THE WARSAW INSTITUTE REVIEW

Date: 31 July 2018    Author: Adam Stolarz

Key Instruments for Financing Innovations in Poland as Part of the “Entrepreneurial State” Policy

Over many centuries , both innovations and inventions have constituted an inherent part of human creative processes. Since the beginning of the 20th century, they have become an essential carrier of economic value, almost as important as traditional resources, such as land, labour and capital, all of them having been mentioned in Adam Smith’s classical economics theory.

Innovation economics focus mostly on such concepts as knowledge, innovation, technology, and entrepreneurship. These factors have stimulated values responsible for the successful growth of many of the world’s countries while boosting innovations[1] constitutes one of the core determinants of a state’s prosperous development policy, which basically consists of the following components:

• purchasing innovative products, both by the state and by its subordinate entities, financing their further development or applying new solutions in public sector companies;
• research grants and scholarships, providing support for scientific societies, subsidizing conferences, financing research and development studies;
• backing business environment institutions, including clusters, incubators, and technology parks;
• initiating research consortia and science parks;
• adapting a higher education system by promoting all research domains being of particular importance to the state’s main industries;
• stimulating cooperation between public research institutions and companies;
• supporting technical and business consulting for technology companies;
• disseminating the results of R&D works and information on innovative solutions via mass media and publicly accessible databases.

Innovation policy in Poland

At the turn of the 1980s and 1990s, the Organisation for Economic Co-operation and Development (OECD) published guidelines concerning innovative activity, which currently constitutes an internationally-accepted methodological standard. These assumptions have also been included in the OSLO MANUAL, a publication containing both definitions and methodological recommendations concerning the following issues:

• expenditure on innovative activity and the types thereof,
• innovations effects and ways of measuring their impact,
• sources of information for innovation ideas,
• objectives of innovative activity,
• obstacles that hinder or prevent innovation.

The percentage of entities that implement process or product innovations is commonly used when assessing the level of modernization in enterprises. According to Eurostat data in 2006–2008, Poland dropped in out one of the bottom positions among other European Union countries. Germany was ranked 1st while Lithuania was placed as the last country on the[2] list. In Europe, the innovation potential of economies is traditionally measured by the Summary Innovation Index (SII), which is published within the framework of the Innovation Union Scoreboard. The total index is calculated as the weighted arithmetic mean of 29 partial indicators for EU countries, Turkey, Iceland, Norway, Switzerland, USA, and Japan. The single indicator consists of several partial ones that cover both innovation expenditures as well as results obtained in this respect. This index assumes a value from 0 to 1, due to the following correlation: a country’s level of innovation will be higher provided that its value is closer to 1. According to the Innovation Union Scoreboard 2015 report[3], Poland, which has achieved a synthetic innovation rate of 0,313, could be ranked among countries with moderate innovativeness, referred to as moderate innovators, being at the same time ahead of Romania (0,204), Bulgaria (0,229), Latvia (0,272) and Lithuania (0,283). Still, Poland has managed to remain in the group of moderate innovators, taking fifth to last place, while the leading position was maintained by Sweden. The list of Europe’s fastest-growing innovators includes such countries as Malta, Latvia, Bulgaria, Ireland, the United Kingdom, and Poland. Globally speaking, EU results still seem to give way to the achievements of the United States, Japan and South Korea. The total innovation indicator for Poland amounts to 56,4 percent of the average indicator for EU countries; such state of affairs has allowed the state to maintain its position among other moderate innovators. Total indicators for EU countries in 2006–2014 confirm a clear upward trend while Poland underlined its quite stable position with a slight increasing tendency. Unfortunately, according to the European Innovation Scoreboard 2017 report[4], Poland was ranked 25th out of 28 EU member states, followed only by Croatia, Bulgaria, and Romania. Even this decline did not prevent the country from being part of the group of so-called moderate innovators. According to data from the Global Innovation Index 2017 ranking[5] (GII 2017), accountable for analysing 127 world economies, Poland was ranked 38th; simultaneously, it was a global leader in terms of growth in dynamics of R&D expenditures by enterprises in 2008–2015, which resulted in an overall increase of 212 percent. As for growth in the state’s domestic spending, Poland was put in third position, behind Slovakia and China (an increase of 107 percent). Moreover, the report states that during the economic recession in 2008–2009, both research and development expenditures seemed to vary significantly in individual countries. For example, China, India, Mexico, Russia, and Poland did not reduce their spending during the crisis; interestingly, they even intensified it once the recession was over. A similar tendency could be observed in enterprises’ R&D expenditures; during the recession, there was a decrease in both domestic and business spending on R&D. Nonetheless, systematic growth was noted compared to the situation before the crisis. According to the authors of the report, such was the case of the economies that traditionally spend much of their funds on research and development, including these of the United States, Great Britain, Germany, the Netherlands as well as those of Chile and Slovakia.

