Investment on hold? Why Polish SMEs must not miss the digital transformation

For over a decade, Poland has recorded one of the lowest investment rates in the region. In 2024, gross fixed capital formation amounted to just 16.9% of GDP, compared with around 26% in the Czech Republic and Romania. By contrast, the EU average was around 21%. This structural gap highlights a persistent weakness in Poland’s growth model: private firms, particularly SMEs, remain reluctant to commit capital.

In an environment marked by regulatory uncertainty, high interest rates and geopolitical tensions, postponing investment decisions may seem rational. Yet, when it comes to digitalisation and AI, delaying strategic spending can put firms at a significant disadvantage.

Why are Polish firms holding back?
The reasons behind weak investment activity are both structural and cyclical. According to the Polish Economic Institute’s report, Investment Activity of Polish Firms (June 2025), the top barriers to investment are:

• High costs of implementation (64%) – especially acute in construction and equipment purchases
• Uncertain economic outlook (57%), cited by both investing and non-investing firms
• Unstable and unclear regulations and taxation (52%), a reflection of Poland’s complex fiscal system

Access to capital also remains a challenge. Among companies that are not investing, 40% point to the high risk of investment and 38% admit they simply lack the funds. By contrast, among active investors, 71% do not consider lack of capital an obstacle – they have resources but are cautious about spending them in unpredictable conditions.

The regulatory environment exacerbates this caution. Frequent and poorly analysed legal changes – often introduced at short notice – make it difficult for entrepreneurs to predict their tax or compliance obligations. Combined with high interest rates, this leads many SMEs to adopt a defensive stance: waiting for stability rather than committing to growth.

A paradox of opportunities and fears
The caution contrasts sharply with the opportunities available. Poland has one of the fastest-growing IT sectors in the region, with the IT services market expected to reach €10 billion by the end of 2025. The country boasts a talent pool of over 650,000 IT specialists, and its start-up ecosystem raised more than €150 million in 2024. Moreover, the EU’s Recovery and Resilience Facility (RRF), channelled through the National Recovery Plan (KPO), will inject substantial capital into digital and green transformation projects.

This creates a paradox: while firms hesitate to invest due to uncertainty, significant financing opportunities are available. Those who seize them early may gain a decisive competitive edge.

Three transformations: energy, automation, digital
As Professor Waldemar Rogowski of SGH and BIK recently said in Bibby’s Biznes Jutra podcast: “Polish firms are currently facing the need to implement three crucial transformations: energy, automation, and digital. (…) Poland is a country where enterprises tend not to invest, while what we need today is an investment rate of around 25% of GDP per year. Another structural problem is the dominance of public over private investment in our economy.”

The implications are clear. Energy transformation – such as building renewable capacity – helps reduce reliance on volatile energy prices. Automation addresses rising labour costs, with robotics replacing manual processes. Digital transformation, including Industry 4.0 tools and artificial intelligence, optimises production, enhances efficiency, and secures long-term competitiveness.

Where do businesses invest today?
Despite caution, firms are not cutting investment entirely. According to Grant Thornton’s Investment Plans of Polish Companies in 2025:

• 38% of large and medium firms plan to increase spending on machinery and production lines, while 48% will maintain existing levels
• 32% intend to expand IT budgets, including systems, licences and hardware
• 25% will fund international expansion, and 22% will invest in employee development, including training and benefits
• 18% aim to launch new products or services, while 16% plan to raise spending on real estate
• Only 15% of firms will increase R&D budgets, and a mere 3% are looking at mergers and acquisitions

This distribution indicates that while companies are hesitant to expand aggressively, they are maintaining core investment budgets. Importantly, areas such as IT and automation remain priorities – signalling recognition of the digital imperative, even if overall spending is restrained.

Financing digital transformation
One of the key reasons firms avoid new investment is fear of external financing. Nearly half of Polish businesses step back from loans due to high interest rates. But according to Wojciech Czapeczko, head of business finance at Bibby Financial Services, this approach can be short-sighted: “Giving up on external capital often means postponing crucial investments, which in the long term weakens competitiveness. Factoring offers a compelling alternative. Unlike traditional loans, its cost is not directly tied to the National Bank of Poland’s reference rate. Instead, it depends on invoice risk and maturity. This means factoring can remain a competitive source of capital even in periods of high interest rates.”

By converting receivables into working capital, firms can finance strategic projects – such as automation, AI systems, or IT upgrades – without burdening their balance sheets with long-term debt. This flexibility is particularly valuable in times of uncertainty, allowing SMEs to seize opportunities rather than freeze growth.

The cost of waiting
Although companies declare larger investment budgets for 2025, the reality is that spending growth is muted compared with previous years. Many firms cannot specify how much they will invest, reflecting growing uncertainty about their future direction.  According to the report by Grant Thornton, only a small minority plan to cut budgets significantly – 8% for buildings, 5% for employees, 4% for equipment – showing that hesitation is more about postponing than reducing investment.

However, hesitation carries a cost. Global competitors are already accelerating their digitalisation efforts, integrating AI and automation into their operations. For Polish SMEs, failing to keep pace risks losing market share, both domestically and internationally.

Conclusion: no time to wait
Poland’s investment rate – stuck at around 17% of GDP – remains far below the EU average of 21%. To close the gap and maintain competitiveness, SMEs cannot afford to wait and see, particularly when it comes to digitalisation and AI.

The opportunity is here: EU recovery funds, a strong domestic tech sector, and financing tools such as factoring create favourable conditions to invest now. For Polish firms, embracing digital transformation is not just a matter of growth – it is the key to survival in a rapidly changing business environment.

Link to the Biznes Jutra podcast on Spotify: https://open.spotify.com/show/3FbZqJgKQKj7KPHvKYDyuu