The project co-nanced by the European Regional Development Fund within the Regional Operational Programme of Warmisko-Mazurskie Voivodeship

for years 2007-2013

fot. Tomasz Raczyski

economy

The Prospects for the Development of the Key Sectors in the Warmisko-Mazurskie Voivodeship Research Report
www.invest.warmia.mazury.pl
1

Prepared by: mgr Urszula Tomczyk dr hab. Magorzata Juchniewicz, prof. UWM mgr Tadeusz Toczyski mgr Justyna Byczkowska-lzak Project Manager: dr Dariusz led The project co-financed by the European Regional Development Fund within the Regional Operational Programme of Warmisko-Mazurskie Voivodeship for years 2007-2013

Contents:
INTRODUCTION..................................................................................................5 1.RESEARCH METHODOLOGY..........................................................................6 2. SOCIO-ECONOMIC FACTORS DETERMINING THE DEVELOPMENT OF THE VOIVODESHIP..................................................................................8 2.1. Natural Conditions.................................................................................................. 8 2.2. Demographic Factors. ............................................................................................ 9 2.3. Social Aspects of the Development..................................................................10 2.4. Economic Factors Determining the Economic Situation..............................13 2.5. Transport Infrastructure.......................................................................................18 3. KEY AND HIGH-OPPORTUNITY SECTORS....................................................21 3.1. Agriculture Sector : Plant Cultivation and Animal Breeding.......................22 3.2. Food Products Manufacturing Sector...............................................................24 3.3. Wood and Furniture Sector.................................................................................25 3.4. Rubber Products Manufacturing Sector...........................................................26 3.5. Machinery and Equipment Manufacturing Sector.........................................28 3.6. Construction Sector..............................................................................................29 3.7. Trade and Motor Vehicles Repair Sector..........................................................30 3.8. Tourism Sector.......................................................................................................31 4. HIGH-OPPORTUNITY SECTORS...................................................................33 4.1. Fishing Sector. .......................................................................................................33 4.2. Energy and Water Sector.....................................................................................33 4.3. ICT Services Sector. ..............................................................................................35 4.4. Business Consulting Services Sector................................................................36 4.5. Medical and Social Services for Dependants Sector. ...................................36 SUMMARY........................................................................................................38

Introduction

he economic growth of a voivodeship, including the sectors most favourable to business, not only depends on internal factors, but also on the global conditions in which markets function. The process of European integration, the extensive opening of economic markets and progression of globalisation has made Poland increasingly dependent on the economic situation abroad. The worlds financial market crisis is significant to the economy of the state, and hence it should also be considered from the perspective of the Warmisko-Mazurskie voivodeship. The perspectives for development of key sectors in Warmia and Mazury can only be tackled by conducting an analysis of the outside situation. Only then is it possible to identify and take action to maximise the use of existing resources, and as a result, improve competitiveness and growth of the voivodeship. The positive effects of actions connected with the growth of the voivodeship should not only be reflected by its commercial sphere, but also by its social aspects. Otherwise, there is no real growth, only an increase in the value of specific economic markers. Therefore, it is important to invest in key sectors in a manner which will provide tangible effects for the voivodeships inhabitants, i.e. by providing jobs and proper quality of infrastructure both social (including health care, social services, education, leisure and culture) and technical. It must be noted on the other hand, that the existing economic and social resources, as well as the quality and commitment of human resources determine the scope and pace of investment performance, which translates into growth of the region. The following study is a summary of a report (full version of the report is available at www.invest.warmia. mazury.pl) from a research conducted by Instytut Bada i Analiz Grupa OSB (eng. Research and Analyses Institute OSB Group) for the Marshalls Office of the Warmisko-Mazurskie Voivodeship. The research of development prospects of key and high-opportunity sectors was conducted within the framework of a project co-financed by the European Regional Development Fund, entitled The comprehensive system of investor services in the Warmia and Mazury - professional impact of economic promotion. The project was aimed at identifying key and high-opportunity sectors within the Warmisko-Mazurskie voivodeships economy. The project was accompanied by a detailed analysis of the conditions of functioning of particular sectors and the factors behind their attractiveness. The research also helped identity the main determining factors and barriers, which could affect the development of the above-mentioned sectors.

1.Research methodology

he research project was based on the fundamental principles of social and economic research methods. The underlying assumption was to conduct the research in a manner which allowed the Ordering Party to meet its objectives.

The underlying assumptions behind the research model of the sector analysis followed basic methods of socioeconomic research, econometrics and the assumptions of classic methods of sector and competition analysis developed by Michael E. Porter. The model served as a measuring tool necessary to identify the key and highopportunity sectors of the economy in the WarmiskoMazurskie voivodeship. The key sectors were also analyzed in terms of their investment attractiveness and areas of development. The main areas of analysis of the key sectors included characteristics of different aspects of their activity, as well as an analysis of their investment attractiveness. The collected data was used to perform a strategic analysis of the sectors and to develop prospects and forecasts for their development. The underlying assumption of the analysis was to relate to Porters 5 competitive forces model: 1. Entry of competitors 2. Threat of substitutes 3. Bargaining power of buyers 4. Bargaining power of suppliers 5. Rivalry among existing competitors The above-mentioned forces define the level of competitiveness in a sector. The forces having the biggest impact on the market situation of a sector define the areas of strategic operation. It should be stressed at this point that a sectors competition is not comprised only of companies providing the same type of goods/services, but also of recipients and purchasers. This is of particular importance from the point of view of sector classification criteria applied in the research. According to Porter and other representatives of economic sciences, the area of a business activity a company wants to compete in does not always define a sector. When defining the notion of a sector, one should take into account the fact that competition in groups of related sectors is also a natural and desired phenomenon1. Performing a structural analysis of sectors, which, during the first stage of the research, were understood to mean areas of activity (Polish Classification of Activities - PCA 2007) helped develop a working definition for the regions key industries. The structural analysis cov-

ered the above-mentioned analysis of the 5 forces of competitiveness. The key sectors were identified using research procedures based on an econometric analysis of public statistics data, desk research analysis of statistical data, program documents and other sources, as well as on the basis of the knowledge of experts in the fields of economy and economics. Subsequently, the material collected during the field research was used to identify the strategic groups, and later to develop their definition and a description of the factors determining their activity in the region. Key sectors are a group of enterprises conducting an economic activity within the same area of the economy, contributing to a significant extent to increasing the quality of socio-economic resources of a region due to at least one of the following factors: high productivity, high result capital, innovativeness (in other words novelties in a sector), quality of human resources or a significant share in the employment structure, importance in the promotion of a region due to advertising endogenous conditions and characteristic products, significant influence on improving the quality of life of the local population. The procedure applied in the process of identification of the high-opportunity sectors was similar to that planned for the purposes of identification of the key sectors. The high-opportunity sectors were selected using a synthetic measuring instrument made up of diagnostic features comprising capital in particular sectors. The calculations are based also on a set of public statistics data and an evaluation provided by experts. A different scheme was applied for the purposes of classifying particular sectors into the high-opportunity group. What is of particular significance in this typology is the prospect for development, whose function of selected characteristics is depicted by a straight-line growth trend (in the period from 2005) and small time fluctuations. Additionally, it is important to note that the anticipated implementation opportunities are rated higher in an expert survey-based research than the present ones. During the research, verification rules were applied by a group of experts who were invited to the research. High-opportunity sectors are a group of companies operating within a common branch of the economy, that are very likely to develop to the anticipated ex-

1 Porter M.E., Strategia konkurencji. Metody analizy sektorw i konkurentw. Polskie Wydawnictwo Ekonomiczne. Warszawa 1996, p. 49.

FIGURE 1. A DIAGRAM SHOWING THE RELATIONSHIPS BETWEEN THE KEY ACTIVITIES OF THE SECTOR ANALYSIS SECTOR ANALYSIS PEST analysis SSI interviews Expert survey

FGI interviews

CATI interviews

IDI interviews

MPSI, HSSI*

SWOT analysis

Expert panels

Identi cation of key and high-opportunity sectors

Analysis of investment attractiveness of key sectors

Prospects and forecast related to the development of key and high-opportunity sectors

Prospects for the Development of Key Sectors... - a RESEARCH REPORT

* MPSI market position synthetic indicator, HSSI high-opportunity sectors synthetic indicator. Source: authors own work.

tent due to at least one of the development potential factors: growth in the value of activity results, technical infrastructure, increasing product/service quality standards, anticipated growth in the demand for a product, rank-and-file initiatives (regarding acquiring development instruments and tools), capabilities of promoting the region, resulting from advertising endogenous conditions and characteristic products. Another objective of the analysis was to develop characteristics of particular sectors and to analyse their investment attractiveness, as well as define the prospects and forecasts for the development of the key sectors.

In order to obtain the most reliable results, a methodological triangulation was planned, which consisted of using a variety of methods, techniques and sources of information in the course of the research. Due to the fact that economic processes and relationships between them are very complex, different research methods and techniques were applied. Individual research procedures cover not only selected aspects of the subject matter, but also irrelevant phenomena, therefore, reactive field research, combined with non-reactive methods, such as investigating the existing sources: public statistics, development strategies, scientific publications and studies (a detailed description of the procedures applied to the identification of the key and high-opportunity sectors has been included in the full version of the Report available at www.invest. warmia.mazury.pl).

2. Socio-economic factors determining the development of the voivodeship

n analysis of the socio-economic situation of the voivodeship identified factors determining the conditions and the areas of development of particular sectors in the region. Additionally, the research helped identify internal and external factors influencing the entrepreneurship structure of the key and high-opportunity sectors in the Warmisko-Mazurskie voivodeships economy. These factors were grouped as follows: 1. Natural conditions and an evaluation of natural resources, 2. demographic factors, 3. social aspects of development, 4. economic factors determining the economic situation, 5. transport infrastructure. The following unit presents only selected aspects discussed in the PEST analysis, the full version of which is included in the final Report from the research available at www.invest.warmia.mazury.pl.

Mazurskie voivodeship, with the capital city located in the centre of the voivodeship and two other large cities Elblg in the west and Ek in the east combined with evenly dispersed district towns and a network of smaller towns, facilitates efficient management of the region and the provision of services to its population3. The abovementioned network appears to be durable and will remain so, according to the socio-economic tendencies and demographic forecasts4. The voivodeship towns are of great importance for the surrounding local structures and in most cases are very attractive from the tourism point of view. However, they require support in terms of infrastructure development, entrepreneurship and revitalization, particularly with regard to former military and industrial areas5. The Warmisko-Mazurskie voivodeship is one of Polands most attractive regions, both in terms of its landscape and tourism. The outstanding features of the regions natural environment include: a diversified land surface and geological structure, abundance of surface waters, large forest complexes, a variety of animals and plants, including species non-existent elsewhere in Europe, as well as numerous protected natural areas, being among the last areas featuring natural biological, landscape and cultural features. Thanks to the exceptional features of its natural environment, the Warmisko-Mazurskie voivodeship has been included in the functional area referred to as The Green Lungs of Poland. Moreover, a large part of the voivodeship has been included in the NATURA 2000 network. Pursuant to the ordinance of the Minister of Environment of 21 July 2004 on the Special Bird Protection Areas Natura 2000 (Journal of Laws of 21 July 2004, item 2313, as amended), the following areas were included in the NATURA 2000 network in 2009: 16 special protection areas (SPA) having a total area of 574, 1 thousand ha and 44 special areas of conservation (SAC) having a total area of 258.2 thousand ha, which accounts for 34.4% of the total area of the Warmisko-Mazurskie voivodeship (compared to 29.8% in Poland). Nearly a half of the province (46.6%) has special natural features and is protected by law (compared to 32.4% in Poland). The Warmisko-Mazurskie voivodeship is one of the most surface water-abundant areas in Poland. The surface water network of the province is comprised of numerous lakes, ponds, rivers, canals and a portion of the Vistula Bay. In 2010, the total underwater land area was more than twice as big as the countrys average, and amounted to

2.1.Natural conditions
The Warmisko-Mazurskie voivodeship is situated in north-eastern Poland. It comprises the historical regions of Warmia, Mazury and Powile. It borders the Masovian voivodeship to the south, the Kuyavian-Pomeranian and Pomeranian voivodeships to the west, the Podlaskie voivodeship to the east, and the District of Kaliningrad of the Russian Federation to the north (marking the external border of Poland and the European Union). The voivodeships location in Central Europe, on the East-West axis, in the Baltic sea region and in the immediate vicinity of the District of Kaliningrad, makes it an important area in the European transportation system 2. The voivodeship has a total area of 24,173 km2, which constitutes 7.7% of the total area of Poland. The administrative division of the voivodeship follows the requirements of the European Union regional statistics, and is as follows: 3 subregions of: Elblg, Ek and Olsztyn; 19 districts of: Bartoszyce, Braniewo, Dziadowo, Elblg, Ek, Giycko, Godap, Iawa Ktrzyn, Lidzbark, Mrgowo, Nidzica, Nowe Miasto Lubawskie, Olecko, Olsztyn, Ostrda, Pisz, Szczytno and Wgorzewo; 2 towns with district status: Elblg and Olsztyn; 116 communes, including: 16 municipal communes, 33 municipal-rural communes and 67 rural communes. The network and the location of the regions towns is of great importance from the point of view of its sustainable development. The settlement network of the Warmisko-

2 Polska rozwj regionw prezentacja regionw wojewdztwo warmisko-mazurskie. Marshalls Office of the Warmisko-Mazurskie Voivodeship. Olsztyn 2008, p. 20. 3 Regional Operational Programme of the Warmisko-Mazurskie Voivodeship for years 2007-2013. Adopted by the Board of the Warmisko-Mazurskie Voivodeship on 14/11/2007.

