state aid and private company services. He has over 15 years of professional experience in tax reviews and tax advisory services for individual clients and capital groups. Piotr Romanowski has become a partner in PwCs Advisory Department. Romanowski has 10 years of experience in management consulting, corporate banking and the energy sector. Romanowskis competencies include Poland as well as Russia and other CEE countries. Mariusz piewak has been named a partner in PwCs Advisory Department. piewak will continue to lead the Financial and Risk Management Group in Poland and CEE. He has extensive experience in consulting for nancial institutions. Piotr Urban has been named managing partner of the PwC audit systems, internal control and internal audit team in Poland and the Baltic States. Urban has 13 years of experience at PwC in audit and advisory services for clients from sectors such as energy, gas, manufacturing, mining, telecommunications, and services. Urban will lead a team located in four PwC ofces in Warsaw and Krakw.

The number of luxury brands that are available from authorized retailers in Poland increased of over 8 percentage points from mid-2010 to mid-2011, according to a report by consultancy KPMG on the luxury goods market in Poland. The growth of luxury brands in Polish retail reflects the growing affluence of Polish society. Out of 200 brands identified as luxury by KPMG, 61% are now available directly from retailers in Poland. Hi-tech goods have the largest representation, with 86% of all luxury brands in this sector sold in Poland. The least-developed sector is luxury hotels, with only 34% of luxury brands present on the Polish market. In other news, Poland and other CEE countries improved their rate of corporate fraud discovery in 20092010, according to KPMGs Fighting Fraud report. The improvement is a result of tougher financial controls implemented by companies to weather the negative effects of the economic crisis, and improved financial risk management. Of the respondents in the KPMG survey, 48% said they invested in improving their internal control mechanisms, while 43% said they will continue such investments in the next two years. Despite companies stricter measures to protect their financials, KPMG noted a rise in leaks or theft of confidential information, with 45% of respondents affected by this problem.

leased 4,400 sq m, and investment group CVBC Investment Holding AG, which leased 2,650 sq m.

PM Group

its sale of over 99% of the shares in Upper Silesia Energy Company, the largest electricity provider in Upper Silesia, to Tauron Polska Energia for PLN 4.6 billion. The firm also represented Vattenfall in the sale of Vattenfall Heat Poland, with power and heat generating plants in Pruszkw, Siekierki and era and heating plants in Ktrzyn and Wola, to the state-owned gas company PGNiG for PLN 3 billion.

Orco Group

Kulczyk Investments

Kulczyk Oil Ventures, a unit of the Kulczyk Investments holding company, has opened a new commercial well in the Olgovskoye gas field in Ukraine. The O-14 well is the third well drilled in the Olgovskoye field since the company acquired its interest in KUB-Gas in June 2010. It is part of a larger development program for KUB-Gas assets through 2011 and 2012. Employers in Poland anticipate a steady hiring pace, with more than 20% expecting to increase staffing levels, HR specialist Manpower reported in the Manpower Employment Outlook Survey released in July. Polish employers across all industry sectors and all regions reported positive hiring intentions for 3Q 2011, a significant increase from 2Q 2011. Of the 751 employers surveyed, 22% anticipated adding to their workforce in 3Q 2011, while 8% plan reductions and 67% expect no change. When it comes to industry sectors, employers in construction had the most optimistic hiring plans, followed by mining & quarrying and hotels & restaurants. Hiring intentions, although not as optimistic, were also signaled by the finance, insurance, real estate and business services sectors. Polands outlook remains one of the most optimistic out of the 21 countries surveyed in Europe, the Middle East and Africa, trailing Turkey and Romania but even with Bulgaria. Law firm Norton Rose Piotr Strawa and Partners has advised energy company Vattenfall in

La Rotisserie Restaurant at the Mamaison Hotel Le Regina in Warsaw, owned by Orco Group, has been shortlisted as the only restaurant from Poland by Dining Guide, a Hungarian trade magazine, in its ranking of Central & Eastern Europes Top 10 Restaurants. The restaurants on the list will compete for the magazines CEE Food Award. Winners will be announced at the end of the year. La Rotisserie Restaurant was shortlisted for chef Pawe Oszczyks signature cuisine and wine pairings. Earlier, La Rotisserie received the Hermes award from Polish HoReCa trade magazines Poradnik Handlowca and Poradnik Restauratora, in the hotel restaurants category. Warehouse and industrial space developer Panattoni Europe has commenced a number of built-to-suit projects in Poland. A 17,600 sq m facility for Faurecja, an automotive producer, is under construction at the KostrzynSubice Special Economic Zone in Gorzw Wielkopolski. A 11,165 sq m project is under construction at Panattoni Park Gliwice I for food distributor Nagel-Group. In Rogonica and Wola Cicha, part of Euro-Park Mielec, Panattoni has completed a built-to-suit facility for household appliances manufacturer Zelmer SA. Food producer Danone has commissioned a 13,600 sq m built-to-suit facility at Panattoni Park wicice. In new leases, Arteria Document Solutions, a back-office processes outsourcing company, has leased 2,500 sq m at Panattoni Park Gliwice II. At Panattoni Park d East, Paul Hartmann Polska has renewed its lease for 5,230 sq m in the parks first building and signed a new lease for 2,000 sq m in the new third building. In central Poland, Panattoni Park Stryw has been fully let, following the addition of two new tenants, automotive glass producer Saint-Gobain Sekurit HanGlas, which

Manpower

Panattoni

Civil engineers and architects from PM Group have been commissioned to oversee construction of a new ofce building which will serve as the headquarters for the Wabrzych Special Economic Zone (pictured). PM Group, which designed the project, is cooperating with general contractor Eiffage Budownictwo Mitex. The project is scheduled for delivery in September 2012. Another construction project under PM Groups supervision is underway at 3Ms European Production Center in Wrocaw, with two new production facilities built by PM Group, from which 3M will supply products for the auto, air and space industries. PM Group is also supervising construction of a building designed by the AA studio for the American School of Warsaw in KonstancinJeziorna. The 6,000 sq m building will meet LEED ecological certication standards and will be delivered by June 2012. In cooperation with design studio Alter Polis, TPS Consult and Ernst & Young, PM Group prepared a study to project the optimal development of the Gdask airport through 2035. Gdask Lech Wasa Airport, Polands 4thlargest, currently serves 2.2 million passengers a year.

ket and 42 on the secondary market NewConnect, the WSE saw the highest number of new company listings ever. The LSE generated 77% of the total value of all IPOs in Europe in the 2nd quarter, thanks to IPOs of commodities rm Glencore and oil and gas company Vallares, together valued at EUR 8.0 billion, when the entire IPO market in Europe was worth EUR 13.4 billion. Deutsche Brse generated the 2nd-largest value of IPOs in 2Q 2011, at EUR 959 million, followed by Warsaw at EUR 600 million. According to a PwC report on executive compensation at the largest public companies in Poland, last year media and entertainment industries paid the highest median yearly salaries to members of management boards (PLN 2.2 million), followed by banking (PLN 1.6 million), telecoms (PLN 1.5 million) and fuels (PLN 1.3 million). Companies included in the Warsaw Stock Exchanges blue-chip WIG20 index paid PLN 1.4 million on average to their board members. The best-paying company was Cinema City International, with an average of PLN 3.5 million paid to each member of the management board.

Salans

The Warsaw ofce of Salans law rm has been honored in the Chambers Europe Awards for Excellence 2011 in the category PolandInternational Law Firm of the Year. 2011 marks the third time Salans has received the award. In 2004 and 2009 it was recognized as the best law rm in the CEE region. In the awards, Chambers, publishers of legal directories, identies the worlds leading lawyers and law rms in various practice areas in different jurisdictions around the world.

The Sheraton Warsaw celebrated the 15th anniversary of Starwood in Poland with a Crystal Gala for friends, customers and business partners. One of the stars of the event was Sheraton chef Artur Grajber (pictured in previous column), who prepared a special tasting menu for guests and a crystal anniversary cake. In its 15 years on the Warsaw market, the Sheraton has hosted 1,500,000 guests. Starwood Hotels and Resorts has launched a new customer loyalty program for event organizers, Starwood Preferred Planner. Members may exchange the points they earn from Starwood for hotel stays or airline tickets. For instance, 20,000 points in the program can earn a two-day stay in the Canary Islands, or 75,000 points a week at the Westin Cape Town. Catering to conference customers, Sheraton hotels have launched a new coffee break menu, developed in cooperation with Core Performance, a specialist in healthy nutrition and lifestyles. Vinoteque, a new food outlet, has opened at the Sheraton Sopot, offering over 250 wines, rare meats and mineral waters. Vinoteque uses an Enomatic wine serving device, which allows the restaurant to offer many wines by the glass while maintaining the pristine quality of the wine left in the bottle. Food sampling and takeaway are available, and Vinoteque also features a cigar lounge.

Staffer

Starwoods Hotels and Resorts

Staffer Hospitality has launched the rst cloudbased online stafng and scheduling tool for hourly workers in Poland. The tool should completely automate the way hourly workforces are staffed and scheduled. It allows workers to sign into their own accounts and sign up for available shifts, and monitor pay and hours worked. Hotel department managers have 24/7 access to the shift scheduling tool, where they can set up and cost contingent labor and view the database of workers. They can monitor and provide feedback to all scheduled workers. Hundreds of hospitality service workers throughout Warsaw already rely on the online platform, at such leading hotels as the Hilton, the Marriott, the Hyatt and the Sobieski. Over the next 6 months Staffer Poland plans to deliver the tool and support services to the construction and healthcare industries. The law rm of Trusiewicz & Siwko advised Polish State Railways as it entered into a partnership with construction company HP Reavis to build a new railway station to replace the current Warsaw West station. The project, estimated at EUR 110 million including office and retail sections, is scheduled for delivery by the end of 2014.

PwC

Trusiewicz & Siwko

The Warsaw Stock Exchange generated the largest number of initial public offerings in 2Q 2011 of any exchange in Europe, but it has a long way to go to match the London Stock Exchange when it comes to the total value of IPOs, according to the IPO Watch Europe report published in July by consulting rm PwC. With 55 IPOs, including 13 on the main mar-

Norton Rose

American Investor The ultimate connection to AmCham Poland

Call to nd out about advertising opportunities +48-22-520-5993
SEPTEMBER 2011 AMERICAN INVESTOR 7

AMERICAN INVESTOR SEPTEMBER 2011

Agenda
Political Discussion Forum

Intelligence from AmCham and its committees

Small & Medium-Sized Enterprises Committee

People and prot

P
oland should better utilize new technology and innovations in the economy in order to continue its economic growth and maintain competitive advantages for investors in the years to come, according to Grzegorz Napieralski, leader of the postcommunist party Democratic Left Alliance (SLD), who spoke at a meeting of the AmCham Political Discussion Forum in July. Napieralski, who heads the Parliament Committee for Innovation and New Technology, said that developed countries have special policies aimed at helping promote innovation. It is high time Poland had its own policy, Napieralski said, or the country will be a loser in the global economic game. Napieralski noted that promoting innovation in the economy is not only about investing in innovative technology. It requires a change in the education system as well as in the overall economic philosophy of political leaders and other stakeholders. But such a change requires strong political leadership. SLD has analyzed how political leadership is put into practice in many different countries, including Israel, Germany and the United States, and it opts for establishing a new ministry to oversee the development of new technology and innovation in Poland. In addition to those areas the ministry would also oversee academic and scientic research, as well as patent law, so that all the elements would move in harmony toward development of the innovative economy in Poland. Napieralski said that the current Ministry of Regional Development is the best candidate for reform and could serve as the basis for such a new ministry. This is because the ministry has been handling EU funds for regional development. Better innovation and R&D in Poland will require better use of EU funds for the growth of high tech and IT. Poland so far has utilized only a tiny portion of what it could have spent, which is a problem that needs to be addressed by the next government. Establishing a new ministry is one of the preconditions for SLD to enter into a governing coalition with parties that will have enough representatives in the new Parliamentpresumably Civic Platform (PO) and the Polish Peoples Party (PSL), which now form the governing coalition. As a potential coalition member after the parliamentary elections this fall, SLD would be interested in heading a number of ministries,

Grzegorz Napieralski, leader of the main left-wing opposition party, shared his thoughts with AmCham on how to help businesses grow while continuing to protect the social welfare of employees
to eliminate administrative barriers that hamper the development of business in Poland, especially in such areas as concessions and administrative permits which businesses have to obtain in order to grow. According to Napieralski, there is also too much scal oversight of the private sector in Poland. There are too many institutions that are authorized to conduct scal audits, and their actions are not coordinated. That calls for improvement, he said. While Napieralski claimed that SLD wants to balance economic freedom with protection of working people, he pointed out that the law requires employers to look after the well-being of their workers too. One tool for doing this more effectively, in his view, is the Labor Code, which he argued has been liberalized too much by the current government. Napieralski said that when it comes to foreign policy, the European Union is Polands most important partner, followed by the United States. The US is Polands most important partner outside of the EU, Napieralski said. He added that SLD would work towards deepening cooperation between the two countries, especially on such platforms as academic cooperation, including student exchange programs. He said that the US helped Poland a lot with the educational programs it offered in the 1990s. Those programs focused mainly on democracy-building, he said. Now it is time to change the focus to free-economy-building. The SLD leader said that he is a strong proponent of closer economic and political cooperation between the US and the EU, and said Poland could serve as an important catalyst. When asked about the energy sector, Napieralski said he was not a proponent of Polands nuclear program. Instead of building a nuclear power plant, which is costly, he said that Poland should modernize its electric grid and power stations. A more energy-efcient grid and more efcient power plants would add some 30% more energy to the system without the need to build any nuForum co-chair Robert Koski with SLD leader Grzegorz Napieralski clear plants. including education, defense, and possibly foreign affairs. Apart from winning a healthy representation in the Parliament this fall, SLD needs to reach a consensus within its own leadership on whether or not the party is ready to take responsibility for governing in Poland. In a crossre of questions from the cochairs of the AmCham Political Discussion Forum, Marek Matraszek and Robert Koski, Napieralski admitted that the younger generation of SLDs regional and local leaders, who are more or less Napieralskis age (he was born in 1974), say the party should stay away from any government coalition talks after the elections, because any government that takes over after the incumbent PO-PSL coalition is bound to lose popular support in time as it deals with many negative consequences of the PO/PSL era. Although he did not exclude entering into coalition talks after the elections, Napieralski did say that there is one party that SLD would not approach under any condition: Law & Justice (PiS), currently the largest party in the opposition. We believe that the PiS electorate might eventually forgive them for entering into a governing coalition with us, Napieralski quipped, but we feel our electorate would never forgive us for making a coalition with them. Napieralski said that although SLD is a left-wing party, it is determined to support the development of the private sector, because private business generates money for the state budget. He said that SLD would opt

Bootstrap economy
ommercial banks have a tough job convincing small and medium-sized enterprises in Poland to use external financing, according to a recent report prepared by Bank Pekao SA in cooperation with polling company PBS DGA. Only 22% of SMEs use bank financing, the report found. Tomasz Kierzkowski, head of the EU Funds and Public Programs Office in the SME Department of Bank Pekao, presented the main findings from the study at the SME Business Forum, the fourth so far in a series organized by the AmCham SME Committee. Kierzkowski explained that because Pekao had no up-to-date data available about SMEs, in the autumn of 2010 the bank decided to ask the owners of small businesses for their assessment of the previous 12 months and the upcoming 12 months in the economy at large, employment trends at their own companies, business prospects, the availability of external financing, capital investment plans, exports and innovation. Based on 7,000 interviews, the bank was able to draw a picture of where SMEs stand in the economy across four sectors: construction, production, services, and trade. One of the questions was whether SMEs finance business investments from their own sources or resort to external sources. Fully 78% of the sample looked only to themselves for financing. Kierzkowski said, Only 22% said they use self-financing coupled with external financing. Why do small companies prefer to bootstrap their financing rather than take out loans from commercial banks? As many as 58% of the respondents who said they did not use external financing explained that they were afraid of taking on the burden of debt. For 17%, self-financing was viewed as cheaper than borrowing money from commercial banks, while 15% said they did not need external financing because their revenue streams are big enough to cover their current financial needs. However, 11% said they did not apply for loans because they figured they did not qualify, while 8% gave other reasons for not resorting to external financing. This is an important message to the banking sector in Poland, Kierzkowski said. Some 78% of small and medium-sized companies have yet to be persuaded to use commercial banking to help their business grow. Other key findings of the report included

A report from Bank Pekao attempts to diagnose the financing needs of small businesses in Poland and their attitude toward the economy around them

an overview of SMEs capital investments in 2010 and their plans for 2011. Last year 42% of SMEs were involved in some capital investment projects and 58% were not. When it came to 2011 projections, 58% said they did not plan any investments this year, while 35% said they did have plans and 7% were not sure. The good message for commercial banks was that the value of investments declared by SMEs for 2011 was much higher than for 2010. Companies who said they were looking at additional financing also pointed to leasing, commercial loans and EU financing as their preferred forms of external financing. Kierzkowski stressed that companies in the construction sector appeared to be the most willing to turn to external financing. This may signal a boost in investment in this sector in 2011, he said. Outsourcing was also on the agenda. In the Pekao survey, 33% of the sample said they outsource services regularly and 19%

from time to time, but 48% said they support all business functions in-house. Of those who said they do outsource business functions, 71% said they outsource accounting and tax services. Marketing and advertising services were outsourced by 21% and IT by 17%. On more general questions about the business environment in Poland, Kierzkowski said that SMEs ranked local administration highly as a partner for their business. They also ranked highly the quality of credit advisory services provided by private banks. The survey also revealed that SMEs are not joiners, with only 8% of the sample belonging to one or more business organizations. The first edition of the report was published in December 2010. The English version is available for download at http://www.pekao.com.pl/mis. Another edition will be published in December 2011.

