Report on Intellectual Capital of Poland

The Report
on Intellectual
Capital of Poland

Authors of the Report:
The Report on Intellectual Capital of Poland was commissioned by the Board of Strategic Advisers Anna Blumsztajn
to the Prime Minister and prepared in cooperation with this team. Pawe³ Bochniarz
Ma³gorzata D¹browska
Board of Strategic Advisers is an advisory and consultative body to Szczepan Figiel
th
the Prime Minister of Poland. It was established on 6 March 2008, according Tomasz Kardacz
to the Prime Minister's regulation. The Board, headed by Micha³ Boni, Ph.D., Katarzyna Królak-Wyszyñska
Secretary of State in the Chancellery of the Prime Minister, prepares analyses Robert Mazelanik
and assessments of the socio-economic situation of the country and participates Hanna Nowakowaska
in developing strategic plans of the government. Teresa Ogrodziñska
It also provides suggestions of goals and objectives for the strategy of economic Monika Roœciszewska-WoŸniak
and social development of the country. Ma³gorzata Rószkiewicz
Tomasz Rudolf
More information on members of the Board of Strategic Advisers to the Prime Krzysztof Rybiñski
Minister and other authors of the report is available at: Andrzej Siemaszko
Tomasz Schimanek
Adam Turowiec
Dorota Wêziak-Bia³owolska
Andrzej Wodecki

Editing:

Design:

Printing:

19 years ago Poland embarked upon a systemic transformation and laborious process of narrowing the gap separating
it from the world's most developed countries and leaders in the global economy. Those years may be perceived through
the turbulent political history, but also through the huge effort of Polish entrepreneurs developing market economy
and competitive exports, and through the diligence of Polish employees working at least 20% above the statutory
working time norms, and constantly raising their efficiency. Those years have also been the time of young Poles'
and their families' investments in higher education, due to which Poland is currently sixth in the world as far as
the number of students per 10,000 inhabitants is concerned.
We have had our successes and achievements, but we have also suffered a number of failures.
We have our strengths and weaknesses, but we are also aware of threats and opportunities. The goal of the Board
of Strategic Advisers, appointed by Prime Minister Donald Tusk, is to create a long-term vision of Poland's development,
as well as of new competitive advantages responding to the challenges of the first half of the 21st century.
We are convinced that it is future-oriented thinking, rather than focus on the present, that determines the standards
of political responsibility in the contemporary world. We believe that this is the only way to prosperity and, let us not
be ashamed to use this word, to the social well-being, where financial aspects of life conditions improvement converge
with the social ones and with the sphere of values.
One of the first initiatives of the Team was undertaking an effort to draw up the Report on Intellectual Capital of Poland.
External experts in various fields were invited to cooperation in the preparation of the project, with the hope that their
enthusiasm and competence would contribute to the compilation of a document which would initiate a wide public
debate. A debate that would focus on how to develop Poland's potential for its future progress, based on knowledge
economy and on the values crucial to triggering the energy of entrepreneurship and creativity.
A fundamental problem to a number of countries, including Poland, in the upcoming years will be presented by demographic
challenges. For this reason, we decided to set the description of Poland's intellectual capital in a generational perspective,
recognizing the importance of harmony and solidarity between generations.
By presenting this report, we intend to initiate a debate beyond current political disputes. The aim of the diagnosis
proposed in the report is not to lay blame, but to define problems to be solved commonly by Polish people.
The challenges identified in this report must be met without delay, as time is working to our disadvantage.
The transforming world will not wait.

Let us not waste our time and opportunities Micha³ Boni, Ph.D.
Warsaw, 10th July, 2008 Head of the Board of Strategic Advisers to the Prime Minister of Poland

The Report on Intellectual Capital of Poland

The report comprises three parts:

- Summary, explaining the reasons for drawing up the report,

About the report and defining basic terminology as well as the method applied
to assess the intellectual capital of Poland;

- Diagnosis, identifying the key challenges related to
At the beginning of the year 2008, when the Board of Strategic Advisers to the development of the intellectual capital of Poland;
the Prime Minister was appointed, I was invited by the founder and head
of the team, Minister Micha³ Boni, to coordinate work on the Report - Recommendations, proposing seven priority measures
on Intellectual Capital of Poland.This initiative was intended to call that must be taken in order to meet the challenges facing Poland.
the attention of politicians, the media and opinion leaders to the role
and importance of the quality and level of intellectual capital in
the long-term development of Poland. As the coordinator of this project, I would like to thank all those whose
The present report, which was drawn up in conclusion of the project, is in character of knowledge, experience and commitment enabled us to draw up this report
a so-called 'green paper' (http://en.wikipedia.org/wiki/Green_paper), which means that within just four months.
it is aimed not at giving solutions, but instead, at initiating a public debate. A debate devoted
to the future development of Poland as a modern knowledge-based economy.
Although relevant government representatives were consulted about certain issues I would like to give special thanks to Prof Ma³gorzata Rószkiewicz
in the course of preparing the report, it is not a government document. It is an expert from the Institute of Statistics and Demography of the Warsaw
report that provides inspiration for the Polish government when planning School of Economics, to Mr Ludwik Sobolewski, President
their policies.
of the Management Board of the Warsaw Stock Exchange,
The Report on Intellectual Capital of Poland was compiled by experts from the Board and to Mr Janusz Witkowski, President of the Central Statistical
of Strategic Advisers and a group of external experts. Office, for their assistance, which was essential to the success
of this project.