Olsztyn 2007, p. 32.. 4 Ibid, p. 8. 5 Ibid, p. 9.

ADMINISTRATIVE DIVISION OF THE WARMISKO-MAZURSKIE VOIVODESHIP

Braniewo

Bartoszyce Lidzbark Warmiski Ktrzyn Wgorzewo

Godap

Elblg Giycko Olecko

OLSZTYN
Ostrda
Iawa

Mrgowo Pisz

Ek

Nowe Miasto Lubawskie Dziadowo

Szczytno

Nidzica

Source: Authors own work

138.6 thousand ha, of which 17.5 thousand ha was land under the internal sea waters (accounting for 22.0% of the total land located under the countrys internal sea waters), 117.5 thousand ha was land under flowing surface waters (accounting for 23.3% of the total land under the countrys flowing surface waters), while 3.6 thousand ha was land under still surface waters (accounting for 5.8% of the total land under the countrys still surface waters). The large number of relatively big water reservoirs could be used as one of the driving forces behind the regions development. This could be conducive to creating new jobs in the tourist industry (especially small catering companies, motels or agro-farms). One of the biggest natural and tourist attractions of the province are its forests, covering 30.6% of its area (compared to 29.2% in Poland). The forests are unevenly dispersed over the region, with the biggest forest complexes including: Borecka Forest, Iawa Forest, Napiwodzko-Ramuckie Forest, Piska Forest and Taborskie Forest 6.

of great help in developing forecasts and in planning the development of particular regions. Such research helps forecast or even shape the development of the system of education (including vocational training), the housing industry, as well as the development and modernization of a variety of other industries. In-depth analyses of spatial relationships between these issues are of big importance when taking into consideration actions aimed at concentration of investment and economic growth. As of 31/12/2010, the population of the WarmiskoMazurskie voivodeship was 1.4 million. In 2005, 2009 and 2010, the population of the region remained at a similar level. According to demographic forecasts of the Central Statistical Office, by 2035 the population of the voivodeship will gradually decrease. It is estimated that by 2035 the population will decrease by 8.3%, compared to 2010, and will amount to 1.3 million. The immediate reason behind this phenomenon, which has been continuing for a few years now, is the year-by-year decrease in the birth rate and an increase in the death rate. Another factor responsible for a decrease in the number of the population is the negative migration balance, which, to a large extent, decreases the workforce and the birth potential of the population. The population of the voivodeship is relatively young. In 2010, the average age for a man was 34.7 years and for a woman was 38.5 years. The life expectancy rate is gradual-

2.2.Demographic factors
Demographic processes have a significant influence on the economy and social phenomena taking place in a given area. From the workforce point of view, it is the situation of the population of a given region, and more specifically, the number and structure of the population, especially the dynamics of its changes, that shape the local labour market. Moreover, the distribution of population, its structure, changes, behaviour and migrations, are
6 Environment Protection Program, op.cit. , p. 16.

ly rising. On average, women live 9 years longer than man, and their average life expectancy is 80.4 years. The Warmisko-Mazurskie voivodeship is the least densely populated voivodeship in Poland, with a population density ratio of 59 people per 1km2 in 2010. The low density ratio is due to a low density of population in rural areas, amounting to merely 24 people per 1 km2. The total population of the towns of Warmia and Mazury amounted to 852.7 thousand people, accounting for 59.7% of the total population. A very important piece of information on the population of a given region is the population structure divided by age, i.e. pre-working age (0-17 years), working age (men aged 18-64; women aged 18-59) and post-working age (men aged 65 and older; women aged 60 and older). Changes in the population structure as described according to this method are directly linked to the conclusions for the labour market supply processes. In 2010, the number of pre-working age people in the Warmisko-Mazurskie voivodeship was 20.0%, compared to 65.2% of working age people and 14.8% of post-working age people. The demographic and social structures, as well as the population ratios, are subject to quite substantial changes resulting from the migration of the population. After all, one of the characteristic features of migration is its direct and immediate influence on the structure and spatial distribution of population7. A fully reliable observation of the phenomenon of migration, both within and outside a country, is very difficult (if not impossible) as official statistics are capable of identifying only formally registered movement of people within and outside a country. Therefore, it can be concluded that this statistical and perceptible migration of population accounts for only for a small part of the actual movement of people in Poland. Therefore, having analyzed the migration data, one can only point to certain directions of peoples movement. It is impossible, however, to provide a quantitative analysis of the phenomenon on the basis of registered movement. Over the recent years, the permanent migration balance has been negative, which means that the number of people cancelling their permanent residence has exceeded the number of people registering for permanent residence purposes. Outflow of population prevailed over its inflow both in inter-province and overseas movement. In 2010, the population balance in the Warmisko-Mazurskie voivodeship was negative and amounted to -2706 people. The internal migration balance was also negative (-2721). The intensity of the movement of people is evidenced by the permanent migration balance calculated per 1000 residents, which increased from -2.2 in 2005 to -1.9 in 2010.

2.3. Social Aspects of Development

From the societys point of view, the development of the key sectors of the voivodeship should be synonymous with a better situation in the labour market, promotion of education in those areas that are wanted in the market, as well as with the creation of favourable living conditions in the region. At the same time, the possibilities of development of regions and, indirectly, of economic and socio-economic activity of the population are conditional, among other things, upon the scope of availability of the social infrastructure and its quality. Social infrastructure, i.e. kindergartens, schools, flats, healthcare and social aid facilities reflects and stimulates the level of development. It may also attract investors and new residents, and serve as a quality-of-life determinant. Companies operating in the voivodeship are perceived as strategic partners for the labour market, mainly due to their capabilities of creating new jobs, which is quite important given the existing unemployment rate. Labour is also one of those aspects of a societys activity that have the biggest impact on changing the quality of its life and transforming the economy in the desired way. The information on the number of employed people comes from different sources, which, to a certain extent, makes an analysis of the labour market difficult. The most comprehensive data can be obtained from the national censuses. However, since they are usually held every 10 years, an analysis of a labour market requires the use of current reporting, even though it does not cover all categories of the employed and includes a variety of groups within a given population. In 2010, the total number of working people in the Warmisko-Mazurskie voivodeship amounted to 627 thousand, accounting for 53.5% of the entire population. The number of working men exceeded that of working women and was 61.7%. There were more people working in cities than in the countryside. Since the basic strength of the labour market are working-age people, the level of their activity on the labour market is of great importance. In 2010, the ratio of professionally active people was 68.1% (72.6% for men and 63.1% for women). In 2010, the employment ratio for the entire population of the voivodeship reached a level of 48 % and, as in the case of professional activity ratio, was higher for men and city inhabitants. The highest employment ratio was recorded for men aged 30-39 (83.5 %). The employment ratio for working-age people was 61.5 % (66.3 % for men and 56.2 % for women). The employment ratio for the WarmiskoMazurskie voivodeship was among the lowest in Poland. People remaining outside the workforce were qualified as

7 Population projection for 2008-2035. Prepared by the Central Statistical Office. Warsaw, 2008, p.70.

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professionally passive. In 2010, there were 546 thousand of them, which accounted for 45.6 % of the total population of the region. But their number has been decreasing. 50% of the professionally passive people were ones with lower secondary, primary and lower education. An analysis of statistical reporting shows that in 2009 the number of people working in the national economy sector in Warmia and Mazury amounted to 412 thousand, including 54.1% working in services, 29.6% in industry and 16.2% in agriculture. Sections that recorded the biggest number of working persons included: industrial processing (C), agriculture, forestry and fishing (A) and trade, repair of motor vehicles (G). The public sector entities employed as many as 27.1 % of working persons, compared with 72.1 % employed in the private sector. The growth in the working class in recent years in the Warmisko-Mazurskie voivodeship has been accompanied by a decrease in the unemployment rate. However, in the last two years, the unemployment rate has been higher than in 2008. The unemployment rate registered in the province in 2010 was 20% (compared to 12.3% of the national average) and was the highest in Poland. Unemployment is a very serious social and economic problem for the province. In 2010, as many as 105,9 thousand people remained jobless (including 53.0% of women). Young people aged 24 and less constitute quite a significant group of the unemployed (21.7%). In 2010, the largest number of unemployed was recorded among people aged 25-34 (28.6%, of which 57.8 % were women). The unemployed remained jobless for a relatively short period of time, ranging from 3 to 6 months (18.3 %) and from 6 to 12 months (18.0%). The ratio of unemployed people reg-

istered with the district labour offices and remaining jobless for over 2 years was 11.5%. An important factor eliminating a lot of people from the labour market was job tenure the biggest unemployment ratio was among people who had never worked or among those who had worked less than 5 years. In 2010, the least wanted people on the labour market of the voivodeship were those with lower secondary (and lower) education, and those with basic vocational education, constituting 60% of the total number of the unemployed, however, their number was lower than in 2005, which is a positive phenomenon. As far as people with tertiary and general secondary education are concerned, their number was higher than in 2005. An analysis of the unemployed classified by education and sex points out a difficult situation among women in the labour market better education did not protect them against unemployment. The reason behind this may be the fact that at times of low demand for labour; women stand lower chances of finding jobs than men. This is not typical only of Warmia and Mazury, but rather of the entire country. Like elsewhere in Poland, the number of unemployed among those with tertiary education has been increasing due to a lower demand (resulting from the inability of the economy to create specialist jobs) on the one hand, and an increased supply (a tendency to upgrade ones education resulting in a higher supply of specialists in jobs that are not wanted by the market) on the other. A very important factor from the point of view of the possibilities of improving the socio-economic situation of the voivodeship is the scope of taking advantage of existing jobs (which shows the mismatch between the demand for jobs and their supply). According to a job demand survey

fot. Tomasz Raczyski

11

stressed in every single document related to the development of Poland, while the creation of favourable conditions for increasing the competitiveness of a knowledgebased economy is considered to be the main strategic goal behind any changes. In 2010, the tertiary education schools9 in the WarmiskoMazurskie voivodeship were as follows: University of Warmia and Mazury in Olsztyn, Kotarbinski Universty of Information Technology and Management in Olsztyn, University of Computer Science and Economics TWP in Olsztyn, Wszechnica Mazurska in Olecko [eng. University of Masuria], Olsztyska Szkoa Wysza im. Jzefa Rusieckiego [Jzef Rusiecki University of Olsztyn], The State School of Higher Professional Education in Elblg, Prywatna Wyzsza Szkoa Zawodowa [eng. Private Higher School of Vocational Education] in Giycko, The Elblg University of Humanities and Economics, Wszechnica Warmiska in Lidzbark Warmiski [eng. University of Warmia] and the Police Academy in Szczytno.
fot. Tomasz Raczyski

conducted by the Central Statistical Office, 17.9 thousand jobs were created in the province in 2010, of which as many as 1.9 thousand remained vacant at the end of the year. The level of salaries is regulated by the market mechanism depending on product availability, in this case, availability of work. In 2010, the average monthly gross8 remuneration in the Warmisko-Mazurskie voivodeship was PLN 2,879.97 and ranked among the lowest in Poland. The average level of remuneration in selected sections of the Polish Classification of Activities provides an additional picture of the economic and financial situation of companies (the higher profits a company generates, the higher remuneration it can offer to its employees excluding remunerations paid in state-owned entities, as their level is defined in accordance with the existing legislation). In 2009, salaries paid by companies from the following sections: finance and insurance, public administration and national defence, mining and quarrying, as well as production and distribution of electrical power were much higher than the average remuneration. The lowest remuneration was paid to people employed by entities providing administrative and support services, as well as by entities providing motor vehicle repair services. Availability of the education infrastructure and its quality, especially at higher levels, influences the pace of change and the future shape of the labour market. The need to invest in knowledge and the quality of human capital is
8 The data does not cover entities with up to 9 staff.

