CEO of Siemens Poland: Digitalisation is the Backbone of Business

“We are witnessing positive changes in Poland. In the third quarter, gross domestic product increased by 0.4% year on year. Admittedly, this is a modest result, but there are predictions that the entire year 2023 will be marked by economic growth, meaning a positive GDP. With consumption rebounding, there is considerable optimism among Poles for an economic upturn”, he points out.

In his opinion, one of the most positive issues influencing 2024 is the disbursement of advances for the National Reconstruction Plan. The European Council approved changes to the Polish plan and the new chapter of REPowerEU, unlocking an additional EUR 2.76 billion in grants and EUR 23 billion in preferential loans. The disbursement of the advance, amounting to over EUR 5 billion, is not contingent on meeting milestones.

“We have the first EUR 5.5 billion unlocked from the National Reconstruction Plan, and we are waiting for projects in sustainability and energy efficiency development”, notes Zieliński. “I am convinced that thanks to the National Reconstruction Plan, there is a chance that in 2024 these additional funds will drive the digital transformation of domestic businesses. The strength of the Polish economy lies in diversity; we have many small businesses producing complex components. These companies need sources of funding to strategically develop and take significant steps towards digitalisation”, he assesses.

Among other positive factors, he highlights the return to normal investment cycles.

“After disruptions in the supply chain, we are returning to normalcy. Delivery times for most of our portfolio have significantly improved, reverting to pre-pandemic levels. This reduction in the time-to-market inspires confidence that 2024 will surpass the preceding year”, states Zieliński.

As he notes, an unknown factor is the absorptive capacity of the German market. This is important because the Polish and German economies are closely intertwined, and both countries are among each other’s main trading partners.

“Our economies are a set of interconnected vessels, and therefore, this bilateral cooperation is very important. Meanwhile, the rebuilding of the German economy after the recession, as well as its energy and digital transformation, are issues that we simply do not know. Therefore, when it comes to the prospects for Polish industry in 2024, the German market seems to be the biggest puzzle”, he concludes.

Nurturing Talent

An important challenge not only for the next year, but also for the coming years is acquiring human capital. Specialists are always invaluable, and the demographic crisis and the decreasing number of Poles of working age are only exacerbating this.

“People are the most valuable capital we have; I am talking not only about the company, but the whole country. Poland does not have that many natural resources and our biggest asset is human capital. Therefore, we must invest heavily in this area”, emphasises the CEO.

This is why Siemens Poland is involved in supporting Polish higher education – the company has been organising the Siemens Award competition with the Warsaw University of Technology for almost thirty years. It is also involved in vocational education as a partner of many high schools and a strategic partner in the last edition of EuroSkills.

Supporting education is one thing, but it is also essential to ensure that educated young people do not leave the country.

“In most specialisations we have the opportunity to retain these people. There are fewer people leaving today than fifteen years ago. Our economy operates in a system of interconnected vessels with the global economies. Many development centres are emerging in Poland, including those of international companies, which support graduates of technical higher education institutions”, points out Zieliński.

An example is the “Engineers 4.0” program implemented by Siemens Poland, aimed at female students who want to enhance their skills in Industry 4.0.

Digitalisation – Challenges and Directions

According to the Digi Index 2023 report prepared by Siemens Poland, there has been a noticeable decrease in interest in digitalisation among domestic medium-sized manufacturing firms. The index measuring progress and readiness for digital transformation decreased from 2.4 in the previous edition to 1.8 in this year’s edition. Larger companies with over 250 employees achieved better results.

According to Zieliński, this is not a signal of a slowdown in the digital transformation of the Polish industry, but rather a natural consequence of the progress of digitalisation, which varies in intensity over time.

“Medium and large companies are aware that digitalisation is a strategic issue for their operation. Sometimes it is even a matter of survival. In smaller companies these priorities evolve over time, as evidenced by a significant jump in the digitalisation index last year compared to two years ago”, he observes.

“The second contributing factor to the index decrease is the absence of external funding through the National Reconstruction Plan, expected for the past two years. A substantial portion of the National Reconstruction Plan funds is earmarked for supporting programs and projects digitalising the industry”, Zieliński says.

The Digi Index study participants identified digitalisation as pivotal for cost savings, time efficiency, resource savings, increased organisational security, resilience to disruptions, and ultimately, competitiveness. Companies increasingly emphasise social and environmental responsibility manifesting commitment to reducing environmental impact, CO2 emissions, and striving to achieve ESG goals.

Which areas to digitalise first depends on the company.

“Digitalisation is not just technology; it is the strategic backbone of the company. Therefore, if we look at various industrial sectors each time we will get a slightly different answer regarding digitalisation priorities”, the Siemens Poland CEO says.

For retail companies, it will be primarily investments in increasingly intelligent and efficient customer interfaces or good warehouse management. The automotive industry, which is undergoing a revolution related to electrification, must think not only about new car models, but also about technological innovations to increase efficiency in both production and the operation of new vehicles. For energy and transportation-related companies, digitalisation is primarily an investment in cybersecurity.

Decarbonisation – Industry’s Promise

Digitalisation enables businesses to boost efficiency, positively impacting sustainable development goals. European Union countries aim for climate neutrality by 2050, with decarbonisation–moving away from coal in energy production–serving as a key component.

“The issue of decarbonisation is primarily a matter of our competitiveness. Renewable energy sources are cheapest when we ensure a certain critical mass. Therefore, there is hope that investments in renewable energy will accelerate significantly making green energy cheaper and more accessible for entrepreneurs or investors”, Zieliński explains.

He emphasises that the cheapest energy is that which is not consumed, so companies are increasingly focusing on optimising production processes. However, it’s not just about costs.

“As an industry, we have made a promise to societies regarding decarbonisation: we want our production to be zero-emission. Siemens declared such a change by 2030, which means that in six years our carbon footprint will be zero. This applies to all our factories and all the services we procure from external companies”, notes the CEO of Siemens Poland.

“By 2050, all products and the entire chain of our supplies are to be environmentally neutral. For example, the plastic used for casings or other elements in automation or electrification will come from recycling-based production or secondary use of these materials”, he adds.

The Sustainable Siemens Strategy, adopted by the company two years ago and effectively implemented, is intended to achieve these goals in line with the principle that market leaders should be an example of change.

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