Entrepreneurship and Innovativeness of Small and Medium-Sized Enterprises (SMEs) in Poland

Democratic upheaval and transformation of the economic system in Poland brought about a rapid growth of interest in self-employment and business activity. At the beginning of the 1990s the net number of new private enterprises increased by over two million. They made a significant contribution to overcoming economic stagnation, transformation of the economic structure and to Poland attaining an economic growth over 5 per cent rate. It should be noted here that the Polish economy, unlike economies of other CEECs, was characterised by a broad margin of freedom left for private business activity throughout the entire period of real socialism. Over 80 per cent of arable lands, a large part of the retail trade, the building sector and services were privately owned. Of course, business activity was run by private entities on a relatively small scale due to legal-administrative barriers and it could be carried only in fields that were not reserved for the public sector. Doctrinal barriers to market entries were removed gradually in the 1980s. 1 As a result of this, the number of private firms rose by almost 200 000 (from 375 000 to 572 000), while the size of the work force doubled (reaching 1 290 000 in 1988). Measures taken in that period provided an impetus for building a market economy started by the “Balcerowicz Programme”. Removal of remaining legal and administrative barriers to business start-ups in 1989 released a true “explosion of entrepreneurship”. Transformation of the economic system gave the proverbial “green light” for small and medium-sized private enterprises which had been handicapped in the previous period.