Many schools from other provinces have their branches in the Warmisko-Mazurskie voivodeship, e.g. Pawe Wodkowic College in Pock branch of Iawa, University of Finance and Management in Biaystok branch of Ek, Bogdan Jaski Academy in Warsaw branch of Elblg, University of Economy in Bydgoszcz branch of Ek, Gdask University of Administration branch of Olsztyn, University of Humanities and Economics in d branch of Lidzbark Warmiski. In 2010, the tertiary education schools of the voivodeship were attended by approximately 50 thousand students (of which 60.5% were women). The public tertiary education schools of Warmia and Mazury offered a total of 18 faculties, of which the most popular included economics and administration, social sciences and education. The most popular faculties at non-public schools were education, economics and administration. It appears that students of both public and non-public schools chose similar faculties. Significant changes have been observed in the structure of education in selected faculties in recent years. Public schools have recorded an increase in the number of students in the faculties of social sciences, architecture, construction and biology, while non-public schools have seen an increase in the number of students in the faculties of education and medicine. There has been a decrease in interest in the faculties of economics and administration, environmental protection and engineering (public schools) and IT, humanities, economics and administration (non-public schools)

9 The data does not cover the Szczytno Police Academy of the Ministry of Interior; information on branches included.

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Table 1. Gross Domestic Product and Gross Value Added

SPECIFICATION Gross domestic product in millions of PLN per capita in PLN per capita, Poland =100 Gross Value Added in millions of PLN (according to the PCA for 2004) agriculture, hunting and forestry; fishing industry including industrial processing construction trade and repairs; hotels and restaurants; transport, warehouse management and communications financial intermediation, real estate and corporate services other services Gross Value added by institutional sectors in millions of PLN companies sector government and local government institutions sector household sector Gross Added Value per working person in PLN agriculture, hunting and forestry: fishing industry including industrial processing construction total services market services Source: Authors own work based on CSO data. 9,640 4,810 9,365 61,440 30,501 57,294 56,115 71,563 72,098 82 022 11,566 5,368 10,484 67,676 32,162 64,391 63,199 80,580 78,682 89 358 12,650 5,866 11,133 70,393 29,359 66,072 63,855 86,243 82,405 92 867 131.2 122.0 118.9 114.6 96.3 115.3 113.8 120.5 114.3 113.2 2005 28,153 19,709 76.5 24,804 2,115 5,449 1,321 6,178 4,043 5,698 2007 32,756 22,961 74.4 28,656 2,238 6,612 5,985 1,876 6,876 4,530 6,523 2008 in total 35,394 24,814 74.2 30,983 2,045 6,864 6,123 2,332 7,645 4,980 7,118 2005=100 125.7 125.9 124.9 96.7 126.0 176.5 123.7 123.2 124.9

2.4. Economic Factors Determining the Economic Situation

Macroeconomic determinants of the voivodeships economic situation The scope of information that may be used in an analysis of factors having influence on changes in the economy, i.e. its development, nature and structure, is very broad. The results of social and economic research are covered by synthetic indicators within the framework of evaluation of national accounts, as well as by data regarding the scope and dynamics of industrial, construction, agricultural and forestry activities, a variety of service areas, social and communal infrastructure, financial results of entities, investment, innovation and research-related activity, etc. The final result of activity of all entities of the national economy is shown by the Gross Domestic Product (GDP) ratio. In 2008, the GDP of the Warmisko-Mazurskie voivodeship was PLN 35394 million. The GDP per capita was PLN 24814, which constituted merely 74.2% of the na-

tional GDP. The growth in the GDP rate per capita proves that the voivodeships economy is growing, however at a slower rate than the national economy. The newly generated Gross Value Added in 2008 was PLN 30983 million and was 24.9% higher than in 2005. The biggest GVA in 2008 was generated by services, i.e. trade and repairs, hotels and restaurants, transport, warehouse management and communications. The industries sector ranked as the largest Gross Value Added contributor, followed by the households sector and the government and local government sector. In 2008, labour efficiency measured by Gross Value Added per working person was PLN 70393. Market services and the construction sector ranked as the most productive sectors, while agriculture as the least productive one. In comparison to 2005, the construction sector displayed a significant growth in labour productivity, while agriculture proved less productive.

13

Table 2. Regional accounts

SPECIFICATION Global production in millions of PLN Intermediate consumption in millions of PLN Employment related costs in millions of PLN Gross operating surplus in millions of PLN Gross primary income in the households sector in millions of PLN per capita in PLN per capita, Poland =100 Gross Disposable Income in the households sector in millions of PLN per capita in PLN per capita, Poland =100
Source: Authors own work based on CSO data

2005 54,913 30,109 10,055 14,732 20,255 14,179 81.3 20,943 14,661 85.4

2007 66,537 37,881 11,572 17,155 22,883 16,040 79.5 23,374 16,385 84.1

2008 in total 72,953 41,970 13,194 17,865 24,818 17,399 79.6 25,270 17,716 84.1 2005=100 132.9 139.4 131.2 121.3 122.5 122.7 120.7 120.8 -

Since 2005, there has been a significant increase in the values representing the voivodeships regional accounts, including global production (by 32.9%), constituting revenues on the production account covering productionrelated transactions, as well as an increase in intermediate consumption (by 39.4 %), i.e. production account expenses. Employment-related costs and nominal profits in the household section grew at a slower rate than global production. The gross primary income increased by 22.5%, while the disposable income by 20.7%. In comparison with 2005, the value of retail sale increased by 4.2%, while the value of wholesale increased by 6.9%. In 2009, over three quarters of goods sold in retail were nonfood goods. Wholesale exceeded retail by merely 2.1% and was also dominated by non-food goods (74.3 %). In 2009, the value of sold industrial production was PLN 20321.7 million and was 28.1% higher than in 2005. The amount of in-

dustrial production sold per capita equalled PLN 14234, which ranked the province 13th in Poland. The province also ranked 13th with regard to the value of sold construction-assembly production per capita which totalled PLN 2725. One of the factors determining the pace of economic changes may be the dynamics of indicators of consumption goods and services. In 2010, the inflation rate in the voivodeship was 3.1% and was higher than the national inflation rate. In comparison to 2005, the prices in the voivodeship, and elsewhere in Poland, grew faster. The possibilities of co-financing different activities in the region may be defined by means of an income analysis, and more specifically, budgetary expenses of the local government Units. In 2010, communes throughout the voivodeship received PLN 3329 million to perform their tasks (56.8% more than at the beginning of the analyzed period). The voivodeships districts received PLN 1209.5

Table 3. Wholesale and retail sale

SPECIFICATION Total retail sale in thousands of PLN food and non-alcoholic beverages alcoholic beverages non-food goods per capita in PLN Total wholesale in thousands of PLN (according to 2007 PCA) food alcoholic beverages non-food goods
Source: Authors own work based on CSO data.

2005 4,988,951.9 1,376,685.7 291,388.4 3,320,877.8 7920 4,963,832.9 674,276.6 996,072.6 3,293,483.7

2007 5,594,300.4 1,583,090.5 261,440.6 3,749,769.3 8635 6,304,081.5 954,249.9 1,675,304.4 3,674,527.2

2009 in total 5,198,752.0 1,026,742.9 227,856.5 3,944,152.6 8211 5,306,168.0 1,050,035.8 312,379.5 3,943,752.7 2005=100 104.2 74.6 78.2 118.8 103.7 106.9 155.7 31.4 119.7

14

Table 4. Local self-government budgets

SPECIFICATION Income of communes in PLN per capita Expenditure of communes in PLN per capita Income of districts in PLN per capita Expenditure of districts in PLN per capita Income of towns with district status in PLN per capita Expenditure of towns with district status in PLN per capita Income of the Voivodeship budget in PLN per capita Expenditure of theVoivodeship budget in PLN per capita Source: Authors own work based on CSO data. 2005 2,122,542,694 1883 2,911,847,496 2038 742,990,867 659 765,253,018 679 789,721,652 2622 791,244,117 2627 231,258,762 162 291,069,608 204 2007 2,644,397,453 2351 3,559,940,332 2495 864,098,364 768 856,862,115 762 994,972,496 3295 949,217,893 3143 435,838,769 306 440,382,704 309 2009 2,963,566,845 2635 4,367,931,132 3059 1,093,463,310 972 1,139,137,070 1013 1,067,955,558 3527 1,155,728,257 3817 785,243,024 550 811,125,580 568 2010 in total 3,329,021,863 2960 5,123,180,543 3589 1,209,501,081 1075 1,258,629,352 1119 1,152,954,878 3806 1,314,791,668 4341 520,383,012 231 541,412,170 481 2005=100 156.8 157.2 175.9 176.1 162.8 163.2 164.5 164.8 146.0 145.2 166.2 165.2 225.0 142.9 186.0 236.3

million (62.8% more), towns with district status PLN 1153 million (46.0 % more), while the voivodeship received PLN 520.4 million (125.0% more than in 2005).

key meat), beef and pork, processed meat, as well as butter and beer than any other region in Poland. It also produces fruit and vegetable juices, frozen fruit and vegetables, groats, flours, dairy and fish products, as well as honey11. As of 31 December 2010, there were 119 thousand national business entities entered in the REGON register. In comparison to 2005, the pace of growth in the number of business entities was 8.1% and was the same as the country average. 95% of all entities were private companies. The public sector, which includes public administration, education and healthcare entities, accounted for 4.6% of entities. In comparison to 2005, the number of public sector entities dropped by 17.5%, while the number of private sector entities increased by 9.8%. The spatial distribution of business entities across the Warmisko-Mazurskie voivodeship is uneven. Most of them are located in towns with district status. In 2010, the towns of Olsztyn and Elblg accounted for nearly 30% of the total number of the voivodeships entities. The number of entities per 1000 people was also the highest in these two districts, with 125 companies in the district of Olsztyn and 101 in the district of Elblg. In regards to rural districts, the district of Wgorzewo accounted for 1.4%, while the district of Olsztyn for 8.1%. The districts of Mrgowo and Giycko ranked top of the list of districts with the highest entrepreneurship indicator per 1000 people (93 and 92, respectively), which is largely due to the well-developed tourism sector in these areas. An analysis of the entities entered into the REGON register

The condition and the breakdown of the economy by sector

The Warmisko-Mazurskie voivodeship is situated in one of the ecologically cleanest regions of Poland, amidst huge forest complexes and lakes, which has been the main factor behind the development of a healthy food industry, wood industry, ecological forest management and (agro) tourism in the region. Other industries important from the point of view of the development of the voivodeship include: tires industry, metal processing machines, coniferous timber and hardwood timber industry. Moreover, the voivodeship borders on the District of Kaliningrad, which should be conducive to different business initiatives.. The Warmisko-Mazurskie voivodeship offers exceptionally favourable conditions for timber companies, i.e. the right climate, raw materials and a vicinity of voivodeships with large forests, which facilitates cooperation between manufacturers and contractors. Apart from this, the voivodeship boasts a well-developed technical infrastructure and many years of experience in the industry. The majority of furniture industry companies are concentrated in the districts of Iawa, Dziadowo, Pisz, Elblg and Olsztyn10. Another very important industry is the food and drinks industry. The region produces more poultry meat (mainly tur11 Ibid., p. 206.

10 Polska rozwj regionw prezentacja regionw wojewdztwo warmisko-mazurskie. Marshalls Office of the Warmisko-Mazurskie Voivodeship. Olsztyn 2008, p. 206.

15

THE WARMIA AND MAZURY SPECIAL ECONOMIC ZONE

Piersele

Bartoszyce Olecko WARM MIS S KO O-MAZURSKIE Dobre Miasto Morg Ostrda Iawa Nowe Miasto Lubawskie
Nowa Osada Wielbark

Pask

Lidzbark Warmiski

Mrgowo Olsztynek
Korpele Piecki

Orzysz

Szczytno Nidzica Mawa Ostroka

Ciechanw MA AZOW WIE ECKIE land for sale land sold to investors

Source: www.wmsse.com.pl.

in terms of the number of employees shows that the majority of entities employ up to 9 employees, accounting for 94% of the total number of entities registered in the voivodeship in 2010. In comparison to 2005, their number grew by 8.2%. Most of them deal with trade, repairs, real estate and corporate services, as well as construction. Entities employing from 10 to 49 employees accounted for 4.6%. Most of them deal with education, trade and repairs. There were only 0.9% of companies employing from 50 to 249 employees and 0.9% of those with more than 250 employees. These entities operate in the area of industry and education. Seven key groups were taken into account in the analysis of the REGON-registered entities by selected legal forms. In 2010, the largest group of entities operating in the voivodeship were individuals conducting economic activities, which accounted for 73.7% (a drop of 1.2% compared to 2005), followed by: civil law companies 5.5% (a drop of 0.8%) commercial law companies 5.1% (an increase of 0.5%) associations and social organizations 3.4% (an increase of 0.6%) cooperatives 0.6% (a drop of 0.1%), foundations (their number remained on the same

level in both periods) A positive phenomenon, from the point of view of development of a region, observed in the Warmisko-Mazurskie voivodeship is the increase in the number of commercial law companies, whose legal and organizational form is most suitable for running a large-scale business activity, and the number of such companies per every 10 thousand people reflects the level of economic stability of a given region. In 2010, there were 42 companies per each 10 thousand residents, most of which were located in the district status towns, and in the following districts of Mrgowo (44) and Olsztyn (39). This ratio was the lowest in districts of Ketrzyn and Pisz (17 and 18, respectively). In turn, the number of companies with foreign capital located over a single area indicates either a favourable or unfavourable climate for investors as companies with foreign capital contribute significantly to modernizing a country. These types of companies, as of 31 December 2010, amounted to 945, i.e. 7 per each 10 thousand residents. Their number grew by 11% since 2005. Companies with foreign capital operated in all districts of the voivodeship, most of them, however, in the district of Olsztyn, accounting for 25.7% of all companies of this kind in the voivodeship.

