THE WARSAW INSTITUTE REVIEW
Date: 18 May 2020
Giants Built on the Fundamentals of Economic Patriotism
A conscious choice of domestic products and services by consumers can be a driving force for the rapid development of the economy, building synergies between local companies, and the expansion of these companies onto global markets. Many national companies created with Polish capital are developing their businesses in Poland. These companies, having conducted their market activities, developed their new products and services in Poland, have meanwhile modernized, and then have proceeded to bring considerable profits both for their owners and for the national economy.
Exceptionally triumphant in the 21st century, globalisation continues to have an indisputably substantial, if not dominating, impact on the internationalisation of national economies. It makes the world witness to a seemingly relentless increase in trade network density and market integration. The effect is that whilst globalisation has its obvious advantages, it also has some negative consequences for certain sectors of the economies of individual countries that have also been observed. Since Poland’s political transformation in 1989 and the conversion of its economic model to a free market economy, there has been a significant increase in the number of companies developing their businesses in Poland. After some time, these companies began to expand their businesses overseas and sell their products and services outside of Poland. Meanwhile, foreign enterprises can simultaneously use the opportunity to enter the Polish market and compete with other, often national entities. Despite the high expansiveness of foreign enterprises and free trade with most developed countries, economic patriotism and its role in building a conscious society and economy should still be an important subject of analysis. This is all the more so since it plays the role of a connecting element not only of national economies but also of Polish society and democracy. Even though there has been an increase in globalisation for several decades now, it is not farfetched to argue that the most affluent countries in the world share their common element – an economic patriotism that consists of trade patriotism and consumer patriotism.
The market has grown in importance in the last century, whereas it could seem that the role of national or regional policy has been somewhat marginalised in the age of globalisation. Since some companies in the world have annual profits many times higher than the GDP of entire countries, it is evident that they influence the economy of certain nations – and the policy of a given country often may become second priority to economic goals. Thus, taking into account globalisation, for the national economy, patriotism is a crucial element of an individual’s identity. After all, it does constitute part of a particular national group or state. This important idea of a community is also adjointly connected with – albeit varying degrees from country to country – notions orbital around history, a common ethnic background, cultural heritage, origin, shared values, the memory of heroes, symbols, the anthem, and national holidays – and everything that defines the nation-state.
Since the times of Adam Smith, people’s economic activity has translated into a simple search for their own interest – which is to bring wealth and prosperity to all entrepreneurs. This interest nowadays is the interest of the Polish entrepreneur expressed by means of taking care of domestic companies, including one-person businesses, micro, small, and medium enterprises, as well as big companies that boost the Polish economy and stimulate smaller businesses.
Trade patriotism is defined as all actions taken by the public and private sector to help the economy of the home country in the wide array of aspects relevant to trade. Genuine and longer-lasting progress and successes of entrepreneurship can only be achieved if governments and public administrations take appropriate steps, both independently and symbiotically. The vital focal point in this context, not to be underestimated, is the simultaneously simple and complex issue of raising awareness of the need for promoting national goods – both on the national and international markets. There are wide ranging macro-economic models and schools of thought on this, however, it could be argued that seemingly, in general, there would seem to be a more mainstream consensus that, as opposed to complete laissez-faire, that Governments have the responsibility, and should, firstly, maintain the appropriate conditions for entrepreneurs so they can create and develop domestic companies. After all, this is where people tend to look to first for help and point the blame in the event of its absence, not the multinational corporations. Therefore, secondly, and most particularly in the trade patriotism context, Governments should avidly support the promotion of their products.
Such an economic strategy could be crucial for every well-developed and developing country alike, albeit likely to manifest in different ways. A significant advantage of trade patriotism, and this must be underlined, is that it does not prevent or directly or indirectly inhibit foreign entities from making their investments in the domestic market. It is neither zero-sum nor a rejection of globalisation, as sometimes ‘economic nationalism’ has been described as by its critics. Economic, and in particular, trade patriotism is hence about encouraging and enabling the economic functionality of a country’s entities in ways that are also beneficial to the country’s partners, rather than excessively obsessive protectionist or trade war-like measures. One does not forget, whilst being proud of the goods and services of one’s own country, that those of foreign entities also influence the economic growth of that country, provided these businesses function transparently and in good faith. Therefore, creating artificial competitive barriers is not a solution; on the contrary, such competition is necessary and ought to be both enabled and encouraged. National economies are fuelled by companies trying to compete globally with their products or services. The success of such companies should stimulate other smaller entities – ones that would fail without the support of economic giants or governments. In all developed countries around the world, for example, the United States, Japan, or Germany, the state supports national companies. It cooperates with them, understanding that an essential goal of internal economic policy is to build a strong group of entrepreneurs and – as a result – guarantee the development of their own societies.