Pawe³ Bochniarz,
Prime Minister's Strategic Advisers Group,
Coordinator of the Project on the Intellectual Capital of Poland.

Table of Contents
Table of Contents

Summary 5

Diagnosis 27
Young children 28
Pupils 50
Students 71
Adults 88
Senior citizens 121

Recommendations 137


Summary


Cooperation with the Institute of Statistics and Demography
THE INTELLECTUAL CAPITAL OF POLAND is the total of intangible assets of the Warsaw School of Economics resulted in developing
of people, enterprises, communities, regions, and institutions, which, properly a measurement model that allows to benchmark the intellectual
utilized, may become the source of the present and future well-being of Poland. capital of Poland and other EU Member States. The adopted
Both the economic theory and the experience of other countries indicate that the role method involves presenting intellectual capital in a generational
of intellectual capital is fundamental to sustainable development of a country. perspective, which enables assessment of the future potential
Certain countries, comparable in respect of their natural resources, geographical position of Poland's development with regard to the individual age
and financial condition, may differ significantly in terms of their successfulness, like Chile brackets. The estimation of the intellectual capital value of
and Argentine, or Spain and Italy. each generation in selected countries has been standardized
The difference between these countries lies in the ability to develop intellectual capital, and presented as percentage (from 0 to 100%). All indexes
which manifests in long-term thinking, readiness to learn, trust in market mechanisms have been calculated as a result of statistical analysis covering
and receptiveness to global competition, but also in efficient government of the country. from several to several dozen indicators.
Whether Poland will manage to find the proper response to its key challenges like Altogether, the measurement model applied in the Report
demographic regression, increasing costs and worsening accessibility of traditional sources on Intellectual Capital of Poland comprises 117 indicators.
of energy, or constantly accelerating pace of technological progress, depends on its ability
to utilize the intellectual capital of the Poles. Index of the intellectual capital of Poland in respect of individual
generations places Poland among 16 European countries surveyed:
Intellectual capital consists of the following components:
13th as regards young children and pupils;
Human capital: the total potential of all Polish people embodied in their education, 13th as regards students;
life experience, attitudes and skills, which can be used towards increasing the present 14th as regards adults;
and future well-being of Polish people. 16th as regards senior citizens.

Structural capital: the total potential of tangible infrastructure elements of the national This indicates that the distance separating Poland from
system of education and innovation, i.e. scientific and educational institutions, research developed European countries in terms of intellectual
centres, IT infrastructure, and intellectual property. capital is still considerable. Until recently, the relatively
low level of intellectual capital did not hinder economic
Social capital: the overall potential of the Polish society in the form of its social norms development in Poland, since the country's competitiveness
of conduct, trust and involvement, which support cooperation and knowledge sharing, was based on other advantages, such as low labour costs,
and thus, contribute to the improvement of the well-being of Polish people. a relatively big market, or its location in the centre of Europe.
However, maintaining the current pace of development
Relationship capital: the potential related to the external image of Poland, to the level in the upcoming decades will not be possible unless
of its integration with the global economy, and to its attractiveness to foreign 'clients': intellectual capital, which is the foundation of
commercial partners, investors, tourists etc. any knowledge-based economy, is strengthened.

6

Nonetheless, Poland must do its utmost to create the optimal conditions What is of top priority among the numerous challenges facing
for utilizing the capital of knowledge, energy, and entrepreneurship of Polish Poland is further investment in its human capital, which is key
people. It is absolutely crucial for Poland to promptly become a business-friendly to the development of the country.
environment. Otherwise, the human capital, i.e. the best students, workers, scientists and It is essential that pro-family policies encourage people to have children
entrepreneurs, will move abroad to countries offering better conditions to run operations. and ensure equal access to various forms of pre-school education, that
A simplified legal system, competitive and open markets, a transparent tax system, the quality of teaching in
and mechanisms stimulating creative cooperation of science, business and culture, may schools be increased, and that Polish institutions of higher education
turn Poland into an ideal location for innovative enterprises generating considerable added produce graduates whose qualifications are more relevant to the needs
value. of the labour market. Finally, the ageing society brings new challenges,
but also new opportunities related to the intellectual capital embodied
in the senior generation.

