Increased Employment Rates and the Nature of the Economic Growth in Poland s Voivodships

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1 Brometr Regionlny Tom 16 nr 4 Incresed Employment Rtes nd the Nture of the Economic Growth in Polnd s Voivodships Mriusz Zieliński Opole University of Technology, Polnd Abstrct The purpose of the rticle is to study the impct of bsic production fctors (level of employment nd vlue of fixed ssets) on the economic growth rte in different regions of Polnd. The hypothesis presented in the rticle is tht in the process of economic growth, the humn fctor (level of employment) plys greter role thn the fixed ssets. The hypothesis ws verified using the dt published by the Centrl Sttisticl Office in the Sttisticl Yerbooks of the Regions for the yers 2000 nd The results of the study confirm the vlidity of the formulted hypothesis. Also, the uthor of the rticle mde the effort to identify the voivodships chrcterized by extensive nd intensive economic growth. Keywords: economic growth, extensive nd intensive growth, employment, dded vlue, fixed ssets JEL: E22, E24, R23 Introduction The most often mentioned key production fctors tht determine economic growth re cpitl nd lbor. The hypothesis presented in the rticle is tht in the process of economic growth, the humn fctor (level of employment) plys greter role thn the fixed ssets. The hypothesis ws verified using the dt published by the Centrl Sttisticl Office of Polnd in the Sttisticl Yerbooks of the Regions for the yers 2000 nd The rticle poses two dditionl reserch questions: Is it vlid sttement tht different regions of Polnd re chrcterized by intensive nd extensive growth? Are voivodships with higher economic growth rtes chrcterized by reltive increse or decrese in the shre of industry nd the enterprise sector (compnies tht employ more thn 9 persons) in the structure of the economy? In order to nswer the first of the bove questions, in ddition to bsolute vlues the reltive vlues of the chnge in the employment level, the vlue of fixed ssets, nd the gross dded vlue in the different voivodships were compred to the verge vlues for the entire economy. In order to nswer the second question, n nlysis ws performed on the dt relted to employment nd increse of fixed ssets in the industry nd the enterprise sector (compnies tht employ more thn 9 persons). 1 Production fctors tht determine economic growth According to the stndrd pproch, the production fctors tht determine economic growth re lbor, cpitl, nd nturl resources (lnd). Currently, the list of production fctors is expnded by dding technology (which determines the level of utiliztion of the three bsic production fctors) nd socioeconomic fctors (relted to the humn fctor) (Woźnik 2004, 104). Some uthors believe tht investment in mteril cpitl is the most importnt fctor ffecting economic growth. E-mil ddresses of the uthors Mriusz Zieliński: M.zielinski@po.opole.pl 2018 by Wyższ Szkoł Zrządzni i Administrcji w Zmościu All Rights Reserved

2 46 Mriusz Zieliński Their opponents emphsize the fct tht decisions concerning the direction of investment (including cretion of technologies or decisions to purchse solutions tht re redy for use) nd the effectiveness of their use depend on the humn fctor. The qulity of decisions mde by people depends, in turn, on their knowledge nd skills; consequently, wht is more importnt is investment in humn cpitl (Domński 1993, ; Jones 2016, 14 17; Rnis, Stewrt, nd Rmirez 2000, ) defined s the potentil of workers (eduction, qulifictions, skills, bilities, ttitudes, motivtion, nd helth) (Fisher, Schoenfeldt, nd Shw 2006, 3). From the mcroeconomic stndpoint, of high importnce to economic growth is ccumultion of humn cpitl (including yers of eduction) nd incresed popultion (Morl-Benito 2009, 13 14). From the microeconomic stndpoint, humn cpitl nd structurl cpitl (orgniztionl systems, mngement tools nd philosophy, nd innovtion cpitl) form intellectul cpitl, which is the source of competitive dvntge of businesses (Dubkevics nd Brbrs 2010, 1). Countries (regions) my