In both rankings, Poland stayed ahead of the Czech Republic, Estonia, Latvia, and Slovakia while Croatia and Romania are ranked even lower. In addition, Poland does not submit many international patent applications that can indicate the efficiency of using funds allocated for innovation. Fortunately, Poland is perceived as one of world’s leaders in terms of growth dynamics, which looks favourably on the country’s future prospects. Nonetheless, the state authorities should make their best efforts to ensure that all of the above-mentioned funds will used genuinely to support the idea of setting up the innovative economy, the effective spending on which is one of the pillars of the country’s Responsible Development Strategy. Thanks to the wide scope of the activities planned, as well as special emphasis on the venture capital formula – which seeks to use public funds and resources – it is possible to take advantage of foreign capital as a significant shareholder of the emerging funds.

Responsible Development Strategy

Since the beginning of 2016, the concept of economic patriotism has become the core exponent of Poland’s economic policy, defined by Professor Eryk Łon as the concern for the common good[6] and the further development of the property of Polish citizens and a systematic increase in their income. Such steps can be implemented by the Responsible Development Strategy (RDS), also referred to as the ” Morawiecki Plan”; such roadmap for Poland’s development was set up in 2016 under the leadership of Deputy Prime Minister Mateusz Morawiecki, who served as Minister of Economic Development and Chairman of the Economic Committee of the Council of Ministers in the Cabinet of Beata Szydło. The draft was adopted by the Council of Ministers on February 16, 2016 whereas the final version of the RDS was approved only a year later whose main tasks were written out up to 2020 (with prospects until 2030)[7].

The Responsible Development Strategy shall constitute a response to the following five development traps for the Polish economy:

1. Middle income trap (salaries of Poland’s working population are three times lower than those earned in highly developed countries while Poland’s GDP per capital amounts approximately to 45 percent of the U.S. GDP per capita.

1. Lack of balance trap (it was estimated that the amount of PLN 95 billion annually flows out to foreign investors as part of profits and returns on capital; Poland’s foreign liabilities total PLN 2 trillion whereas two thirds of Polish exports originate from foreign companies that account for 50 percent of the country’s overall industrial output),
2. Average product trap (it was calculated that R&D expenditure accounts for 1 percent of Poland’s GDP, only 13 percent of small and medium-sized enterprises place innovative solutions on the market while no more than 8,5 percent of all exportations can be referred to as innovative)
3. Demographic trap (the number of Poles at pre-working age amounts to 7 million; according to recent prognosis, if such an unfavourable trend continues, this number will decrease to 5,6 million in 20 years)
4. Trap of weak institutions (this can refer to the 44 amendments made to the VAT bill since 2004, low efficiency of state institutions, and a lack of effective public policy coordination)[8].