AMERICAN INVESTOR SEPTEMBER 2011

Photo: Tomasz wiok

SEPTEMBER 2011

AMERICAN INVESTOR

Agenda
Outsourcing/High Tech Committee

Intelligence from AmCham and its committees

Cloud computing providers are condent, but cloud computing, as an idea, is nothing new. Cloud computing is a term that covers a wide variety of technologies, including hardware offered as a service and also software offered as a service, Pietrzak explained. These are service delivery models that have been around in the market for years. The cloud computing hype began when providers started to offer competitive pricing and more exible service. It was possible when technology advanced to the point of offering broadband connectivity. It changed the way companies could leverage the existing technology. What is different now from 10 years ago is that companies now have to reconsider their business models in order to see how they can apply cloud computing to get a competitive advantage out of it. Pietrzak observed that IT people employed by companies are often afraid of cloud computing, because they think that if the company they work for outsources IT to the clouds, their jobs will be in jeopardy. This is the wrong approach, Pietrzak said: IT professionals in companies will not disappear because of cloud computing. They will be needed to reinvent business processes and build entirely new markets. Pietrzak said that with cloud computing, IT issues are not going to be easier for companies. They are going to be much more complicated. Offering the simplicity of a process to the end user often means that internal processes at the providers end are much more complex. So with cloud computing which is focused on providing simple solutions to multiple clientsit means that IT people in companies will actually have more work to make the process smooth and simple. Pietrzak admitted that there are limits to cloud computing: Because of data protection regulations, which prohibit certain data from being processed outside the country for instance, some cloud computing providers cannot offer e-mail services or other services that require transferring sensitive data outside of the company to another country where the cloud computing providers have their servers. scale urban renewal project which will change the image of the area upon completion next year. Part of the Praga South revival has also come about thanks to rapid growth of the Gocaw neighborhood. But nationwide, developers have problems selling their new projects. This situation has obviously affected the number of new residential projects started this year. Before 2010 there were an average of 12,000 apartments started each year, but in 2010 only 10,000 were delivered to the market. The drop in new projects is supposed to stabilize the market. But the demand for new apartments is expected to remain limited. According to a study by REAS, only 3% of all 900,000 households in Warsaw are potential buyers of new apartments, which translates into only 12% of all yearly transactions in residential property in the city. Sztejter said this is the real reason developers nd it difcult to sell new residential property. Sztejter said that the outlook for 2011 is not encouraging. Developers in such markets as d, Pozna and the Tricity are especially under stress. There were more project cancellations than new transactions in those places, Sztejter said. According to Sztejter, one idea to boost sales of new apartments would be to deliver them in turnkey condition rather than cold shell, which is the rule now. This is because in the past only a tiny fraction of homebuyers were interested in turnkey apartments, Sztejter said. This has changed recently, however, with as many as 60% of potential homebuyers having a strong preference for turnkey apartments, according to a study by GFK Polonia. Sztejter explained that buyers prefer to handle the interior ttings and decoration on their own instead of outsourcing the work and covering the cost. But if developers introduced a turnkey standard as a value-added service without actually charging for it, Sztejter thinks this would boost sales of new apartments. Despite the crisis in residential property there are outstanding success stories as well. One of them was showcased by another speaker at the Real Estate Committee meeting, John Geoghegan, country director at Mennolly Poland, the developer of the upscale residential complex Nowe Powile in the Powile neighborhood of Warsaw. The project, completed between October 2007 and December 2010, delivered 296 apartments to the market, along with six retail units and several ofces. By May the developer had sold 75% of all apartments, at an average of PLN 14,600 per sq m. At the moment we make a sale every week, averaging about 80 sales a year or PLN 12 million a month in transactions, said Geoghegan. This is not normal in the Polish market. Geoghegan underlined that the seed of the projects success was the developers focus on quality. First off, Mennolly invested in a super location, a block between the recently opened Copernicus Science Center and the Warsaw University Library. Then the developer invested in quality design, hiring one of the most renowned Polish architects, Prof. Stefan Kuryowicz. (Kuryowicz since died in a plane crash in Spain in June.) It is thanks to Kuryowicz that the Nowe Powile complex is viewed as one of the best residential compounds in Warsaw today, Geoghegan said. Mennolly is now reaping the fruits of its bold investment. Potential buyers represent all walks of Warsaw life. The developer recognizes each buyers uniqueness, letting them have their say in the interior design of the apartments they plan to buy. While sales of the Nowe Powile residential development are thriving, the retail section of the complex has had remarkable success as well. The British luxury car brand Bentley has taken space there for its rst dealership in Poland. Mennolly concluded by saying that there is good money in Poland for good product. But it has to be a good product, he warned. You wont get away with plaster nishes and cheap windows.

Cloud computing became reality as broadband sped up

And the cloud rolls on

Outsourcing IT functions to web-based providers helps companies keep costs down to earth
usinesses cannot exist without the latest technology, because their customers use it and produce data that companies need to integrate in order to spot market trends and make proper market decisions, according to Piotr Pietrzak, chief technologist for the CEE SEI Cloud Team at IBM Poland, who spoke at a meeting with the AmCham Outsourcing/High Tech Committee in May. This means, however, that the IT costs that businesses incur are on the rise as they upgrade their IT infrastructure to embrace more and more data. The cost structure for IT is complex and ever-changing, and thus chief information ofcers often do not know the price tag attached to specic systems. When you ask a CIO how much it costs to operate a particular IT system within the company, such as ERP , CRM, or even e-mail, more than 50% of CIOs will not know the answer, Pietrzak said, citing

an IBM survey. This is because there are a lot of hidden costs involved in IT. It is not easy to calculate the real cost because of the need to constantly grow it. This is one of the reasons cloud computing is becoming so popular with businesses. With cloud computing, companies deal with more exible and transparent IT costs, Pietrzak said. Cloud computing providers have to know how much they need to put into their budget to maintain their operations. Pietrzak said that almost all of companies IT needs can be supported by cloud computing. The problem is that companies do not know it. The technology is available, but the problem is that it is not known widely enough yet, Pietrzak said. We can produce faster processors and larger and faster discs. Companies do not absorb the new technology quickly enough to support their daily business and operations.

Real Estate Committee

While the residential market in Warsaw has seen a slump in medium-range property prices and transactions, upscale locations are still successful
he Polish housing market seems to be getting worse as time passes, according to Pawe Sztejter, a partner at real estate consulting rm REAS who spoke at a meeting of the AmCham Real Estate Committee in May. Sztejter said that most specically Warsaw, which remains the primary market for residential real estate, saw a dramatic drop in transaction volumes in 20102011. For instance, by May 2011, there were a total of 4,500 new apartments completed in Warsaw that had not been sold. Of this gure, 1,500 units are in the

Downtown living
T

Wilanw district, and about 80% are apartments of over 90 sq m in the mid-range price segment. Other major residential marketsKrakw, d, Pozna, Wrocaw, and the Tricity (Gdask, Gdynia and Sopot)have not fared much better in recent months. Of the six major markets, Wrocaw is the one that has suffered the most from the crisis in residential property sales. A year ago there were 763 unsold apartments in completed projects in Wrocaw. This year, the number rose to over 900. When it comes to prices, the markets out-

side Warsaw saw a rather steep decline, to nominal levels from the rst quarter of 2007, which represents an even steeper decline in real terms because of ination. The price drop in Warsaw has not been so dramatic, however, due to its resilience as the capital. In fact, Warsaw is faring quite well when it comes to up-market residential. The district of Mokotw is still popular with buyers, while other districts are witnessing a revival. The most outstanding example is Praga South, thanks to the development of the new national sports arena there, involving a large-

10

AMERICAN INVESTOR SEPTEMBER 2011

Agenda
Infrastructure Committee

Intelligence from AmCham and its committees

added sites come as big surprises for GDDKiA. As of May, the Natura 2000 list included 364 protected sites in Poland, considered to be natural habitats, covering 8.1% of Polands landmass. Meanwhile, the Polish government has submitted an additional 469 sites to the European Commission for inclusion in the Natura 2000 list. We anticipate that all the proposed sites will be accepted by the commission, Maranda said, which will boost the number of protected sites in Poland to 833. She added that the European Commission thinks that along with the sites already identied by the government, Poland should create 34 more sites for the protection of rare species and their natural habitats. If their status becomes strict protection, they will become huge obstacles for GDDKiAs development of road infrastructure. Maranda said that while GDDKiA is monitoring the development of the Natura 2000 list, the directorate, which is the largest investor in road construction in the country, has no other choice but to draw up new road plans to bypass the protected regions. However, there are instances where construction has already begun when suddenly a protected area is established along the route. For GDDKiA, it is usually impossible to abandon what has already been built, and then the agency has to recultivate, one-for-one, the land covered by construction work (with each hectare claimed for construction being offset by a hectare of newly recultivated area). This slows down completion of the agencys construction projects. When the agency is forced to reroute a road project it also loses time, because the whole investment processincluding feasibility studies and the likehas to be started again from scratch. Maranda described Natura 2000 as one of the main impediments to smooth development of roads in Poland. We have to be in compliance with the EU legislation on protection of nature, she explained. So we do the best we can. But Natura 2000 was introduced in other countries in the EU when they had already built their road networks, so it is a completely different problem in Poland than in the West. ture development following the countrys entry into the European Union in 2004, he said. However, when the global economic crisis hit in 2008, some investment processes were stalled. Piechociski said that in 2009 the government decided to take PLN 10 billion off of the road infrastructure development budget. The reality was that the money from the EU was too much, compared to Polands ability to co-nance projects, and therefore Poland could not utilize it. In order to keep at least some investment projects going, in 2009 the government had to cut road maintenance expenditures, passing some of them on to local governments. According to Piechociski, EU funding alone is not enough for Poland to implement a rational policy for development of its transportation infrastructure, especially given the many years of neglect in infrastructure investments. This is something many politicians and business leaders seem not to notice, he said. Piechociski said that part of the problem is that the public does not understand the importance of transport infrastructure for the development of the national economy. Good infrastructure will not emerge on its own, Piechociski said. However, a popular view on how to build new infrastructure is to have a private investor work with the public sector, through the publicprivate partnership scheme, regardless of whether the private company is going to make a prot on its involvement in the project or not. Even educated people think this is the way to go. Another problem is that Polish politicians have failed so far to draw up clear rules of engagement for the private sector so it can get involved in the development of infrastructure projectsnot only in transportation, but also in energy and other sectors. Poland needs a clear policy toward private investors, Piechociski said. Politicians so far have failed to set clear goals for the private sector. What they have done amending the Public-Private Partnership Actis not enough because the act is a dead letter anyway. So the problem is not only a bad atmosphere in the public administration for contacts with the private sector. Speaking more broadly, Piechociski noted that Polands political position within the EU is on the rise, which will allow the country to have its say in shaping the policies of the EU in the years to come. Poland has nished its entry into the EU, a process which is ended symbolically by the countrys Presidency of the Council of the European Union, Piechociski said. Being a newcomer to the EU meant for Poland that the country had to either accept or reject several pan-European plans, schemes, and projects drawn up by other countries before Poland became an EU member. But the time when Poland was only a consumer of EU solutions is about to end. A new phase is starting in which Poland will be a co-author of economic and political plans and schemes that will affect the entire European Union. Piechociski added that this new situation will have an impact on business organizations in Poland, which will have to refocus their attention from domestic legislation to rules coming out of Brussels. Some of the issues regard the quality of regulations governing business. Other issues may regard the national bias of some EU regulations, he said, as member countries try to protect their interests in many different ways on different legislative platforms. According to Piechociski, the big question for Poland will be the state of its economy after 2020, when Poland is no longer absorbing huge EU nancial aid. We can make the same mistakes that Ireland and Spain made, Piechociski said. Those countries, for years, were presented as leaders in utilization of EU aid. But after a period of very dynamic growth, they have experienced a dramatic economic slowdown. The trick for Poland will be to avoid making the same mistakes.

Subsidizing farming
he system of direct subsidies to farmers, which is one of the agship mechanisms of the EUs Common Agricultural Policy (popularly known as CAP), will be continued in the next EU nancial perspective, which starts in 2014, according to Waldemar Guba, deputy directorofstrategy at the Department of the European Union and International Cooperation at the Polish Ministry of Agriculture and Rural Development, who spoke at a meeting of the AmCham Agri & Food Committee in June. Guba noted that despite the criticism of direct subsidies to farmers, even in the following nancial perspective, the system will be continued due to the growing prices of energy and natural resources. The system may be modied, however. There is a trend within the European Commission to treat subsidies to farmers as a form of public aid focused on the maintenance of natural resources, instead of help to boost profitability, Guba explained. This may be executed through a new aid program. Guba noted, however, that restrictive regulations governing environmental protection in farming may have a negative impact on the agricultural market in Poland, because it is relatively underdeveloped and is striving to implement modern mass-market production methods. More restrictive regulations governing farming may negatively affect the competitive edge of Polish farmers against their competitors in the European Union as well as outside of the union, Guba said. Meanwhile, farmers are already under pressure from the restrictive CAP policy. Farmers who receive CAP subsidies are routinely in-

Agri & Food Committee

The EU system of direct subsidies to farmers will probably become even more complex
spected for their compliance with CAP regulations. Farmers are entitled to 100% subsidies only when they comply with the CAP regulations 100%, Guba said. If farmers are found to be willfully breaching the regulations, they may be deprived of even 100% of the subsidies. Another problem, according to Guba, is how to dene agricultural innovation at a time when some CAP subsidies are expected to be rechanneled to support the development of innovation in farming. But there is a rub. Usually it is big companies that make good use of innovations, said Guba. Meanwhile the farming market in Poland is dominated by small and medium-sized farms. This is the specic nature of Polish agriculture. So if we support innovation in farming, we have to make sure we support mechanisms that benet not only big companies, but also small and medium-sized farmers. Guba noted that the denition of farming is also evolving within the EU and may soon embrace other areas than just food production. Renewable energy is one of them. The Ministry of Agriculture is a strong proponent of renewable energy within the EU, Guba said. At present the discussion about renewable energy, such as biomass, is very technical. It focuses on whether bio-energy may really contribute to the reduction of greenhouse gas emissions. We are looking at whether large-scale production of biomass will have a negative effect on maintaining the quality of soil, for instance. So the discussion is really technical.

Road construction is subject to strict environmental rules

Noahs Highwayroad system Polands efforts to upgrade its

our corridors of the strategic Trans-European Transport Network cutting across Poland, linking Eastern and Western Europe and connecting Southern Europe with the Baltic harbors, will be signicantly modernized through the 20112015 National Road Development Program coordinated by Polands General Directorate for National Roads and Motorways (GDDKiA). According to Katarzyna Maranda, deputy director of the Environment Department at GDDKiA, who met with the AmCham Infrastructure Committee in May, the program is simple from the engineering point of view. It is more difcult from the point of view of environmental protection, however, because the path for the network collides with several national parks, nature reserves and landscape parks in Poland that are under the protection of the European Unions Natura 2000 program. They are really impossible to bypass, Maranda said. When a road cuts across a nature reserve, it poses a set of environmental issues. For instance, if the area is the natural habitat of ani-

are stymied by the requirement to protect natural habitats

mals, the new road has to include overpasses and underpasses that will allow the animals in the area to move freely from one side of their habitat to the other. The design of the passages has to take into account the type of animalsfrogs, for example, require water bridges, and deer require land bridgesas well as the population size. But passages to protect animals are not enough. The highway itself has to be protected against animals, which could cause collisions if they intrude into the motorway. To this end, different types of protective fences have to be erected for small and large animals. There are regulations governing the type of fence to use, even in the construction phase, Maranda said. But while certain aspects of protecting the environment during road construction and use are clear and simple to follow, there are more complex legal issues with planning new roads, especially when they cross areas that are on the Natura 2000 list. The list is still open, and new sites are being added. As Maranda explained, Sometimes those newly

Know the ropes

Producers must learn the ins and outs of the Polish Trade Inspection
ariusz omowski, deputy director of the Department of Trade Inspection at the Ofce of Competition and Consumer Protection (UOKiK), met with the AmCham Consumer Products Committee in July to present the legal framework that governs the Trade Inspection in Poland, the goals of the institution, the system it has in place to combat violations, and the rights and duties of businesses in the marketplace. The Trade Inspection is a government agency that monitors the legality of business activities in selected spheres of commerce. Although the list of commercial activities that the Trade Inspection does not cover is long (such as agricultural products, banking, nance, insurance, IT and R&D), the agency has a nger in many pies. It has a say on nearly all issues involving trade in consumer goods and companies that bring them to the marketplace.

Consumer Products Committee

ing, with no coherent nancial policy in sight

here is a question mark hanging over the future of road infrastructure development in Poland, because the country does not have enough money in its budget to provide its own portion of nancing for all construction projects that may qualify for co-funding from the European Union, according to Janusz Piechociski, a member of the Polish Parliament from the Polish Peoples Party (PSL) and vice chair of the Parliament Infrastructure Committee, who spoke at a meeting with the AmCham Infrastructure Committee in June.