7
More complex Increasing Focusing the system Activating Ensuring synergy Increasing Regular
and efficient the quality of education senior citizens of science, business the quality measurement of
family policy of education on the needs and culture. of legal operations, intellectual
of the labour Creating vacancies procedures capital indicators
market with high and infrastructure
added value for business

Enabling the utilization of human capital
Ensuring high quality of human capital as a source of the country's competitive advantage,
growth and well-being

Building social capital of Poles: increasing trust in interpersonal relations and in citizen-state relations,
activating social activity.

Initiatives related to activating and developing the potential embodied in Polish people should be joined with the use of social capital.The state can stimulate the process
of increasing social capital by improving the credibility of its institutions and by promoting appropriate norms of conduct in mutual relations.

7 The Report on Intellectual Capital of Poland

The success of developing the intellectual capital of Poland will require a great deal Nevertheless, such a negative scenario does not have to come true.
of effort aimed at changing the traditional attitude to the implementation of key reforms. There is yet another possible scenario, in which Poland becomes
one of the most dynamic economies in the EU. This scenario
The above-mentioned changes should manifest in: predicts that thanks to an extensive network of modern nurseries
and kindergartens Polish children receive quality education from
greater use of teamwork performed beyond government departments and coordinated by the very beginning of their educational path, and Polish families are
the Prime Minister; able to afford having more children and perfectly manage
to reconcile their family life and professional careers. Professional
wider scope of consultations, with the participation of representatives of the media, activity of women and senior citizens is the highest in Europe, which
NGOs, and parliamentary opposition; results in growing tax revenues to the treasury and,
consequently, in increased public investments in infrastructure and
engaging highly qualified and well prepared project managers to be operationally intellectual capital. There is no room for boredom, local
responsible for the implementation of reform projects communities are vibrant with life, nobody is left
stranded. Several Polish universities make their way to the top
What is also essential is a shift from short-term to long term government 100 universities in the world, and they become the first choice
policies, which should be accompanied by due regard to improving the quality universities for students from all over the world. Many of them
of political debate and focusing it on issues of genuine importance to the country take up their permanent residence in Poland, attracted by well-paid
jobs for highly qualified and well educated professionals.
The experience of other countries teaches us that even twenty years of relatively Polish economy stimulates numerous innovations which are
dynamic economic growth is insufficient to bridge the gap separating a country afterwards implemented in other countries on all continents.
from the developed world. Unless the right decisions are taken at this moment, The choice of the scenario belongs to Polish people. The optimistic
the pace of Poland's development will decelerate, and the distance to more one will become realistic provided that challenging reforms in such
developed countries will stop shortening. areas as social transfers, taxes, economic regulations, or public sector
Given the intention to initiate a debate on the intellectual capital of Poland, this report has operations, including health service, education and science, are
been made available online, with the possibility to add remarks and comments related to its introduced successively without delay. One should be prepared for
individual parts. resistance on the part of strong groups of interest, and should be
You are welcome to take this opportunity at http://www.innowacyjnosc.gpw.pl/kip aware that the results of the reforms will be visible not sooner than
in 5-15 years.
If the Polish lack courage, determination and readiness to work in the interest of Poland
regardless of political divisions, history books of the third decade of the 21st century will cite
Nevertheless, such reforms are indispensable if Poland's success is
the example of Poland as a warning of possible consequences of failure to invest in
to become more than just wishful thinking.
the intellectual capital of a country. Poland may become one of the poorest countries of
the European Union, which allows the most talented individuals to emigrate and the most
prosperous businesses to move to countries with lower taxes.

8

Poland failed to develop as The rate of the long-term economic growth in Poland
does not exceed 4.3%, which is by far less than in other
dynamically as it should have countries in the region. Moreover, it is not certain

in the past decade whether this pace will be maintained in the nearest
years.

Poland has advanced towards Europe less
significantly than other countries in the region
GDP per capita compared to the EU25 average in 2007

A proverb says that failure is an inherent part of each success.
Undoubtedly, a lot has changed for better in Poland for the last
90 Slovenia
Czech Republic 20 years: the society is more prosperous, people are better
80 educated and more open-minded. What the Poles cannot afford
70
Estonia at the moment is to rest on laurels. Even a draft comparison of
Slovakia
Latvia Lithuania Hungary the pace of economic development in Poland and other countries
60
from the former communist block demonstrates that Poland is
50 failing to make the best use of its potential, and is not developing
Romania Poland as quickly as other countries in the region, e.g. Slovakia, Estonia,
40
or Lithuania.
30

20
20 30 40 50 60 70 80 90 100

The length of the arrow illustrates by how much the distance separating
each of the countries from the EU average has been shortened.
GDP per capita as compared to the EU25 average for the year 2007.