prefer growth bsed on use of lbor-intensive technologies (especilly in high unemployment conditions) or cpitl-intensive technologies (which increse the level of technologicl dvncement of the economy but crete few new jobs) (Brtkowik 2013, 135). Economic growth my be extensive (when it is cused by incresed utiliztion of lbor, cpitl, nd other production fctors with smll chnges in their efficiency) or intensive (when the increse in lbor efficiency exceeds the increse in the utiliztion of other production fctors s result of use of new technologies, better orgniztion of work, etc.). Extensive economic growth slows down when the vilbility of ny of the production fctor is reduced (Woźnik 2004, 49 52, ). Thus, the rte of GDP growth depends mostly on the level of utiliztion of the lbor resources (employment rte, efficiency, length of work time) nd on the technicl infrstructure used by the lbor (rte of investment, cpitl intensity dependent on the selected technologies nd brnches in which investments re mde) (Pisecki 2011, 61 62). The present rticle mkes references to the concept of economic growth bsed on the prdigm of knowledge-bsed economy. According to tht concept, it is increse in the vlue of humn cpitl tht mkes it possible to mintin long-term economic growth (s well s qulittive chnges in the socio-economic structure i.e., production structure, technology, lbor, nd mngement) (Fiedor nd Kociszewski 2010, ; Mlik nd Jsińsk-Biliczk 2018, 2 3; Woźnik 2004, 20). The bove ssumptions re the bsis for the hypothesis of the rticle presented in the introduction. 2 Production fctors nd the nture of economic growth in Polnd s voivodships Tble 1 shows comprison of the level of employment ccording to registered dt in different regions of Polnd in the yers 2000 nd The totl employment nd the employment in the industry re dt vlid s of 31 December of the respective yer; in the cse of the enterprise sector (compnies employing more thn 9 persons), the dt shows the verge yerly level of employment. In the nlyzed period, employment decresed by 4,3% countrywide. 1 In 5 voivodships, employment incresed. Those five voivodships re: Pomorskie ( 7,8% increse), Wielkopolskie ( 7,2% increse), Dolnośląskie ( 4,6% increse), Lubuskie ( 1,4% increse), nd Mzowieckie ( 0,8% increse). The voivodships with decrese in the level of employment tht is close to the ntionl verge (0,9% to 8% of decrese of employment) were: Młopolskie, Śląskie, Wrmińsko-Mzurskie, Kujwsko- Pomorskie, nd Zchodniopomorskie. In the remining voivodships, the decrese in the level of employment in the yers exceeded 10%. In the cse of the industril sector the level of employment incresed lso in five voivodships. The plce of the Mzowieckie Voivodship (decrese of employment in the industry by 17,8%) in the list of voivodships with incresed employment level in the industry ws tken by the Wrmińsko- Mzurskie Voivodship ( 6,9% increse in the level of employment in the industry). The highest rte of increse of employment in the industry ws observed in the Lubuskie Voivodship (n 11% increse). In the enterprise sector (compnies employing more thn 9 employees), the level of 1. [In the journl Europen prctice of number nottion is followed for exmple, ,33 (Europen style) = (Cndin style) = 36, (US nd British style). Ed.]

3 Incresed Employment Rtes nd the Nture of the Economic Growth 47 Tb. 1. Level nd rte of growth of employment in the yers 2000 nd 2015 in selected sections by voivodships Totl employment Employment in the industry Employment in the enterprise sector thousnds b % c thousnds b % c thousnds b % c / / /2000 Polnd , ,3 4, , ,2 4, , ,0 5,0 Dolnośląskie 1 025, ,0 4,6 246,1 263,0 6,9 727,1 766,5 5,4 Kujwsko-Pomorskie 762,7 707,1 7,3 177,6 167,4 5,8 480,8 444,7 7,5 Lubelskie 979,1 817,2 16,5 117,9 107,5 8,9 402,9 390,4 3,1 Lubuskie 330,1 334,6 1,4 79,6 88,3 11,0 230,2 216,9 5,8 Łódzkie 1 066,0 956,9 10,2 241,1 219,5 9,0 601,1 577,7 3,9 Młopolskie 1 334, ,9 0,9 230,7 223,8 3,0 715,2 801,4 12,0 Mzowieckie 2 387, ,7 0,8 388,8 319,6 17, , ,5 31,0 Opolskie 372,0 321,6 13,5 82,8 76,3 7,8 230,7 