EU money road not enough is construction is shrinkPolands budget for

Infrastructure Committee

Piechociski stressed that while Poland may spend up to PLN 34 billion on road construction this year, it will be able to come up with only PLN 26 billion next year and PLN 8 billion in 2013. According to Piechociski, whose party is a member of the current governing coalition, thanks to cohesion funds from the EU the current government will go down in history as the one that started the largest number of road construction projects ever in Poland. Poland got a signicant boost in nancing infrastruc-

The goal of the Trade Inspection is to make sure that companies adhere to the regulations governing the products and services they offer. The Economic Freedom Act, which is the bill of rights for businesses in Poland, authorizes the Trade Inspection to audit legal compliance by businesses. The agency is generally required to notify businesses in advance when it intends to conduct an inspection, but inspectors may sometimes show up unannounced, particularly when they are investigating a consumer complaint, a safety issue or an alleged serious breach of law. Agency inspectors are also authorized to conduct controlled purchases of suspicious goods, in order to gather evidence for further proceedings. At the meeting, omowski walked the participants through each step of the inspection procedure, explaining the applicable regulations. He highlighted along the way the rights that businesses have and the typical problems that may surface during and after an inspection. He also explained some of the limitations of the system that may affect the actions taken by inspectors.

12

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

13

Agenda

Intelligence from AmCham and its committees

stead of taking this asset, which hopefully is an appreciated asset, and reinvesting in people to create productive capacity in intellectual property, products and services. Where do people come in? A higher and higher portion of total stock price is coming from intangible assets, Herman said, referring to the US experience. Desks, computers and chairs are real assets. Unfortunately, to the accounting world, people are intangible assets. But I think Im pretty tangible, creative and productive. Herman said that his company, HIP Investment, analyzes annual reports from companies around the world. The only example that we have found so far of a possibility of putting people on the balance sheet is from InfoSys, a global technology company headquartered in India, he said. Their 2008 2009 report has a human resource evaluation. They took the number of software professionals and the support staff who serve the customers, and put a value on human resources in Indian rupees. They talked about the producing capacity of people. That calculation ends up leading to something called return on human resources value or return on assets. When people are booked as an asset, however, the results can be puzzling. What you usually nd on return on assets in a high tech business, such as computers, is from 20% to 40%, which is a very attractive return. But according to InfoSys, the return on human assets is 56%. So you might say it is a threat. We actually dont know whether it is good or bad, because nobody else is doing it in this way. What they showed us for 2008 and 2009 was under 5% and 6% respectively, so it was a positive trend on return on assets. But we dont know whether they were better than Tata or IBM. This is something that can develop. Herman said that given the current standards of international accounting, people will continue to be a cost on the balance sheet. This is something we need to invest in to help them appreciate it, in order to create new products and services to keep customers coming back. Herman also commented on the UN Human Development Index, a scorecard for three categories (economic, social and environmental) used to grade countries and regions. The top-rated are typically Scandinavian and English-speaking countries, Herman said. Bottom-rated are countries in Africa. Interestingly, while there is a human development index for countries, there has been no such index for companies. Now HIP Investment has prepared one. It is a human development index that is linked to protability, Herman explained. The business case for doing it is that customers want to do good with what they buy and how they invest. Although they may be difcult to obtain, Herman thinks that the numbers depicting the correlation between human development and protability should be available. The real problem, he explained, is a human barrier, not a technical barrier to taking us into the 21st century and tapping into all of that information, which is available from a number of government, non-government and academic institutions.

Corporate Social Responsibility Committee

AmCham Media Patronage

On the books employees are only a cost

Accounting for human assets

C

Consumers come face-to-face with online content

Engage, engage and sell

S
Facebook is a website that we use when we want to get a certain behavior out of our customers, Fisher said. Facebook is a tactic, and it can be a really powerful tactic, but it is not the center of our social media strategy. Fisher illustrated his analysis with references to Facebook, YouTube, Twitter and social blogs. He said that each of the platforms requires a different marketing strategy, just as old-time media require different marketing strategies too. Facebook is incredible at engaging with your customers, making a dialogue with them, Fisher said. It is very much about customer relationships. YouTube, in turn, is the right platform for driving awareness: You can generate hundreds of thousands of viewslots of people that are exposed to your message on video. But, Fisher said, YouTube is terrible for driving trafc to marketers websites. Less than one-tenth of one percent of people who watch a video on YouTube actually click a link instead of watching that video. But the blogosphere, he said, is amazing for driving demand. It is about that afnity. If Im following a football club, Im clicking every single blog and cant get enough of it. What about Twitter? It can be really powerful in inuencing because it helps us reach the right group of people. Those different strategies can be properly executed only when informative decisions are made with the support of data that depict the behavior of individuals who become involved in the interaction. Every action online creates data, and data can be mined to get insights into the actions of our clients, Fisher said. It show how they engage with our brands and with each other. Social media is pretty measurable. There are different metrics to get to know different things, such as pointof-sale sales, loyalty, engagement, peer marketing, and other parameters. Metrics can help marketers make business decisions regarding brands. Such data is not cheap to get, but as with any media planning for any kind of

The numbers show that employee engagement creates shareholder value

freedom to work on a project of their own choosing one day a week. Employee engagement boosts companies value in Poland too, Herman claimed. Public companies in Poland are rated under several performance indicators, one of them being the Respect Index, which seeks to identify companies managed in a responsible and sustainable manner. It also puts strong emphasis on the investment attractiveness of companies, as characterized by such aspects as reporting quality, the quality of investor relations, and information governance. From year to year, this index includes some 15 to 20 companies listed on the Warsaw Stock Exchange. Herman said that during the rst year of the indexs existence, the value of the companies in the index grew by about 30%, while the market average was about 15%. One year does not make a big difference, he admitted, but it is something to look at and consider. That could be a topic to discuss in Poland. Herman pointed out that there are data showing that happy employees translate into a companys better future results. However, investors do not necessarily appreciate this correlation. This is because of modern accounting standards. You must have heard that people are companies most valuable asset, Herman explained, but in general people are not included in nancial statements as an asset. They are a cost on the income statement and a liability on the balance sheet. Sometimes if you do an acquisition of another company and you pay your price, people might be an asset on the balance sheet as good will. In the US, companies that report their profits to Wall Street are under pressure from the stock market to show more prot, Herman explained. Companies want to reduce costs, and it means that they reduce peoplein-

ompanies that are seen by their workforce as good employers have a higher share value than companies that are not good employers, according to Paul Herman, a promoter of the concept of investing for positive impact on human and social issues as well as natural resources, who met with the AmCham CSR Committee in May. Perhaps this is because happy employees are more inclined to commit their skills to their professional work. Herman cited a Gallup survey of employee engagement, which covered some 3 million workers in the US. Only 18% of the respondents said they used their best skills at work every day, and 80% said they did not. Herman said that if the 80% only had a work environment that engaged their potential, the companies they work for would benet from their innovative skills, which could translate into new products and great customer service. Herman is the founder and CEO of investment rm HIP Investor (HIP stands for Human Impact and Prot). He told the AmCham committee that the rating by Forbes magazine called The Best Companies to Work For is the best indicator of how happy employees increase their company value. The Forbes rating is based on a survey of the people who work for companies that are rated as the bestboth publicly traded and closely held. The survey asks about their employee satisfaction, how engaged they are with the company, and what their salaries are. The rating rst appeared in 2007, and a new edition comes out every spring. Herman said that public companies that were top-rated as employers offered above-market returns on their stock over the period of 20072010. One of the best examples to support this theory is Google, which for years has been one of the most protable companies for shareholders and which notably engages its employees, for example by giving them the

ocial media are a two-way conversation that takes place between customers, but marketers are part of the dialogue, according to Jake Fisher, cofounder of the New York-based social media marketing rm Attention, who spoke at a conference in Warsaw in July announcing a partnership in Poland between Attention and Valkea Media, a niche magazine publisher whose portfolio includes the English-language weekly Warsaw Business Journal and an array of custommade magazines for companies in various industries. Although technologically social media include blogs, discussion forums, social networking, micro-blogging platforms with media sharing, and other forms, social media are more about interaction than technology. It is about how content connects with people, as Fisher put it. This would explain why companies without traditional media and publishing expertise are not the best providers of content for online marketing. Without the knowledge of the impact their content may have on social media users, their marketing efforts may easily go astray and do more harm than good to the brands and their reputation. Fisher mentioned the example of a global marketer that failed to devote proper attention to the posts it generated on its Facebook prole, resulting in threats of legal action from users. Another global brand misjudged its Facebook strategy to the point that it had to close the prole, which again generated legal claims from Facebook users who had contributed to the prole. While ending up in court is an extreme example, companies who do not have content that is crafted for specic use on social networks are at best wasting their money. To spend wisely, marketers need to consider a number of factors. One is that, contrary to popular belief, social media cannot be equated with Facebook.

Examining how brands can make an impact through social media

advertising campaign, data is an essential part of making knowledgeable decisions. But those metrics need proper understanding. A proper Facebook strategy is not about the number of friends you have, Fisher said. The number of friends on Facebook is probably the worst metric. I can buy half a million fans of my Facebook page, and it takes no time. The important thing after that is what you are going to do with those 500,000 fanshow you are going to sustain engagement. According to Fisher, a successful marketing strategy on Facebook is not measured by the number of fans or friends that a marketers prole has, but the number of likes it generates over time and how many times the content is viewed and commented on, including text comments as well as comments consisting of photos and other media. While marketers on social media must be engaged in the conversation between their customers, they also need to be looking at user-generated content. Some content, such as critical comments about products or services, may not be what marketers hope to see. Again, Fisher said, there are ways of measuring user-generated content for whether or not it is driving marketers business objectives. One example of how complex marketing on social media may be involved getting users engaged with a beer brand. Following an unsatisfactory marketing effort, Fishers company discovered that 7 pm on Sunday is the best time to push beer on social media. If we posted at that time we got ve times as many engagements as we did posting at any other time, Fisher said. While all the metrics and strategies for social media marketing are essential, marketers will not succeed without original content that is unique, trustworthy and engaging. This is why Attention partnered with Valkea Media to merge the knowledge of interactive media with old-school knowledge of how to create content that suits different targets.

14

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

15

COVER STORY: Outsourcing

Is this a sustainable business?

To maintain its global edge, outsourcing in Poland must become more competenceintensive

o matter how we perceive the effects of the recessionas fueling the growth of the outsourcing sector because rms seek more cost-effective business solutions, or as hampering it because more investors would have set up outsourcing operations had it not been for the unfavorable economythe numbers depicting the growth of the outsourcing sector in Poland are impressive. According to the report entitled Business Services Sector in Poland from the Association of Business Service Leaders, as of December 2010 Poland had 282 outsourcing centers owned by 220 foreign companies. Together they supported nearly 70,000 jobs. Of this number, 205 were business process outsourcing centers (hired to provide selected non-operational business processes, including IT) and shared services centers (hired to handle business processes for clients or afliates). There were 77 outsourcing centers specializing in research and development commissioned by other companies.

In the geographical spread, Warsaw is the hot spot for outsourcing, home to 54 centers, followed by Krakw (43), Wrocaw (38) and d (31). Over half of all outsourcing centers are located in these four cities, but other budding hubs include the Tricity (Gdask, Gdynia and Sopot) and Pozna. Perhaps more impressive than the sheer number of jobs that foreign outsourcing companies have created in Poland is the speed at which they have done so. When the global economic crisis hit in 2008, they employed 46,500 people. Two years later, at the end of 2010, the number had gone to 69,000nearly 50% growth. The trend is still upwards. ABSL estimates that the number hit 75,000 by mid-2011. The ve largest outsourcing employers in Poland include four companies with American capital. Capgemini employs over 3,000 people in Krakw, Katowice and Wrocaw. General Electric supports over 3,000 jobs in Gdask and Warsaw. IBM employs a similar number at centers in

Krakw, Wrocaw, Gdask and Warsaw. France Telecoms outsourcing operations in Poland maintain nearly 2,500 jobs, as does the Hewlett-Packard center in Wrocaw. Last year was a good year for outsourcing. The main market developments included the expansion of Infosys BPO Poland for its parent company Infosys Technologies Ltd to provide service to SAP clients. ACP Pharma opened a nancial services center in Rzeszw, and Amway opened a business services center in Zabierzw (counted as part of Krakw). Wrocaw saw new centers opened by IBM (shared services) and McKinsey (R&D). In Pozna, IKEA and Kennametal opened shared services centers, and Sony Pictures Entertainment opened a center for nancial and accounting services in the Tricity. Citibank opened a new R&D center in d. Investors remained busy in the rst half of 2011. Ernst & Young opened a shared services center in Wrocaw, BSH a center

in d, and McKinsey a support services center in Pozna. New centers from various investors were in the pipeline in d and Biaystok. competency pyramid Outsourcing is sometimes perceived as a sweatshop industry, where young people are hired to perform simple, nearly automatic tasks. While this is true to some extent in manufacturing and call centers, it is far from reality when it comes to BPO. Consider Lionbridge, a NASDAQ listed US company which provides content localization services (it works for global marketers, software developers and computer game developers, among others, to adapt all types of content of their products to the language and cultural specics of the target group). Lionbridge has four global delivery centers, in China and India, and a joint operation in Warsaw and ilina, Slovakia. It is thanks to the development of employee competencies that the Warsaw/ilina deliv-

ery center managed to boost the number of jobs it supports from 150 and 35 respectively ve years ago to over 400 and 80 by July this year. In the beginning we were undertaking relatively simple, clearly dened tasks, said Jacek Stryczyski, general manager of Lionbridge Poland and Slovakia. We delivered a piece of an entire project that was managed someplace else, in the US, Western Europe or Japan. Gradually, however, we began to handle more and more complex elements of the projects, and eventually got to manage entire processes for clients. Now Lionbridge engineers work directly with their clients. We handle client relations so we are at the top of the value chain, which is one of the prerequisites for a stable business in the future, said Stryczyski. But we continue to develop our value chain further. He added that because of the success of this development strategy, nearly 100 Lionbridge staff are project managers, including many who have been certied by the Project Management Institute. IBM has a similar story of competence building. IBMs rst outsourcing venture was a nancial and accounting center, opened in 2005, which supported 89 jobs. Today there are three centers maintaining an estimated number of 3,000 jobs (the company does not reveal its local gures). IBM outsourcing centers provide services not only to IBMs internal network, but to external clients as wella signicant progress in competencies. According to Jolanta Jaworska, government relations director at IBM and vice president of ABSL, It is a much more demanding job than servicing your company internally. When you service your own company, you are dealing with the same internal processes. When you are servicing external clients, you have to adjust to their processes in such areas as IT, human relations, procurement, and nancial procedures. Polish workers can successfully adjust to such requirements. This is what gets noticed in the West and what attracts investors to Poland. They perceive the country as a proven ground for outsourcing. the human factor The ability of Poles to embrace outsourcing jobs with skill has become a characteristic feature of the market. Unlike workers in China or India, Poles share cultural values with other Western countries, such as the US, and can effectively interface with clients from those countries. Poles are well-educated, creative, willing to work,

16

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

17

COVER STORY: Outsourcing

Foreign investors perceive Poland as a proven ground for outsourcing.

Jolanta Jaworska IBM

know foreign languages, and still available at a competitive cost than their counterparts in the West, Jaworska said. According to Alicja Skiba-Walczak, selection branch manager at Kelly Services, a human resource company, the success of outsourcing in Poland has to do with demographics. Generation Y has had a signicant impact on service centers, she said. They are very conscious about their professional career planning and perceive service centers as a good starting point. They appreciate the international character of the business, that they interface not only with their immediate managers but also with client representatives, and that the job gives them an opportunity to learn the ropes of working in big international corporations. What is really an outstanding quality of Poles working in outsourcing is their creativity and exibility, according to Lionbridges Stryczyski. When it comes to project management, which is an art in it-

self, it requires the skill of combining processes with a exible and creative approach to meeting the goal of nishing projects within a given time frame and budget, he said. We work under the pressure of time, because the market launch of the products we work on is already dened. It is we who oftentimes serve as a bumper, able to make up for delays that occurred someplace else. But we can handle that surprisingly well because project management is one of our core competences. room for improvement Investors in outsourcing centers cannot complain about the lack of skilled university graduates. Stryczyski noted that there are many graduates with basic management knowledge, because business studies are popular. Where he sees a problem, however, is that their knowledge is theoretical and lacks all the practical aspects that are a must in todays workplace. To leverage that, Lionbridge has a special implementation

If the public administration could knowledgeably outsource some of its processes it would be a real boost for the sector.
Jacek Stryczyski Lionbridge

Outsourcing in Poland in a nutshell

ervice centers with foreign capital began business in Poland as early as the 1990s, but it was in 2005 2006 that most of the existing centers were founded. This came as a result of a boom in global offshoring, coupled with Polands entry into the European Union, which helped build a positive image of the country in terms of its compliance with EU regulations and its political stability. The largest single-year increase in the number of outsourcing centers in Poland was in 2006, when 45 new ones appeared. The growth of investment in the outsourcing sector continued in 2007 2008, followed by a decline in 2009 which resulted from the global economic crisis. In 20092010, 20 new centers were added in Poland.

program for its new blood. The people we recruit, by default, are rst project assistants who support managers and learn the ropes in the meantime, Stryczyski said. The recruits know they have to learn, because there is no university program that would prepare professionals to work in such a specic sector. Stryczyski understands that the universities cannot be expected to teach the exact skills his company needs. But they can teach certain intellectual attitudes. We need people who are open-minded, he said, and open to other people. We need people who are willing to upgrade their skills and update their information, who embrace change with open minds. This is what universities should teach, because those are the aspects that will be critical for the economic development of Poland in the future. Stryczyski is not alone in his complaint. Many outsourcing insiders underline that the potential of the people working in the outsourcing sector would be higher if they had received more practical training at the university level. According to Skiba-Walczak from Kelly, Our universities offer rather theoretical knowledge and give little oppor-

tunities for students to interface with business practitioners. According to Marek Rosiski, a principal at Baker & McKenzie, The education system aims at theoretical knowledge. Rosiski heads the law rms Technology and Outsourcing practice and is also a management board member of the Outsourcing Institute, an industrys think tank. University graduates do not have basic practical knowledge required in the modern professional environment. For instance, they may not know how to make a PowerPoint presentation, he said. But there has been some progress made recently, as various business organizations have taken the issue to universities. This is an area which has room for improvement, and the process has already started. Skiba-Walczak added that the universities have noticed the problem too, and in fact have created a new educational niche. The problem is being addressed by universities who are joining hands with many private companies to offer postgraduate courses that focus on the practical side of business management, she said. Universities have noticed a market niche, and are more and more willing to cooperate with the private sector in this area. Part of the problem is also that while the talent pool is huge in Poland, outsourcing companies are already looking further ahead to the time when it may be more difcult to recruit the right people. They use their cooperation with universities for employer branding, to get noticed by future university graduates and attract them to their companies. The competition is keen in Krakw, where 43 service centers employ 15,600 people, the highest number for an individual city in Poland. According to Skiba-Walczak, There is work in outsourcing centers in Krakw. People who have a knowledge of European languages other than English know they will get a job with another company, so they do not cling to their current job and are willing to change jobs even for just slightly higher pay. In this respect they are similar to their colleagues in Western Europe. lack of outlook While outsourcing companies clearly have an eye on the future development of the sector, the same cannot be said of lawmakers and political elites in Poland. Many outsourcing industry insiders say that Poland does not have a strategy for stimulating the development of competence-intensive outsourcing. There are many reasons Poland should have such a strategy. Along with those factors already mentioneda good educational base, cultural synergies with major markets, and the depth of the talent pool service centers are competence-intensive enterprises. This means that once they are established, it is not feasible to relocate

Generation Y has had a signicant impact on service centers.