The RDS aims to boost Poland’s own potential for responsible development of the country and to improve the quality of life of its inhabitants. All corrective measures shall focus on three specific objectives as well as being based on the[9] following pillars:

Specific Objective (1) – Sustainable economic growth based on knowledge, information and organizational excellence

1. Reindustrialization processes carried out on the basis of Polish resources and aiming to strengthen the foundations of the Polish economy. Industry constitutes the very core of all commercial spending in research and development, and for companies belonging to the tertiary sector.
2. The development of innovative companies, understood mostly in terms of boosting the level of products’ technological advancement, stimulating new organizational and technological solutions on the basis of enterprises’ own resources as well as promoting pro-innovation attitudes thanks to the optimal use of human capital.
3. Small and medium-sized enterprises – increasing Polish companies’ potential in order to make them more competitive, due to all actions performed in their legal environment as well as implemented innovations, creating new jobs and facilitating greater access to financing instruments for enterprise development.
4. Capital for development translates into mobilizing financial resources, including these of the private sector, which should eventually result in higher level of investments. In order to strengthen Polish companies, it is vital to expand the financial instruments offered by state development institutions. Moreover, it is desirable to boost the efficiency of using public funds, with particular regard to European subventions as well as capital gathered by the Polish diaspora. Capital for development may also provide favourable conditions for establishing a savings culture in Poland, mainly due to the fact that the level of domestic savings largely determines investment possibilities of the state economy.
5. Foreign expansion of Polish companies encompasses the efficiency of employed capital, both thanks to economies of scale as well as due to their stronger presence on already existing markets and entering emerging and fast-growing ones of Asia and Africa. Such a step will help to reduce the current account deficit in the country’s overall balance of payments. Apart from exports – with special regard to high-tech goods – foreign expansion should primarily consist of direct investments of Polish enterprises.

Specific Objective (2) – Socially-sensitive and geographically-balanced development

1. Geographically-balanced development is defined as an evolution of all territories by reinforcing their endogenous potential, boosting development factors, as well as removing all existing barriers. In addition, such advancement processes shall encompass regions that are currently struggling with restructuring and adaptation challenges (including Silesia and the macroregion of Eastern Poland), rural areas (along with their local urban centres), and medium-sized cities being gradually deprived of their essential economic functions.
2. Social cohesion needs to become a determinant of the economy’s dynamic progress, therefore such development shall be first and foremost conducive to social inclusion, which will subsequently translate into an economy characterised by a high level of quality employment and entrepreneurship.
   

   On the one hand, such attitude may mean the need to adapt the economy to current demographic trends, in particular by ensuring the availability of services provided in response to these challenges while, on the other, it may necessitate further development to be supported as well as appropriate use of the potential offered by particular social strata on the labour market.

Specific Objective III – Effective state and institutions for growth and social and economic inclusion

1. Law in the service of citizens and state economy is essentially understood in terms of improving the quality of law, mostly by reducing regulatory burdens in order to provide more favourable conditions for carrying out business activities in Poland as well as satisfying the basic needs of particular groups of citizens. Thus, any changes in this respect shall be primarily marked by such factors as deregulation, improvement of the legal system – including a stable and predictable legal environment as well as rationalised legislative processes, understood in terms of partnership between the main institutional, corporate and social entities.
2. Pro-development institutions and strategic expansion management are equivalent to the functioning of institutions that enable the setting up of a country’s competitive advantages as well its proper social entities. This area includes comprehensive actions to increase the efficiency of public institutions (consolidation, integration of activities), changes in the administrative structure and its functioning (de-bureaucracy), boosting efficiency of the judicial system, changes in the public procurement system, and emphasizing the importance of dialogue.
3. e-state portal makes it possible to take advantage of the opportunities offered by all digital technologies available. Electronic programs used both for servicing citizens and entrepreneurs and within some state administration agendas will enable the improvement of the functioning of the latter in the long-term, reduce service costs and make companies function in a more efficient way.
4. Public finances – in order to implement state policy as providing favourable conditions for potential growth in the incomes of Polish citizens – while increasing cohesion in social, economic and territorial aspects – it is crucial to undertake appropriate stabilizing actions as well as to boost the efficiency of public finance management.
5. Effective use of EU funds is first and foremost perceived in terms of reorienting the current way of spending European subventions while taking into account the scope, coordination and forms of support useful to co-financing projects regarded as of key importance for achieving the defined development goals.

