Poland urged to strengthen financial market to support innovation-driven growth

Poland must enhance the depth of its financial market to support investment in innovation and economic development, according to a recent report from ING Bank Śląski. The study highlights the critical role of financial deepening—defined as diversified and accessible sources of funding—in fostering innovation-based growth, especially for new and emerging businesses.

The report emphasizes that Poland’s current investment levels remain low, limiting the country’s potential for development. A more robust financial ecosystem, which includes a well-functioning stock exchange and greater access to venture capital and private equity, could provide the necessary funding channels to support business growth across various stages.

While traditional financing through banks and capital markets remains important, the report argues that openness to riskier funding—such as venture capital—is essential for innovation. At present, Polish companies predominantly rely on internal funds, with 70% of investments financed from their own resources. Only 11% depend on loans or leasing, and the use of equity or bond issuance is relatively rare.

The report also notes an imbalance in bank portfolios, where government bonds now outweigh loans issued to the private sector. Meanwhile, the Warsaw Stock Exchange (WSE) remains underdeveloped, with a market capitalization of only 25% of GDP—significantly below the EU average. Experts cited in the report suggest that strengthening local capital markets would better serve Europe’s diverse economic needs than relying solely on centralized financial hubs.

Despite a stable regulatory environment, Poland lacks a mature ecosystem for venture capital and private equity. Business leaders interviewed for the report stressed the need to attract foreign investment and to promote Poland as a reliable destination for long-term funding in innovation. They also called for stronger domestic investment vehicles that can support startups and innovative firms.

Grzegorz Brona, President of Creotech Instruments, emphasized the importance of promoting Poland to foreign private funds and ensuring strategic technologies remain under national control. Meanwhile, Tomasz Ciąpała, President of G8, pointed out that many Polish firms are caught in a “middle-growth trap,” needing capital to scale but lacking efficient access to funding.

The report also touched on structural issues, including the dominance of state-owned enterprises on the WSE and the complexity of capital-raising procedures. It recommended reforms to encourage medium-sized and family-owned businesses to list on the stock exchange and to direct more private savings—currently focused on deposits and real estate—into productive investments.

Waldemar Olbryk, President of Archicom, concluded that Poland must evolve beyond past economic models and embrace flexibility, agility, and innovation to build a competitive future. He noted the need to improve the startup ecosystem and better align education with market needs.

The findings are based on interviews with 25 Polish business leaders and executives from foreign chambers of commerce, supported by macroeconomic analysis from ING economists. The report underscores a consensus: while Poland has strong foundations, a more dynamic and inclusive financial market is needed to unlock its full innovation potential.

Source: ISBnews