Alicja Skiba-Walczak Kelly Services

More resources
ne of the best forums in Poland for discussing outsourcing issues is AmChams own Outsourcing/High Tech Committee (www.amcham.pl/outsourcing), available exclusively to AmCham members. The Association of Business Service Leaders in Poland (www.absl.pl) successfully lobbies for government support for the outsourcing industry. Thanks to lobbying efforts by ABSL, the Polish government has allowed public aid to be granted to companies who invest in big cities. Previously the government had planned to allow certain incentives to be available only to investors in the least economically developed regions of eastern Poland. ABSL also focuses on establishing direct contacts with municipal authorities to share with them their experience and needs. In its first two years of existence, ABSL has held roundtable meetings with officials from municipal government and public agencies critical to the BPO business in d, Gdask, Pozna, Szczecin, Krakw and Katowice. ABSL also liaises with the Ministry of Foreign Affairs and the Polish Information and Foreign Investment Agency on a promotional campaign for Poland abroad. The Outsourcing Institute (www.instytut-outsourcingu.pl) is a think tank which works to identify obstacles to the development of the outsourcing sector in Poland and propose solutions. The tools are conferences, publications about outsourcing, meetings with the media, educational outreach, and providing a hub for the industry to exchange ideas and best practices. Currently the institute is preparing a white paper to serve as a basis for a discussion among top government officials about what vision for the economic development of Poland should gain government support. It will address the issue of outsourcing from the public sector and how it may give a boost to the development of the outsourcing sector in Poland.

them to cheap labor countries. In other words, the outsourcing industry creates sustainable jobsa win-win situation for the private sector and the nations economy. As IBMs Jaworska put it: It is much easier to relocate a manufacturing unit to a cheap labor country than a service center. You can hardly relocate a company whose business is supported by hundreds of highly qualied personnel who have mastered the skill of working as a team within the company and with clients outside of the company. Think of the cost and length of the recruitment process such a move would require. Think of the training programs and the costs involved. For Stryczyski, keeping outsourcing companies in Poland is one of the strategic issues that will have a critical impact on shaping Polands economic future. This is about building Polands competitive edge, he said. If for some reason the cost of labor in Poland grows, investors will see what options they have. On one hand, salaries in Poland will have to grow. On the other hand, however, the nancial efciency

acknowledged that the outsourcing sector would get a signicant boost if the government itself resorted to outsourcing in more sectors than just IT. As Stryczyski said, If the public administration could knowledgeably outsource some of its processes it would be a real boost for the sector. The UK and the US have appropriate laws which allow government institutions to do long-term deals with the private sector. We need that too. To some extent, such long-term deals are already a reality in Poland, according to Baker & McKenzies Rosiski. Some government institutions in Poland outsource their IT to the private sector. Rosiski said that the law that regulates such outsourcing is a good basis for extending this practice into more areas, beyond IT. The problem is more political than legal. There are many examples of strategic, long-term outsourcing deals signed by government authorities, which show that it is possible in the public sector said Rosiski. Every country needs modern technologies and the support of IT compa-

There is an issue of the strategic vision for the development of the outsourcing industry.
Marek Rosiski Baker & McKenzie

of service centers in Poland should not be decreased. Pointing to the labor-related costs that employers must bear, he said, That is the challenge for lawmakers. Stryczyski perceives a shifting equilibrium. The way I look at it is from the perspective of maintaining the competitive edge of the Warsaw operations vis--vis our delivery centers in other countries, he explained. Many factors come into play here. For instance, when the zoty got stronger against the dollar, we in Warsaw became less competitive compared to our operations in the US. There is high unemployment in the US, and it is also a factor. There was a time in 2008 that the dollar was so weak against the zoty that it paid off to create new jobs in the US more than in Poland. Those are the dilemmas investors are facing every day. What can government do? Industry insiders voice many different ideas for government to help the outsourcing industry reach new heights and ensure a sustainable business for years to come. Apart from such issues as whether Polish labor law is liberal enough for the private sector or whether taxes and labor-related costs could be lower, it seems to be universally

nies to implement and maintain them. The Schengen Information System, the IT system of the police headquarters or the EU subsidy system for farmers are all examples of outsourcing transactions in the public sector. Nobody would challenge the necessity to implement modern technologies, as nobody would challenge the necessity to build new roads. The issue becomes more tricky when it comes to outsourcing of human-supported processes. This will inevitably trigger difcult discussions about measuring performance and improving efciency and therefore will involve political risks. Again, for Rosiski, we have a strategic choice to make, which will dene the outsourcing industry in the long run: to focus on low-competence outsourcing based on cost reduction and lay offs or the sophisticated high-end services which are the basis of an innovative, modern economy. As Rosiski put it choosing the latter is in the best interest of Poland and we should build support around this. We need a long-term strategy for the development of a modern competence-based outsourcing industry. Tomasz wiok

18

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

19

MONTHLY MEETING: US Ambassador briefing

Photos from the Monthly Meeting on page 38

Opening a new chapter

Polish-American relations have entered new areas beyond energy and defense with a huge contribution from the American business community in Poland

mChams Monthly Meeting with the US Ambassador, an annual event that takes place in June, had an extra interesting twist this year, as it was conducted only a few days after US President Barack Obama held his rst visit to Polanda visit that marked a new phase in Polish/US relations. US Ambassador Lee Feinstein thanked the American business community for helping put trade and economics at the center of the relationship between Poland and the United States, on par with other areas of PolishAmerican relations such as security and the promotion of democracy. The American business community in Poland played a major role in making the visit the success that it was, Ambassador Feinstein said. For the last couple of years we were trying not only to demonstrate the continued closeness of Poland and the United States, but also to show that the relationship we have is not only about our history but also about our present and our future. In doing so we wanted to show that our relations are not only about common securityof course security is fundamentalbut are also about the importance of economic ties between the two countries. Feinstein said that the leadership of the two countries agreed to convene a Poland-US business summit in the fall of this year with cabinet ministers as well as senior businesspeople at the table: This is something that was done in 2003 with great success, and Im very pleased we will be able to partner with AmCham as well as other business organizations and private sector groups. It will be a very important meeting, and we believe there will be a lot to talk about. energy sector The ambassador said that among the things that are welcomed by American business is the commitment of the Polish government to the development of nuclear energy. Feinstein observed that during Obamas stay in Poland, the President saidnot for the rst time that nuclear energy is not an option that we can take off the table. He added that while Poland is seeking the best offer for development of its nuclear program, it is good news for American rms. Used to competition, they are condent they can make the best offer to Poland. Ambassador Feinstein said that when it comes to the energy sector, Polish-US cooperation has been very good for at least a year. Just weeks before Obamas arrival in Poland, a conference on shale gas was held in Warsaw. It was the second such conference co-sponsored by the US Embassy in Poland and the Polish Ministry of Foreign Affairs, following a conference organized in the spring of last year. Ambassador Feinstein said that the May 2011 event generated a lot of media attention not

only in Poland but internationally as well. We wanted to focus not exclusively on Poland this year, or on Polish-American cooperation, but on shale gas in the region, and we got a fair amount of international attention. According to the ambassador, while exploration for shale gas is underway in Poland, all sides concerned should be cautious about the prospects of the shale gas industry here. But he pointed out that it is equally important to make sure that there are no articial barriers to shale gas development. This was a very clear message that came from the shale gas conference, Feinstein said. It was reinforced on the highest levels of both our governments at a meeting between President Obama and Prime Minister Donald Tusk. Beyond trade The ambassador said that President Obama welcomed a proposition from the Polish government to set up a sort of innovation fund under whose auspices Polish rms would obtain access to the newest technologies developed in the US, to help develop them further. This is a very important initiative, Ambassador Feinstein said, as it means that Poland will need to harmonize policies in regulatory areas with the US before new technologies are introduced onto the market in Poland. This is something that is going to be extremely important to us, he said. Geopolitics Answering questions from AmCham members, Ambassador Feinstein talked about the perception of Polish/US relations in terms of Polands growing role in international politics. He said that the US played a supporting role

in ensuring Polands membership in NATO and the EU. Poland has every right to be proud of its growing inuence in both organizations, he said. There are a lot of problems in the world and a lot of economic challenges in the world, and the best way to address them is to work together. So the stronger Poland is in the EU, the better we like it. The stronger the EU is, the better we like it too. Ambassador Feinstein also said that during a meeting with President Obama, Prime Minister Tusk spoke very personally about how much the US and Poland have in common on a number of the issues that will come to light during Polands EU Presidency. They include the common security and defense policy, energy policy, climate change issues and intellectual property, to name a few. This is why, as Ambassador Feinstein stressed, the stronger and more inuential role that Poland can play in the EU, the better it is for the US. a new chapter Speaking more broadly, Ambassador Feinstein noted that in an interview for Polish Television a day after President Obamas visit, Polish President Bronisaw Komorowski said that the visit opened a new chapter in Polish-American relations. We really think it does, Feinstein said. Addressing specically the AmCham community, he said the new shift in Polish-American relations has been possible thanks to the hard work of people like you who have been working on Polish-American relations for a long time. Tomasz wiok

Meet the speaker

Farewell to Commercial Counselor Jim Wilson

he Monthly Meeting in June was an opportunity for the American business community to bid farewell to Jim Wilson (pictured left), Commercial Counselor at the US Embassy. Wilson has returned to Washington to take on new responsibilities at the US State Department as the chief ofcer promoting trade in Africa. According to US Ambassador Lee Feinstein, Wilson had put economic and trade issues at the center of Polish-American relations. Over the course of our couple of years working together, we have seen not just the magnitude of Polish-American economic ties grow, but also the quality and the scope, Feinstein said. Many times some of the

biggest rms and some of the most prosperous hedge funds will circumvent embassies because they have lots of their own resources. But not since Jim has been here. All of these people make a point of making a stop at Jims because they know that Jim is a very strong advocate for American business and very knowledgeable about the business community. AmCham Chairman Joseph Wancer (pictured right) added that Wilson has been a very strong and reliable link between the US administration and the American business community in Poland. He said that Wilsons cool outlook oftentimes helped achieve a more realistic view of business issues.

LEE A. FEINSTEIN was nominated by President Barack Obama to be the next US Ambassador to the Republic of Poland on July 20, 2009, unanimously confirmed by the US Senate on September 22, and sworn in on September 28.On October 20, 2009, Ambassador Feinstein presented his credentials to Polish President Lech Kaczyski. Feinstein is the 25th US Ambassador to Poland. Ambassador Feinstein has worked in several senior capacities in the US Defense Department and State Department, including as Principal Deputy Director of Policy Planning, where he advised on strategic goals and objectives in political military affairs. Feinstein was National Security Director to Hillary Rodham Clinton during her presidential campaign and an outside foreign policy adviser to President Obama during the general election.He served on the Presidential Transition Team after the election and then as Senior Advisor to the Office of the Secretary of State. As a Visiting Fellow in Foreign Policy Studies at the Brookings Institution and Deputy Director of Studies and Senior Fellow at the Council on Foreign Relations (CFR), Ambassador Feinstein wrote widely on US national security, foreign policy, and international institutions. He advised Newt Gingrich and George Mitchell, who chaired a congressionally mandated Task Force on the United Nations, and co-directed the non-partisan CFR Task Force on Enhancing US Leadership at the United Nations. Ambassador Feinstein served as senior advisor to Human Rights First and is an authority on the principle of the responsibility to protect. He is the author of Darfur and Beyond: What Is Needed to Prevent Mass Atrocities, which was featured in CFRs Emmy Award-winning multimedia presentation Crisis Guide: Darfur. With Tod Lindberg, he is also author of Means to an End: US Interest in the International Criminal Court, published by the Brookings Institution Press. An international lawyer, Ambassador Feinstein holds a JD from Georgetown University, an MA in political science from the City University of New York, and an AB from Vassar College. He is married to Elaine Margaret Monaghan, a native of Scotland and a foreign correspondent who has covered the Kosovo conflict, the Northern Ireland peace talks, and developments in the former Soviet bloc. They have two children.

SEPTEMBER 2011

AMERICAN INVESTOR

21

CEO Forum: Innovation and leadership

Business as unusual
he role of CEOs in encouraging innovation across the corporation was on the agenda at the AmCham CEO Forum in June. Facilitated by renowned journalist Micha Kobosko, the discussion was led by Olga Grygier, managing partner of PwC Poland, and Bogusaw Kuakowski, business development director and managing director of Qualcomm Poland. mind-reading The rst part of the forum belonged to Grygier, who presented the main conclusions of the Global PwC CEO Survey, an annual poll of the attitudes of 1,200 CEOs concerning the economy. Grygier said that the key theme of the 2011 survey was innovation, as more and more CEOs broadened their attention to innovation as a tool for their companies to keep pace with the market. From about 2007 up to 2010, the CEOs were very much focused on protecting their market share on the existing markets, Grygier said. It meant that all companies were very focused on their customers, on protecting and gaining additional market share. There was a lot of price competition as well as a focus on efciencies and cost reduction. This year, however, the importance of innovation came to the fore. CEOs are saying that all of that is still important, but we need to grow out of this because we are not going to grow by doing things the same way, Grygier said. The markets are changing, our consumers are changing, and a lot of our consumers are now in emerging markets. And they think differently. We need to reposition to that, and we need to be working with our customers a lot more to help change our products and services to what they actually need and expect from us. Grygier noted that not only do consumers expect more for less, but they want to see whether products are manufactured and supplied in a responsible manner and also want to have their say in how new products are developed. Here technology and innovative thinking play a huge part. Consumers feel that the access to social networks and mobile devices gives them direct access to business and manufacturers, Grygier said, so that they can actually inuence the way companies develop their products and services.

Innovation is the key to getting ahead and staying ahead when times are tough
Building from the ground up The PwC survey revealed that CEOs are beginning to think about innovation in a much broader way. They want innovations and great things to change the world, but there is a great focus on incremental innovation, Grygier said. This involves a focus on ideas that can improve business model efciency and turn out products that are more suitable for their customers. With such an attitude, CEOs are now much more focused on encouraging their employees to be innovative. This attitude has taken innovative thinking to the ground oor. As Grygier put it, No longer are we thinking about innovators as men and women in white coats locked away in a lab. She noted that while innovation may start with a focus on environment-friendly products and services, it may easily embrace any area of business. Business leaders are much more open these days to partnerships and collaboration, Grygier said. Given everything that is happening in the world and how quickly that is changing, and also given the recent economic crisis, no company, no matter how big, may think that they can do everything by themselves. As a practical result of this process, companies are much more inclined to enter into alliances and partnerships with suppliers, customers, research institutes and governments. They are also much keener to involve employees in the process of innovating. potentialthen what? Along with the CEOs shifting focus on innovation, the PwC survey revealed the growing importance that CEOs attach to emerging markets in their policies for battling the economic crisis. Grygier explained that in previous recessions it was clear that it was the developed economies that were going to pull the economy out of trouble. Not this time. We are seeing a real divergence of the global economy, she explained. Even though the predictions for global growth are around 4%, half of the developed world is expected to grow at half that rate, while the other half is expected to grow even faster. In this picture, Poland is viewed as one of the fast-developing spots. Indeed, when it comes to innovation Poland has great potential. To make her point, Grygier cited the 2010 edition of the

Meet the speakers

olga Grygier, who was born in Poland, lived in the United Kingdom for 24 years. She has been with PwC since 1991, becoming a partner in the Corporate Finance Energy Team in London. Grygier has extensive experience in advising governments and leading international corporates from the energy and infrastructure sectors on privatization, M&A activity and restructuring. She also has considerable experience in advising on PPP projects in Great Britain and Central Europe. She is a fellow of the Institute of Chartered Accountants in England and Wales.

Bogusaw kuakowski is country manager responsible for business development at Qualcomm. He joned Qualcomm from Linx Telecom, a privately held telecom, where he was a member of the supervisory board. In 2007-2008 he was president and CEO of mPay International. His most acclaimed business role was that of CTO and a board member of the privately-held media company ITI Group, for which he launched the rst mpg4-based television in Europe. In 1996-2005 Kuakowski was chairman and CEO of PTC, one of the leading mobile phone operators in Poland.