All activities regarded as priority objectives shall be at the same time conditioned by the need to guarantee sustainable macroeconomic stability, also in the context of the state’s budget policy. The aforementioned steps shall be supplemented by further infrastructural projects and other regulatory and institutional actions, also in such key areas for economic advancement and improving life quality, including social and human capital (education, culture, health), transport, energy acquisition and distribution as well as providing viable environmental status in accordance with the idea of sustainable development.

Entities financing innovations in Poland

The process of creating an innovative product is preceded by research and development, during which a lone inventor – or a team of innovators – processes an immaterialized concept of a product into its real form, thus resulting in a prototype. At this stage, financial outlays attain a considerable level that keeps growing until the product is finally launched onto the market. In order to perform the so-called market test, the very first merchandises are usually placed on the market in a relatively small quantity. In the case of successful feedback, a company begins preparations to start serial production. Putting the product onto the market will allow the enterprise to slow down the pace of preparations for mass production after the risk, understood as negative feedback on the product and its unsuccessful acceptance on the market, is eventually eliminated at an appropriate stage.

Nonetheless, private business entities were oftentimes unable to bear all unpredictable risks, which would make it challenging for them to incur any related expenses as a similar situation necessitated the state’s active involvement. Such engagement in the economy is usually tantamount to refuting the liberal conception of the country as a “night watchman”. Thus, the conviction, according to which no one should interfere in the economic sphere in order to make it flourish, does not correspond to current reality; in addition, such attitude may even constitute a real threat to the interests of national economies that face such challenges as regionalization and globalization. Therefore, the state shall first and foremost guarantee its active and appropriate presence in the economy, and to provide for the possibility of the inflow of foreign investment capital instead of just speculative capital. Such is the main theme noted by the economist Mariana Mazzucato in her book entitled The Entrepreneurial State: debunking public vs. private sector myths, which has been recently translated into Polish[10]. According to its author, the title myth consists of a conviction that innovative development is primarily powered by the private sector while the state is bound to play a passive role during the entire process. Mazzucato opposes such a false image of the state’s vision as an active participant, or even a director of pro-development policy, without which the innovativeness of the economy would be significantly reduced. In light of this approach, the state shall perform the duties of a dynamic – and sometimes even a leading – partner of the private sphere.

Thus, the only state that can successfully face modern challenges is the entrepreneurial one as it is essentially focused on setting multiple directions for both development and regulating relations between the public and the private sectors. Nonetheless, a country’s participation in all benefits achieved by the private sector is a serious problem that needs to be tackled. If the state engages in some high-risk projects, its share in profits would be perceived as appropriate, enabling to at least partly neutralize the costs of a possible failure. At the same time, it would be easier to convince taxpayers to carry out projects that might potentially be related to high uncertainty. In her publication, Mazzucato argues that the state’s role as an active inspirer, and therefore the main strategist of innovative development, will foster the proper conditions for the entrepreneurial state model being widely accepted by members of society. The future of economic development will therefore depend on whether such a vision of the state is accepted and further implemented in its practical dimension. Such perspective was outlined in the Responsible Development Strategy.

The main legal act determining the rules for financing innovative activities in Poland is the Act of 30 April 2010 on the Principles of Financing Science. According to Article 3 of the Act, science financing is defined as providing support for the implementation of the scientific, technical and innovative policy of the state, with particular regard to scientific research, development works and other tasks being of special importance for civilisation progress as well as the country’s economic and cultural advancement.

The aforementioned objectives are more precisely implemented by two executive agencies: the National Science Center and the National Center for Research and Development, the latter being essential to put innovative policy into effect.