The notion of consumer patriotism is based on the conscious purchasing attitudes of consumers – above all, the awareness of benefits of choosing buy or invest in domestic products or services, where such possibilities exist. The latter fuel economic growth, reduce unemployment, create new jobs, and allow companies to compete in international markets. It is essential to understand that consumers can contribute to the wealth of the whole society by making individual purchasing decisions. Profits generated by individual local producers directly translate into increased tax revenue for the state budget, which benefits all citizens. In practise, Embassies and their respective trade departments or programmes contribute to encouraging the purchase of goods and services originating or associated with their country, like for instance, the ‘Australian Made’ campaign and website. Consumer patriotism is orbital around highlighting the positive aspects of goods and services coming from or associated to a particular country, not in any way demeaning others.
Some individual consumers, however, are reasonably wary of some negative effects associated with the spread of globalisation. They consider global trends and economic and social influences, the aim of which is to develop international brands as harmful to the local economy. Also, in many cases, they take action reflecting their attitude towards, for example, foreign companies, goods, or services. The example of such efforts is consumer ethnocentrism, increasingly emerging among consumers as the opposite of globalisation. It is reflected in their preference to buy national or local goods. These consumers often treat it as a responsibility and moral duty to support local producers and service providers as the latter emphasize responsibility towards the community and the role of social capital. In these specific instances, where the effects of globalisation are more negative than the limitations without it, paradoxically, globalisation would have naturally contributed to increased localisation. Approaching this both alternatively at simultaneously, this is also apparent in specific scenarios where the benefits of localised economic activity, such as relatively higher degrees of self-sufficiency in a community, outweigh the benefits of globalisation. In this context, an element of patriotism is considered advantageous for the success of businesses supporting the development of the society in said country.
Polish companies with Polish capital are doing well
The Polish market, due to Poland’s membership in the European Union, open borders, and numerous customs agreements with other countries, is filled with foreign companies transferring their income abroad. However, what should be emphasised is that Polish companies are the basis of the state’s economy since they contribute to the state budget funds and guarantee the protection of Polish tradition and culture. Naturally, competition is important because it increases the quality of products or services offered. As it turns out, many Polish companies can compete with foreign ones in terms of quality, price, or attractiveness of their goods. What is more, Polish products and services are sometimes presented as model solutions all over the world.
Economic patriotism is perfectly illustrated by the example of the Polish company Drutex, a tycoon in the window manufacturing market. The company set up 35 years ago in the small town of Bytow, and today employs more than three thousand people, has several production facilities totalling over 11 ha in one location and its prized technologies. Drutex not only produces and distributes products all over the world but also hires Polish citizens and creates its research programmes and IT solutions. The company uses its own know-how. It has also built some up-to-date machines and prototype of smart windows in-house, which are an excellent example of the company’s strength and independent policy. This allows for extensive development of the company not only in terms of its technical and production potential, but also maximisation of its profits. What is crucial is that the company’s activity also generates enormous benefits for the Polish economy – it contributes to the reduction of unemployment, supports other companies and entire sectors of Poland’s economy, and generates direct inflows to the state budget. Drutex, just like other large Polish companies, also creates awareness among citizens who, in their consumer choices, prefer products manufactured on the domestic market.
