Why is it worth considering the location of electronics manufacturing in Poland?
Over the past 30 years, global electronics manufacturing has become heavily dependent on the Chinese supply chain. The COVID-19 pandemic, along with the global economic turmoil and the polarization of China and America into two opposing global geopolitical and financial centers, has severely affected global supply chains, especially in the electronics industry. These realities give Poland a unique opportunity to become a key base of electronics manufacturing and become an essential element of the new global supply chain system of the 21st century. What can companies that decide to consider the location of electronics manufacturing in Poland gain? Let’s find out.
The health crisis has shown the world’s dependence on some countries for masks or medicines. The same applies to widely understood electronics. So in times of crisis, more and more companies began to pay attention to suppliers from Eastern Europe, including Poland. The strategic location of Poland means that it has qualified staff and experienced employees, the latest technology, and relatively low prices and labor costs.
In other words, the country on the Vistula River has become a frequently chosen destination for European companies in contract electronics production for at least four reasons.
#1: The labor factor
Its effect is related to the demographic potential of the country (region) and depends on the number of labor resources, their qualifications, gender, and age structure. Economic solid foundations and qualified staff are the strengths of production companies deciding to invest in Poland. However, when discussing the issue of labor, one cannot fail to mention the still low employment costs.
In terms of wages, there is still a gap between Poland and the EU average. Eurostat data shows that the average Pole earns EUR 1,150.67 per month, i.e., approximately PLN 5163.79 gross. That is one-third of what the average European earns. The Polish average wage is 26 percent German wage and 38 percent French salary. Thus, the Polish earn five times less than the EU record-holders, i.e., the Luxembourgers. Even with country-to-country price differentials eliminated, the income gap is very pronounced. It is worth noting that the presented data include all expenses incurred by the employer in connection with employment, including the costs of recruitment and even if workwear.
Given the above information, there is no doubt that the order electronics manufacturing in Poland can be a source of significant savings for companies from the electronics industry.
#2: The logistics and transportation factor
Transportation is one of the most significant economic areas of the Member States of the European Union economy. However, its efficient functioning largely depends on management efficiency and the scale of possible benefits from the single European market. Poland carries out many foreign types of transport after joining the European Union and eliminating border barriers and thanks to the neighborhood with Eastern Europe and strategic location.
The transport industry in Poland is currently in a rapid development trend, which contrasts with the general problems facing logistics and the whole supply chain market in Western European countries regarding filling vacancies with qualified employees and increasing wage pressure. In addition, the appropriate location of Poland at a similar distance from the countries of Eastern and Western Europe and the Scandinavian countries allows logistics companies from the country on the Vistula to ensure quick implementation and lower transport costs compared to, for example, Asian companies.
#3: The legal factor
The difference between the democratic system dominating Europe and the authoritarianism and legal systems of both models is one of the most critical factors influencing economic relations with China. As a result, the field for cooperation and monetary exchange is not as large as in the case of Europe. That is also reflected in the field of electronics manufacturing. The European Union guarantees that the internal legal systems of the 27 Member States will comply with EU legislation. It is no different in the case of Poland, where legal regulations are constantly adapted not only to market requirements but also to European Union directives. This fact significantly simplifies all formalities related to cooperation between business partners in the electronics industry.
Moreover, Poland falls under the jurisdiction of the judicial authorities of the EU. Entrepreneurs can, therefore, calmly and, most of all, trust in ordering contract manufacturing of electronics to Polish companies. It is much easier to assert your rights and claims from another member state than from a gigantic partner located in Asia with entirely different laws and regulations.
#4: The cultural factor
When considering the profitability of electronics manufacturing in Poland, you cannot ignore the cultural aspect. In 2020, China was the EU’s leading trading partner. So there is no doubt that economic and trade relations must underpin EU-China collaboration. However, they cannot be the only factor determining cooperation. Business partnerships with companies located in Asia determine a danger that the two sides will not agree on the fundamental issue of values and norms on which the current international order is based, which may significantly hinder cooperation.
These types of barriers, cultural and philosophical differences have a significant impact on business partnerships. Companies that outsource the contract manufacturing of electronics to contractors outside of Europe must make every effort to find a “common language” in business relationships, which is a difficult task in the case of two separate cultures. Therefore, Poland’s belonging to the European business culture is one of the most critical assets. Shared experiences, environment, and transparent communication enable both parties to benefit from cooperation.
Poland’s potential
Companies that are already locating electronics manufacturing in Poland pay attention to the transparency and reliability of Polish business partners. Today, more and more companies in this country have developed modern production lines, thanks to which they can provide advanced electronics production services. Furthermore, polish workers’ care for quality and reliability in order fulfillment is widely appreciated. Poland’s location between Europe and Asia only further emphasizes that it is the right direction for European companies in contract manufacturing of electronics. Electronics production has always been a Polish specialty, and everything indicates that this situation will not change in the next few years. Here you can find more information on https://asselems.com/.