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THE SUWALKI SPECIAL ECONOMIC ZONE

Gdask
Suwaki Grajewo Makinia Grna Biaystok Grajewo

RUSSIA
Godap

LITHUANIA

Godap Ek

BELARUS

Suwaki

Biaystok
Makinia Grna

Warszawa

Source: www.paiz.gov.pl/strefa_inwestora/sse/suwalki.

In 2010, over 50% of entities operating in the voivodeship fell into one of four sections of the Polish Classification of Activities (PCA 2007): wholesale and retail; repairs of motor vehicles, including motorcycles (29.1 thousand), construction (14.1 thousand), real estate services (10.0 thousand) and industrial processing (9.8 thousand).

in the voivodeship in sections H and L (19.1% and 14.2% respectively). The Warmisko-Mazurskie voivodeship is open to domestic and foreign investors. In order to accelerate the economic development of the region, the local authorities apply a system of support and investment reliefs, being much of an encouragement for investors. The local authorities offer attractive investment areas (e.g. there are two Special Economic Zones in the voivodeship, i.e. the Warmia and Mazury Special Economic Zone and the Suwaki Special Economic Zone), state aid and a pro-investment policy. Entrepreneurs operating in the voivodeship can also count on local labour offices to provide support with regard to creating new jobs. They can also apply for support from structural funds (detailed information on reliefs, exemptions for investors and on the possibilities of conducting economic activities in Warmia and Mazury is available at www.invest.warmia.mazury.pl - Reliefs and Exemptions for Investors in the Province of Warmia and Mazury with Breakdown into Districts and Special Economic Zones and Possibilities of Running Business Operations in the Province of Warmia and Mazury). Polands membership in the European Union creates additional possibilities of development of the voivodeship. Firstly, it provides the opportunity to apply for numerous aid funds.

Investment
The scale of investment depends, to a large extent, on the income generated by companies, as most of the capital expenditure of companies is financed from their own budgets. In 2009, the value of capital expenditure in the national economy was PLN 5854 million. Its analysis by ownership type shows that it was on a similar level for the public and the private sector (47.4% and 52.6% respectively). In 2009, over 65% of capital expenditure in the WarmiskoMazurskie voivodeship concentrated on the following 6 sections of the PCA: mining and querying (B), industrial processing (C), production and distribution of electrical power, gas, steam, hot water and air for air-conditioning systems (D), distribution of water; sewage water and waste management, land reclamation (E), transport and warehouse management (H), as well as real estate market services (L). Capital expenditure incurred in sections B, C, D and E accounted for 32.3% of the total expenditure

17

NATIONAL ROADS IN THE WARMISKO-MAZURSKIE VOIVODESHIP

Braniewo Bartoszyce Lidzbark Warmiski Ktrzyn Giycko Wgorzewo

Godap

Elblg

Olecko

OLSZTYN
Ostrda
Iawa

Mrgowo Pisz

Ek

Nowe Miasto Lubawskie Dziadowo

Szczytno

Nidzica

Source: Authors own work.

Secondly, the situation of the region on the eastern border of the EU creates opportunities for obtaining additional aid funds. Rational use of such funds may stimulate further comprehensive development of the voivodeship and, consequently, the growth of its investment and competitive attractiveness.

2.5.Transport infrastructure
Due to its geographical location, the WarmiskoMazurskie voivodeship is an important region from the

European transport connections point of view. However, the major transport routes run on the outskirts of the region or outside it. A chance for changing this situation might include building the S61 expressway (the so called Via Baltica route), which is planned to run through the voivodeship, and more specifically, through the town of Ek. Via Baltica is a major road connecting the Baltic States. It starts in Finland and runs across Lithuania, Latvia and Estonia, all the way to Warsaw.

18

fot. Wojciech Wjcik/fotowojcik.pl

RAILWAY ROUTES IN THE WARMISKO-MAZURSKIE VOIVODESHIP

Braniewo Bartoszyce Elblg Lidzbark Warmiski Ktrzyn Giycko Wgorzewo

Godap

Olecko

OLSZTYN

Mrgowo

Ek Pisz

Iawa

Ostrda Szczytno

Nowe Miasto Lubawskie Dziadowo

Nidzica

rdo: Source: Authors own work.

The following transport corridors (TEN-T) run through Warmia and Mazury 1. Corridor VI Gdask Katowice ilina, encompassing: expressway S7 Gdask Olsztynek Warsaw Krakow Budapest; trunk railway route Gdynia Iawa Warsaw Zebrzydowice ilina. 2. Corridor IA Riga Kaliningrad Elblg Gdask, constituting a branch of corridor I. Corridor IA comprises the following routes: expressway S 22 Elblg Grzechotki (Kaliningrad); railway route Malbork Braniewo (Kaliningrad-Riga); inland waterway (Berlin) Bydgoszcz Elblg (Kaliningrad). The following routes are located in the immediate vicinity of the voivodeship: 1. Corridor I Helsinki Riga Kaunas Warsaw (Via Baltica), including: expressway S8 Warsaw Biaystok Helsinki; trunk railway route Warsaw Biaystok Trakiszki (Riga Tallinn Helsinki). 2. Corridor VI Gdask Katowice ilina, including the planned A-1 motorway Gdask - ilina. The international connections also include: the international airport in Szymany near Szczytno, the international sea port in Elblg, international border crossing points (road crossing
12 Ibid., p. 29.

points in Bezledy, Godap, Gronowo and Grzechotki, railway crossing points in Braniewo and Skandawa, sea crossing points in Elblg and Frombork, and a border crossing point at the Szymany airport)12. As there are no motorways and expressways in the voivodeship, the national roads are of great importance for the international and domestic transport as they link the voivodeship to the European transportation system. The major national roads running through the voivodeship include: road no. 7: Gdask Olsztynek Nidzica Warsaw, all the way to the border with Slovakia in Chyne; road no. 16: Olsztynek Olsztyn Ek, leading to the border crossing point between Poland and Lithuania in Ogrodniki; road no. 51: Olsztynek Olsztyn Bartoszyce, leading to the border with the District of Kaliningrad of the Russian Federation in Bezledy; road no. 65: running from the border with the Russian Federation through Godap Olecko Ek Biaystok, all the way to the border with Belarus. The basic road network is shaped in a manner ensuring good intra-regional connections. In 2010, the total length of roads running through the Warmisko-Mazurskie voivodeship was 22,569 km. In 2010, the total length of railway routes running through the voivodeship was 1207 km, all of which were standard gauge routes. Their network ensures good con-

19

BORDER CROSSING POINTS AND MAJOR PORTS IN THE WARMISKO-MAZURSKIE VOIVODESHIP

GRONOWO BRANIEWO GRZECHOTKI BEZLEDY

GOMNO

SKANDAWA

Braniewo Bartoszyce Lidzbark Warmiski Ktrzyn Giycko Wgorzewo

GODAP Godap

Elblg

Olecko

OLSZTYN
Ostrda
Iawa

Mikoajki Mrgowo Pisz Ek

Nowe Miasto Lubawskie Dziadowo

Szczytno

Nidzica

road border crossing point railway border crossing point sea port inland port

Source: authors own work.

nection between the biggest towns of the region. Passenger traffic is handled by means of modern rail buses. Moreover, there is a railway link to the District of Kaliningrad of the Russian Federation, running through Elblg and Braniewo. The total length of inland waterways running through the voivodeship is 352 km, the most important of which are: the Elblg Canal, Jeziorak Lake and Miomyn - Szelg, the Pisa River and the Great Masurian Lakes Route. The major inland ports are located in Ostrda, Giycko, Mikoajki and Wgorzewo. The voivodeships inland seaways located in the Vistula Bay are linked to the Baltic Sea and sea ports located in the Bay of Gdask, Gdask and Gdynia. The Town of Elblg constitutes a node connecting the inland and sea waterways. The town has a good port infrastructure (grain elevators, side-tracks, ship-repair yards, numerous marines). The vessel traffic in the Bay moves along marked routes, the main one of which runs through the centre of the Bay from Elblg to the border with Russia and is linked to the nearby ports and harbours. The part of the Bay located in the WarmiskoMazurskie voivodeship includes: 3 ports: Tolkmicko, Frombork, Nowa Paska, 2 harbours:
12 Ibid., p.. 34.

Suchacz, Kamienica Elblska, and 4 fishing ports: Suchacz, Tolkmicko, Frombork and Nowa Paska13. The Mazury airport is located in Szymany near Szczytno. All air traffic at the airport is currently suspended. Wilamowo near Ktrzyn is home to the Lake Land Aeroclub and the Air Department of the Warmisko-Mazurskie Border Guard Unit. Currently, the airfield handles sport, tourist and business traffic. The Olsztyn airfield in Dajtki handles sport and civilian air traffic. It is located approximately 4.5 km from the centre of Olsztyn. The airfield is used by the Medical Air Rescue. Altogether there are about 23 airfields in the voivodeship, of which the fastest developing ones are those in Giycko and Gryliny. The Warmisko-Mazurskie voivodeship borders on the District of Kaliningrad in the Russian Federation. Over two hundred kilometres of the Polish-Russian border constitute the outer border of the European Union. Seven border crossing points are located along it: road crossings in Bezledy, Gronowo, Godap and Grzechotki, railway crossings in Braniewo, Gomna and Skandawa. In 2009, as many as 1263.6 thousand people crossed the border crossing points of the voivodeship, both Poles and foreigners.

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3. Key and high-opportunity sectors

he analysis of the key and high-opportunity sectors in the Warmisko-Mazurskie Voivodeship was divided into two research stages. The first stage constituted a process encompassing integrated research activities aimed at identifying the key and high-opportunity sectors in the regions economy. The second stage was aimed at defining the structural determinants of competitiveness of the sectors, and at creating a scenario of their development by 2020. Attaining the expected project results was, to a large extent, conditional upon the results of the activities carried out during the first stage of the research. The underlying assumption applied in the procedure of identification of the key and high-opportunity sectors was the application of methodological triangulation. The pragmatics of this assumption consisted in obtaining information about the importance and the status of the regions sectors from many sources, using different research techniques and tools, as well as taking into account opinions of groups of experts representing a variety of areas of knowledge. The identification procedures applied in the research included a multi-aspect approach to the researched phenomenon. The following groups of people were invited to participate in the research: representatives of the local government units and experts representing different scopes of socio-economic knowledge. Apart from this, the research consisted of a thorough analysis of existing materials. The identification process began with gathering data from public statistics filed with the Central Statistical Office contained in strategic and program documents regarding the Voivodeship and the country. The material so gathered was

used as a basis to prepare the PEST analysis results and to compute the synthetic indicator of the development of all sections of activity of the national economy entities in the Warmisko-Mazurskie Voivodeship according to the PCA 2007. The data regarding the national economic entities of the Voivodeship was obtained from the regional statistics resources, the local data bank and, within the scope necessary for the purposes of the research, were computed by the Statistical Office in Olsztyn according to the current PCA 2007 classification. As far as field research is concerned, the gathered material was used to identify the sectors which have a significant influence on the economic development of the regions districts. Inclusion of the representatives of the local government units in the research was dictated by the fact that these units are responsible for performing tasks specified in the June 5th 1998 Act regarding district local governments. The research conducted by means of an expert survey method was of a different nature. The experts invited to participate in the research represented different areas of knowledge and thus provided a broad scope of information on the evaluation of the voivodeships key and highopportunity sectors of their own selection. The final stage of identification of the key and high-opportunity sectors consisted of holding three meetings with experts as part of a focused group interview (FGI). The meetings were devoted to an analysis and evaluation of the material gathered as a result of the above-mentioned research. The meetings resulted in identifying the key and high-opportunity sectors of the Warmisko-Mazurskie Voivodeship.

FIGURE 2. A DIAGRAM SHOWING RELATIONSHIPS BETWEEN PARTICULAR METHODS USED IN THE PROCESS OF IDENTIFICATION OF KEY AND HIGH-OPPORTUNITY SECTORS.
(researching existing materials)

PEST analysis

of key and high-opportunity sectors

Synthetic indicator

FGI interview meetings with experts

(gathering experts opinions)

Source: Authors own work.

Expert survey

Identi cation of key and high-opportunity sectors in the Warmisko-Mazurskie Voivodeship

(interviewing representatives of district local governments)

SSI interview

21

The process of identification resulted in identifying eight sectors of key importance for the development of the local economy, and thirteen sectors standing high chances of gaining significance for the socio-economic development of the region.