Poland is not doomed to success
The experience of other countries teaches us that even twenty years of relatively dynamic Poland is currently facing similar dilemmas. It is compelled
economic growth is insufficient to bridge the gap separating a country from the developed to launch subsequent challenging reforms in such areas as
world. Unless the right decisions are taken at this moment, the pace of Poland's development social transfers, taxes, business regulations, and the overall
will decelerate, and the distance to more developed countries will stop shortening. performance of the public sector including health service,
education, and science.
Greece, Portugal and Italy are examples of countries which, after two decades of rapid growth,
experienced a decrease in the pace of development, and, as a result, have not yet reached One should be prepared for resistance on the part of strong
complete convergence with richer EU countries in terms of well-being. groups of interest, and should be aware that the results of
the reforms will be visible not sooner than in 5-15 years.
The countries that have achieved a spectacular economic success, such as Ireland, South Korea,
or Taiwan, have also managed to maintain their growth rate for 30 to 40 years at the minimum. Nevertheless, such reforms are indispensable if Poland's
success is to become more than just wishful thinking.
A distinctive feature of this group of countries in the overall profile is the exceptional ability
of their governments to employ long-term thinking and to give priority to measures aimed What is also essential is a shift from short-term to long
at achieving strategic objectives over short-term operations. term government policies, which should be accompanied
by due regard to improving the quality of political debate
and focusing it on issues of genuine importance to
the country.

10

Key importance of intellectual
capital to economic development
Both the economic theory and the experience of other countries indicate that the role Interestingly, the first recorded use of the term 'intellectual
of intellectual capital is fundamental to sustainable development of a country. capital' comes from the correspondence between two
Certain countries, comparable in respect of their natural resources, geographical outstanding economists of the 20th century, John Kenneth
position and financial condition, may differ significantly in terms of their successfulness, Galbraith and Micha³ Kalecki from 1969. Galbraith wrote
like Chile and Argentine, or Spain and Italy. in a letter to Prof Kalecki the following words:
“I wonder if you realizm how much those of us in the world
The difference between these countries lies in the ability to develop intellectual capital, around hale owed to the intellectual capital you have provided
which manifests in long-term thinking, readiness to learn, trust in market mechanisms and over these past decades”2.
receptiveness to global competition, but also in efficient government of the country.
The definition of intellectual capital was formulated by
Prof Leif Edvinsson, who often refers to it as 'the ability
to generate future income'.
What does the term 'the intellectual capital of Poland' refer to?
Listen to the statement by Prof Edvinsson recorded
THE INTELLECTUAL CAPITAL OF POLAND is the total of intangible specially for the purposes of this report, in which he
assets of people, enterprises, communities, regions, and institutions, which, properly
defines intellectual capital and explains its significance, at:
utilized, may become the source of the present and future well-being
of Poland.1 http://www.innowacyjnosc.gpw.pl/kip/index.php?m=9

Source: ¹ Literature on the subject does not offer one generally accepted definition of intellectual capital. The one accepted by the authors of this report is close to the definitions formulated by Malhotra and Bontis:
Intellectual capital is the 'hidden assets' of a state/a nation which are the basis of its economic potential growth, its well-being, and its position in the world (Malhotra, 2000).
Intellectual capital comprises the 'hidden properties' of people, enterprises, communities, regions, and institutions which are the source of the present and future well-being (Bontis, 2004).
² A. Serenko, N.Bontis (eds.), “Meta-Review of Knowledge Management and Intellectual Capital Literature …” (MacMaster University, 2004).


Poland does not exist in a vacuum
Poland is not a country that functions in a vacuum. A complex network of economic, political, Therefore, it is important to have a closer look
social and cultural relations makes us a part of the world's social and economic ecosystem. at the key challenges in a worldwide perspective
and their implications for the development strategy
Important events and global trends have and will have an impact on the pace of the country's of Poland as the economy based on intellectual
development, and for this reason Poland must observe them and consider their implications capital.
for Poland.
The most important of them are as follows:
The 1998 crisis in Russia, the attacks of 11th September 2001, the epidemic of SARS,
or the most recent crisis in the US mortgage market are examples of events that ageing population of European countries and
influenced Poland, although they took place in distant countries. the increasing flow of immigrants from Africa
and Asia;

demographic regression in Poland;

rising costs and deteriorating accessibility
of traditional sources of energy;

increasing role of China and India in
the global economy;

knowledge becoming outdated, and the increasing
pace of technological progress.

12

Ageing Europe, and the flow Percentage of Population Aged 65+

of immigrants from Asia and Africa Year
Worldwide
1950
5,2
2005
8,1
2050
16,2
Africa 3,3 3,4 6,9
East Asia 4,4 8,8 24,8
Over the next 20-30 years every city in Europe, i.e. in Poland as well, may expect an increase
South and Central Asia 3,7 4,7 13,5
in the number of immigrants. South East Asia 3,8 5,4 17,6
Eastern Europe 6,5 14,3 26,6
Poland 5,2 13,3 31,2
Western Europe 10,2 17,2 27,7
Latin America 3,5 6,3 18,5
South America 3,4 6,4 18,5
Source: The cover of the World Bank's North America 8,2 12,3 21,5
report on migrations
Average Age of the Population
This is how a pedestrian crossing
in a Polish city in the year 2030 Year 1950 2005 2050
may look like. Worldwide 23,9 28,0 38,1
Africa 19,1 19,0 28,0
East Asia 23,5 33,4 45,9
South and Central Asia 21,2 23,2 37,2
South East Asia 20,6 26,0 40,2
Poland needs immigrants due to a dramatic decrease in population, quickly ageing Eastern Europe 26,4 37,5 48,1
society and workforce shortages in certain professions. Poland 25,8 36,8 52,4
If immigrants work, pay taxes, and become part of the Polish society, the Polish Western Europe 34,6 40,5 46,7
economy will only profit from that. However, if a proper immigration and integration Latin America 20,0 26,0 40,1
policy is not implemented, Poland will face the risk of emergence of ghettos for South America 20,4 26,5 40,0
immigrants from poorer countries, as well as of an increase in unemployment rate North America 29,8 36,3 41,5
and social welfare expenditures.