Innovation Scoreboard, a study of how innovative the economies of EU member states are, which compares a number of dimensions that are used to grade innovation. On human resources we are doing really well. As a nation, we are seeing well-educated people and good access to people with skills that are needed. We have done very well in the last 20 years, which brought fantastic business models and some great ideas into the market, resulting in a number of local successful brands and businesses. Grygier noted, however, that when you look at all the eight indicators that reect levels of innovativeness, Poland has huge room for improvement. It is ranked as a moderate innovatora nice way of saying that Poland is mediocre at innovation compared to the EU as a whole. There are three areas that dragged Poland down: Linkages and Entrepreneurship, a category that includes the level of collaboration and the potential to enter into partnerships, Innovators, which is the number of commercial ventures that bring their innovations to the market, and Economic Effects of Innovations, or the ability to translate innovation into new jobs, exports, and prots. Grygier offered a hypothesis to explain, at least partially, Polands poor performance in the Linkages and Entrepreneurship category. It may have something to do with the low level of public trust in Poland, she said. We have the lowest level of trust in Europe, while the countries that are known for being innovative tend to be at the higher end of the spectrum. There seems to be some correlation between being an open environment that nourishes ideas and creativity or a closed society that does not trust anybody. With a changing economic perspective it is clear that cost-competitiveness is not a sustainable advantage for Poland over Western European countries. This means that Poland has some major challenges ahead on its way to becoming one of the most competitive economies in Europe. Grygier said that the traditional way of doing business in Poland is always to play it safe. Until now it has worked well for the economy. Poland has had a good, large market. The country could compete with welltested ideas from other markets and make them work in our market. But is this going to be a valid strategy in terms of growth going forward? I think that knowing some of the issuesthe trust issue and the lack of collaboration and cooperationbusiness leaders will need to have their own strategies for overcoming those issues. opening up The other speaker, Bogusaw Kuakowski, is well-known for building from scratch the

rst high-density satellite television network in Europe, utilizing the mpg4 media le format. He said that applying innovative thinking and practice in business is a tough call, especially in such industries as telecoms, nancial services, insurance and banking, which operate on saturated markets where it is extremely hard to get new business and customers, and thus to utilize innovation. Somehow you have to work out how to get the best ideas, he explained, because your employees cannot see or feel what customers demand and anticipate. Kuakowski said that businesses tend to hire new people who have had experience in the same or related industries, but that is a mistake. By not looking to people with experience in a business other than the one the company is in, the company signicantly limits the innovation potential of its own staff. On the other hand, business leaders often have to handle an overdose of creative ideas and select what they think will best suit their business. Here you have to make sure that it is not just machinery that selects an idea, but some clever thinking behind it, Kuakowski said. Grygier pointed out that one way to solve that is to allow customers to comment on different ideas submitted for their consideration and evaluation. risk/reward Another problem with pro-innovative thinking in business, according to Kuakowski, is the apparent lack of trust between innovators and business angels. The conditions under which business angels are willing to invest in an innovative business are unacceptable to the innovators, he said. Grygier noted that one of the inhibitors of innovation and creativity is the low level of risk tolerance in businessa characteristic feature of business strategies in Poland. If you want to encourage innovation and creativity, she said, you have to recognize that you are not going to be able to get it all absolutely right. There are going to be some ideas that can be great ideas but are just not going to work. If you have a culture that tends to focus on punishing mistakes rather than rewarding good ideas, then that potential for creativity is going to be lost. Grygier observed that this attitude in corporations in Poland is one reason that a lot of talented people go to Western Europe or the US: They do brilliantly there because they thrive in an environment which rewards their outstanding creative personalities. interaction True to the spirit of the AmCham CEO Forum, which encourages extensive audience participation, several important points

were voiced from the oor. AmCham Board Member Richard Lada, who blazed the hightech trail in Poland in the early 1990s, observed that the Polish university system grooms graduates who are discouraged from thinking outside the box and sharing their ideas with their peers. Lada said that one of the characteristic features of life at his alma mater, Stanford, was the open environment for exchanging ideas: Everybody was talking about innovation, and teachers worked on the hotbed for new ideas. In Ladas view, change is needed for the university system in Poland to break away from the old-style school, which promoted political and other types of conformism among university graduates. With the existing university system, you will not have CEOs who are willing to take risk, he said. You have to reform the education system in order to develop the core of CEOs who are going to be able to undertake innovation. Paula Wsowska from Cisco, who also teaches at the Harvard Business School Innovation Academy, echoed Ladas observation, saying that when she teaches executives about the model of open innovation, they do not accept the idea of disclosing their companys business plans. This has to do with their level of trust, Wsowska said. I think it is because of history, not because of human nature. culture Ryszard abiski, president of Focus Research, a marketing research company with regional branches in 20 European markets, said that creativeness is not determined only by universities or general cultural issues. The importance of markets in inciting innovation should not be overlooked. As much as 70% of all innovation at Focus Research comes from Poland, abiski said. The bulk of those innovations come from our customers and employees. This is because Poland is a very competitive market, with all major brands already present here. Another speaker from the oor was David Stokes, general manager of IBM Central & Eastern Europe. IBM has several centers in Poland, and Stokes said it is pleased with the talent available here. However, he strongly advocated the power of business culture to create an innovative environment. Business can create a culture of innovation, Stokes said. We have learned that you have to build a business culture for innovation, and this culture can be built independent of the country you are in. We are in 170 countries in the world. Each has a different environment when it comes to supporting innovation. Our experience is that company culture is not just one thing triggering innovation. It is THE thing. Tomasz wiok

22

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

23

FOCUS: Membership Satisfaction Survey

Getting better all the time

n February 2011 AmCham conducted a comprehensive survey to check the temperature of the membership. The results offer a useful tool for the leadership and the new chairman to reexamine the chambers activities and priorities and to identify areas for improvement. The overall results were encouraging. Out of the 85 responses received (out of 330 members and a database of 800+ e-mails), satisfaction was rated above-average to high in most categories. Thirty-one percent of respondents are very satisfied with their membership, 60% satisfied, 5% somewhat satisfied, and 4% not satisfied. Most highly valued are the chambers major events, including Monthly Meetings, Business Mixers, the 4th of July Picnic, and anniversary balls. In our analysis of the results, however, we focused on the areas that rated the lowest, even though the scores for those areas were, on balance, positive. The areas that show room for improvement include our media visibility, which was deemed too low, and our

Most valuable products and services

Business networking and the chance to interface with VIP speakers and guests were seen as the most valuable AmCham services. Very valuable Valuable Not so valuable

AmCham continues to improve its efforts to meet the needs of its members

lobbying and committee work. Two other areas that raised questions include the value of our magazine for advertisers and the place for AmChams involvement with other business organizations. These areas of weakness and questions are where the Board of Directors has focused its efforts and where changes are being implemented. media presence For years, AmCham has made a deliberate effort to be visible in the press, which is reflected in over 100 media hits per year, with recent increases in TV presence. Yet 61% of respondents say AmCham is not sufficiently visible in the media, if visible at all. The steps taken to improve our media presence include creating a Marketing & Communications Committee for AmCham members, which should also serve as an advisory body for AmCham itself, and encouraging all Board members to increase their own media presence to ensure a convergence of messages. When asked if AmCham is valuable in

terms of lobbying for my sector, 20% said very valuable and 38% said valuable, but 43% said not valuable. Inasmuch as most sectors have their own dedicated lobbying organizations, this may nonetheless be regarded as an acceptable response. When asked if AmCham is valuable in terms of general policy work, 9% said very valuable, 59% said valuable, and 33% said not valuable. While it is appropriate that we rate higher on general policy work than on sector-specific issues, a one-third dissatisfaction level gives cause for concern. Couple this with the response to the question of the usefulness of committee meetings, where 38% of respondents were very satisfied, 55% satisfied and 7% not satisfied. In itself, this is not a bad result, but categories that rated better include CEO Forums, balls, Business Mixers, Monthly Meetings and our annual picnic. The AmCham committee structure is one of the most valuable features of our operations in that it identifies specific areas of attention, specific speakers and decision-makers to meet with, is a place for companies to engage in real work and exchange information, and generates research and papers we produce. As such, we would like satisfaction with the committees to be higher. Conse-

Valuable business networking VIP speakers and guests Fun events for meeting people Meetings where I can learn about my sector Prestige of belonging Lobbying for my sector Resource when I have a need American Investor as a source of market news US visa assistance General policy work Photos in American Investor Advertising in American Investor 0%
Source: CN Richard Ellis, European Investor Survey, February 2011

25%

50%

75%

100%

Usefulness for the members business

Very Satised 4th of July Picnic Monthly Breakfast Meetings Business Mixers American Investor Anniversary Ball Committee Meetings CEO Forums Special Reports Krakw Branch Policy Papers/Legislative Updates Website Charity Drive Wrocaw Branch 0%
Source: AmCham Membership Satisfaction Survey, 2011

How AmCham members valued AmCham products and services for their business. The chart does not include not applicable responses.

Satised

Not Satised

quently, we have taken specific steps in this area, including a review of our committees with an aim at right-sizing them, and a review of our lobbying procedures and communication channels. The question remains, given our resources in terms of finances, staff and company mix, how influential and robust can we expect to be? Regardless, it is clear that the members (71%) believe that AmCham must focus on policy work. comparison with other chambers When comparing AmCham to other business organizations, it must be taken into ac-

count that AmCham has 8 staff members, while some other organizations have 30 to 60 staff to support their work. Generally, the Board of Directors sees AmChams role as being rather specific in promoting American business in Poland and general good business practices in Poland, without trying to take the place of strong Polish business organizations. Given this niche, we do well.
American Investor

satisfied, and 4% not satisfied), but 72% said that the advertising is not valuable to them. This makes it clear that sustaining a monthly magazine with fewer and fewer advertisers is not feasible. Therefore, we are looking to move to a quarterly magazine with electronic newsletters in between and a website that supports better communication overall. Most other AmChams in Europe have already moved in this direction. cooperation with others Another issue requiring further thought is our level of cooperation with other business organizations. While 35% of respondents said this is very important, 48% said it is neutral and 17% said it is of low importance. The Board is in the process of reviewing our level of cooperation with other business organizations and the reasoning behind it, as well as establishing our strategic position and how best to communicate our strategy and achievements in this regard to the general membership. This analysis was supported by several interviews with members to better interpret what the responses mean. AmCham would like to thank all members who took the time to respond, and Roman Gurbiel for his immense support in carrying out this project. Dorota Dabrowski

The chambers magazine, American Investor, gets high marks as a source of market information (37% very satisfied, 59%

Satisfaction guaranteed?

As many as 92% of the sample said they were satisfied or very satisfied with AmCham services and products Not satised 4% Somewhat satised 5%

Policy watch

Over 70% of the sample support AmChams signicant focus and commitment on policy and position papers

No 29%

Very satised 31% Yes 71%

Satised 61% 25% 50% 75%

100%
Source: AmCham Membership Satisfaction Survey, 2011

24

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

25

FOCUS: Executive chef

They are sure to develop their beef industry and their meat industry in general, and netune their breeding programs for poultry, which comes down to the point that Poland is in transition to developing more skills and techniques.
Its up to my associates to make sure that what they do is to the best of their ability. If they need to be shown or advised, they just need to ask me. The key point here is always good communication. But working with people in the restaurant business in Europe is somewhat different from working on cruise ships or with Americans. Baxter, who has been working with Americans for many years, says that they are always very well-organized and motivated to focus on customer service. They want to make sure that you get what you want, he says. They have great work ethics. Thats why they have great restaurants in the US too. Working in ve-star hotels in Europe, Baxter has noticed that everybody here talks about stress. He remembers this from the early days when he arrived in Europesomething that he found different. In this industry in Australia everybody works very hard and solid, but nobody talks about stress. We arent talking about it. Youre busy, you work hard. You have just had a very hard day. learning new products The opening of the kosher kitchen at the Marriott Warsaw in March was an intense period. The project was accomplished under the supervision of Chief Rabbi of Poland Michael Schudrich. The kosher kitchen has many rules and regulations, Baxter says. You need to pay attention to details. But that is normal in the restaurant business. One of the challenges with the kosher kitchen project was nding some of the required products in Poland. With meats, there are only specic culls at certain times, Baxter says. If you look at countries like France or the Netherlands, they have a greater varied product. You walk into something like a supermarket and can pick things off the shelf. This is not so in Poland at the moment. You need to order and source them. meats Kosher aside, it is because of meat that Baxter nds Poland an exciting new market for the restaurant business. One thing that really stands out for me is what they do with pork products here, Baxter says. I really enjoy getting products from small smokehouses, where theyve got great hams, a nice smoked pork neck, and all different cuts of pork. The way they prepare hams and sausages is certainly rst-class. Baxter is also appreciative of such products as cabbage and the way it is used in bigos (stewed with different cuts of meat), and kaszanka (a traditional sausage of pig partsblood, liver, lungs, skin and fat and buckwheat). But there is room for improvement in the diversity of the products available on the marketplace and pricing. He nds meat products a little too expensive, particularly beef and lamb. Time will bring new solutions, he believes. Im sure they are working on it in Poland, Baxter says. They are sure to develop their beef industry and their meat industry in general, and ne-tune their breeding programs for poultry, which comes down to the point that Poland is in transition to developing more skills and techniques. the changing market It is about time. Baxter is fascinated by what he has seen in Poland in terms of new restaurant concepts as well as product and service quality. Despite his relatively short stay in Poland, Baxter has already visited a number of places (including the Marriotts own Parmizzanosgreat to dine in your own restaurant with friends and introduce new concepts and food). The Amber Room leaves a big impression (great quality cuisine, with an abundance of details light, modern, sharp presentations, and also innovative), and Papaya, in Warsaw, is very interesting, with fusion cooking going on in there, Baxter says. Its great avors with nice food presentations. Other favorite places in Warsaw include Sense (its great-looking, well-located, with a well-varied menu) and Cuda Wianki, which has just recently opened (ideal for regional cooking and dining on weekdaysescargot from Mazury done in garlic butterit was good). While in Gdask, Baxter spotted the restaurant Fellini. The chef, Greg, who is very passionate and hands-on, according to Baxter, prepared for him one of his signature dishesfoie gras with a chocolate trufe parfait. It was great, Baxter says. The thing I liked very much was daily fresh produce used on the day, and an extensive specials board. the book Baxter is not only a chief cook and a manager, but also has a passion for educating the public about good cooking. Because traveling is a big aspect of Baxters career, he decided to write a book focusing on 20 countries, most of which he explored for culinary purposes, with highlights of a couple of characteristic dishes. His experience in Poland will contribute to a chapter. The book aims at bringing readers closer to markets, Baxter says. It is to attract people to actually cooking, give them a little bit of the avors from different countries around the world, and if theyre going to do a little bit of traveling, information from some markets within those countries. immediate impact While the impact of his book remains to be seen, Baxter hopes to have a more immediate impact on the restaurant-going public in Warsaw, the countrys most competitive restaurant market, through his work at the Marriott. First and foremost he wants diners to see that the Marriott outlets are developing their food products and focusing on quality, consistency, and great execution. He hopes that in time diners will feel condent about coming back in different ways to the Marriott outlets. Id like to see them come back to Parmizzanos, take a drink and something to eat at the Panorama, try some sushi in ChopstiX, or enjoy a Sunday brunch at Lilla Weneda, says Baxter. The new Lobby Bar is coming, and it is going to be an enhancement to the product. I hope I can deliver better food and bring people here. I want people to come to the Marriott to eat in 2011 and beyond. Tomasz wiok

In a world where the restaurant business is driven by taste and economy, Gavin Baxter has the right balance of experience to embrace the two domains with quality and confidence
aving spent 11 years at sea as a chef on private yachts and large luxury cruise lines, Gavin Baxter, from Australia, who earlier this year was appointed executive chef at the Marriott Warsaw, has developed a sense of looking at his diners expectations first and foremost. He was fortunate to start early on in the cruise business, when people came there for food rather than the views. They wanted to have a great dining experience above all, Baxter says. They really wanted to feel that their expectations have been fulfilled and exceeded. This is why on a ship the menu has to change every day, which makes every day different and, needless to say, a very challenging one for the chef. I would change it 26 times on a 26-day cruise, Baxter says. Every lunch menu would be different. Then probably after a month or so you might see some similarities coming back through on a rotational basis. With main deliveries every two weeks on a ship, and perhaps little top-ups along the way, Baxter learned to merge creativity with a super-solid approach to provisions and economy. When we were going to different regions and areas, I would go ashore and buy what I thought would make a great impact on the guests and Id bring that onboard. I would execute that with local dishes from the region on the menus for that particular day. The production process was facilitated by a computer system, which helped Baxter control the use of products and plan menus for the coming days. The system had to make up for the lack of any opportunity to place an extra order. In time Baxter perfected the business to the point of running his own operations on the ship. I organized all my own menus and was personally responsible for the overall experience.
26 AMERICAN INVESTOR SEPTEMBER 2011

A new chef in town

H
changing marriott outlets As a chef, Baxter can exercise his inuence over the Marriott outlets he is in charge of. They include restaurants Parmizzanos, Lilla Weneda and ChopstiX, the Lobby Bar, the Panorama Bar & Lounge, Champions Sports Bar, Vienna Caf and La Patisseriea total of 650 seats with 90 staff working in the kitchen and in the wait area. At the Marriott we work on a cook smart philosophy, which is delivery of simple, fresh chef-crafted food, Baxter says. Compared with his work on ships, at the Marriott there is more focus on simplicity and sharp-quality presentations that are well-executed. Baxter is condent he has the exibility to do that. He has already improved the salad and cold food presentations and introduced curries with condiments. He worked to create different effects of height and color, and with different cups and glasses, to create presentations that have eye-catching contrasts. He also focused on improving the kitchen work so it embraces a variety of vegetables as well as different cooking techniques. The comments that are coming back are really good, Baxter says. Our regular guests have had sensational comments. It was a quick x. One example of how Baxter improves the overall performance is to work on tasting menus before the events and adjust to the needs of the customers. We work to see which areas we think it will work well, and look to execute menus through those particular areas, Baxter says. But it also means that he has to watch closely the performance of the outlets he is in charge of. This includes monitoring the performance of the dishestheir nancial performance, but also guest comments. We do try to get as much feedback from the different guests to be able to digest all that

Executive chef Gavin Baxter in the kitchen of the Marriott Warsaw

information and look to execute a plan, Baxter says. Baxter has already placed his footprint on the new Lobby Bar. He has broken down the bars performance to identify which areas work well and found new and interesting alternatives. Sunday brunch has been of great interest for Baxter. I turned it around and changed it, Baxter says. We have a great ChopstiX bar serving Asian favorites, but sushi was prepared by other people in the kitchen and they were not executing it as well as the cooks in the ChopstiX kitchen could do it. I decided to take one of them and do live sushi preparation in front of the guests, which is actually a form of entertainment. Sushi is popular, so people really want to see it, know it is prepared fresh, and feel the experience. Another of his projects was changing the menu at ChopstiXa kind of constant change. There is a new menu coming out in the next two weeks, Baxter says. This alone is a game-changer for the cooking crew. To prepare a new menu from start to finish takes over a month. We cook everything, Baxter says. We photograph it, break everything down, every ingredient, and set up displays for cooks inside. To have that ready takes from a month to six weeks. Working with people The position of executive chef is as much about cooking as about managing staff. When Baxter came to the Marriott he did a little bit of cooking himself, late at night sometimes, and did a lot of presentations. His staff learned early on that Baxter is a chef who enjoys cooking. Another point was his openness. First, he let his staff know what his expectations were. He tried to make his staff feel he is open to questions and will always give them a straight and honest answer. As Baxter says, I think Im hard but Im fair, and Id like to think that Im reasonably wellrespected. Honesty for Baxter is the key point that he is looking for in people he works with. But equally important is peoples passion about what they do. This is because Baxters expectations of his staff are high. I want to be sure that the guests who are coming here are pleased, Baxter says.