3.1.Agriculture sector: plant cultivation and animal breeding

The voivodeships agriculture sector has a long tradition and contributes significantly to the promotion of the region. The agricultural market has a big influence on the social situation of the region. The sector occupies a significant position in Polands employment structure (15.9%), which means that being the main source of income for a large number of people in the region, it shapes their living standards to a significant extent. The average number of people employed in the sector decreased between 2005 and 2009. During the same period, there was a significant increase in the value of goods and materials sold per each employed person. The dynamics of change in these values shows that agriculture is not only the key sector of the region, but also that its importance for the regions economy is growing. The representatives of the agricultural sector, who participated in the research, represented mostly private entities (96.3 %). 55.6 % of them dealt with production, 11.1% with trade, 7.4% with services and 7.4% with services and production. The majority of the respondents were representatives of entities employing up to 9 employees (51.9%) and from 10 to 49 employees (44%). The products of the researched entities included grain growing, poultry, cattle and swine breeding. The competitiveness of goods produced as a result of the work of these entities resulted mainly from their high quality and low prices. The respondents believed that the relationship between the price and the quality was very favourable and it allowed a product to stand out from products offered by the competition. The quality and prices of the products manufactured by farms in the voivodeship are the main sources which build its competitive position. According to the research, nearly 50% of them sell their product all over Poland. The remaining group of the representatives of agriculture build their competitive position mainly in the region and on the local market. The quality of labour resources is one of the most valuable resources of competitiveness for enterprises. Its value is determined by the employment structure, type of employment contract, education, and pro-education activity. Most of the staff which was researched was employed based on employment contracts. In most cases these contracts were for unspecified and specified periods of time. Most employers choose to hire people with general and technical secondary education. The remaining entities build their human capital by hiring people with primary, basic vocational, lower secondary or no education. Only a few respondents said they employed mainly people with tertiary education.

Table 5. The key and high-opportunity sectors in the WarmiskoMazurskie Voivodeship.

PCA SECTORS AGRICULTURE SECTOR: PLANT CULTIVATION AND ANIMAL BREEDING FISHING SECTOR FOOD PRODUCTS MANUFACTURING SECTOR WOOD AND FURNITURE SECTOR C RUBBER PRODUCTS MANUFACTURING SECTOR MACHINERY AND EQUIPMENT MANUFACTURNG SECTOR D F G J M Q I; R; N ELECTRICAL POWER AND WATER SECTOR CONSTRUCTION SECTOR TRADE AND MOTOR VEHICLES REPAIRS SECTOR ICT SERVICES SECTOR BUSINESS CONSULTING SERVICES SECTOR MEDICAL AND SOCIAL SERVICES FOR DEPENDANT PERSONS SECTOR TOURISM SECTOR Key High-opportunity

Source: authors own work.

This part of the research process consisted of measuring variables, which characterized the structural factors of competitiveness of the sectors, followed by gathering (on the basis of experts panels) qualitative data of factors determining the development of the sectors and their development prospects. All of the selected key sectors were also classified as highopportunity sectors. Due to the fact that the issue of researching high-opportunity sectors falls entirely within the scope of the issues related to the key sectors, the following description is a combined analysis of these two sector categories.

22

Most employers do not have any problems related to hiring staff with appropriate qualifications. However, some entities reported problems related to the remuneration demands of candidates, as well as problems related to hiring people with appropriate qualifications, skills and experience. The quality of human resources is one of the intangible assets of enterprises and has a significant influence on the level of development and efficiency of use of their material assets, as well as on their financial results. Only every third farm has specialist human resources. Moreover, more than 50% of this group of entities mentioned specialist education as one of the sector-specific resources. The other respondents mentioned the ability to handle machines and equipment among the unique resources of the company. As regards the availability of these resources, the majority of respondents said they were easily available, while the rest of them had experienced problems in this respect. Innovation activities in the agricultural sector divide the respondents into two almost equal groups. The first one are entities which have not introduced any innovative changes over the last two years. As regards the other group, the most frequent frequent innovations consisted in improving products and successfully introducing new products to the market. The key determinants of the intensity level are related mainly to rivalry instruments and the entry exit barriers. A competitive position on the market in the agricultural sector is built mainly on the basis of an attractive relationship between a product and its price. The majority of the respondents believe the agricultural market sector is characterized by a large number of competitors, high pace of growth in demand and high fixed costs. Competition is high when it comes to the quality of products.

The entry and exit barriers are largely related to the power and the directions of intensity of competition, as well as to specific resources of the agricultural sector. A large number of competitors, high quality of products and the necessity to increase expenditure on fixed assets create conditions of entering a market and exiting it. Entering a market or increasing the competitiveness of entities in the agricultural sector has little to do with brand identity and loyalty, availability and administrative, legal, social and political barriers. As these factors are not considered important by the respondents, they are not considered to be a barrier to exiting a market either. The main suppliers of the agricultural sector entities do not have a lot of bargaining power. Moreover, according to the research, most of them are wholesalers there are many of them and there is a possibility of choosing the purchase terms and conditions. The information provided by the respondents on the type of activities undertaken in their companies in order to arrive at a favourable (positive) financial result corresponds, to a large extent, to the strategies applied by these entities. In most cases, the entities of the agricultural sector generate a positive financial result by increasing the level of sales and by reducing costs. In most cases, though, the sale price has increased, rather than decreased. The agricultural sector is attractive to investors mainly due to the demand for food products that satisfy the basic needs of people. The sectors big development potential is also connected with the possibility of obtaining structural funds from the European Union. Other factors conducive to increasing investment expenditure are connected with the high availability of necessary and specific human resources, raw materials, materials or half-products, as well as techni-

fot. Wojciech Wjcik/fotowojcik.pl

23

cal infrastructure. On the other hand, the legal regulations, the general economic situation in the country and the domestic and foreign competition have an insignificant influence on creating a favourable investment climate.

managed to keep the number of employees at the same level, the remaining enterprises reported a decrease in the employment level. The sector-specific resources include mainly machines, equipment, technologies and raw materials, such as crops and other food half-products. Their availability on the market was evaluated by the respondents as high. The knowledge resources result mainly from the number of customers and contractors, rather than from the application of patents and modern organizational solutions. In turn, the sources of creating knowledge resources in companies are mainly their customer base and modern production technology solutions. According to the research, innovation activities in the food manufacturing sector are conducted by nearly half of the researched entities. As the sector deals mainly with production, innovation regards mainly products and manufacturing processes. The activity of the companies with regard to creating innovative knowledge resources results from the fact that they have their own R&D facilities. The companies from the sector compete with each other mainly with regard to the quality of their products. The sectors product offer is relatively varied, mainly due to the uniqueness of the products. The high pace of increase in demand for food products and the large number of companies offering them proves that the competition in the sector is rather moderate. The barriers of entering and exiting the market are largely linked to the strength and the intensity of competition, as well as to the nature of the resources and products of the food manufacturing sector. The significant number of competitors, combined with the high quality of products and the high value of fixed assets and technologies create very high entry and exit barriers. Other very important factors are experience and strong brands, which are not weakened even by a fast paced increase in demand for the manufactured products. The suppliers of materials for the sectors entities have a very strong bargaining power, resulting from a limited number of suppliers on the market and from the importance of the quality of the delivered food. Moreover, the limited presence of substitute products on the market proves that the suppliers have many possibilities of determining transaction terms. According to the research, the above-mentioned factors create relationships between the suppliers and the researched enterprises. The strategies applied by the companies from the sector result, to a large extent, from the specifics of the business. Due to the large number of competitors and equally large number of wholesalers, as well as due to the small diversity of the products on the market, the most frequently applied

3.2. Food Products Manufacturing Sector

Due to the agricultural character of the Voivodeship, production of food is one of the key industries of the local economy. Food processing, according to the Polish Classification of Activities, falls into the category of industrial processing and its growth is very dynamic. The value of goods and materials sold in the industry has increased by nearly 30.5% since 2005. There has also been an increase in the average employment rate (1.4%), in the level of salary rate (23.0%) and in the gross value of fixed assets (37.46%). All representatives of the sector participating in the research represented private companies, mostly commercial law companies, including limited liability companies (37.2%), and individuals conducting economic activities (11.1% each), followed by civil law companies (9.3%) and co-operatives (2.3%). Most of the researched enterprises dealt with production (39.5%), production/trade/services (27.9%) and production/services (25.6%). Most of the respondents represented small companies, employing from 10 to 49 employees (41.9%), micro companies, employing from 0 to 9 employees (27.9%), and medium-sized companies employing between 50 and 249 employees (25.6%). Only a small number of representatives of large companies, employing between 250-999 employees (4.7%), participated in the survey. The researched entities produce different types of flour and confectionery products, milk and meat products, e.g. cold meats and other foods. The biggest market value concerning this sector resulted from the quality of its products and their attractive prices, which make these products popular also abroad. The materials necessary for the manufacturing of these products are supplied mainly by domestic entities and occasionally by foreign ones. Moreover, the competitive advantage determinants are set by Polish entities operating domestically. The quality of labour resources constitutes one of very valuable resources of competitiveness of companies. Its value results from the employment structure connected to the type of employment contract, education and pro-education activity. According to the research, most of those employed in the sector have general and technical secondary education and basic vocational education. The non-material workforce resources are employees who are most valued for their skills and professional experience. According to the respondents, employment agreements were concluded mainly for an unspecified period of time, however, even though most of them

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strategy consisted in decreasing costs by investing in machines and equipment, gathering information on the market and controlling the companys costs. Another popular strategy applied by the companies was the strategy of concentration, which consisted in searching for new markets and customers, as well as extending the existing product base to new, high-quality products. The investment attractiveness of the food manufacturing sector is mainly due to the big demand for food products in the domestic market and, to a limited extent, in overseas markets. The range of demand for food products is conducive to trade exchange, which results in a significant number of companies exporting their goods. Investment, however, may be impeded by the legal requirements e.g. licenses, quotas, tax reliefs, as well as by low availability of raw materials and half-products, as well as EU funds. In order to strengthen their position on the market, many of the researched companies decrease their costs by gaining new customers, entering new geographical markets and investing in new machinery. The knowledge of the market and the laws governing it is undoubtedly of great importance in this respect. The market competition instruments include specific resources. In the case of food production by a group of small companies the importance of specialized resources is vital. Specific resources include, among other things, the value of the capital. It is also very important because of the high level of specialization of medium-sized and big companies, and the broad use of production technologies.

employees. Many of the entities taking part in the research employed from 50 to 249 employees (13.0%) and from 250 to 999 employees (10.1%). The big companies participating in the research employed 1000 and more employees (1.4%). The wood and furniture sector companies participating in the research manufactured different types of furniture (e.g. kitchen, bathroom and office furniture), windows, doors and chairs. Some of the researched companies manufactured sawmill products and furniture frames. The biggest market value of the wood and furniture products was their quality, which, combined with competitive prices, make these products popular mainly in the domestic market. Nevertheless, the sector has a significant customer base abroad. According to the research, the wood and furniture sector workforce includes mainly employees with basic vocational and general secondary education, experienced and skilled in handling machines. According to the information provided by the respondents, most of the employment agreements are signed for an unspecified period of time. However, even though the majority of the entities from the sector manage to keep the number of employees at the same level, the total number of people employed in the sector has decreased recently. The specific resources of the sector include mainly machines and equipment, as well as raw materials i.e. wood, whose availability is considerably high. The knowledge resources include customer and contractor data bases, and, to a smaller extent, the use of utility models, patents or inventions. Creation of resources by means of implementing modern organizational and marketing solutions was rather incidental. Most of the companies carried out some form of innovation-related activities. The product and marketing improvements implemented by the companies were accompanied by high activity in creating knowledge conducive to innovation. The sources of knowledge for the companies from the sector were mainly scientific, technical and traderelated periodicals, participation in conferences, fairs or exhibitions. The Internet was quoted as a valuable source of information only by every third company from the sector. The companies from the sector compete mainly in terms of quality of their products. The competition in the market is rather strong, given the number of companies and the slow pace of growth in the demand for wood and furniture products. In the case of the sector, the entry/exit barriers are related mainly to the intangible assets of the companies. The most important factors in this respect are experience,

3.3. Wood and furniture sector

Wood processing has long traditions in the economy of the region. The importance of the sector results, to a large extent, from the availability of raw materials, its specific role in the promotion of the region and in building its position in the national economy and in foreign markets. For the purposes of the research, the wood and furniture sector was divided into the following categories: furniture manufacturing, manufacturing of wood, cork, straw and other weaving materials, as well as manufacturing of sawmill products. All of the representatives of the wood and furniture sector participating in the research represented private companies. They were mainly individuals conducting economic activities (44.9%), commercial law companies (29.0%) and civil law companies (14.5%). Nearly a half of them dealt with production (47.8%). 36.2% of them dealt with services and production, while 10.1% with production, trade and services. Most of the researched companies employed up to 9 employees (39.1%), followed by 36% of companies employing from 10 to 49