190,0 17,6 Podkrpckie 945,6 809,7 14,4 159,9 159,9 0,0 427,2 409,1 4,2 Podlskie 495,5 413,1 16,6 66,1 63,9 3,3 225,2 209,2 7,1 Pomorskie 740,3 798,2 7,8 174,0 170,7 1,9 521,3 540,4 3,7 Śląskie 1 750, ,0 4,5 537,6 484,5 9, , ,3 8,7 Świętokrzyskie 594,2 465,0 21,7 87,3 80,2 8,1 264,0 226,7 14,1 Wrmińsko-Mzurskie 454,0 433,2 4,6 95,4 102,0 6,9 290,6 269,1 7,4 Wielkopolskie 1 351, ,4 7,2 327,8 360,6 10,0 859, ,5 21,0 Zchodniopomorskie 571,1 525,7 8,0 121,8 107,0 12,1 393,7 344,7 12,4 Source: Sttisticl Yerbook of the Regions Polnd 2001 (pges 90, 92), Sttisticl Yerbook of the Regions Polnd 2016 (pges 286, 288) Averge yerly level of employment, in the compnies employing more thn 9 persons b Thousnds of persons c Rte of growth Tb. 2. Vlue nd rte of growth of Gross dded vlue by region in current prices Gross dded vlue Gross dded vlue per employee PLN billion % PLN % / /2000 Polnd 602, ,4 165, ,2 Dolnośląskie 47,9 134,6 180, ,4 Kujwsko-Pomorskie 29,4 70,7 140, ,5 Lubelskie 23,8 61,0 155, ,1 Lubuskie 14,3 35,3 146, ,6 Łódzkie 36,6 97,0 165, ,8 Młopolskie 44,9 126,1 180, ,0 Mzowieckie 119,7 353,9 195, ,8 Opolskie 14,5 33,5 131, ,7 Podkrpckie 23,6 62,6 165, ,6 Podlskie 14,2 35,1 148, ,8 Pomorskie 34,4 91,9 167, ,1 Śląskie 83,3 197,7 137, ,3 Świętokrzyskie 16,1 37,8 134, ,0 Wrmińsko-Mzurskie 17,0 42,5 149, ,1 Wielkopolskie 55,8 156,5 180, ,0 Zchodniopomorskie 26,7 60,2 125, ,1 Source: Sttisticl Yerbook of the Regions Polnd 2002 (pge 302), Sttisticl Yerbook of the Regions Polnd 2017 (pge 526) Rte of growth

4 48 Mriusz Zieliński employment on the ntionl scle incresed by 5%. Employment in the enterprise sector incresed t rtes similr to the ntionl verge in the Dolnośląskie nd Pomorskie voivodships. A much greter increse in the level of employment in this sector ws observed in the Mzowieckie Voivodship ( 31% increse), the Wielkopolskie Voivodship ( 21% increse), nd the Młopolskie Voivodship ( 12% increse). In other voivodships, the level of employment in the enterprise sector decresed. Tble 2 shows dt concerning the chnges in the gross dded vlue (totl nd per employee) in the yers 2000 nd The voivodships where the totl increse in the gross dded vlue ws bove the ntionl verge ( 165,1% increse) were (in the order ccording to their rnking) the Mzowieckie Voivodship, the Młopolskie Voivodship, the Dolnośląskie Voivodship, the Wielkopolskie Voivodship, the Pomorskie Voivodship, nd the Podkrpckie Voivodship. There re seven voivodships where the increse of gross dded vlue per employee ws bove the ntionl verge ( 183,2% increse), nmely the Podkrpckie Voivodship, the Lubelskie Voivodship, the Świętokrzyskie Voivodship, the Młopolskie Voivodship, the Łódzkie Voivodship, the Podlskie Voivodship, nd the Mzowieckie Voivodship. The leding voivodships re lso those where the decreses in the level of employment re the gretest; consequently, the increse of the nlyzed indictor is due to the reduction of employment by wy of elimintion of the lest productive employees. Tble 3 shows comprison of the gross vlue of fixed ssets by region in Polnd in the yers 2000 nd The totl gross vlue of fixed ssets in current book vlues incresed between the yer 2000 nd the yer 2015 by 140,3%, or less by 25 percentge points thn the gross dded vlue. This indictes tht the nture of the economic growth in Polnd is intensive (n incresed effectiveness of utiliztion of lbor in the economy). In eight voivodships, nmely Lubuskie, Podkrpckie, Wielkopolskie, Dolnośląskie, Młopolskie, Łódzkie, Kujwsko-Pomorskie, nd Pomorskie, the increse in the vlue of fixed ssets ws higher thn the ntionl verge. The increse in the vlue of fixed ssets in the industry ws slightly lower nd ws equl to 137,7%. The increse in the vlue of fixed ssets in the industry ws higher thn the ntionl verge in s mny s ten voivodships, Tb. 3. Vlue nd rte of growth of Gross vlue of fixed ssets in current book vlues Gross vlue of fixed ssets Gross vlue of fixed ssets in the industry Gross vlue of fixed ssets in the enterprise sector PLN billion % b PLN billion % b thousnds b % b / / /2000 Polnd 1 444, ,8 140,3 