1. Teamwork: Baxter helps x a problem. 2. A dish being sent out to a diner. 3. Baxter gives directions to one of his assistants
SEPTEMBER 2011 AMERICAN INVESTOR 27

Photos: Tomasz wiok

FOCUS: Management education

FOCUS: New member company

degrees were not recognized in Poland, where the basic degree is an MA. This meant that students were required to have a Polish masters degree in order to be admitted to an MBA program. For this reason, the MBA was initially perceived on the Polish market as equivalent to a postgraduate degree, rather than as a graduate degree. This created considerable confusion. Finally, as with any new product, there are problems with establishing quality standards for the product in an environment where there is a limited understanding of quality in education. As a result, the market today is in desperate need of an independent assessment system for Polish MBAs, based on alumni performance in the professional world. due diligence Anyone interested in enrolling in an MBA program in Poland should take time to consider a few issues before signing up. First and probably most important is whether the US partner of the MBA program in Poland is an established institution. This means that the US university should be a top-rank institution whose business school is at least accredited by the Association to Advance Collegiate Schools of Business. When dealing with business schools outside of the US, potential students should look to whether they are accredited by the Association of MBAs or the European Foundation for Management Development. Another issue to consider is whether the program offered in Poland is an important part of the portfolio of the partner institution. There are a variety of reasons why a US university might enter the Polish market, some of which are better than others from the students perspective. The institution must be committed to offering the same quality of instruction as in its US degree programs, and not just view the Polish program as a way to make money. Clearly, the US institution needs to cover the costs of the program with its tuition, but the primary objective should be to provide a top-quality management education to the Polish participants. With this come more in-depth issues. Is the curriculum equivalent to that of the partners US-based MBA program? A rule of thumb is that there should be about 600 hours of in-class instructionface time with faculty in the classroom. Obviously, you will be spending more time than that in total, but look carefully at how much time is devoted to actual instruction. More fact-checking should be applied to the curriculum. Is it generalist or specialized? This is obviously a personal choice, but you need to be aware of what you are getting. Many programs are focused on a particular discipline, such as nance, or a particular market, such as high tech.

One should also be aware that most highranking US business schools will not allow their degree to be offered away from the main campus unless at least 50% of faculty contact time is with faculty from the US institution. Finally, an important issue is the quality of the contacts and networking that the program provides. You will work closely with your fellow students and make friends for a lifetime. You will have the opportunity to interact with high-level managers from various operational areas, different industries and different countries. Whether you plan to do business in Poland, across Central Europe, the EU, the US or Asia, you will make valuable contacts. It will be of great benet if the program provides an alumni network that includes both Polish and US members. pricing According to a portal devoted to management education in Poland, mbaportal.pl, there are currently over 50 MBA programs on the market. The tuition ranges from PLN 4,000 to over PLN100,000 per program, with an average of about PLN 30,000. Price is not the only difference between programs, of course. All programs in Poland are priced favorably compared to their US counterparts, and in this sense they can offer great value for money as well as a great education. Tuition for the Warsaw-Illinois EMBA program, for example, is EUR 18,200, versus USD 94,000 for the University of Illinois EMBA program in Chicago. The University of Minnesota program run jointly with the Warsaw School of Economics costs about USD 29,400. By comparison, in Prague the University of Pittsburgh Executive MBA costs USD 48,500. In short, programs are attractively priced for the Polish market. a business decision The nal point is that before you enroll, you must collect information about the programs you are interested in. Visit their websites, attend information sessions or lectures for prospective students, and, most importantly, talk to alumni. If you are lucky, you can nd graduates of the programs at work or among your friends and family. Their rst-hand experiences and opinions are important, and indeed are among your most valuable guides when choosing where to get your MBA. The process may look daunting at rst, but if you gather the right information you will be able to make the best decision for you, your family and your career. By Susan Cohen, PhD, University of Illinois at Urbana-Champaign, and Tomasz Ludwicki, PhD, University of Warsaw. The authors are the directors of the Warsaw-Illinois Executive MBA program.

Exploring for business

What are chevrons aims and aspirations in poland and how are you going to develop this business opportunity? Chevron has acquired four ve-year concessions in the Lublin Basin: Zwierzyniec, Frampol, Krasnik and Grabowiec. It is our aim to build a successful shale gas business in Poland and to ensure that our contribution to Poland is a positive one and that our reputation will be as a good neighbor, a good partner and a good steward of the environment. Our immediate plans are focused on fullling our license obligations. We are now carrying out a seismic acquisition program in our concession areas and are scheduled to drill our rst well in the fall. We are at the earliest stages of evaluation, and it is far too soon to have any indications on how, or indeed if, the opportunity will mature. We believe that our concession areas hold good potential, but this will need to be conrmed over time by an extensive period of exploration and evaluation, through which we will build an understanding of the reservoir and how to reduce economic risk. Our activities in Poland are subject to Chevrons Environmental, Social and Health Impact Assessment process, which is applied to all major capital projects and will be applied to this shale gas opportunity. ESHIA is a rigorous global process which identies potential impacts and the means of avoiding, minimizing or mitigating these. This process ensures that we are good stewards of the environment in all our operations worldwide. Engaging with local authorities and communities is a key requirement within ESHIA and exemplies how we do business, so we are talking to a lot of people to get an understanding of concerns on the ground and to establish a way forward to address these. What are chevrons corporate values? Chevron holds the protection of people and the environment as a core value. Our commitment is a matter of deeply held beliefs within our organization in the responsibility we share to ensure that we carry out our business safely, with integrity, and without environmental harm. Our top priority is safety. We do not put cost ahead of protecting people and the environment, and this commitment is fundamental to the way we conduct business. We have stringent processes and procedures in

American Investors Tomasz wiok talks with John P Claussen, Country Manager for Poland at Chevron . Upstream Europe, about Chevron Polska Energy Resources Sp. z o.o., an energy company which recently joined AmCham, and its prospects in Poland

MBA degrees from US universities have been available in Poland for 20 years

Mastering a degree in business administration

Insiders explain the options for earning an MBA in Poland and offer tips on how to manage the decision-making process

his year marks the 20th anniversary of the rst program in Poland offering an Executive MBA degree in conjunction with a US partner: the Warsaw-Illinois Executive MBA, run jointly by the University of Warsaw and the University of Illinois at Urbana-Champaign. Indeed, modern management education in Poland, based on a market economy, was recognized only a short while before the program was established. In theory, management was taught at universities during the communist era, but the approach was theoretical rather than practical. As a result, companies that employed graduates of this theoretical management could attain an advantage in the market only because of superior access to raw materials and equipment, not as a result of overall superior management practice. The change in the economic environment that resulted from the opening up of Poland and all of Eastern Europe to world markets led to a surge in the demand for well-trained, forward-thinking managers able to develop and operate market-driven endeavors. Perceiving a need for management education in Poland in line with international standards, the Ford and Mellon foundations put seed money into joint sponsorship of programs by US and Polish universities. The ef-

fort was later supplemented by the US Agency for International Development. This support led to establishment of several joint programs. Two of the more prominent programs granting MBA degrees from the US partner are the Warsaw-Illinois Executive MBA program and the Warsaw Executive MBA program, established in 1995 by the Warsaw School of Economics and the University of Minnesota. The programs offer US degrees with quality instruction by American, Polish and international instructors with years of teaching and management experience. The programs are recognized by US and European accreditation agencies. a degree of confusion As absurd as it may seem, legally speaking, a Polish university cannot confer a Master of Business Administration degree. No such degree exists under the law that denes academic degrees in Poland. This is why the joint programs do not offer an MBA degree from the Polish institution, but instead it is issued by the US or other international partner. Another twist is that US universities require at least a bachelors degree (the basic undergraduate degree in the US) to be admitted to an MBA program. However, bachelors

place that are subject to regular audit to ensure we meet our own high standards. Partnership is also a core value. We believe in being a good partner and building positive and benecial relationships with governments, communities and industry wherever we do business, and we aim to be a welcome presence in the communities where we work. Our rst focus is always on prevention. We believe that our operations are safe and that we can drill shale gas wells in Poland safely and without environmental harm. What can you say about the companys future growth prospects in poland? We are obviously hopeful that in the event that productive shale is found, an economic development case will follow. However, shale gas is high-cost by comparison to conventional gas developments. We are at the earliest stages of evaluation, but we do recognize that if initial drilling results are positive, our operations will require scaling up, which will actively progress in line with growth requirements.

28

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

29

FOCUS: Member company

EXPERT: Airlines and consumers

The problem of grounded ights

The European Court of Justice issued a judgment on May 12, 2011, of great signicance for the entire airline industry in the European Union, concerning the liability of air carriers for the consequences of unforeseeable events resulting in ight cancellations
Mark Watson and Jim Hemmer cause no one doubted that closing the airspace over the Malm region was an instance of force majeure. No one could have predicted that this specific difficulty would occur or how it might affect the ability to carry out the flight. The court apparently had no doubt about this either, but it nonetheless found that airlines should not fill their flight schedules up to the brim, but should always allow a little extra time. Thus, even if Air Baltic could not have predicted a power outage in Sweden, it should have assumed that some external difficulties might delay the flight, and provided a crew that was not overworked. Unfortunately, the ECJ did not provide any guidelines for how airlines should set aside a minimum reserve time. It indicated only that the same criteria would not be appropriate for all situations. It also found that Art. 6(1) of Regulation 261/2004, which requires air carriers to provide passengers with care after a delay of at least two, three or four hours (depending on the length of the flight), should not be used as a guideline. This was what the passengers sought. That would mean that in the case of any flight exceeding 1,500 km, the air carrier would have to reserve at least 2 hours to counteract the effects of extraordinary circumstancesor 4 hours for flights of over 3,500 km. Fortunately, the court rejected that interpretation. As consolation to the airlines, the court held that the assessment of the ability of the air carrier to operate the programmed flight in its entirety in the new conditions must not result in the air carrier being led to make intolerable sacrifices in the light of the capacities of its undertaking at the relevant time. Beware of time slots Notwithstanding this reservation, the ruling by the ECJ is unfavorable to European airlines, primarily because of the unclear criteria under which an airline should establish the minimum cushion in its flight schedule in order to be able to carry out flights even when emergency circumstances arise. The ruling does not reflect the fact that despite the best intentions on the airlines part and allowing additional time, it may still be impossible to carry out the flight because the schedule for departures and arrivals at the airport may make it difficult to adjust the flight schedule. At busy airports, minor delay of a departure may mean that the aircraft loses its slot, and even if it is fully prepared for takeoff it must often wait an hour for another slot. There is no way to define precisely the additional time that must be allowed in order to avoid such situations. If airlines attempt to apply the ruling rigorously, they should set aside additional time even though it is uncertain whether the cushion will in reality be sufficient to carry out the flight if emergency circumstances arise. This approach would definitely generate significant additional costs for airlines. Small airlines operating only a handful of planes would be most seriously affected. In order for such airlines to remain profitable, they must operate their aircraft with minimum downtimenot standing on the runway waiting for whatever emergency circumstances might arise. It is unclear whether these factors were taken into consideration by the court when it issued the ruling in the Air Baltic case. more to come This is not the only recent case that has significantly limited the airlines ability to invoke the extraordinary circumstances clause in order to refuse payment of flat compensation. In a judgment dated December 22, 2008 (Friederike WallentinHermann v. Alitalia, Case C549/07), the ECJ rejected reliance on the extraordinary circumstances clause for technical problems, even if the aircraft was serviced regularly and properly. Despite the ambiguity inherent in these rulings by the European Court of Justice, they may be relied on by passengers seeking compensation for flight delays and cancellations, and the industry must be prepared to face increased operating costs.

By Piotr Majer legal adviser aszczuk & Partners

Growth on the radar

American Investors Tomasz wiok spoke with two managers of Antenna SoftwareJames Hemmer, President & CEO, and Mark Watson, EVP and General Managershortly after Antenna announced the creation of a technology center in Krakw
What are the driving factors for development of the krakw operations? Mark Watson: The main factor behind the expansion of our technical center in Krakw has been our signicant global business growth. The center provides product development and customer service for customers across the Americas, Europe and Asia-Pacic. The teams will continue to provide engineering support for the Antenna Mobility PlatformAMP They will . be focusing mainly on AMP mobile web products, and customer support for mobile apps, both native and hybrid architectural styles. Why krakw and not the antenna operations in the uk, for instance? Mark Watson: We have had an engineering center in Krakw since 2005. Krakw was chosen because of its proximity to highly qualied IT and engineering staff and its ight connections with the rest of Europe. Our Krakw engineering teams are all employees of Antenna. We were also helped signicantly by the Krakw branch of the American Chamber of Commerce in 2005, at a time when we were investigating whether to locate our engineering center in Poland. how important is the polish market for antenna? Jim Hemmer: Poland is an important European market for us. Antenna is particularly interested in developing business within the manufacturing, nancial services and telecommunications sectors. how important is poland as a source of manpower? Mark Watson: Poland is very important to us a source of highly qualied IT and software engineering staff. What is the corporate culture at antenna like? Jim Hemmer: As a global organization, we are very multicultural and we pride ourselves on promoting a set of core values that hold us true to our vision and that are supported across the organization. Above all, Antenna is committed to fostering a vibrant, rich and productive community of employees, customers and partners. What are the plans for further development of the krakw center? Mark Watson: As our business grows there will be a requirement to increase employee numbers across the business. We have the capacity to support just over 150 employees at our new center in Krakw. We plan to expand our engineering capabilities in Krakw to ensure that we keep on the cutting edge of innovative and quality products, and to provide proactive customer outreach in terms of customer support.

it seems that last year and the rst half of 2011 have been good for the company. What were the main driving factors for your business? Jim Hemmer: The main driver behind our recent business success has been the continued growth of mobile as a channel to engage both consumers and employees. As mobile becomes more and more strategic to businesses, enterprises are realizing that they need a comprehensive solution that addresses the needs of all users. As mobile becomes more and more strategic to businesses, enterprises are realizing that they need a comprehensive solution that addresses the needs of all users. Antenna delivers the whole spectrum of mobile experiences, a wide variety of mobile apps and mobile optimized websites that empower employees to be more effective and make it easier for consumers to do business with their favorite brands. Antenna also made two successful acquisitions during this periodVolantis Systems in January 2011 and Vaultus in March 2010which have enabled the company to expand into new segments, geographies and markets. After buying Volantis Systems in January, Antenna is expanding the Krakwbased operations so it becomes one of the companys key technology centers, along with centers in Jersey City, Boston, Toronto and Bangalore.
30 AMERICAN INVESTOR SEPTEMBER 2011

n Andrejs Egltis & Edvards Ratnieks v. Latvijas Republikas Ekonomikas ministrija (Case C-294/10), passengers on an Air Baltic flight from Copenhagen to Riga sought compensation from the airline for cancellation of the flight. The flight was scheduled for departure at 8:35 pm, but at 8:30 the airspace around Malm was closed because of a power outage affecting radar and navigation systems. Passengers waited onboard the aircraft until 10:45 pm, when they were told that the flight was cancelled. It turned out that the reason for the cancellation was that during the wait for takeoff, the flight crew had exceeded their permissible working time.

depending on the length of the flight. This was the compensation sought by the passengers in the recent ECJ case. The key issue, however, was whether cancellation of the flight to Riga resulted from extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. If the carrier can demonstrate extraordinary circumstances, the passengers are not entitled to flat compensation under Regulation 261/2004. The purpose of this rule is to release the carrier from liability for instances that are beyond its control, such as force majeure.