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fot. Tomasz Raczyski

availability of supplies, brand and brand loyalty. Another factor having a big influence on the competitiveness of a company is availability of modern technologies and its geographical range. The barriers related to the capital resources, specialist equipment and distribution channels, as well as those related to the cost of changing suppliers were considered to be moderate. Suppliers of goods for the sector have a moderate bargaining power. Availability of goods offered by them is, to a large extent, limited, however, the choice of a supplier has influence primarily on the quality of deliveries and availability of the substitute offer. The strategies applied by the wood and furniture sector companies are largely related to the specifics of the products they offer and the characteristics of the customers. Due to the fact that the customers expect products of high quality, as well as due to the existence of product copies and substitutes, the most popular strategy consists in decreasing costs by means of investing in machines and equipment, which results in improving the production process. The strategy of making a product stand out from other products consists in winning customers loyalty. The least popular strategy is the strategy of concentration by entering a market niche. Entrepreneurs who apply this strategy to build their competitive position usually focus on quality and customers. The factors behind the investment attractiveness of the sector result mainly from the level of demand in the domestic market and, to a smaller yet significant extent, in the overseas markets. A significant number of companies export their products to other countries. Another advantage of the sector is the high availability of raw materials in the market.

in the Warmisko-Mazurskie voivodeships economy. As a result of the research, the sector was identified as one of the key and high-opportunity sectors, and its activity covers the following: manufacturing of rubber products (tires, rethreading of tires, and manufacturing of other rubber products). All representatives of the sector participating in the research represented private companies, mostly individuals conducting economic activities, followed by commercial law companies, including limited liability companies. The business activity conducted by the researched enterprises focused on production, trade and services. The respondents represented micro companies, employing from 0 to 9 employees, small companies, employing from 10 to 49 employees and medium-sized companies, employing between 50 and 249 employees. The product offer covered a full range of services related to the rethreading of tires and manufacturing of other rubber products. As Michelin Polska S.A. refused to participate in the research, the product offer discussed herein does not include the production of tires. The biggest market value of the sector lies in the quality of its products and their prices, combined with the brand identity. The products manufactured by the sector are sold mainly in the domestic market but also abroad. The materials necessary for the manufacturing purposes of the sector are supplied mainly by Polish companies, although foreign partners constitute a significant group of suppliers as well. The territorial competitiveness of the products provided by the researched companies, has reached a level corresponding to that of the competition. Most companies from the sector conclude employment contracts for a specified or unspecified period of time with their employees. Most employers hire staff with gen-

3.4.Rubber Products Manufacturing Sector

Due to its long tradition, experience, reputation and influence on the promotion of the region, the rubber products manufacturing sector plays an important role

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eral and technical secondary education and basic vocational education, with skills and qualifications allowing them to handle machines and equipment (e.g. woodwork machines), and with appropriate upholstery and health and safety certificates. In most cases the said qualifications have little to do with the manufacturing of rubber products, which proves that the level of specialization requirement is rather law. According to the respondents, an important value for each enterprise are people with skills and experience. As there are no specific qualification requirements, the employers from the sector do not encounter any problems with hiring appropriate staff. The problems appear during the recruitment process and are related mainly to the deficit of candidates with suitable skills and professional experience. In most cases the level of employment has remained the same, and in some companies it has even increased. Intangible labour resources are employees, who are valued most for their skills and professional experience. The specific resources of the researched companies include mainly fixed assets and high cash reserves necessary to start and continue the manufacturing process. Innovation-related activities, which create both fixed and intangible assets, do not create high potential for the sector in the form of specific assets. Among the companies manufacturing rubber goods which participated in the research over a half have not been involved in any innovation-related activity. The remaining companies have employed innovative solutions aimed at increasing the quality of their products and manufacturing processes. The most important factors responsible for creating the competitive position of the sectors companies are good management systems and, to a smaller extent, quality control and work organization systems. The competition within the sector is rather moderate and takes place in the area of quality and brands. Other factors which build competitive advantage are rather on the same level for all companies, which proves that the competition in the sector is moderately intense. The entry/exit barriers are linked to the strength and direction of intensity of competition, as well as the nature of assets and products. Despite the small number of factors determining success, entry barriers are big. Entities commencing their activity in the market need a lot of capital. Factors which have a much stronger influence on a companys success include intangible assets, such as: experience, reputation and customer loyalty. If a company wishes to close or change its specialization, the high expenditure incurred to purchase the technology, as well as the gained experience and the customer base resulting from customer

loyalty may make it difficult for such a company to sell its assets or switch to a different type of activity. In most cases, the companies from the sector have a loyal group of customers expecting products of high quality. They are mostly dispersed and incapable of coordinated purchasing. The relationships between the researched enterprises and their customers are shaped by the number of important clients and by how important a given product is to them, as well as by their income. The suppliers of goods for the entities from the rubber products manufacturing sector have a big bargaining power resulting from the number of suppliers in the market and the importance of quality of the deliverables in the sector. This is also evidenced by little or no influence of substitute products connected with the choice of the supplier. The majority of the researched entities build their competitive position in the market by using tactics consisting in using particular instruments of different strategies. The most popular strategies are cost-reduction strategies and differentiation strategies. The respondents said they built their position using the concentration strategy, i.e. entering a market niche, to a much smaller extent. The main barrier to the development of the researched companies was, according to the respondents, related to the economic situation nationwide and worldwide. Increased costs resulting from higher inflation make the development of companies extremely difficult. The actions undertaken by the companies from the sector in order to generate a good financial result comply with their strategies. In most cases, however, a positive financial result is generated by means of increasing sales, decreasing the costs and by providing a more varied assortment of goods. The strategies applied by the researched companies are, to a large extent, linked to the competition factors typical for the rubber goods manufacturing sector. The moderate pace of growth in the sector, the relatively high importance of the geographical range of the companies from the sector, as well as the high customer loyalty and brand awareness, encourage the researched companies to be active in those areas where competition is most intense. Obtaining good results by using the above-mentioned strategies may help these companies succeed in the market. The investment attractiveness of the sector, according to the respondents, results primarily from the demand for the sectors products in the domestic market. The factors behind the investment attractiveness include also domestic and foreign competition, setting the direction and the

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intensity of rivalry. An analysis of competition intensity shows that competition is strongest when it comes to differentiation through quality and brands. Therefore, there are numerous undeveloped areas that may prove attractive for investors.

High cash reserves, which, in the case of production companies, allow them to effectively manage their liabilities and receivables, are also of great importance. Intellectual property resources are comprised of customer and contractor data bases, as well as modern technology solutions. The level of innovation in the machinery and equipment manufacturing sector compared with that of other sectors proves that the companies from the sector are quite eager to implement modern changes. The most popular innovations are those that increase the quality of products. Most of the companies have introduced new or improved products. The direction and intensity of innovation, points out a strong rivalry in the area of quality of manufactured machinery and equipment. On the other hand, companies underestimate process, marketing and organizational innovations. Intensity of competition in the sector points to a fierce rivalry regarding the quality of offered goods. Despite the growing demand for machinery and equipment, the awareness of competition is high and the operations conducted by the companies are strongly linked to the tactics applied by the competition. Entering the market of machinery and equipment manufacturing sector is connected primarily with rivalry and numerous technical, economic and strategic competition determinants. The main factor determining the competitive position of the companies from the sector is the availability of modern technologies, combined with reputation, experience and the level of product differentiation. Another important factor is having a high capital, including initial capital, as well as being independent of the strategies applied by the competition. In the case of closing or changing a specialization, the high costs incurred on the purchase of specialized assets, combined with the gained experience and the loyal customer base may make it difficult for a company to dispose of its assets or switch to a different form of activity. Suppliers have a quite significant bargaining power in the sector, mostly due to a limited number of wholesalers in the market and, in the case of many companies, high costs of changing suppliers. The strategies applied by the researched enterprises depend, to a large extent, on the level of competition in the sector. The large number of competitors in the market, the strong bargaining power of suppliers and clients, as well as substitutes and copies of products, force most companies in the sector to build their competitive position in accordance with the costs-reduction strategy. In most cases they increase their output by investing more in machinery and equipment, as well as by obtaining and using the knowledge about the market and the laws governing it.

3.5. Machinery and Equipment Manufacturing Sector

The Warmisko-Mazurskie Voivodeship has a long tradition connected with the machinery and equipment sector. Its products are sold both domestically and abroad. The products manufactured by the local companies enjoy a good reputation. The representatives of the machinery and equipment manufacturing sector participating in the research represented private companies (96.6%), mostly individuals conducting economic activities (38.5%), commercial law companies (35.9%), including limited liability companies (20.5%), civil law companies (2.6%) and co-operatives (2.6%). The economic activity of these enterprises included mainly production (52.5%), production and services (22.5%) and production, trade and services (12.5%). The respondents represented medium-sized entities, employing from 50 to 249 employees (37.5%), micro companies, employing from 0 to 9 employees (32.5%) and small companies, employing between 10 and 49 employees (30.0%). Companies in the manufacturing sector offer agricultural, cleaning, wood-processing, industrial and pneumatic machinery, as well as machinery for the fishing, foodprocessing and transport industry. The market value of the goods sold in the sector results from the high ability of the sector to compete in the domestic market and, to a large extent, in foreign markets. The geographical range of the sales of these goods proves that the competitiveness of the companies from the sector extends far beyond the region. The workforce in the sector has specific qualifications and professional skills, encompassing a broad scope of knowledge and technical expertise related to the production processes. The workforce market has limited possibilities of satisfying the needs of employers, which forces many enterprises to upgrade the qualifications of their staff through different courses and trainings. There have been no changes in the number of people employed in the sector recently. Employers tend to hire more staff rather than reduce their employees. The value of the sector-specific resources, such as fixed assets, raw materials, information and intellectual property constitute the most important tool for building competitive advantage in the sector. The most important resource specific for the sector is its infrastructure and real property.

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The investment attractiveness of the sector, according to the respondents, results mainly from the demand in the domestic and foreign market. Apart from this, the companies exports exceed their imports, which is one of the key factors behind the sectors investment attractiveness. Availability of workforce having specific qualifications and skills is another factor which attracts investors.

The product offered by the researched entities encompassed a full range of construction services. The researched enterprises offered services related to road and bridge construction, as well as telecommunication networks and house building (including wooden houses), roofing, paving and faade-making. The source of competitiveness of construction services in the Warmisko-Mazurskie voivodeship is offering high quality at a low price. Many of the companies enjoy high recognition in the market, while some of them base their activity on copying well-known brands. Their products are equally popular among local and regional customers, as well as customers from other parts of Poland. The companies offer their services also to foreign customers. The resources necessary for the production of their services are supplied by local and regional suppliers, as well as suppliers from other parts of Poland and abroad. The companies from the sector have to compete with entities from all over the country. Workforce constitutes a valuable non-material asset of the companies in the sector. Their employees have a varied level of education and highly specialized professional skills. Their professional experience is perceived by their employers as a sector-specific resource. Over the past year, there have been no changes with regard to the level of employment. Most of the companies have kept their hitherto employees, and whatever changes may have taken place with regard to the employment; they consisted of hiring staff, rather than reducing it.

3.6.Construction Sector
One of the most dynamically growing branches of the voivodeships economy is construction. 2005-2009 was a period of significant growth for the sector. The value of sold goods and materials increased by 41.7%. During this period, the average employment rate in the sector increased by 29.3%, while the average salary by 24.6%. As a result of the research, the sector was identified as a key and a high-opportunity sector in the local economy. The representatives of the construction sector who participated in the research represented private companies (75.1%) and public companies (24.9%). Most of them were individuals conducting economic activities (35.4%), commercial law companies (14.4%), including limited liability companies (33.1%), civil law companies (12.7%) and co-operatives (3.9%). The prevalent types of economic activity included services (73.5%), services and production (11.6%) and production, trade and services (6.6%). The respondents represented micro-companies, employing from 0 to 9 employees (37.0%), small companies, employing from 10 to 49 employees (39.8%), medium-sized companies, employing from 50 to 249 employees (22.1%) and large companies (1.1%).

fot. Tomasz Raczyski

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A high level of use of fixed assets requires high expenditure. Availability of the sector-specific resources, such as fixed assets, raw materials and information does not diversify the opportunities of building competitive advantage. Intellectual property resources created by the companies, such as customer data bases, modern technological solutions, inventions, utility patterns and patents define the areas of rivalry in the sector. Innovativeness in the sector points to a fierce rivalry regarding the quality and scope of offered services. This is evidenced by changes introduced by companies, in products and processes. Marketing and organizational changes were implemented only by a small group of companies. According to the research, the rivalry between the sectors companies regards mainly the quality of offered services. Although other factors behind building competitive advantage were more or less the same for all companies, competition between them is strong and results from the number of companies in the market and the dependence of actions undertaken by the researched entities on the tactics applied by their competitors. Entering the market requires experience, customer loyalty and high capital. The biggest barrier to building a competitive position in the market is rivalry with other companies, which offer high quality services and have loyal customers. In the case of the companies from the sector, their experience and customer base constituting intangible value of each company may make it difficult to dispose of their assets or switch to a different type of activity. According to the research, the bargaining power of purchasers of construction services is very high. This is due to the large number of companies in the market and the slow pace of growth in the demand for this type of services. Moreover, most customers expect high quality services. Even though the number of individual customers and customers forming coordinated purchasing groups is nearly the same, they still can choose from a large group of companies. The bargaining power of suppliers of products for the sector is rather low, which results from their large number and similarity of products in their offer. The choice of a supplier depends not so much on the possibility to negotiate favourable purchase conditions as on the number of important customers. On the other hand, the relationships the companies have with their suppliers constitute a valuable asset, as the costs of choosing or changing a supplier is rather high. A threat to the bargaining power of suppliers is the possibility of losing customers as a result of their integration. The strategies applied by the researched companies depend, to a significant extent, on the factors determining compe-

tition in the sector. The moderate growth in the demand, strong competition combined with the extreme importance of the number of significant customers force most companies to apply the cost-reduction strategy. Strategies of differentiation and concentration are used to a smaller extent. According to the respondents, the investment attractiveness of the sector results primarily from the demand in the domestic market and from areas of development defined in the strategies created by the local government units. Another factor conducive to investment is the availability of workforce with specific qualifications. There are many suppliers in the market, and so the availability of necessary materials and products is very high. The customers purchase the companies products individually or in organized groups, and their bargaining power results primarily from their income.