Clothing and footwear are dominant segments of the economy with the Polish capital in Poland. Such companies as CCC, Big Star, Bytom, Badura, Cropp, Reserved, Gino Rossi, Lasocki, Vistula, Wólczanka, or Ryłko and Wojas have their shops in every major shopping centre not only in Poland but also abroad. Similarly to Drutex, these companies send their products, among others, to EU countries or to the United States, which not only increases revenues from product sales but also promotes the Polish economy. The quality of services offered by Drutex is appreciated all over the world and confirmed by the international certificates and technical documents. Thanks to the cooperation with almost 4 thousand international trade partners, Drutex company has been implementing the most prestigious projects. The windows produced in Bytow are used, among others, in large hotel designs in the United States, automotive centres in Mexico, or housing and commercial estates in Germany, Italy, France or Sweden. It is worth mentioning that the brand ambassadors were world-famous soccer players such as Jakub Błaszczykowski, Philipp Lahm and Andrea Pirlo. The positive opinions about the quality of products and services provided by this company are not only a profit for Drutex itself – they also guarantee the quality of Polish brands as a whole. The example of Drutex shows a comprehensive implementation of economic patriotism because it is a company with Polish capital which constantly improves its domestic and international activities, and thus fuels the Polish economy. Companies that act according to such principles nourish the Polish market and the tax system of the Polish state, leaving millions of złotys for the development of the economy, the social system, or local infrastructure investments.
Economic patriotism of Polish consumers
The research carried out by Katarzyna Włodarczyk from the Institute of Management and Marketing of the University of Szczecin shows that when asked about the reasons for choosing a Polish or foreign product, the respondents indicated a few of them. In the case of choosing Polish products, the most frequent reasons were habituation (61% of respondents), predilection for the brand (52%), support for the domestic economy (45%), or preference for Polish products (45%). In the case of choosing foreign products, 44% of respondents stated that such a choice reflects the prestige of the owner; 43% could not explain the reason for their choice, and 33% of respondents declared that they prefer foreign products over Polish ones.
According to the author of the article Globalizacja a patriotyzm ekonomiczny polskich konsumentów [‘Globalisation and the economic patriotism of Polish consumers’], “the promotion of domestic goods makes it possible to escape from global patterns of behaviour and bulk purchasing. The transformation of the Polish economy initiated in 1989 has created new prospects for the economic development of the country and new conditions for the economic situation of business entities as well as for households, which, to support the domestic economy, should in today’s reality strongly support Polish production, Polish products, and Polish services provided by Polish entrepreneurs and employees.”
Help from the synergy of Polish companies
Helping, especially in times of crisis, seems to be particularly difficult for businesses now forced to cope with its effects and mitigate negative market trends. Companies are saving their finances, jobs, and basically trying to survive in changing realities. However, the doctrine of economic patriotism and responsibility for the domestic economy makes assisting others an important task for responsible companies. As part of the fight against the global coronavirus pandemic, entrepreneurs operating in Poland decided to help Polish hospitals and patients by organizing the “Helping. Together” initiative. Its initiator, Leszek Gierszewski, President and founder of Drutex – a company that, thanks to the development of strong foundations, have not yet experienced the negative effects of the crisis and cultivates good practices in the field of the corporate social responsibility (CSR).
The action started with a noble gesture of the company, which donated 1 million zlotys in March to renovate and supply four Polish hospitals. Now, it’s already over 1,5 mln PLN and it’s not the last word that the company said. It has also launched its own production of safety helmets which are than forwarded to the medical staff all over Poland. Another big companys, for example LPP, Budimex, Posnet, CCC Posnet donated a lot of necessarys protective equipment for hospitals – only in March they purchased thousands protective masks, medical suits, protective visors, and portable ventilators for the hospitals. So far, 70 companies taking part in ‘Helping. Together’ collected over 24 million zlotys which have been transferred to health care facilities, people affected by the coronavirus pandemic, and non-governmental organizations. The initiative was supported by key Polish companies, businesses with international reach, and smaller companies, sharing a sense of responsibility for their compatriots and a country struggling with a deadly virus. Initiatives such as ‘Helping. Together’ represents a huge potential of our national champions, who can demonstrate their ability to manage the crisis and rise in solidarity above divisions, not only to return to business but above all to help those who need it most.
Economic patriotism constitutes an integral part of the economy and is progressively increasing its existence and importance in the world. Conscious consumerism of developed societies allows them to decide on their purchasing choices, taking into account both their economic and patriotic values. As far as state institutions are concerned, they provide the best conditions for the entrepreneurs to make sure the development of domestic entrepreneurship takes place smoothly and without obstacles. All these efforts will not go unnoticed, and will be rewarded – it is the entrepreneurs who may then promote the country abroad and bring measurable profits in the form of taxes that will serve the state, and in turn, circularly contribute to the wellbeing of Polish citizens and residents in Poland, and as such, elevate the position of Poland and its security in the world.
Authors: Editorial Team of the Warsaw Institute Review
This article was originally published on The Warsaw Institute Review.
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