This paper evaluates the competitiveness of Poland and Czech Republic as potential hosts of a Foreign Direct Investment (FDI) project involving automotive assembly. The potential investors are from the US. FDI contributes to the globalization of businesses.
In addition, it acts as a channel for the transfer of certain technologies and capital. Besides, FDI allows for the exchange of skilled manpower.
Since the automobile industry is flourishing both in Europe and Asia, any government will snatch the slightest opportunity at its disposal to host the manufacturing or assemblage of automobiles.
Poland’s Evaluation
According to a report published on the Polish Information and Investment Agency’s website in September 2011, Poland is viewed as the best destination for investors dealing with manufacturing projects (PIIA, 2011).
This was after FDI intelligence ranked Poland as the number one destination in Europe with regard to investment in manufacturing projects. On the global scene, Poland was ranked at position three as the best destination with regard to production projects (PIIA, 2011).
Only the US and China beat Poland on the global scene. In terms of quality and cost, Poland also topped the list in Europe. However, Germany and France beat Poland when quality was the decisive factor (PIIA, 2011). Investors often look for destinations with low investment costs and those that can produce quality products.
FDI intelligence singled out Poland as the perfect destination when quality and cost are considered. After joining the European commission in 2004, FDI projects in Poland have significantly increased (Estrins, Hughes, & Todd, 1997). The economic environment in Poland is suitable for FDI projects.
The country has a stable and predictable economy. Besides, Poland has one of the fastest growing economies in Europe. In terms of the social environment, low labor costs are significant factors that attract FDI to Poland.
In political terms, Poland has solid legal and judicial systems, which attract FDI. The level of corruption is low in Poland thus encouraging investment.
Potential Benefits for Poland
Poland is likely to benefit from FDI in a number of ways. Politically and economically, FDI markets Poland’s suitability as a potential investment destination not only for FDI projects, but also other projects. The host country’s politicians are challenged to show the necessary political will that will attract foreign investors.
As a result, cases of bribery, corruption, bad governance, political propaganda, are likely to be minimized. In social terms, FDI will enable Polish citizens acquire employment (Pressman, 1999). FDI inflow from EU is at a whooping 85% in Poland. This means FDI contributes significantly to the creation of jobs in Poland.
According to Pressman (1999), HP, which is one of the current FDI in Poland, created 1,100 jobs in 2010. Consequently, this leads to increased standards of living in the host country. Thus, Pressman (1999) agues that if HP can broaden its investment in Poland, the number of job opportunities for the locals is likely to increase.
In return, HP will gain a global reputation, and this will enhance its chances of investing in other countries. Pressman (1999) also notes that Foreign Direct Investment benefits the host country by purchasing raw materials from the locals. On top of that, FDI brings the advanced IT solutions.
Czech Republic’s Evaluation
The Czech Republic is a common FDI recipient in Europe. The country is centrally located in Europe and thus it acts as a meeting point for Western and Europe (Dunning & Narula, 1996). Czech Republic boasts of a strong industrial base that is comprised of an adequate skilled work force.
On top of that, the Czech Republic offers incentives to potential foreign investors inform of subsidies (Kay, 2008).
Other macroeconomic factors such as a stable political and economic environment also boost Czech Republic’s attractiveness. FDI will promote the existence of the political will required to attract other foreign investors.
Potential Benefits for Czech Republic
FDI can benefit Czech Republic in a number of ways. FDI is likely to increase productivity in the Czech Republic. Domestic firms in the Czech Republic are likely to benefit from FDI because FDI attracts other foreign investments (Dunning & Narula, 1996).
Experts argue that FDI contributes to economic spillover in that technological expertise and skilled manpower are exchanged. In socioeconomic terms, FDI can enhance wages in the country. On the political front, FDI promotes the existence of the political will required to attract foreign investment in the country.
The government is likely to enhance its governance in order to maintain a good image to potential foreign investors. Dunning and Narula (1996) argue that the Czech economy has significantly grown due to an increase in FDI inflows.
Initially, the country had experienced sluggish economic growth because it relied on local production. Czech Republic is likely to realize an increase in production levels.
Competitiveness: Poland versus Czech Republic
Poland seems to have an upper hand when compared to Czech Republic in terms of foreign Investment attractiveness. Poland has been ranked by FDI as the best destination for investment in Europe owing to its low cost of investment, and stable economic and political environments.
Although, the Czech Republic has a stable economic and political environment, its attractiveness in terms of quality and investment cost is not as attractive as Poland’s. The Czech Republic has a better approach because the government offers subsidies to potential foreign investment firms.