462, ,3 137,7 834, ,9 117,2 Dolnośląskie 107,3 276,7 157,9 38,3 110,4 188,0 62,1 162,1 161,1 Kujwsko-Pomorskie 62,5 155,3 148,6 20,2 49,4 144,8 30,4 75,0 146,6 Lubelskie 70,0 151,5 116,5 14,1 35,9 154,4 29,1 53,9 85,3 Lubuskie 32,8 97,6 197,4 9,0 37,0 311,9 15,4 45,2 193,8 Łódzkie 85,9 216,3 151,8 31,2 80,6 158,5 45,7 111,1 143,4 Młopolskie 100,9 258,7 156,3 33,6 73,0 117,1 56,0 121,9 117,8 Mzowieckie 298,3 715,5 139,9 81,7 157,6 92,9 207,2 431,9 108,5 Opolskie 43,2 81,7 89,3 19,5 32,3 65,9 24,0 41,1 71,4 Podkrpckie 58,3 152,9 162,1 20,0 48,8 143,5 27,0 64,7 139,8 Podlskie 39,4 91,1 131,3 7,7 22,3 188,6 14,7 34,3 132,7 Pomorskie 79,9 196,5 146,0 20,2 57,5 184,2 47,1 101,4 115,4 Śląskie 190,8 417,4 118,8 90,3 192,9 113,5 138,3 252,2 82,3 Świętokrzyskie 41,6 89,2 114,3 15,5 31,9 106,2 19,6 40,0 103,6 Wrmińsko-Mzurskie 45,7 102,1 123,6 8,4 27,0 222,3 17,9 38,8 116,5 Wielkopolskie 122,6 319,2 160,3 35,3 101,6 188,1 67,0 172,6 157,7 Zchodniopomorskie 65,7 150,1 128,5 17,5 41,2 135,8 33,1 66,5 101,3 Source: Sttisticl Yerbook of the Regions Polnd 2001 (pges ), Sttisticl Yerbook of the Regions Polnd 2017 (pges ) In the compnies employing more thn 9 persons b Rte of growth

5 Incresed Employment Rtes nd the Nture of the Economic Growth 49 nmely Lubuskie, Dolnośląskie, Podlskie, Wielkopolskie, Dolnośląskie, Pomorskie, Łódzkie, Lubelskie, Kujwsko-Pomorskie, nd Podkrpckie. A comprison of the rnking lists relted to the totl increse in vlue of fixed ssets nd the increse in the vlue of fixed ssets in the industry leds to the conclusion tht in the nlyzed period industriliztion ws the bsis for economic growth in the following voivodships: Lubuskie (the first plce in both lists), Wrmińsko-Mzurskie (the second plce in the increse of the vlue of fixed ssets in the industry nd the twelfth plce in the increse of the totl vlue of fixed ssets), nd Podlskie (the third nd the tenth plce, respectively). In the enterprise sector (compnies employing more thn 9 persons), the increse in the vlue of fixed ssets ws lower nd ws equl to 117,2%. In eight voivodships i.e., Lubuskie, Dolnośląskie, Wielkopolskie, Kujwsko-Pomorskie, Łódzkie, Podkrpckie, Podlskie, nd Młopolskie, the vlue of fixed ssets in the enterprise incresed more thn the ntionl verge. Tble 4 shows the rtios relted to the chnges in the level of employment, the vlue of fixed ssets, nd the gross dded vlue. The rtios were clculted by dividing the rtios of specific voivodships by the rtions for the entire country, so s to determine whether the growth in individul voivodships is more intensive thn the ntionl verge. Of the six voivodships where the economic growth ws fster thn the ntionl verge, in three (Dolnośląskie, Pomorskie, nd Wielkopolskie), the employment level nd the vlue of fixed ssets incresed fster thn the gross dded vlue. A similr sitution took plce in four voivodships where the growth of dded vlue ws slower thn the ntionl verge, nmely Kujwsko-Pomorskie, Lubuskie, Śląskie, nd Zchodniopomorskie. This indictes reltively (compred to the ntionl verge) extensive nture of the growth in those voivodships. In bsolute numbers, n increse in the vlue of fixed ssets tht ws higher thn the increse of dded vlue (which indictes extensive economic growth) ws observed in the following voivodships: Lubuskie, Kujwsko-Pomorskie, nd Zchodniopomorskie. The voivodships where the economic growth ws intensive nd where the increse of gross dded vlue exceeded the increse in the level of employment nd in the vlue of fixed ssets were Lubelskie nd Mzowieckie voivodships. In the remining voivodships, the increse of gross dded vlue is between the increse in the level of employment nd the increse in the vlue of fixed ssets. The Mzowieckie Voivodship nd the Lubelskie Voivodship re lso the leders with regrd to the Tb. 4. Rtios showing the chnges in the level of employment, the vlue of fixed ssets, nd the gross dded vlue in the yers Employment Vlue of fixed ssets Gross dded vlue Totl Per employee Polnd 100,0 100,0 100,0 100,0 Dolnośląskie 109,3 107,3 105,9 98,7 Kujwsko-Pomorskie 96,9 103,5 90,9 92,3 Lubelskie 87,3 90,1 96,5 110,9 Lubuskie 106,0 123,8 93,1 90,3 Łódzkie 93,8 104,8 100,0 103,7 Młopolskie 103,6 106,7 105,9 105,2 Mzowieckie 105,3 99,8 111,5 101,6 Opolskie 90,4 78,8 87,4 99,5 Podkrpckie 89,4 109,1 100,2 117,8 Podlskie 87,1 96,3 93,6 103,4 Pomorskie 112,6 102,4 100,8 89,4 Śląskie 99,8 91,1 89,5 92,3 Świętokrzyskie 81,8 89,2 88,4 105,9 Wrmińsko-Mzurskie 99,7 93,1 94,0 95,7 Wielkopolskie 112,0 108,3 105,8 93,9 Zchodniopomorskie 96,1 95,1 85,1 89,7 Source: Clculted by the uthors bsed on the dt provided in tbles 1 3