Key entities to finance innovations in Poland

The main task of the National Center for Research and Development[11] (Pol. Narodowe Centrum Badań i Rozwoju, NCBR) is to foster modern solutions and technologies that may be conducive to increasing innovations, and thus Poland’s economy competitiveness. The Center’s activities are aimed at strengthening the cooperation between various actors of the Polish business sector, which will result in greater involvement of entrepreneurs (including foreign ones operating in the territory of the Republic of Poland) in financing research and more effective commercialization of their results. While pursuing these goals, NCBR makes sure that any public funds spent on research and development works shall result in the greatest benefits to the Polish economy.

Thanks to several dozen programs currently being implemented by the institution, the Center is able to provide financial support for a project (the NCBR’s annual budget amounts to about PLN 5 billion[12]) at all levels of technological readiness, starting from initial industrial research to the development of an innovative product, service or technology. Such an offer is additionally complemented by other programs aiming to support the financing of international protection of industrial property or foreign expansion of young innovative entrepreneurs. In addition, the Center pays great attention to ensuring favourable conditions for the further development of scientific staff. A particular focus shall remain on supporting young academicians. Moreover, such governmental agencies as the Ministry of National Defense, the Ministry of the Interior and Administration as well as the Internal Security Agency conduct joint activities related to research on the state’s defence and security. Both programs and projects aim to increase the potential of Poland’s scientific and industrial entities as well as to strive for the state’s technological independence, mostly by setting up Polish know-how in such domains as technology, security and defence. Business partner projects are best evidenced by the INGA (Innovative Gas Industry) venture, constituting the[13] result of cooperation initiated by GAZ-SYSTEM, PGNiG and NCBR in December 2016. The program’s objective is to increase the innovation and competitiveness of the Polish gas sector. The program’s total budget comprises PLN 400 million. Financial grants for research and development works may be applied by consortia made up of enterprises or scientific units or by the latter only. Financial support may be guaranteed to the best proposals that encompass innovative projects to be implemented in such domains as exploration, hydrocarbons extraction and production of gaseous fuels, exploration of coal-bed methane, providing materials for gas network construction and operation, gas network as well as use, trade and new applications of both LNG and CNG. The Agency’s activity embraces only the below-mentioned NCBR VC program.

The National Science Center[14] (pol. Narodowe Centrum Nauki, NCN) provides for subsidising basic research carried out in the form of research projects, doctoral scholarships and internships (offered after obtaining a PhD degree), research projects for experienced scientists that are essential for implementing some innovative solutions for scientific development, as well as some other studies that do not fit into the scope of interest of the National Center for Research and Development. The NCN budget reaches approximately PLN 1 billion[15].

Polish Agency for Enterprise Development[16] (pol. Polska Agencja Rozwoju Przedsiębiorczości, PARP) is involved in the implementation of both domestic and international projects financed by structural funds, the state budget and multi-annual programs of the European Commission. PARP is actively involved in both creating and implementing state policy in the field of entrepreneurship, innovation and staff adaptability in order to transform the agenda into a key institution accountable for establishing an entrepreneur-friendly environment. Pursuant to the “Think Small First” principle, the Agency’s activities are carried out with particular regard to the needs of the SME sector. In 2007–2013, the Agency disposed of a total budget in the amount of over EUR 7 billion, which could be spent on implementing operational programs [17]. Moreover, PARP carries out 13 activities within the Innovative Economy Operational Program under the following priority axes:

• Priority axis 1: Research and development of modern technologies;
• Priority axis 3: Capital for innovation;
• Priority axis 4: Investment in innovative ventures;
• Priority axis 5: Diffusion of innovations;
• Priority axis 6: Polish economy on the global market;
• Priority axis 8: Information society – increasing the economy’s innovativeness.

The state’s support system is provided within the framework of the ScaleUP pilot[18] program implemented as part of the StartInPoland governmental venture. As part of this activity, PARP seeks to combine the potential of creative start-ups with infrastructure, resources, and knowledge and experience offered and gathered by large corporations. The undertaking targets mostly young companies that may receive up to PLN 60 million to develop their ideas and further activities.