3.7. Trade and Motor Vehicles Repair Sector

Trade is one of the key sectors of all economies. Its importance results from the role it plays in the society: it regulates the exchange relationships, helps satisfy the needs of individuals and organizations, and determines the level of transfer of knowledge, culture and material resources between communities, nations and states. Section G wholesale and retail sale; repair of motor vehicles, including motorcycles, is an area of exchange of different consumer goods. This area includes the repair of means of transport, being a huge area of trade relations, e.g. sale of spare parts. The financial results of trading companies displayed a growth tendency between 2005 and 2009. Despite the crisis, the value of sold goods and materials increased in the aforementioned period by 5.52%. The value of the companies property (gross value of fixed assets) increased by 37%. Even though the average employment rate decreased during the period, salaries increased by 24.7%. The majority of respondents participating in the research represented private companies (96.6%), mostly individuals conducting an economic activity (45.2%), commercial law companies (13.7%), including limited liability companies (24.3%), civil law companies (9.1%) and co-operatives (7.6%). Most of these companies dealt with trade (52.9%), trade and services (20.9%) and other forms of activity related to trade, production and services (25.5%). The respondents represented micro companies, employing from 0 to 9 employees (52.7%), small companies, employing from 10 to 49 employees (37%), medium-sized companies employing between 50 and 249 employees (6.9%) and large companies, employing between 250 and 999 employees (3.4%). The main product of the sector (hereinafter referred to as the trade sector) is the sale of a variety of consumer goods: food products, furniture, household appliances, press,

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chemical and industrial goods, motor vehicles, plumbing and heating products, woodwork and many other goods. The trade sector workforce has varied qualifications and skills. Due to their specific nature, the trade sector companies can be divided into two categories. The first one employs people with required skills and professional qualifications. The other one is smaller and employs people selling specialized products. These companies encounter barriers related to recruiting the necessary workforce. Over the past year there have been no significant changes in the employment level in most companies. Any changes that have taken place consisted in increasing, rather than reducing the number of employees. The most important sector-specific resources are the technical infrastructure and real property. High cash reserves, which, in the case of companies selling goods allow them to purchase the necessary assortment and cover the fixed costs during cyclical changes of the demand level, are also of great importance. Intellectual property, typical for the trade sector, includes mainly customer data bases and is created by over 50% of the companies. The specific resources of the companies from the sector are also the most important tool in the building of their competitive advantage. In comparison to other sectors, the level of innovativeness with regard to implementing modern solutions is rather low. Most of the changes regarding new or improved products point to an intense rivalry with regard to increasing the level of demand in the market. It also appears that the sector underestimates the importance of innovation in the areas of processes, marketing and organization. Trade companies, most of which are intermediaries between producers and end-customers, do not create the value of goods, but can only contribute to increasing the quality of their sales. The lack of differentiation of the level of competitive advantage building tools among the companies points to high opportunities of entering the market. Entering a trade market is primarily connected with rivalry with companies having experience, that is, a group of loyal customers and good relationships with suppliers. Having substantial capital, including initial capital, is also of great importance. Closing of a trade activity may be difficult given the costs incurred to purchase equipment and goods, as well as the results of the experience effect: customers and suppliers. These barriers are not very big, though. According to the respondents, the purchasers have little influence on the sales terms. The sales prices depend largely on the level of income of clients and the number of important clients. Relations with the customer, is seen as one of the most important elements of a tender. The cost a

client would have to incur changing his/her seller is more important for the client, than the mere fact that there is little choice in choosing a seller. The bargaining power in the relationship between the trade companies and their suppliers proves that suppliers have much more bargaining power. This results from the expenditures and costs that companies bear when creating a network of delivery of goods and materials, as well as from their unavailability, confirmed by a significant number of respondents. The types of strategies applied in the sector depend, to a large extent, on the factors determining competition. The threat of substitute products forces many companies to apply the strategy of concentration and differentiation, i.e. extending their activities to markets in which they might gain the loyalty of a fixed group of customers. The cost strategy of the companies consists in extending their knowledge of the market and the laws governing it. According to the respondents, the investment attractiveness of the trade sector results primarily from the demand in the domestic market, relatively low entry barriers and the development areas defined by the strategies developed by the local government units. The development of the sector is closely linked to the development of other sectors of the economy. The sectors attractiveness results from many factors, e.g. population income and development areas defined by the local governments. Nevertheless, this sector is attractive to investors due to the fact that it satisfies all needs of the society.

3.8.Tourism Sector
Tourism is where many areas of the economy meet together. The most important of them are those handling tourist traffic directly, i.e. hotels, camping sites, bars and restaurants, as well as cultural facilities and tourist organizations. Entities offering basic tourist services fall into one category in the PCA (2007) entitled Accommodation and Catering. In the years 2005-2009, their financial result increased and the value of sold goods and materials grew by 19.4%. At the same time, the property (gross value of fixed assets) of these companies increased by 45.8%. The importance of tourism for the voivodeships economy lies not only in the value of financial results created by entities handling tourist traffic directly, but also in more intense activity of trade, health-related services and many other branches of the economy. The development of tourism is also of great importance from the social point of view as it helps increase the standards of living and creates jobs in the region. During 2005-2009, the average employment rate in the accommodation and catering section increased by 11.8%, while the salaries increased by as much as 24.8%.

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The respondents from the tourism sector participating in the research represented private companies (67.4%), foundations and associations (20.2%) and public units (12.4%). Most of them were individuals conducting economic activities (41.4%), associations and social organizations (26.7%), limited liability companies (15.6%), civil law companies (8.9%) and co-operatives (3.3.%). Most of the companies deal with services (69.7%), trade and services (12.4%) and production, trade and services (7.9%). The majority of the researched entities were micro-companies, employing from 0 to 9 employees and small companies, employing from 10 to 49 employees (48.3% each), as well as medium-sized companies (3.4%). The product offered by the researched entities included a full scope of services related to accommodation, catering, entertainment and culture. The biggest value of the sectors product is its quality, price and that its recognizable. The majority of customers are Poles, although the tourist services of the region are also popular with the locals and foreigners. The high level of use of the voivodeships resources by the tourism sector has a significant influence on stimulating many other areas of activity and, consequently, on increasing their financial result. The main competitors are entities operating in the Voivodeship. According to the research, the workforce is one of the most valuable intangible resources of the sector. The people employed in the sector have a high level of education and professional qualifications, as well as personality traits required by the sector. Over the past year there have been no significant changes with regard to the employment level. Most of the companies have kept their hitherto employees, and whatever changes that took place regarding employment consisted of hiring staff, rather than reducing it. High level of use of fixed assets requires a lot of capital, especially initial capital. Despite the high availability of resources and information, the sector-specific assets are among the factors which determine the areas of competition and its intensity. Intellectual property resources (customer data bases and modern marketing solutions) are created by nearly 50% of the companies and constitute an important competitive advantage building tool. In comparison to other sectors, the level of innovativeness with regard to implementing modern solutions is rather high. Most of the changes regarding products and processes points to an intense rivalry as far as increasing or gaining the level of demand in the market are concerned. Many companies, however, seem to underestimate innovations related to marketing and organization, especially in the form of promotion, advertising and research, which, in conjunction with product and process-related innovations, would be very helpful in extending the range of activity

with regard to a product, customers and territory. According to the research, the companies from the sector compete in the area of quality, brand-identity and reputation. Although other factors determining competitive advantage are more or less the same for all companies, competition between them is high and results from the number of companies in the market and how they react to tactics applied by their competitors. Entering the market requires a significant capital. However, factors which have a bigger influence on the success of a company in the sector include: experience, territorial range, brand, customer loyalty, as well as administrative, legal, social and political factors. It is also important that companies become familiar with the tactics applied by the competition. In the case of closing or changing a specialization, the high costs incurred on the purchase of specialized assets, combined with the gained experience, as well as the loyal customer base may make it difficult for a company to dispose of its assets or switch to a different form of activity. According to the respondents, the customers have little influence on defining the sales terms. Availability of substitutes and the intensity of competition in the sector shape the sale prices only to a limited extent. Changing a supplier does not have any influence on the relationships with the customers. What matters in this respect, though, is the importance of a product to the customer, their income and the number of important customers. Due to the high costs related to choosing or changing a supplier, suppliers have a very strong bargaining power in the sector. A threat to this bargaining power, though, may be the threat of customers becoming integrated. The types of strategies applied by the researched entities are, to a large extent, closely linked to the factors determining the competition in the sector. The fast pace of growth in demand, combined with the big importance of customers, the brand, as well as the quality of services and the company image make most companies apply the strategy of concentration and differentiation. The cost-reduction strategy is less popular as a competition strategy, but is often used by companies to improve their financial results. According to the respondents, the investment attractiveness of the sector results mainly from the areas of development defined in the strategies developed by the local government units. Moreover, entrepreneurs have greater possibilities of obtaining funds for development from the EU structural funds.

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4. High-opportunity sectors

he following five sectors identified during the research process cannot be classified as key at this point, however, they may play a significant role in the development of the Warmisko-Mazurskie voivodeship in the near future.

in a variety of statistics, price lists, leaflets and web sites. As far as sector-specific raw materials are concerned, the respondents pointed to food products, wood and feed. The companies from the sector do not encounter any difficulties in obtaining the above-mentioned resources as they are easily available on the market. The fishing market is characterized by a moderate competition, demand growing at a fast pace, high fixed costs and a small variety of products. The competition instruments are more or less the same for all companies and include: quality and company image. According to the respondents, the researched companies offered better quality products than their competitors, and had a better image than other companies. On the other hand most of the entrepreneurs believed that their companies had the same ratio of price to quality as their competitors. In their opinion, they also shared many similarities with regard to reputation, payment terms, frequency of introducing new products, timeliness, distribution networks convenient to customers, advertising and promotion of sales, scope and quality of services, as well as customer service. The most important factors conducive to investment in the sector are access to qualified workforce and appropriate technical infrastructure, as well as demand. The sector does not set the requirements regarding building a competitive position very high. The most important tools of building completive advantage are quality and image. Competition is rather moderate, however there has been a growth in the demand for the sectors products. Another factor conducive to the development of the sector is the geographical location of the Voivodeship and the abundance of surface waters.