Poland’s PPT Evaluation
Poland’s PowerPoint presentation is well organized. It begins by outlining what the presentation entails. Part one of the presentation highlights the country’s investment climate.
The second part explains the competitiveness of Poland with regard to FDI.
The third part showcases Polish-US economic relations. In terms of investment climate, the presentation highlights geographic and demographic features.
Next, the presentation indicates the country’s competitive advantages. Poland is located in a strategic location in the continental Europe.
Poland forms a significant trans-European corridor. The country’s GDP growth is twice the EU coverage. The country has a population of 38 million consumers and a 10% growth of the retail market.
The presentation proceeds by highlighting the country’s fast economic growth and stable political environment. On top of that, the presentation highlights the country’s employment and unemployment rates, GDP growth rates, and inflation statistics.
The presentation also gives a comprehensive analysis of Polish legal framework, which has necessitated business relations between the US and Poland.
The presentation concludes with a summary. In the summary, Poland is shown to be in a strategic location, and has significant EU resources. In addition, the summary highlights the country’s rich human resources and cost effectiveness.
Czech Republic’s PPT Evaluation
The Power Point Presentation showcasing Czech Republic’s competiveness is extremely appealing. The presentation begins by showcasing the country’s attractive sites and general outlook. For example, the presentation shows a pictorial presentation of historical sites in the country.
In addition, the first section showcased the country’s architectural prowess. The presentation then proceeds by highlighting the geographical competitiveness of the country. The Czech Republic is located in central Europe. Its central location in Europe makes the country a meeting point for Western and Europe.
This is followed by demographic statistics. According to the presentation, Czech Republic has a population of approximately 10.4 million people. The country has a land mass of 49 017 square miles.The presentation also indicates the position of Czech Republic in the European market.
The European Union has a total of 27 members with a population of 496 million. Out of the 27 member countries, 15 countries use the Euro including Czech Republic.
Another key aspect that is comprehensively covered in the presentation is the economic status of the country. Important economic statistics included in the presentation include trade balance, import and export rates, employment status, and the country’s GDP.
According to the presentation, over 100 automobile manufacturers have manufacturing or assembly operations in the country. Statistics of foreign and domestic automobile manufactures and assemblers are given. The presentation also highlights the bilateral relationship, between the Czech Republic and the US.
Poland’s PPT versus Czech Republic’s PPT
Both presentations are extremely appealing. However, the Polish presentation has an eye catching approach which focuses on US Poland business relations. From the economic, cultural, political and geographical points of view, both presentations have provided vital information.
Since both countries are competing for an investor from the US, the presentation should show the benefits a US investor is likely to get.
Some of the most significant statistics include benefits that US investors are likely to get in Poland and Europe at large, the legal frame work in Poland, and a detailed update on the US-Poland business relationship. In addition the Polish presentation concludes by highlight its main points.
The Polish presentation ought to include the country’s historical and natural attractiveness.
On the other hand, the Czech presentation scores highly in terms of the county’s natural and historical attractiveness. The presentation begins by showcasing the country’s attractive sites and general outlook.
For example, the presentation shows a pictorial presentation of historical sites in the country. In addition, the first section showcased the country’s architectural prowess. Moreover, the presentation acknowledges the geographic location of the Czech Republic.
From the above presentations, it is evident that in order to attract a foreign investor, a country should showcase compelling statistics on macroeconomics and legal framework. A country’s natural attractiveness should also be included.
Poland’s presentation is the most appealing. It highlights in detail the competitiveness of Poland, the benefits the US investor is likely to get, and compelling macroeconomic and demographic statistics.
Recommendations for Poland
The presentation has addressed the main factors in detail. These factors include macroeconomics, legal framework, and demographics. However, the presentation should also market Poland’s natural attractiveness and heritage.
Recommendation for Czech Republic
The presentation has covered the country’s macroeconomics and natural attractiveness in detail. However, the presentation can be enhanced by detailing the benefits US investors are likely to get in case they invest in the country. This should include the country’s legal framework, and how it favors foreign investors.
Both presentations need to explain further how social cultural environment will affect foreign investors.
References
Dunning, H., and Narula, R. (1996). Foreign Direct Investment and Governments:Catalyst for Economic Restructuring. New York: Routledge.
Estrins, A., Hughes, K., and Todd, S. (1997). Foreign Direct Investiment in Central and Eastern Europe:Multinationals in Transition. London: The Royal Insititute of International Affairs.
Kay, N. (2008). Foreign direct investment in the Czech Republic: a challenge for domestic firms. Web.
Polish Information and Investment Agency (PIIA), (2011). Poland most attractive for manufacturing projects. Web.
Pressman, S. (1999). Fifty Major Economists. New York: Routledge.