The Foundation for Polish Science (pol. Fundacja na rzecz Nauki Polskiej, FNP) is an independent, self-financing Polish non-profit organization with its headquarters in Warsaw. Established in February 1991, its mission is to support Polish science. Its founding capital in the amount of PLN 95 million was provided mainly from subsidies of the Central Fund for the Development of Science and Technology, due to the fact that the institution was being liquidated at that time. FNP constitutes Poland’s largest non-budget source of science financing.

The EU Framework Programs[19] for Research and Technological Development are the EU’s main instrument for funding research studies and work in Europe. They constitute the third largest budget line of EU expenditure, preceded only by the Common Agricultural Policy and Structural Funds. The seven-year Horizon 2020 Framework Program, scheduled for 2014–2020, is currently being implemented, which makes it the EU’s largest project in the domain of research and innovation. Its budget has a total of EUR 80 billion, of which 2,8 billion will be ultimately spent on the above-mentioned spheres[20].

Building venture capital for innovative projects

Poland’s new innovation policy should be further supported by venture capital funds and corporate venture capital funds (their company equivalents) while news on investments in start-ups or accelerators may eventually prevail over press releases about changes in Poland’s tax. Investments in innovative entities are widely discussed by representatives of the SME sector, both new and traditional industries, politicians and EU institutions. The idea of venture capital is widely recognizable in the financial world whereas corporate venture capital constitutes nothing more than an integral corporate structure within capital groups that operates in various industries, being also part of the open innovation system that aims to invest in small innovative enterprises for two main purposes:

• supporting the parent company strategy, with the investment objective to integrate a solution within the corporation, entering a new market and introducing a new product), or
• purely financial reasons (maximizing the company’s return on investment).

Poland’s current CVC structures accompany the implementation processes of the Responsible Development Strategy conducted within the framework of development capital. Perceived in terms of a catalyst for creating joint state and private capital units, the NCBR CVC support program will exert a positive influence on the development of the market. Nonetheless, it is difficult to provide any exact structural framework of the CVC within the open innovation system; over the past few years, it was possible to develop and successfully implement some of their functioning models. First and foremost, in spite of its name, corporate venture capital does not resemble a typical venture capital fund; CVCs are created not by investors but by corporations for a simple reason – as corporate venture capital aims not only to subsidise small “targets” at their early stage of development but also enterprises in much more advanced phases of growth. Poland has become an area of ​​intense development of venture capital entities specializing in financing innovation. Established in 2016 by the Polish government as part of the RDS, the Polish Development Fund (PFR) offered, via its subsidiary (PFR Ventures), repayable funding to innovative companies belonging to the SME sector, regardless of their advancement stage (pre-seed, growth or expansion). As part of the instruments, five programs were launched (PFR Starter FIZ, PFR Biznest FIZ, PFR Open Innovations FIZ, PFR KOFFI FIZ and PFR NCBR FIZ), which were to transfer over PLN 2 billion for the development of small and medium-sized enterprises in the form of repayable financing provided by appropriate intermediary institutions[21]. The following projects of funds and vehicles for financing innovation may be distinguished:

1. NCBR CVC. By pursuing the policy of combining public funds with resources and experience provided by private investors, the NCBR made a decision to launch the world’s first NCBR CVC Fund-of-Funds. The total allocation of the NCBR funds for the NCBR CVC Fund under the Smart Growth Operational Programme amounts to EUR 100 million (PLN 440 million) and constitutes 50 percent of the funds for the project capitalization (PLN 880 million). The remaining funds will be secured by private corporate investors. NCBR CVC is managed by a professional funds fund manager, namely PFR Ventures consortium supported by PFR TFI. The fund is supervised by a team that can boast of having unique experience on both Polish and international markets in the field of creating VC funds. The NCBR CVC project intends to create between 6 and 9 CVC funds, whose capitalization would vary between PLN 60 and 100 million, in different sectors of the R&D commercialization market. The investment goals of CVC funds are to be achieved within 13 years, which could be possible thanks to their cooperation with commercial investors, such as large enterprises (corporations), managed by independent management entities.
2. Fundusz EEC Magenta (The EEC Magenta fund). The corporate venture capital (CVC), set up jointly by Poland’s energy holding company TAURON, the Polish Development Fund and the National Center for Research and Development, constitutes the first such entity on the Polish market. TAURON will invest in two funds created under the PFR Starter: FIZ and BRIdge VC / PFR NCBR CVC programs. Such support will enable multi-stage support for innovative companies. It could be possible thanks to taking part in acceleration programs, investing in enterprises at their initial stage or ensuring subsequent funding under the NCBR CVC.
3. PGE Ventures. Launched in 2016, the strategy of Poland’s largest energy group envisages some innovative activities to be carried out. The plan will have a significant impact on the development of start-ups. PGE Ventures has announced the launch of external venture capital funds as part of the Polish Development Fund programs (PFR) and the National Center for Research and Development (NCBR). As Tauron seeks to set up Poland’s start-up ecosystem, PGE Ventures also aims to invest in the following programs: PFR Starter FIZ, BRIdge Alfa, BRIdge VC. PGE Ventures submitted applications for these programs in order to create external funds, in which PGE Ventures will be supposed to act as the main investor, thus having a fundamental impact on the funds investment strategy. Innovation constitutes one of the pillars of the PGE Group’s business strategy. By 2020, the company will have allocated a total of PLN 400 million to develop research and innovation, of which half comes from private funds while the remaining resources are provided within the framework of external financing. In addition, Grupa Lotos intends to invest PLN 50 million per year using its own funds in order to develop new technologies, products and business lines. While supporting the innovative project, PGE sought to undertake any comprehensive steps, which seems to explain why capital investments in start-ups are carried out by PGE Ventures, separated as a specialised CVC fund, while incubation and project acceleration processes at their initial stage shall be first and foremost treated by the PGE Nowa Energia company. Such distribution will allow for quick and efficient operation as well as optimization of the entire process.
4. Grupa Lotos (The Lotos Group): Poland’s oil company Grupa Lotos is bound to create a CVC fund[22], with an estimated value between EUR 40 and 50 million. The work on establishing the CVC funds are still at a relatively early stage as the corporation is currently assembling its management team. Thus, one can assume that Grupa Lotos will invest in start-ups that may be classified as part of the fuel industry.
5. Poczta Polska[23] (Polish Post) This institution is currently making its best effort to launch a venture capital this year and to invest in “new and promising companies”. It is said that Poczta Polska aims to take over a Zapakuj.to box editor and Pakomatic intelligent pack stations. In the foreseeable future, the state agencies may also be interested in Hyperloop technology, which is currently being developed by the HyperPoland company and which would potentially be deployed to transport parcels. All these projects participated in the first edition of the Gamma Rebels acceleration program powered by Poczta Polska, which was co-organized by the postal operator while the second edition has only recently come to an end.

Conclusion

Such steps towards innovation development as well as establishing and adopting effective marketing strategies are crucial to implement the “Morawiecki Plan”. They have an impact on eliminating the middle income trap by promoting projects of high intellectual capital at the expense of low-processed production and low-margin business services for international corporations. They directly reduce the average product trap, mainly by focusing on developing Polish technical solutions and supporting their expansion on foreign markets (one of the pillars defined in the Strategy). The emerging venture capital and corporate venture capital market, supported by state institutions and large corporations, constitute an opportunity to set up development capital. It is vital that – apart from local, including public, sources –foreign entities also express their interest in projects of high growth potential. Such is the practical implementation of the idea of ​​the Entrepreneurial State as depicted by Mariana Mazzucato.

 

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