consult the crystal ball The European Court of Justice held in this case that because the legal grounds air carrier is obliged to impleThe basis for the passengers ment all reasonable measures to claims was the EUs Deniedavoid extraordinary circumBoarding Compensation Regustances, it must reasonably, at the lation (261/2004). The regulastage of organising the flight, take tion imposes various obligations account of the risk of delay conon airlines toward passengers in nected to the possible occurrence instances of denial of boardof such circumstances. It must, ingtypically as a result of over- consequently, provide for a certain booking, delay or cancellation of reserve time to allow it, if possithe flight. Depending on the sit- ble, to operate the flight in its enuation, airlines may be required tirety once the extraordinary cirto provide passengers appropri- cumstances have come to an end. ate care, lodging, reimburseThis means that when airlines ment of the cost of the ticket, or plan their flight schedules, they other benefits. must factor in the risk of unforeOne right that is popular with seen circumstances and schedule passengers is flat compensation flights and departures with some for denial of boarding or flight time cushion. cancellation, of EUR 250 to 600 The holding is surprising, be-

SEPTEMBER 2011

AMERICAN INVESTOR

31

EXPERT: Innovation

EXPERT: Product placement

Follow the path of world leaders

By Micha Turczyk Senior Manager, R&D and Government Incentives Team Tax Department, Deloitte

Catching up with reality

of any placed products and direct encouragement to purchase them are also prohibited. The Broadcasting Act provides a general requirement that the use of the product placement should not affect the editorial independence and autonomy of the broadcaster. If any program includes product placement, the broadcaster has to inform By Magorzata Darowska the audience accordingly. Attorney-at-law The Polish Parliament opted Head of Intellectual Property, Techfor an unconditional ban on nology & Communications Practice theme placement, i.e. where Group, Salans reference to a product, service and Karol Laskowski or trademark is made in the Associate, Salans programs script or dialogue. So it seems you can look at a product, service or trademark placement differs from sponsoregislation legalizing but not talk about it. ship mainly in that the sponsorproduct placement took The restrictions on product ship need not be featured in the effect on May 23, 2011, in the form of an amendment to program itself. That said, product placement and duties of broadcasters are quite wide-ranging, placement has been used before the 1992 Broadcasting Act. Product placement has suffered in programs on the basis of spon- but the new regulations apply sorship agreements, where prod- only to programs produced in the past from bad PR, often after the amendment came into being regarded as a sneaky form ucts were lent to producers free force. However, care should be of charge and appeared in the of advertising, and has been used to ensure compliance, beprogram. Under the new regulaprohibited by Polish and EU tions, it may prove difficult to dif- cause violation of the rules on regulations. Nevertheless, deproduct placement can attract ferentiate between these two spite the legal uncertainties, it forms of commercial communica- large finesup to 10% of the has featured in a number of broadcasters revenues for the movies and TV shows, including tion. previous year or up to 50% of some Polish productions. Viewed from that angle, the new legislation is merely playing catch-up, providing a legal framework for what is already out there on the visual media marketplace. However, broadcasters and producers will now be able to use the new regulations, conditions permitting, to raise financing for productions. from itincluding Hollywood and other foreign productions. This will make compliance a nightmare, because the broadcaster will have to determine whether a program includes theme placement or directly encourages the purchase of certain products. If it does include product placement, the audience will have to be informed several times over. Thus, the product placement regulations will indirectly affect the entire audiovisual market, since most movies are eventually shown on television, and broadcasters will have to organize their programming schedule to comply with the law. Good try, but Lets look at the positives: the legalization of product placement is a good initiative insofar as it creates a legal framework for a type of commercial communication that is already commonly used in the media. Under current regulations, we will not have to watch actors pontificating on the benefits of certain products. The disclosure requirement is generally needed as well, but it may swiftly become excruciating to bear if a high percentage of programs contain product placement messages. If the product placement is for, say, a chocolate bar sold almost exclusively in North America, is a duty to disclose the placement relevant or appropriate when the broadcaster has no influence over the placement and makes no profit from it? Of course it may be argued that the viewer has a right to know about any type of hidden advertising, but there again the Broadcasting Act does not apply to movies on general release in movie theaters, DVDs, computer games or music, where product placement is a common practice.

Innovation in business is understood in many different ways, but there are some solid indicators to stick to
nnovation is usually associated with the implementation of new products or services based on proprietary solutions of the innovator. This understanding of innovation is shared by most countries in the world that encourage businesses to invest in R&D in their countries. The indicators that count under this approach to innovation are R&D expenditures as a percentage of the countrys GDP the number of patents , registered, the method that generated the innovation (e.g. license or research), cooperation between the innovator and business, and the quality of R&D infrastructure available in the country. The importance of the first indicator is clear. The most innovative economies, such as Sweden, Finland and Japan, spend from 3.2% to 3.7% of their GDP on research and development. Less innovative countries, such as Poland and most other countries in Central & Eastern Europe, spend less than 1% of GDP on R&Dwell below the 3% recommended by the EU in the Lisbon Strategy developed in 2000. One element that may be decisive for attaining the goals of the Lisbon Strategy may be intensification of activities encouraging the enterprise sector to increase R&D expenditures. The enterprise sector is responsible for over 50% of R&D expenditures in any given country. It would be necessary to undertake very resolute actions on the EU and national level in order to encourage businesses to invest more in R&D.
32

proven strategies Encouraging companies to assign larger parts of their budgets to implementation of R&D in the given country or region is a strategy adopted by many developed countries attempting to build added value for their economies. Creation of a favorable climate for R&D investments is one of their main priorities. Good examples include Canada and the United States, particularly specific regions like Quebec (the most attractive tax incentives for R&D activity in Canada) and Massachusetts (the biggest share of R&D expenditures in relation to GDP among enterprises in any US state). The priorities for economic development in these regions include tax incentives, R&D grants, and support for cooperation between research entities and businesses by financing the development of clusters and creation of research infrastructure. This type of strategy produces results. The number of companies transferring their R&D activity to such regions is growing every year. Often, manufacturing capacities for the most advanced products are relocated there as well, building the regional and national economy even further. Actions and initiatives supporting the development of R&D in the US and Japan have proved to be effective, with R&D expenditures there representing a higher share of GDP than the average for 27 EU countries. The example of countries that use economy-building strategies based on stimulation of investment in R&D should be followed as soon as possible by Poland and other CEE countries, where the share of R&D expenses is small

but the countries try to compete on the international arena to attract foreign direct investment. The advantage of low labor costs in production is ceasing to be the primary distinguishing feature of CEE countries. The factor that is becoming increasingly more decisive for the location of FDI by international corporations is the potential for development of technology centers in a given country. Costs for hiring engineers and technicians are still very attractive compared to Western Europe and North America, but mechanisms of cooperation with the R&D sector and tax and grant systems to which companies are accustomed are poorly developed in most countries of Central & Eastern Europe. solutions for poland In response to the challenges posed by the EUs Europe 2020 strategy, Poland adopted an action plan aimed at increasing innovation, including R&D expenditures as a share of GDP . The plan was set forth in the National Research Program, an instrument which is supposed to facilitate implementation of the states research policy, bringing Poland into line with European and world standards. The program calls for an increase in innovation through concentration of the scientific community and state budget outlays on specific priority areas (e.g. power engineering, medicine, pharmaceuticals, IT, telecommunications and mechatronics). The National Research Program takes a highly formal approach to the issue, focusing on technical areas that will be promoted and supported from the central budget in Poland. It may be expected that this solution will achieve only partial results, because, as mentioned above, private enterprise influences the share of R&D expenditures in the country. Even though the program will probably contribute to an increase in expenditures by enterprises in the specified priority areas, it will not serve as an incentive for an increase in innovation for companies operating in other areas. Therefore, in order to increase

innovation and achieve the established aims, it would be necessary to introduce other instruments to encourage all businesses to invest in R&D. European funds are a good example of such an incentive in Poland. In previous years, businesses could obtain non-refundable grants for the development of innovation and R&D. They could obtain support even for outside research, which helped to expand cooperation with research institutions and stimulated the growth of this sector. However, grants from the EU are already running out and will not be available at least until further competitions are launched in the 20142020 program period. In this situation, it would be good to introduce appropriate solutions in the fiscal policy of the state, in the form of tax breaks for enterprises investing in innovation. This mechanism is already functioning in Poland (with tax deductions for expenses incurred to acquire the results of R&D), but it is not very popular (only 431 out of over 1.8 million registered enterprises have made use of it). Moreover, it focuses on the purchase of innovative solutions from external sources and does not support R&D carried out by companies in Poland. accelerating innovation The EUs ambitious plan for the year 2020 is achievable, but requires more resolute and dynamic action on the part of the member states. Poland should follow the path of world leaders, who set a good example. Apart from increasing budgetary expenditures, it is necessary to take care of enterprises by offering them new, more functional instruments, such as tax exemptions effectively reducing the cost of hiring engineers in Poland. This would make Poland more attractive and competitive on the international arena when seeking FDI, and also provide an incentive for creation of R&D centers and clusters employing teams of highly specialized engineers.

Product placement has finally become legal in Poland, conditions notwithstanding

legal definitions The new regulations define product placement as inclusion of or reference to a product, a service or a trademark so that it is featured within a program, in return for payment or other consideration, as well as inclusion of products in a program or providing services to the program free of charge (known as prop placement). Product placement is different from traditional advertising primarily because it is included in the program itself, not in a separate advertising slot. Product placement is closer to the concept of sponsorship, which involves promoting a specific brand, product or service in return for financing the production or media service. Product

The legalization of product placement creates a legal framework for a type of commercial communication that is already commonly used in the media.
the fee for the broadcasting frequencies. hollywood productions Bizarrely, even though the EUs Audiovisual Media Services Directive offers member states the option to derogate from rules on commercial communication with respect to external programs (e.g. Hollywood productions), Polands legislature decided to make broadcasters comply with regulations on product placement in relation to all programs, regardless of whether the broadcaster has any influence over the product placement or gains any profit

the rules The amended Broadcasting Act sets out a general rule that product placement is prohibited and then provides rules under which it may be conditionally allowed. Product placement is generally admissible in cinematographic works, movies and series made for audiovisual media services, sports programs and light entertainment shows. In other types of programs, especially those aimed at children, product placement is not allowed. Singled out for blanket bans are tobacco products, alcoholic beverages, medical services, and gambling. In addition, excessive exposure

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

33

EVENT: AmCham Wrocaw

EVENT: Charity

Sharing diverse approaches to CSR

ver 50 guests, including Deputy Governor of Lower Silesia Ilona Antoniszyn-Klik, Anna Panasiuk from the Ministry of Labor and Social Policy, and representatives of Polish and international companies, learned about different approaches to CSR policy in local and multinational enterprises operating in Poland at a workshop organ-

Golng to help children in need

ized by AmCham Wrocaw, in cooperation with the PolishGerman Chamber of Industry and Commerce, the British Polish Chamber of Commerce and the Scandinavian-Polish Chamber of Commerce. The main business partner of the event was IBM, which hosted the event at its Wrocaw delivery center.

1. Karolina Lisowska, UPS Polska; Joanna Emilianowicz, Kraft Foods; Iwona Makowiecka, Polish-German Chamber of Industry and Commerce. 2. The workshop in full swing. 3. Joanna Matryba, Kraft Foods, presenting the companys internal CSR policy.

Science and money meet in Wrocaw

rof. Jerzy Langer, Foreign Secretary of Academia Europaea and former Deputy Minister of Science and Higher Education, and a science and innovation advisor to the Mayor of Wrocaw, spoke about financing large-scale R&D initiatives using EU funds. He also discussed the concept of the Wrocaw Research Centre EIT+, the institutes activities and its future development plans, at a breakfast meeting hosted by AmCham Wrocaw in June.

P
1

2 4

5
1. Wojciech Wasik, HS Wrocaw; Prof. Jerzy Langer; Piotr Freyberg, 3M. 2. Wojciech Wasik; Joanna Bensz, AmCham Wrocaw Director. 3. Piotr Freyberg; Jerzy Langer. 4. Pawe Tenerowicz, Miller Canfield; Bill Hall, Pittsburgh Glass Works; Piotr Freyberg; Jerzy Langer. 6. Bill Hall; Pawe Panczyj, Ernst & Young. 8. Joanna Bensz; Bill Hall.
34 AMERICAN INVESTOR SEPTEMBER 2011

he annual McMasters charity golf competition took place in May at Lisia Polana Golf Club. The event was organized by the Ronald McDonald Foundation and AmCham, and sponsors included Golf & Life magazine and the photographic agency AKPA. The event was a fundraiser for the childhood cancer prevention program supported by the Ronald McDonald Foundation. Experienced golfers competed in team and individual matches. The individual tournament was won by Wojciech Szpila, followed by Con Murphy and AmCham Board Member Roman Rewald. Meanwhile, new players took lessons with the experienced instructors from the Lisia Polana Golf Academy. After the competition, everyone took part in a charity auction. The funds were donated to the Ronald McDonald Foundation.

1. Marzena Drela, AmCham Deputy Director; Prof. Adam Jelonek, Chairman, Ronald McDonald Foundation; Katarzyna Nowakowska, Managing Director, Ronald McDonald Foundation. 2. Golf Academy in action. 3. Golf lessons for children. 4. The trophies. 5. Foreground: Pawe Kastory, Corporate Profiles; Piotr Jucha, AmCham Board Member. 6. Krzysztof Kapa; Con Murphy, PM Group. 7. Guests at the fundraiser.

SEPTEMBER 2011

AMERICAN INVESTOR

35

EVENT: AmCham Krakw

EVENT: AmCham Krakw

Reinforcing business ties in Katowice

Business Mixer out of town

he Krakw Branch of AmCham hosted the Summer Business Mixer in June at Villa Rotunda in the beautiful suburb of Przegorzay. The event was generously sponsored by BP, CH2M Hill, Cooper Standard, International Paper, RR Donnelley and Skalski SA.

n May, the AmCham Council, represented by AmCham Board Member Paul Fogo and AmCham Executive Director Dorota Dabrowski, accompanied by US Consul General in Krakw Allen Greenberg, met in Katowice with Mayor Piotr Uszok and representatives of the business community in Upper Silesia, including AmCham member companies and selected non-member rms. The venue for the meeting and the business mixer that followed was the Goldstein Palace in the center of Katowice. The event was organized by AmChams Krakw branch.

10

11

12

13

14

15 16

17

1. The official part begins. 2. Piotr Uszok, Mayor of Katowice; Dorota Dabrowski, AmCham Executive Director. 3. Andrzej Korpak, General Motors Manufacturing Poland; Allen Greenberg, US Consul General in Krakw; Dorota Dabrowski; Paul Fogo, AmCham Board Member. 4. Monika Pilarska, AmCham Krakw Director; Pawe Tynel, Ernst & Young. 5. Andrzej Korpak. 6. Ewa Martuszewska, Dave Gibson, Fluor. 7. Marek Suczyk, Kroll Ontrack; Marcin Nowak, Capgemini; Paul Fogo. 8. Marcin Nowak; ukasz Kwieciski, Skanska.

1. Monika Pilarska, AmCham Krakw Director, starts the ofcial part of the mixer. 2.Yossi Wircer, Holiday Inn Krakw City Center Hotel; Stijn Oyen, Sheraton Krakw; Magorzata Jamrozik, CH2M Hill; Aleksandra Filutowski; Magorzata Lewicka. 3. Krzysztof Put, Coca-Cola; Grayna Nowak, FEC&C. 4. Stijn Oyen; Magorzata Lewicka; Yossi Wircer. 5. Jerzy Fedorowicz, MP; Sylwia Salwiska, Art; Piotr Skalski, Skalski SA. 6. Jerzy Fedorowicz; Anna Wieraszko, Amway. 7. Mieczysaw Pasowicz, John Paul II Hospital; Prof. Krzysztof Zieliski, Cracow University of Technology; Sawomir Kope, Krakw Technology Park. 8. Dariusz Kietyka, Irena Biela, Fluor; Magorzata Jamrozik. 9. Leszek Rodeski, Web Inn. 10. Andrzej Pawowski, Halina Zbczyska, Jagiellonian University. 11. Grzegorz Smoka, GM; Monika Pilarska; Magorzata Podrecka, Can-Pack; Anna Wieraszko. 12. Monika Pilarska; Jakub Nowakowski, Galicia Jewish Museum; Allen Greenberg, US Consul General in Krakw; Natalia Oleksy, Galicia Jewish Museum. 13. Marek Rajca, Silgan White Cap. 14. Marcin Nowak, Capgemini; Alex Fiszer, Marchot Club. 15. Jerzy Fedorowicz; Piotr Skalski. 16. Marcin Nowak; Tomasz Berbeka, International Paper. 17. Monika Pilarska; Marek Swach, Bank Pekao SA.

36

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

37

EVENT: Monthly Meeting

EVENT: CEO Forum

Once a year at the Ambassadors place

t has become a tradition for AmCham to assemble at the US Ambassadors residence once a year to learn where US-Polish commercial relations are heading and how AmCham can help. With host Lee Feinstein, AmCham also took the opportunity to bid farewell to Jim Wilson, head of the US Commercial Service in Poland, who heads back to Washington.

I
3

Innovation at the top

EOs experience and perspective on encouraging innovation in the corporations they lead were on the agenda at the AmCham CEO Forum in June. The panelists were Bogusaw Kuakowski from Qualcomm and Olga Grygier from PwC. The moderator was journalist Micha Kobosko. The venue was Mamaison Hotel Le Regina Warsaw.