Source: UN, “World Population Prospects: The 2008 Revision” [http://esa.un.org/unpp/index.asp?panel=2]


Poland is in danger of secondary If the unfavourable demographic processes continue, Poland
will face the risk of public financing system collapse and inability
demographic regression to provide welfare benefits for the senior generation. The 'social
welfare states' are threatened with bankruptcy.
The secondary demographic regression crisis may be avoided
Secondary demographic regression entails exposure to the collapse
by way of stimulating the activity of senior citizens in the labour
of economic growth and of the public financing system in Poland
market and by extending the period of professional activity.
in a long-term perspective.
Change in the demographic structure of the population of Poland
as broken down into age group categories, in the years 2007-2030
If the current retirement age is maintained, the Polish population of productive 100%
90%
age will have decreased by over 800 thousand by the year 2015.
80%
Change in the population of Poland in the years 2007-2030 70%
65+
60%
45-59/64
65+ 50%
18-44
40%
0-17
30%

45-59/64 20%
10%
0%
2007 2015 2030
2030
18-44 2007 As early as 2015 The population 2030 The demographic
2015
today the population of children keeps depression generations
of children is by half decreasing. reach their adulthood.
smaller than that The percentage of The senior population
0-17 of their parents. retired population doubles in number.
is rising.

The challenge to be faced by the Polish state is a shift from
Total
the passive policy of social transfers on behalf of senior citizens,
-1.500.000 -1.000.000 -500.000 0 500.000 1.000.000 through an active policy taking advantage of the increasing
demand of the senior generation, to introducing new products
Source: Population forecast for the years 2003-2030 based on the results of the 2002 Polish Census, Central Statistical Office (GUS).
and services and utilizing the intellectual capital of senior
citizens.

14

Poland may have to face dramatic dilemmas, as, in the short run, it has
no alternative to coal-based energy, whose resources in Poland are
Lack of a strategic attitude towards substantial, and as 'clean coal' technologies are not yet accessible in
Poland on a commercial basis.
investing in the Polish power
A low level of intellectual capital manifests itself also in
industry, combined with the inability to develop strategic plans, which is likely to cause

reductions of CO2 emissions, inevitable energy deficiencies in Poland within a few years'
time. Poland must overcome this weakness, otherwise it will

has caused a significant be constantly 'surprised' by events which might be foreseen
if the strategic planning mechanisms were in place.

barrier to our growth It pays to learn from the experience of others. For example,
in the Parliament of Finland a new committee was established
Due to low prices of energy, investments in the Polish power industry has been marginal. a few years ago. Its name is the Committee for a Constructive
This may result in temporary problems with ensuring the continuity of energy supplies Tomorrow, and its aim is to facilitate reflection and to conduct
over the nearest 2 to 3 years, while the energy reserve in 2008 was de facto lower debates on the strategic challenges facing Finland, such as
throughout the year than what is required under the relevant energy security regulations. the growing importance of Russia, the development
Within 3 to 6 years' time Poland will be facing a permanent energy deficiency, which of nanotechnology, or the ageing of the society.
will be impossible to compensate with the country's limited import capacity.
Listen to Paula Tiihonen, a Finnish MP, discussing the tasks
of the Committee for a Constructive Tomorrow here, at:
Over 90% of the energy in Poland is generated from coal, which means that the country's
http://www.innowacyjnosc.gpw.pl/kip/index.php?m=15
CO2 emission per capita is higher than the EU average, although it uses as little as half
of the EU energy consumption average.

Source: "Najwa¿niejsze zagadnienia dotycz¹ce funkcjonowania sektora elektroenergetycznego w Polsce”, a report by presidents of the power industry companies (February 2008).