4.1. Fishing Sector

The Warmisko-Mazurskie voivodeship belongs to the most surface water-abundant areas in Poland, which is the main factor determining a dynamic development of the sector. Moreover, the development of the fishing sector is conditional upon the quality of water resources and the quantity of fish present therein. Given the environmental factors and the large water resources of the Voivodeship, the fishing sector stands big chances of becoming a key sector for the development of the voivodeships economy. The representatives of the fishing sector participating in the research represented private companies, mostly limited liability companies, individuals conducting economic activity, as well as associations and social organizations. The researched companies are production and production-tradeservices entities, mostly from the SME sector: micro companies, employing from 0 to 9 employees, small companies, employing from 10 to 49 employees and medium-sized companies. The product of the sector is fish stocking, fishing and sale of bred fish. The biggest advantage of the product is its quality, uniqueness and that its recognizable. The product is sold mainly in the local and regional markets. It is not very competitive in the national market and, according to the respondents, is not sold overseas. The biggest competition of the sector companies are the local and regional entities. Most staff are hired based on employment contracts for a specified or an unspecified period of time; however, nearly every fifth entity does not have any employees at all. Most of the people employed in the sector have general/ technical secondary education. On the other hand, every fifth entity hires people mainly with tertiary and basic vocational education. The people working in the sector have specific technical or fishing skills, many of them are educated in economics. Even though the fishing sector requires highly specific qualifications, the employers do not have any difficulties finding suitable workforce. The sector-specific resources are mainly fixed assets, such as buildings and fishing equipment. The respondents agreed that information is as important a resource as fixed assets. The necessary information is usually available

4.2.Energy and Water Sector

The growing prices of electricity, as well as outdated technologies and inefficient power grids necessitate the search for alternative energy sources, for example water energy. The development of this sector in the WarmiskoMazurskie Voivodeship is possible mainly due to a thick network of small watercourses suitable for use by small power plants. The companies from the energy and water sector participating in the research were mostly public entities. The researched entities represented the following legal forms: civil law companies, individuals conducting economic

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activity, commercial law companies, including limited liability companies. All of the researched companies are service providing companies, mainly micro entities, employing from 0 to 9 employees, small enterprises, employing from 10 to 49 employees and medium-sized companies, employing between 50 and 249 employees. Energy is a product whose sales process is very complex. Energy producers, sellers and distributors are separate entities. Power plants sell power to sellers. Consumers sign energy distribution contracts with sellers, however, they have a rather limited choice due to the fact that it is the distributors who own the necessary technical infrastructure. Electrical energy production is a very important aspect of sustainable growth. This issue is often raised during international debates. According to the Green Paper towards a European Strategy for the Security of Energy Supply adopted in March 2006, the basic priorities within the EU will be: 1. increasing the security of supply by increasing the solidarity among member states, 2. pursuit of varied and efficient structure for obtaining energy, 3. integrated approach to climate changes, 4. completion of the building of the European electrical power and gas markets through accelerating liberalization, 5. development of innovative power technologies, 6. cohesive external energy policy14. Most of the people working in the sector are employed

on the basis of employment contracts for a specified or an unspecified period of time. Most of them have general/ technical secondary education and tertiary education. Only a small number of companies employ persons with basic vocational education. The majority of persons working in the sector are employed on the basis of employment contracts for a specified or an unspecified period of time. Most of them have general/ technical secondary education and tertiary education, although some of the entities employ people with basic vocational education. The people employed in the sector have specific expert licenses and certificates. The employees of all of the researched companies have participated in training courses financed by the EU or their employers. The sector-specific resources include primarily fixed assets, such as means of transport, construction equipment, furnaces, heating boilers, turbines and other specialist machines and equipment. Both the fixed assets and resources are easily available in the market. The characteristic features of the energy and water market include small number of competitors, demand growing at a fast pace, high fixed costs and similarity of products across the market. Most companies of the sector use the same competitive strategies. Most of the researched entrepreneurs believe that their companies have the same ratio of price to quality as their competitors. In their opinion, they also shared many similarities with regard to reputation, payment terms, frequency of introducing new products, timeliness, distribution networks convenient to customers, advertis-

14 Polska polityka energetyczna wczoraj, dzi, jutro, President of the Energy Regulatory Office, Warsaw 2010, p. 10.

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ing and promotion of sales, scope and quality of services, as well as customer service. The most important factors conducive to investments in the sector include availability of technical infrastructure, development in the areas defined by strategies drawn up by the local government units, as well as high availability of qualified workforce. The sector does not set high requirements regarding the building of competitive advantage. The companies from the sector operate in accordance with law and contracts. The sector-specific resources are easily available in the market. The respondents believe that there arent many competitors in the market and that the pace of growth of demand for the sectors services is increasing. However, this sector is going to evolve toward an environment friendly economy following the principles of sustainable growth. Given the natural environment of the voivodeship and its agricultural and tourist character, the sector is likely to develop towards alternative energy sources and thus increase the competitiveness of the regions economy.

of the local communities. The companies participating in the research were mainly private companies, most of them individuals conducting economic activities, limited liability companies, civil law companies, associations and social organizations. Most of them are service, service and trade, and service and production companies. The respondents represented mainly micro companies, employing from 0 to 9 employees (68.8%), small companies, employing from 10 to 49 employees (18.8%), medium-sized companies, employing between 50 to 249 employees and large companies, employing between 250 and 999 employees (6.3 each). The products provided by the representatives of the ICT sector participating in the research are information technology and telecommunication solutions. The main advantage of the products sold by them is their quality and price. These products are sold mainly in the national, regional and local markets, and, to a very limited extent, abroad. The biggest competition for the companies representing the sector are other companies operating in Poland. The majority of people working in the sector are employed on the basis of employment contracts for a specified or an unspecified period of time, however, nearly every third company does not have any employees at all. Most of the employees have general/technical secondary education and tertiary education. They also have sectorspecific qualifications. Most of the companies do not have any problems with finding a suitable workforce, and nearly half of them have employees participating in lifelong learning. The sectorspecific resources are mainly fixed assets, such as means of transport, office equipment and specialist machinery and equipment. The respondents find information to be a

4.3. ICT Services Sector

Information and Communications Technology (ICT) is one of the key factors necessary for the development of the region and for increasing its competitiveness. Common access to information and communications technologies may help reduce the level of social exclusion and depopulation of the region, resulting from the peripheral location of the Voivodeship. The development of social awareness of the benefits of using modern information and communication solutions will have a positive effect on the development of the sector, while new investments, promotion of widespread use of ICT tools, as well as secure access to this technology will contribute to strengthening the territorial cohesion of the Voivodeship and to the integration

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very important asset as well. The necessary information is usually available in a variety of statistics, price lists, leaflets, advertisements and announcements, as well as information available on websites. Another important resource is big cash reserves. Most companies in this sector use the same competitive strategies. Most of the researched entrepreneurs believed that their companies had the same ratio of price to quality as their competitors. In their opinion, they also shared many similarities with regard to reputation, payment terms, frequency of introducing new products, timeliness, distribution networks convenient to customers, advertising and promotion of sales, scope and quality of services, as well as customer service. The most important factors conducive to investment in the sector is the growing demand for information-related services, uniform tools of building competitive advantage domestically and abroad, as well as the qualified workforce.

ary education. They are mainly economists, architects and graphic designers, and have sector-specific qualifications. Most of the companies do not have any problems with finding suitable workforce, however 1/3 of them complained about the scarcity of people with suitable qualifications, skills and professional experience. They also believe that the candidates salary expectations are too high. The sector-specific resources are mainly fixed assets, such as means of transport, office equipment, specialist machinery and equipment, as well as measuring instruments. They are also believed to be easily available. The respondents find information to be a very important asset as well. The necessary information is usually available in a variety of statistics, price lists, leaflets, advertisements and announcements, as well as information from websites. A small number of companies pointed to big cash reserves as a significant resource. The competition in the market is very big. The respondents opinions on the pace of growth in demand, fixed costs and differentiation of products were divided. Hence these factors are not considered very important. The companies differ from one another only to a moderate extent in terms of applying various building instruments to gain competitive advantage.. The respondents opinion differed only with respect to advertising, sales promotion and customer service; however, it is difficult to identify the dominant opinion. The most important factor conducive to investment in the sector is the demand for information-related services. According to the respondents, it is possible to obtain EU funds to develop a company. On the other hand, every third respondent believes that the sector is not attractive from the investment point of view.

4.4.Business Consulting Services Sector

High unemployment rate, especially among young people, may stimulate them to start an economic activity of their own. Currently, people planning to set up their own business may apply for different types of financing and preferential loans. The development of entrepreneurship will stimulate the demand for consulting services and thus increase the profitability of the sector. The companies participating in the research are private entities, mostly individuals conducting economic activities, limited liability companies, civil law companies and co-operatives. Most of them deal with services and services and trade. The respondents represented micro companies, employing from 0 to 9 employees and small companies, employing from 10 to 49 employees. The products provided by the sector include tax and management consulting, accounting, payroll and human resources services. The main advantage of these products is their high quality and attractive price. Many of the companies in the sector are well-known in the market and have a good reputation. Only a handful of companies provide services that could be described as unique. The companies in the sector provide their services to local, national and regional customers, some of them even to customers abroad. Their biggest competition is local and among national companies. The majority of people working in the sector are employed on the basis of employment contracts for a specified or an unspecified period of time, however, a half of the companies do not have any employees at all. Most of the employees have general/technical secondary education and terti-

4.5. Medical and Social Services for Dependant Persons Sector

The voivodeships location amidst forest, lakes and rivers is conducive to the development of the medical care sector. Moreover, the ageing of the society, combined with its growing wealth (including the elderly) and longer life expectancy will stimulate a growth in the demand for all kinds of medical and rehabilitation services. The abovementioned tendencies are likely to continue worldwide, hence this sector has a chance to become a key sector for the development of the economy of the WarmiskoMazurskie Voivodeship. The companies participating in the research were mainly public entities, most of them individuals conducting economic activities and civil law companies.

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Most of them are service, service and trade, and service and production companies. The respondents represented mainly micro companies, employing from 0 to 9 employees (43.1%), small companies, employing from 10 to 49 employees (40.4%), medium-sized companies, employing between 50 to 249 employees (15.6%) and large companies, employing between 250 and 999 employees (0.9%). The products provided by the representatives of the sector participating in the research include: psychotherapy, dentistry, nutrition and diet therapy, psychology, social aid, rehabilitation (including rehabilitation of the disabled) without accommodation, as well as care for the elderly with and without accommodation. All respondents highly emphasized the quality of their services, which, in the case of private companies, are competitive in terms of price. They are also unique. Despite the popularity of the medical and paramedical services among foreign tourists, the entities providing services to foreigners did not participate in the research. The majority of people working in the sector are employed on the basis of employment contracts for a specified or an unspecified period of time. The companies hire mainly people with tertiary education and general/technical secondary education, who also have sector-specific skills and hold certificates in sensory integration, social work, educational improvements, rehabilitation etc. Apart from that, employees of nearly all companies participate in lifelong learning. Most of the respondents said that even though the sector required a specialized workforce, they did not have any problems finding suitable staff. The sector-specific resources are mainly fixed assets, such as buildings and premises, means of transport, office and medical equipment. Another sector-specific resource gathered by the researched companies is information in the form of price lists, information posted on websites, as well as information included by clients in psychological tests. A small group of companies found big cash reserves an important factor as well. The majority of respondents said the sector-specific resources were available in the market. The following factors are characteristic of the market: big competition, high pace of growth, high fixed costs, differentiation of products and a big importance of strategy. The majority of companies use the same instruments for increasing their competitive advantage. The tactics applied by the majority of sector enterprises in order to generate a positive financial result consists in cost

reduction. Moreover, a large group of companies improve their financial result by improving the quality of work organization, obtaining funds, cooperating with other entities and employing qualified workforce. According to the respondents, there are many competitors in the market, but at the same time the demand for medical services is growing.

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Summary

ursuit of an efficient pro-development policy in the region requires the choice of a specified strategy. The main task the public administration should focus on is the drawing up of a list of actions that will facilitate efficient management of socio-economic changes. This is connected with a complex system of different elements facilitating the achievement of predefined objectives. Creating pro-development socio-economic change management mechanisms is of particular importance. Creating such mechanisms requires a specified and comprehensive approach on the part of the local authorities, including parallel actions undertaken in many areas. Particular stages of this project were aimed at searching for correlates of change in those areas that are considered key from the point of view of economic development of the Warmisko-Mazurskie voivodeship. This analysis points to the key problem areas, mainly the low level of economic development in comparison to the rest of the country. However, evaluating the development prospects for the Voivodeship is not an easy task. According to the obtained data, if the present tendencies continue, in some areas threats will continue to grow, however, one can also point to areas in which the situation is likely to improve. Some of the observed phenomena result from macro-social and macroeconomic trends which are difficult to prevent, but can be neutralized in order not to impede economic development. The regional economy could be improved through intervention in some sectors of the voivodeships entrepreneurship. A serious problem is the low competitiveness of companies, resulting, among other things, from the fact that a lot of entities are individuals conducting business activities, as well as from the fact that only a handful of companies are involved in foreign trade. Other factors behind the low competitiveness of companies include limited investment possibilities, relatively low investment in innovative ventures, as well as limited R&D spending during crisis. The local authorities will play a key role in this respect. The level of financing that can be obtained from external sources will depend primarily on the efficiency, effectiveness and competence of the authorities. However, the role of local governments is not limited only to obtaining funds. Good management and organization results in more efficient solutions to problems and a more efficient management of resources made accessible to the authorities. The research conducted as part of the project mentioned herein is one of many stages aimed at improving the situation of the economy and population of the Warmisko-Mazurskie voivodeship; and takes into account presently identifiable prospects for changes in areas considered key for further development of the region. The above-mentioned research should also be one of the stages of building a socio-economic change management system. It should also be stressed that the analytical works are only the introduction to institutional transformation, as the final objective of the realized tasks is to implement practical solutions consisting in building an efficient institutional infrastructure, as well as to integrate actions toward the development of the region and its local communities. Since change is a natural phenomenon in a society, especially in view of dynamic globalization, attitudes consisting of an active involvement in new challenges, searching for change and efficient use thereof are much more efficient, and, at the institutional level, can be referred to as a change management system.

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free copy

THE MARSHALS OFFICE OF WARMISKO-MAZURSKIE VOIVODESHIP IN OLSZTYN 10-562 Olsztyn, ul. Emilii Plater 1 T: +48 89 521 91 70 E: biuropromocji@warmia.mazury.pl W: www.warmia.mazury.pl