Family-run firms, at first glance, appear to be enormously important to the Polish economy accounting for around 75% of all businesses and 50% of employment, according to academics. But as the majority are still under first-generation ownership, they can’t be classed as family businesses in the strictest sense of the term.
Poland’s turbulent political landscape since the start of the Second World War dictated the organisation of its economy up until the early 1990s. It was the invasion of Poland by Germany in September 1939 that triggered the Second World War, and although the conflict ended six years later, it would be half a century before Poland regained its autonomy. With the Allies handing responsibility for the rebuilding of Poland to Russia after the war, Joseph Stalin installed a puppet Communist government.
Very few pre-Second World War family firms survived the Communist era however, following the country’s first free elections in 1989, Poland has been reorganising its economy from a centralised to a free market model. In the early 1990s, the government implemented a “shock therapy” programme. This saw price and currency controls relaxed, large-scale privatisation of public assets and the liberalisation of trade within the country – to kick start its economy.
This period saw what was dubbed an “explosion of entrepreneurship” and the birth of many privately-owned firms. As a result, 71% of family businesses are in the hands of the founding generation and the average age of Polish family businesses is only 14 years. This means they are hard to distinguish from other small and medium enterprises in the country, and at the moment there is no official definition of a family business in Polish law. This lack of clarity means the statistics on family businesses and their significance to the Polish economy is not as clear as elsewhere in Europe.
Experts point out that while many first-generation companies employ family members, this does not necessarily mean they will become long-term family businesses, and it’s important not to over interpret the extent to which family firms dominate the Polish economy.
These companies have not had much time to build a viable business model, and if these business are to survive they need to crack the succession problem. Succession is likely to dominate the debate surrounding Polish family business for the near future as so many companies are preparing for the tricky first-to-second generation transfer.