% shares of China/India, OECD and

Growing Importance of China the rest of the world in global population and GDP

Share of world population
and India in the Global Economy 1820

1870
Over the nearest few decades Chindia will significantly increase its share in the global GDP.
It may once more account for half of the global production of goods and services, as at 1950
the beginning of the 19th century. China is becoming a global competitor not only in
the production of footwear, garments, computers, household appliances, and radio 1973
and television equipment. It is also strengthening its position in sectors requiring advanced
knowledge and innovative approach. 2001

0 10 20 30 40 50 60 70
China + India
The student population in China has exceeded 30 million, which is more than in the European Rest of World
Share of world GDP
Union and the United States put together. OECD
1820
China is the world's biggest exporter of computers and telecommunication equipment, while
India is the world's capital of software outsourcing, earning over USD 12 billion yearly from 1870

software production1.
1950

China and India are quickly developing their intellectual capital, viewing 1973

it as their chance for an evolutionary leap. Being aware of these trends,
2001
does Poland develop its relational capital with these two countries properly?
0 10 20 30 40 50 60 70

1
Source: European Commission, “Globalization: Trends, Issues, and Macro Implications for the EU”, Economic Papers, (EC, 2006).

16

Knowledge becomes outdated The number of patent applications submitted to the World Intellectual
Property Organization increases significantly each year
180000

instantly, and technological 160000
Number of patent

progress has reached a staggering 140000

120000
applications

pace 100000

80000

60000
A sharp increase in the number of patent applications indicates an accelerated pace
of technological progress in the 21st century. 40000

20000

Asian countries are fast in developing their knowledge-based economies; during four years 0
the number of patent applications tripled in China, and increased by 140% in South Korea. 1978 1982 1986 1990 1994 1998 2002 2006

Number of patent Growth dynamics of
applications submitted number of patents
to the WIPO in 2007 (2003-2007, %)
There is a huge gap separating Eastern and Central Europe from the top
USA 52280 27,4
ten leaders in the world's innovativeness, and Poland has been regressing Japan 27731 59,2
in recent years. Germany 18134 23,7
South Korea 7061 139,4
Does the Polish system of education teach the right skills, such as creativity, France 6370 23,2
analytical thinking or teamwork, which are indispensable in the innovation Great Britain 5553 10,5
China 5456 321,3
process?
Netherlands 4186 -6,5
Switzerland 3674 28,4
Sweden 3533 35,3
Hungary 160 40,4
Czech Republic 123 48,2
Poland 102 -33,8


Poland abounds in statistics presenting
the past, or, what has been
left behind.

18

How to show what is still
ahead of us?
How to present our potential
for growth?


The Report on Intellectual With this report Poland has joined a group of pioneer countries
in measuring and describing national intellectual capital.
Capital of Poland is intended
to show growth potential Before Poland, intellectual capital reports were issued
among others in such countries as:
in Poland as compared to Sweden (1999);

other EU countries Israel (2000);
Taiwan (2003);
Arabian Peninsula countries (on the UN initiative, 2004).

The team responsible for compiling this report comprised
over 21 members including Andrzej Wodecki, Tomasz Rudolf,
Katarzyna Królak-Wyszyñska, Szczepan Figiel,
Ma³gorzata D¹browska, Tomasz Kardacz, Tomasz Schimanek,
Hanna Nowakowska, Anna Blumsztajn, Teresa Ogrodziñska,
Miko³aj Herbst, Alek Tarkowski, Krzysztof Rybiñski,
Eliza Durka, Pawe³ Kaczmarczyk, Mateusz Walewski,
Maciej Duszczyk, Maciej Bukowski, Dorota Poznañska,
Jakub Wojnarowski.

Additionally, the report was enhanced by observations
and suggestions of several dozen other people, representing
institutions of public administration, science, education,
health service, NGOs, and business.

20

In the course of creating the present report, a series of interactive workshops with over a
hundred participants were conducted. The workshops were intended to engage representatives
of government administration and NGOs in the debate on the key challenges related to
the intellectual capital of Poland.

A prototype of the report was presented at the fourth annual conference of the New Club
of Paris devoted to intellectual capital, held in Paris in May 2008.
That offered a chance to gather opinions on the Polish concept of the report from
the world's leading authorities on intellectual capital.

Listen to Prof Edvinsson comments at:


People with well developed human and relational capital tend to hold
higher positions and earn more money than those who have low level
of these kinds of capital. The following four components: human capital,
What are the components relational capital, organizational capital (also termed 'structural'), and
social capital constitute intellectual capital.
of intellectual capital? It can be easily noticed that intellectual capital is not tantamount to
intelligence as it is a much broader notion.

