Supplying Support for European Growth

Image of a Polish shipyard

A British exit would shake the European Union to its core, costing the political partnership its second-largest economy, not to mention one of its top two military powers. But in Central and Eastern European (CEE) countries like Poland, there is a less visible threat to future prosperity — brain drain, especially in the area of logistics and supply chains, one of the key drivers of economic development in the region.

As supply chains increasingly span the globe and compete on a scale not witnessed before, many firms have adapted their geographic locations to take advantage of CEE supply markets. For instance, global companies like Pratt & Whitney, Bombardier, Volkswagen and Amazon have established facilities in Poland, leveraging proximity to economic networks, resources and highly skilled, cost-efficient labour to better serve their customers. This trend, of course, has naturally necessitated improvements in infrastructure, which have largely been achieved through the close cooperation between academic and private-sector institutions. But while the logistics infrastructure has significantly improved over the last decade as a result, significant improvements in business education and management research have not materialized.

This is not a minor issue.

Look at Poland. As the only EU member to survive the recent global financial crisis without a recession, it has become known as a regional economic powerhouse largely because of the impressive pace of growth achieved by its logistics and supply chain management (SCM) sector. But to sustain this growth, the sector, not to mention the economy as a whole, needs to be supported by competitive business schools. And with all due respect to the nation’s academic community, Polish business schools have lots of room to improve when compared to their international peers.

Furthermore, the research output of Polish universities and business schools needs to increase, especially in areas that support economic growth. For instance, the result of a query for “supply chain” in the Scopus database from 2007 until 2015 returns 52 articles published with the country of origin of at least one of the authors being Poland. Only a few papers in the top journals from the operations management/management science area can be identified and most of them are written by authors affiliated with public universities. By comparison, the same query returns 143 papers from Switzerland (a country with a much smaller population), 624 papers from Canada, and 3,770 papers from the United States. You could argue that this is still a relatively good result given the declining expenditures on education and R&D (4.9 per cent and 0.9 per cent of GDP as of 2011, respectively) in Poland. Then again, a lack of international hiring among Polish business schools also doesn’t pave the way for optimism surrounding the region’s managerial education landscape.

Industrial firms, retailers, and third-party logistics providers, along with supply chain consultancies, after-sales service providers and IT solution providers, all benefit from the ability to rely on professionals equipped with the latest knowledge, methods and tools. But while these things are taught in logistics and supply chain management (SCM) courses at top universities in other parts of the world, there is much to be desired when it comes to management education in CEE nations. As a result, we need to raise the awareness of investors and researchers from the international business community about the region’s growing market for logistics and SCM.

If international companies want to be successful in the global marketplace, they have to rely on a friendly local business climate, which includes building executive education and research programs at business schools that can compete with their international peers. Attracting top international faculty is a prerequisite and management should consider investments in this area when making outsourcing decisions. This is especially relevant for local business schools, whose mandate should be not only to teach in executive programs, but also to do research and publish in top international management journals.

Simply put, the ties between the higher-education institutions and the private sector in CEE nations must be strengthened. This is the key to unlocking the successful research potential in the area of logistics and SCM. Through the advancements of research methods and technology transfer to the CEE countries, firms can gain a competitive edge, as the cost of doing business and research in the CEE countries is still relatively low. The sustainable growth can only be achieved by finding synergies and opportunities in logistics and SCM from the academic and practitioner perspectives in this developing European region.

Ultimately, academia creates boundary conditions for innovativeness and economic growth in the long term. Therefore, private-sector firms should consider making an investment in thought leadership when outsourcing to CEE countries.

Ensuring that the region’s next generations of researchers can work at home instead of having to spend their whole careers abroad would go a long way toward sustaining economic growth. In Poland’s case, it would also be a tribute to scientists like Maria Sklodowska-Curie and Jerzy Neyman.