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DEFENCE I OFFSET

Jarosław Kruk 

"So-so" NEW POLISH TECHNOLOGIES

01/04/2019

I ask myself whether the Polish arms industry can effectively develop and implement modern technologies and startups developed by scientists.

Plants owned by global players follow the strategy of the group and if they succeed in discovering something interesting - they transmit all the know-how to the headquarters, and there they decide what to do next. Private companies, at least a few of them, are trying to implement modern technologies into their production, especially when it comes to production with export opportunities. Often they create modern technologies and try to commercialize them. It is obvious that foreign markets require very modern technologies and low prices, often lower than on the domestic market. On the other hand, we do not hear  that a small company X has invented a given technology in the broadly understood state security sector, successfully implemented it and independently or jointly with an industry or financial partner started production. We also do not hear the state-owned industry has created a lot of interesting technologies that are later being implemented. There are admittedly excellent PIAP exceptions, but generally it is quite so so.

In general, the development of modern technologies is quite weak in Poland. Virtually the vast majority of Polish startups are trying to find a foreign partner who will buy the majority of shares / stocks and if it is good, it will put up funds for the development of technology. Hitherto experience of most technology companies shows that in our country, after exceeding a certain stage of development, it is difficult to develop a technology company. Last year, some tax incentives were introduced, and the next ones will become effective in 2019 (IP Box), but how will it work in practice - it is not known. Bureaucratic  inanity can destroy a lot despite seemingly good regulations. So far, innovation support in our country is at best mediocre.

All in all, it's good that we implement solutions that have effects in the EU and Israel. In the latter country a lot of startups related to the military industry and broadly understood national security and civil defense come into being.  Interestingly, their founders are young people supported by experienced practitioners - the average age is 50-60 years. They invest little, usually the equivalent of 100,000 to one million zlotys. They try to interest the army, police, special services and fire brigade with their solutions. Of course, first and foremost they try to obtain money from specialized funds, which invest in what seems to have even initial interest of the army and other state services. And many such companies are successful; they find a buyer for an idea or technology or a specialized fund which  helps in obtaining funds based on an IPO on NASDAQ or in acquiring an investor.

We can not compare ourselves to an environment in which a relative or a good friend on Wall Street is a rule rather than a rarity, but you can always follow good examples. That is just to copy how it's done there, transferring the solutions and slowly adapting them to our conditions. Our  biggest problem is not inventing  a given technology, because scientific institutes, universities and young enthusiasts handle this pretty well. The main problem is commercialization of these technologies.

It turns out that the final recipient (or recipients) of new solutions is not very interested in them because he needs and prefers solutions from „the shelf”. Perhaps it would be good to know why is this so.

Conclusion of the contract for the delivery of the first phase of the Wisła Project and the offset agreement connected with it raises questions about how to use the actual and legal possibilities to develop the arms industry and effectively meet the needs of the Armed Forces.

According to my home portal Defence24.pl, Polish industry is able to develop the production of antiaircraft missile effectors with a range of more than 10 km, a needed link in the aerial defense system. It would be worth inserting into programs  being  developed. At the same time, the question arises whether the Polish industry can independently produce a system of the Wisła type - today it seems that it does not. Narrow specialization may give it a chance - the production of selected elements/ components for the needs of foreign concerns introducing them into  their supply chain and doing so well enough and cheaply, that would be profitable for the group to order these elements not only for systems intended for Poland.

In general, there is a lack of flexibility in our purchasing procedures. There are no legal contraindications to acquire, in one large purchase transaction, a part of the key technology from the point of view of state security in the offset; buy a license for a specific product, with the right to develop it and sell it to foreign markets; in some part lead to industrial cooperation. So that the Polish defense industry would be treated as a whole in the Ministry of National Defense and not  divided into state sector under the influence of the Treasury and private. There are, after all, so many legal solutions that can protect the interests of state security.

 

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