What is intellectual capital? Can it be measured on the level of a country, region, city, or HUMAN CAPITAL:
the total potential of all Polish people embodied in their
company? Why is the growth of intellectual capital so essential for the future of Poland? education, life experience, attitudes and skills, which can be used
Every one of us knows the right answers to these questions. Moreover, when making life The four towards increasing the present and future well-being of Polish
people.
decisions, we are usually driven by the necessity of generating and developing intellectual IC
STRUCTURAL CAPITAL:
capital or by the opportunities of using the already existing one. For example, when planning components: the total potential of tangible infrastructure elements of
the national system of education and innovation, i.e. scientific
professional careers for our children, we often try to foresee what occupation will be best and educational institutions, research centres, IT infrastructure,
for them, and what skills they will have to develop to succeed in the labour market. Our INTELLECTUAL and intellectual property.

decision is influenced by tradition, e.g. a child born in a family of lawyers, physicians, or CAPITAL
SOCIAL CAPITAL:
scientists is more likely to follow the career path of his/her parents since they already know the overall potential of the Polish society in the form of its social
norms of conduct, trust and involvement, which support
the environment and may assist the child in his/her future career. In other words, the parents cooperation and knowledge sharing, and thus, contribute to
the improvement of the well-being of Polish people.
possess a firm relational capital (commonly and not quite adequately referred to as 'contacts'
or 'friends in high places'), which the child may benefit from. When we found a business, we RELATIONAL CAPITAL:
the potential related to the external image of Poland, to the level
often ask ourselves whether we will manage, whether we are competent enough to remain of its integration with the global economy, and to its
in the market and to succeed afterwards. In other words, we analyze our human capital. If it attractiveness to foreign 'clients': commercial partners,
investors, tourists etc.
is too low, we sometimes enrol in extra courses to raise that capital. If, on the other hand,
we establish a joint venture, we usually trust our partners, which means that we have high
social capital in our environment. Listen to Prof Salim Al.-Hastani, University of Manchester, commenting
on the crucial role of intellectual capital, and, in particular, on moral
standards as a component of intellectual capital, at:

22

Cooperation with the Institute In the literature neither the notion nor the concept of
intellectual capital of a region have been formulated
of Statistics and Demography in an explicit and comprehensive manner. Consequently,
no common measurement method has been established.
of the Warsaw School of Economics Nonetheless, two procedures of informing about regional
national intellectual capital have been developed until now.
resulted in developing a The first one, chronologically earlier, is based on assessing

measurement model which the position of a given country or city in comparison
with others by applying various indicators related to

enables comparing levels of the components of intellectual capital. The other one,
gaining increasingly more popularity, involves methods

the intellectual capital of Poland for creating synthetic indicators of intellectual capital
or of its components or elements.

and other EU Member States Only the latter approach may be referred to as intellectual
capital measurement procedure. In the case of the first one,
such terms as 'reporting' or 'describing' should rather be
used. Currently, professional literature in the field reflects
a debate focused on selecting a set of most adequate
indicators for assessing intellectual capital of a region.
The controversies regard both the concept itself and the
accessibility of required statistical data. Additionally, the
discussion covers the issue of establishing a measurement
model which would enable quantification of intellectual
capital being in fact a conventional notion.


The search for the best formula of the measurement model of intellectual capital was based
on the following assumptions:

It is possible to express intellectual capital of a region in numerical terms
as one number; INTELLECTUAL
CAPITAL
Individual indicators suggested in the professional literature as describing
intellectual capital do not have equal role in diagnosing intellectual
capital, as some of them, at a given time and in a certain region, -0,015 0,904 0,919 0,83
tend to reveal the level of the region's capital in greater extent than others;

Consequently, it is possible to rank intellectual capital indicators, and to select Intellectual capital:
Intellectual capital: Intellectual capital: Intellectual capital:
preschool and school
students adults senior population
those which are of key importance to measuring the value of intellectual children
capital of a region at a given time; 0,086 0,607 0,583
0,201
The intellectual capital model applied in this report was estimated for the region 0,507
0,124
of 16 EU countries, while the individual member countries were considered as
observation units, and their intellectual capital was assessed in respect of its
Diagram 1: Path diagram of the intellectual capital model:
elements and components. components of intellectual capital, and
their interrelationships

24

ksfims8 ksfims9 ksfims6 ksfims1

klpe1 0,474 0,512 0,897 -0,036 -0,898
The underlying assumption was that this report klpe10 0,876 ksn1 0,926
0,844 0,755 ksictb3
would present the measurement of intellectual capital klpe12 -0,735 ksn2
-0,487 SCIENCE COMPANIES
klpe13 0,803 klste 3a 0,923 ksictg2
-0,287
in a generational perspective, which klpe2 0,886 kklste 5a 0,038 ksictg3
EDUCATION 0,913 ksictg4
klpe3 0,935
would enable assessment of the developmental ICT 0,782 ksicti1
klpe4 0,868 -0,238 -0,943
potential of Poland related to each individual klpe5 0,751
0,796
0,947 ksictinf1

klpe8 -0,477 ksrdi1 -0,005 ksictinf2
generation. klpe9 -0,742
HUMAN CAPITAL
ksed1
0,746 STRUCTURAL CAPITAL 0,943 ksicts1
(ADULTS) 0,357 (ADULTS) 0,161 0,949 ksicts2
The conceptual model of intellectual capital of individual ksed4
0,116
generational groups was designed in compliance with klpj1 0,808 0,939 0,549
ENVIRONMENT -0,461 kssef1
klpj10 -0,194 0,681 0,191 kssem1
the general framework of the intellectual capital concept QUALITY
klpe2 -0,214 0,06 kssodn1
established in the professional literature [Edvinsson, Malone, -0,81
OF LIFE INTELLECTUAL INTELLECTUAL 0,926 ksspo3
klpj3
klpj4 0,737 CAPITAL PROPERTY
2001; Andriessen, Stam, 2004; Bontis, 2004; Lerro, Carlucci, (ADULTS)
ATTITUDES 0,878 kswp1
Schiuma, 2005; Rószkiwicz, Wêziak, Wodecki, 2007]. BUSINESS 0,851 kswp2