C
2

5 3 4

5 7

7 6

8 9

10

1. US Ambassador Lee Feinstein. 2. Jim Wilson, US Commercial Service; Joseph Wancer, AmCham Chairman; Dorota Dabrowski, AmCham Executive Director; Marzena Drela, AmCham Deputy Director. 3. Lee Feinstein; Joseph Wancer. 4. Jim Wilson; Dorota Dabrowski; Lee Feinstein. 5. Monika Pilarska, AmCham Krakw Director; Piotr Jucha, AmCham Board Member; John Lynch, AmCham Board Member. 6. Maciej aszczuk, aszczuk & Partners; Mirosaw Dackiewicz, Agri Plus; Justyna Szpara, aszczuk & Partners; Andrzej Pawelczak, Animex. 7. The chef at the US Ambassadors residence is well-known for his culinary arts. 8. John Lynch; Jim Wilson; Tony Housh, AmCham Board Member. 9. Dorota Dabrowski; Paul Woodward, CocaCola Poland Services. 10. Tony Housh; Xavier Douellou, 3M Poland.
38 AMERICAN INVESTOR SEPTEMBER 2011

1. Bogusaw Kuakowski, Qualcomm; Olga Grygier, PwC; Micha Kobosko, Point Group Business Unit. 2. Joseph Wancer, AmCham Chairman. 3. Joseph Wancer; Paula Wsowska, Cisco. 4. Bogusaw Kuakowski; Olga Grygier; Richard Kauyski, Kauyski & Madeja; Marek Suczyk, Kroll Ontrack. 5. Alain Bobet; Micha Szwarc, TechSoup Foundation. 6. Paul Fogo, AmCham Board Member; Adam de Sola Pool. 7. Dorota Gutkowska, Levi Strauss; Richard abiski, Focus Research; Joseph Wancer. 8. Olga Grygier; Sylwester Klarowicz. 9. Dorota Walkowska, Agnieszka Naumiuk, Mamaison Hotel Le Regina. 10. Judith Gliniecki, AmCham Vice Chair; Agata Dulnik, Right Management; Dorota Gutkowska; Dorota Hansberry; Dorota Dabrowski.

10

SEPTEMBER 2011

AMERICAN INVESTOR

39

EVENT: Fourth of July Picnic

Platinum sponsor

Gold sponsors

Silver sponsors

Celebrating Americas independence

s many as 600 AmCham members and friends with their families, including 150 children, joined US Ambassador Lee Feinstein, AmCham Chairman Joseph Wancer and the AmCham Board of Directors to celebrate American Independence at the 4th of July Picnic at the Krlikarnia Palace in Warsaw. Notable guests included Henryka Bochniarz, president of the Polish Confederation of Private Employers Lewiatan, Olympic gold medalist Robert Korzeniowski, philosopher and womens rights activist Magdalena roda, and former national soccer team player Dariusz Dziekanowski. In a short speech, Ambassador Feinstein thanked the American business community for their inspiring cooperation, which has helped put business before politics in Polish-American relations under the Obama administration. This is the way it should be, Feinstein said to great applause from the crowd.

4 5

7 8

10

11

1. US Marines bring in the American ag. 2. US Ambassador to Poland Lee Feinstein; AmCham Chairman Joseph Wancer; AmCham Executive Director Dorota Dabrowski; AmCham Vice Chair Judith Y. Gliniecki; AmCham Board Members Roman Rewald and Peter Kay, with children who sang the Polish and American national anthems. 3. Joseph Wancer and the Marines. 4. Peter Kay; Judith Gliniecki; Lee Feinstein; Roman Rewald. 5. Henryka Bochniarz, Boeing; Roman Rewald; Lee Feinstein. 6. Robert Korzeniowski; Piotr Jucha, AmCham Board Member. 7.Judith Gliniecki; Dorota Dabrowski; Marek Sowa; Patrycja Goos, UPC. 8. Joseph Wancer; Marzena Drela, AmCham Deputy Director; Piotr Chmielecki, Jack Daniels. 9. Alain Bobet; Roman Rewald; Lee Feinstein. 10. Krystyna Wancer; Joseph Wancer. 11.Linda Caruso, US Embassy; Judith Gliniecki; Dorota Dabrowski. 12. Aneta Montano, FCm Travel Express, with family. 13. Richard Kayski, Kayski & Madeja, with friends.

12

13

Photos by AGENCJA REPORTER

The ofcial part of the picnic was commenced with the Presentation of the Colors by the US Marine Corp, and children singing the American and Polish national anthems. Despite the rainy weather the guests had a splendid time under a big tent of over 1,300 sq m. The Platinum sponsor of the event, McDonalds, served McNuggets and shrimp along with salads and ice cream. The Sheraton Warsaw also served delicious dishes, while the Sotel Warsaw Victoria Hotel provided desserts. The InterContinental Hotel offered ice cream to suit any palate. Drinks were served by Brown Forman, distributor of Jack Daniels whiskey and Finlandia Vodka, and CEDEC, distributor of ubrwka vodka and Carlo Rossi wine. Beer was sponsored by Zamkowe and Pera brands, and soft drinks by Coca-Cola and Pepsi. Special thanks go to Levis, which dressed the AmCham staff for the event. While adult participants engaged in socializing, children played at the Kids Corner sponsored by Universal Express and Express Relocations and participated in activities organized by the United Way Foundation. Older children tested their pilot skills on ight simulators provided by

10

11 12

13

Photos by AGENCJA REPORTER

1. Magdalena roda; Henryka Bochniarz. 2. Paula Rewald;Thomas Schoen, Sheraton Warsaw Hotel. 3. Jacek Siwicki, Enterprise Investors; Magda Maruszczak, KPMG. 4. Dorota Dabrowski; Christopher Smith. 5. Ron Nawrocki; Joseph Wancer; Wojciech Warski, Softex Data. 6. Dariusz Dziekanowski with daughter. 7. Matt Lynch with a partner. 8. The Jucha family with Marzena Drela; Dorota Dabrowski. 9. Marta Pawlak, AmCham; Paula Wsowska, Cisco; Dorota Dabrowski; Sawek lzak. 10. Cezary Krasodomski, Cisco, with family. 11. Beata Bednarska-Gostomska, FedEx; Micha Szwarc, TechSoup Foundation; Richard Kayski. 12. Ambassador Feinstein with family. 13. Jacek Siwicki; Richard Lada, AmCham Vice Chairman; Marzena Drela; Jerzy Kleniewski, MEP; Roman Rewald; Marta Pawlak, Anita Kowalska, AmCham.

40

AMERICAN INVESTOR SEPTEMBER 2011

SEPTEMBER 2011

AMERICAN INVESTOR

41

Bronze sponsors

Grand Prize sponsors

FedEx. The UEFA Corporate Hospitality Club Prestige stand was manned by Robert Korzeniowski. One of the most exciting moments of the evening was the announcement of the rafe winners. With over 150 prizes, the rafe attracted a record number of players. The grand prize was provided by LOT Polish Airlines: a round-trip ticket to any European destination. FCm Travel Express and Aerosvit sponsored two round-trip tickets to any Ukrainian destination. A lucky winner took home an HP notebook, while two bicycles in the rafe were sponsored by Avis and McDonalds. In-kind sponsors of the event included Animex, with Krakus and Morliny meat products, FritoLay, Oreo and Heinz foods, Lynka and Russell Europe with t-shirts, Medicover with medical assistance, and Walt Disney and Wolters Kluwer with toys. The artistic part of the evening was divided into three performances: a mix of pop and fusion by MistChill, and rock and roll by V.O.A. and diva Izabella Rzeszowska.

3 4

9 10

11 8 9

12

13

14 10 11 12 16

15

16 13 14 15

Photos by AGENCJA REPORTER except No 17 by Anita Kowalska

17

1. Andrew Hope, Fanton Hill Capital, with Marzena Hope and daughter. 2. The Kids Corner was sponsored by Universal Express and Express Relocations. 3. The United Way stand. 4. The InterContinental Warsawprovided ice cream. 5. Deep-fried shrimp from McDonalds were sought out by many participants. 6.Desserts were sponsored by the Sofitel Victoria. 7. Coca-Cola provided soft drinks. 8.A flight simulator from FedEx. 9. Children and their parents have fun. 10. Michael Moritz, Radio PiN; Marzena Drela. 11. The Sheraton Warsaw provided catering. 12.Jack Daniels was one of the drink sponsors... 13. ...and ubrwka another. 14. Robert Korzeniowski. 15. Participants gather for the official part of the evening. 16. Ronald McDonald entertains children and some of their parents. 17. Dafne Dabrowski, age 1, was one of the youngest guests at the picnic.
Photos by AGENCJA REPORTER

1. Picnic participants having a good time. 2. A lucky winner of one of the grand prizes; Marzena Drela; Robert Korzeniowski. 3. Winners of the LOT Polish Airlines ticket to any destination in Europe. 4. ChillMist entertained the party. 5. Giant soap bubbles were one of the attractions for children. 6. The raffle was popular as ever. 7. Over a hundred prizes were awarded to raffle players. 8. The AmCham team. 9. V.O.A. rocked the night. 10. Brian Bode supervised the AmCham lottery drawing. 11.United Way activities for children. 12.Little picnickers. 13. Iza Rzeszowska, an actress from the Jewish Theater in Warsaw, performs live. 14. Members of American football team the Warsaw Werewolves with Marzena Drela and Katarzyna Duba, Avon Cosmetics Polska. 15. Picnic sponsors had an excellent opportunity to showcase their products to over 600 participants. 16. Fireworks culminated the event.
SEPTEMBER 2011 AMERICAN INVESTOR 43

42

AMERICAN INVESTOR SEPTEMBER 2011

SUMMARIES: in Polish

AmCham Guide to Committees

W tym numerze:

COVER STORY

Pomimo globalnego kryzysu ekonomicznego sektor outsorcingu w Polsce przeywa wzrost. Czy ten stan bdzie trwa? str. 16
EKSPERCI
problem odwoanych lotw Odpowiedzialno przewonikw powietrznych za nieprzewidziane wydarzenia skutkujce odwoaniem lotw, str. 31 podajc za liderami Cho innowacyjno w biznesie jest rnie okrelana warto trzyma si wyprbowanych definicji , str. 32

www.amcham.pl
Agri & Food
www.amcham.pl/agri_food
Mission: To provide a platform for discussing and solving issues and identifying opportunities in the agricultural and food sector by creating a base for dialogue and expertise. CoChairs: Andrzej Pawelczak, Animex; Maciej ubieski, Universal Leaf Tobacco Poland.

For the most recent information about the work of AmCham Committees, and upcoming events:

Energy & Environment

www.amcham.pl/environmental
Mission: To help members develop their energy and environmental business in Poland. By helping members work collectively to overcome any systemic difficulties encountered in their business the committee aims to increase the level and quality of investment and activity in these sectors. Co-Chairs: Adam de Sola Pool; Jerzy Chlebowski, Mitsubishi.

Outsourcing/High Tech

www.amcham.pl/outsourcing
Mission: To provide a platform for discussing, identifying and addressing common SSC/BPO issues related to hightech operations; to maintain contact with local authorities, educational and governmental institutions to present a unified business perspective and to suggest ways of possible cooperation. Co-Chairs: Marek Suczyk, Kroll Ontrack; Jacek Stryczyski, Lionbridge.

European Union Affairs

www.amcham.pl/eu
Mission: To provide members with relevant information on EU-related issues, including EU funds, and to represent American investors before the Commission and the Polish government. Co-Chairs: Magdalena Burnat Mikosz, Deloitte; Jerzy Thieme.

Pharmaceutical

www.amcham.pl/pharmaceutical
Mission: To discuss and identify common interests and exchange information regarding Polands pharmaceutical market; to act as a representative body and collective voice of pharmaceutical companies before governmental institutions. Co-Chairs: Jarosaw Oleszczuk, Abbott Laboratories; Roberto Servi, Eli Lilly Polska.

Health

www.amcham.pl/health
Mission: To provide a united forum for US companies to share their expertise on the healthcare system and exchange knowledge and experience with national counterparts, and promote the US experience and capital while establishing the best conditions and opportunities for investments. Co-Chairs: Elisabeth Asirifi, IBM Polska; Jolanta Chlebicka-Dominiak, Johnson & Johnson.

Political Discussion Forum

www.amcham.pl/pdf

www.amcham.pl/consumer
Mission: To provide a forum to share knowledge and exchange experience in all areas common and relevant to manufacturers and distributors of goods. Co-Chairs: Magorzata Surdek, CMS Cameron McKenna; Agnieszka DzigielewskaJoczyk, HP Polska.

Consumer Products

MONTHLY MEETING
nowy rozdzia Relacje polsko-amerykaskie wkraczaj w nowy etap oparty o relacje biznesowe, str. 20

www.amcham.pl/infrastructure
Mission: To discuss issues of the development of infrastructure; to promote infrastructure solutions for cooperation between private and public partners. Co-Chairs: Krzysztof Wierzbowski, Wierzbowski Eversheds; Andrew C. Kapusto, Raytheon Homeland Security.

Infrastructure

Mission: To build relationships with key players in Polish politics, regardless of whether within the government or not, in small groups and in private settings, to serve as a vehicle into the world of Polish politics behind official curtains. Co-Chairs: Robert Koski, Kulczyk Holding; Marek Matraszek, CEC Government Relations.

Real Estate

www.amcham.pl/real_estate
Mission: To discuss issues regarding the complexities of the real estate market in Poland, and exchange information. To be an educational and networking forum for members and to lobby and influence legislative departments of the Polish government. Co-Chairs: Halina Wickowska, K & L Gates; John Baka, Colliers International.

CEO FORUM
Biznes jak zwykle Innowacyjno to sposb na uzyskanie przewagi konkurencyjnej w czasach gospodarczego spowolnienia, str. 22

Corporate Social Responsibility

www.amcham.pl/csr
Mission: To encourage and facilitate responsible business practices among AmCham members to support them to improve the quality and effectiveness of their CSR programs. CoChairs: Wojciech Arszewski, UPS Polska; Anna Jawor, IBM Polska.

RELACJE ZDJCIOWE
Spotkanie na temat CSR we Wrocawiu, str. 34 Spotkanie na temat finansowania nauki, we Wrocawiu, str. 34 Charytatywne spotkania graczy w golfa, str. 35 Spotkamie zarzdu AmCham z wadzami Katowic, str. 36 Biznesowy mikser w podkrakowskich Przegorzaach, str. 37 Spotkanie z Ambasadorem Stanw Zjednoczonych, str. 38 CEO Forum na temat innowacyjnoci w biznesie, str. 39 Piknik z okazji Dnia Niepodlegoci Stanw Zjednoczonych, str. 40

FOCUS
lepsza oferta AmCham kontynuuje starania dostosowania swojej oferty do potrzeb i wymaga czonkw, str. 24 nowy szef kuchni Gavin Baxter z warszawskiego hotelu Marriott, str. 26 dyplom Bma Jak zdoby dyplom MBA w Polsce, str. 28 poszukiwanie biznesu Tomasz wiok z American Investor rozmawia z John P Claussen, dyrektorem na . Polsk w firmie Chevron Upstream Europe, str. 29 rozwj na celowniku Tomasz wiok z American Investor rozmawia z James Hemmer i Mark Watson, manaderami z firmy Antenna Software, str. 30
American Chamber of Commerce in Poland 2011. All rights reserved.

Intellectual Property Rights

Mission: To advocate for IPR protection and provide leadership that will bring together interested partners; to share information with decision-makers and law enforcement. The police, judiciary, prosecutors, customs officials, legislators and journalists are among the target groups, while the curriculum of law schools should have more emphasis on IPR. Co-Chairs: Agnieszka Wyszyska-Szulc, Philip Morris; Anna Lasocka, aszczuk & Partners.

www.amcham.pl/ipr

Small & Medium-Sized Enterprises

www.amcham.pl/sme
Mission: To provide a forum for exchange of ideas/best practices to improve the performance of SMEs; to identify and promote solutions to facilitate and support the managerial and operational efforts of SMEs through educational, networking or lobbying efforts that leverage the resources and knowledge of AmCham and its membership. Co-Chairs: Alain Bobet; Cezary Krasodomski, Cisco Systems.

Defense & Security

www.amcham.pl/defense
Mission: To serve as a platform for defense industry issues and exchange relevant information. The committee creates a networking forum and fosters a positive working relationship with the government and people of Poland. Co-Chairs: Paul Zalucky; Stan Prusiski, Sikorsky Europe.

DZIAY STAE
Informacje o Firmach Czonkowskich Izby, str. 2 Informacje o dziaalnoci Komitetw Izby, str. 8 Przewodnik po Komitetach Izby, str. 45

Marketing & Communications

Mission: To provide a forum for member firms to share knowledge and exchange experiences in marketing, communications and PR; provide educational and networking opportunities for member firms interested in these areas; and serve as an advisory body for AmCham. Co-Chairs: Anya Ogorkiewicz.

Employee & Labor Relations

www.amcham.pl/labor
Mission: To create an information exchange forum of HR professionals to share, discuss and learn about the latest trends in HR management and influence local policy and decision-makers. Co-Chairs: Jolanta Jaworska, IBM Poland; Peter Strupp, United Business Development.

www.amcham.pl/marketing

Tax & Financial Services

www.amcham.pl/tax
Mission: To provide a platform for identifying tax and financial issues and create an educational forum to keep A Cham members informed on current and upcoming legislation. Co-Chairs: Piotr Bartuzi, Bank BPH; Andrew Hope.

American Investor to oficjalny magazyn Amerykaskiej Izby Handlowej w Polsce. Magazyn reprezentuje gos rodowisk midzynarodowego biznesu w Polsce. Celem magazynu jest dostarczanie czonkom Izby i innym czytelnikom aktualnych informacji na temat dziaalnoci Izby a take trendw biznesowych i polityce spoecznej firm. listy do rekacji prosimy wysya na adres poczty elektronicznej: tomasz.cwiok@amcham.pl

44

AMERICAN INVESTOR SEPTEMBER 2011