Therefore, certain subcategories of intellectual capital were COOPERATION 0,473 kswp3
klpp1 0,276 0,047 0,876
distinguished, and afterwards separate measurement models 0,743 krge1
0,021
klpp2 0,908
-0,220 krge3
were developed for each of them, which were then used as klpp3 -0,737 SOCIAL CAPITAL SOCIAL CAPITAL -0,210 krge4
klpp4 -0,563 (ADULTS) (ADULTS)
variables enabling construction of the measurement model 0,745 krgi1
klpp5 -0,411
-0,241 -0,012 -0,961 0,574 krgmi1
of intellectual capital of a given generation. klpp5a 0,29 0,055 0,970 0,938
0,585 krgmi2
kspn8 kspn2
klpp6 0,526
Measuring and describing national intellectual capital ENGAGEMENT krtu2 klste_6a klste_7a
in a generational perspective is an innovative approach.
In other countries' reports which have been produced -0,04 -0,109 0,949 0,502

so far the age groups not participating in the labour kspn8 kspn8 kspn8 kspn8
market have been omitted. The Polish approach, recognizing
the importance of inter-generational harmony and Path diagram of the intellectual capital model of adults
solidarity, was acknowledged by international experts:


The estimated values of intellectual Each such index is generated on the basis of statistical
analysis of several to several dozen indicators.
capital (IC) of individual generational
The measurement model used in the Report on Intellectual
groups in selected countries have Capital of Poland includes 117 indicators.

been standardized in the range A full list of indicators, together with the relevant data
for the 16 Member States included in this comparison,
of <0; 1>, and shown as percentages can be viewed on the website:
http://www.innowacyjnosc.gpw.pl/kip/index.php?a=
wskazniki

Additional information on the applied methodology is
Applying this approach enabled creating generation-based indexes also available on the above website.
or ratings of intellectual capital and of its individual components, including:
The report was originally intended to present comparative
data for all EU Member States. However, this occurred
human capital; unfeasible due to data inaccessibility. For countries not
relational capital; present in the IC ratings in the report several
indicators included in the model were unavailable.
social capital;

structural capital.

26

Diagnosis


Children

What are
the living standards
of Polish children?

Are they provided with
proper conditions for
development?

What can Poland
learn from
others?

Children

IC Index for preschool
and school children
The intellectual capital index for preschool and school children places
Germany
Poland 13th among the 16 EU countries included in the comparison.
Hungary

This means that Poland lags behind most of the European countries in respect of Austria

the intellectual capital of the part of society which determines the country's future Ireland

capacity for development and competitiveness. France
Belgium
What considerably accounts for this disadvantageous position are, among others, Czech Republic
the following statistical factors: Spain
low participation of 4-year-olds in education; Sweden
relatively high under-5 mortality rate; Italy
low percentage of pupils declaring their interest in future jobs connected with science. Netherlands

Great Britain

By contrast, the following indicators have a positive impact Poland

on the above-mentioned position of Poland: Finland
Portugal
relatively low percentage of children aged 11, 13, and 15 who live in one-parent families;
Greece
comparatively large average number of days per week in which school children declare
to spend an hour or more on physical activity; 0 20 40 60 80 100

very high average proportion of time spent on learning to read, or doing mathematics, Intellectual capital indexes have been based on the analysis of the key
as compared with the EU average; IC indicators attributed to a given generation. The full list of all 117
good results of Polish pupils in respect of reading literacy (PISA).* indicators used for the purposes of Poland's IC model is available at:
www.innowacyjnosc.gpw.pl/kip/

*PISA is the abbreviation for the Programme for International Student Assessment, which is an OECD-coordinated international research.

30

Children

Children have always
been considered as particularly
important in Poland
Poland's generation of children was affected by the income stratification in the days
of the economic transformation, and by the resulting division of the country into
Poland A and Poland B*.

Relative poverty of numerous rural families, systemic weakness of the health service,
as well as early childhood education standards which are inadequate for the needs
of contemporary society, all make Polish children disadvantaged at the beginning
of their life with comparison to their peers from other European countries.

Children's attainment in primary school, presented in the PISA reports, place Poland
at the level of the European average in respect of pupils' mathematical and scientific
literacy, and in second position in Europe with regard to their reading literacy.

Source: **Poland A – western, central and southern parts of the country, which are more prosperous, Poland B – eastern parts of the country, which are economically belated and underdeveloped.


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