6 50 Mriusz Zieliński increse of gross dded vlue per worker. Also in this list, ll of the seven voivodships tht were described bove s those where extensive economic growth ws observed, recorded growth tht ws below the ntionl verge. If it is ssumed tht n increse of the gross dded vlue per worker bove the ntionl verge indicted intensive economic growth, then such growth ws recorded in the following voivodships: Łódzkie, Młopolskie, Podkrpckie, Podlskie, nd Świętokrzyskie. In the lst three of the forementioned voivodships, s well s in the Lubelskie Voivodship, such good result ws chieved mong others thnks to the lrgest decrese in the level of employment observed in Polnd. The correltion coefficient between rte of growth of the totl gross dded vlue nd the rte of growth of employment in the enterprise sector turned out to be sttisticlly significnt t the level 0,01. Slightly lower (0,05) sttisticl significnce ws observed in the correltion between the rte of growth of totl employment level nd the rte of growth of totl gross dded vlue (positive correltion) nd the rte of growth of gross dded vlue per employee (negtive correltion). Becuse the correltions between rte of growth of dded vlue nd rte of growth of vlue of fixed ssets turned out to be sttisticlly insignificnt, this confirms the hypothesis of the rticle. Tb. 5. Correltion coefficients between the rtes of growth of specified indictors 2000/2015 rte of growth of: totl employment vlue of fixed sset employment in industry vlue of fixed sset in industry employment in the enterprise sector.... vlue of fixed sset in the enterprise sector Compnies employing more thn 9 persons * p < 0,05; ** p < 0, /2015 rte of growth of: totl gross dded vlue gross dded v. per employee 0,568* 0,477 0,175 0,057 0,913** 0,337 0,599* 0,118 0,118 0,331 0,028 0,155 The determintion coefficients were clculted for the reltions tht turned out to be sttisticlly significnt. In the cse of the reltion between rte of growth of totl employment nd rte of growth of totl gross dded vlue, the determintion coefficient multiplied by 100% ws equl to 32,27% nd in the cse of the reltion between the rte of growth of totl employment nd rte of growth of gross dded vlue per employee, it ws equl to 35,94%. Thus, determintion of economic growth by the level of employment is not high. A very high coefficient of determintion multiplied by 100%, equl to 83,33%, ws clculted for the reltion between rte of growth of employment in the enterprise sector nd rte of growth of totl gross dded vlue. This reltionship is mutul: n increse in employment in compnies lrger thn micro-businesses results in n increse in the GDP (gross dded vlue) nd economic growth enbles higher employment in enterprises (e.g., s result of micro-businesses trnsforming into smll enterprises). Conclusion The hypothesis presented in the introduction (the humn fctor i.e., the level of employment plys greter role thn fixed ssets in the economic growth process) is supported by the coefficients of correltion between those vlues. With reference to the reserch questions: reltive chnges in the level of employment in the industry do not determine the rte of economic growth by region, while voivodships with the highest rte of economic growth re chrcterized by reltive increse in the employment level in the enterprise sector. The comprisons of the dt indicted tht extensive growth, both bsolutely nd reltively (compred to the ntionl verge), ws observed in the Lubuskie Voivodship, the Kujwsko-Pomorskie Voivodship, nd the Zchodniopomorskie Voivodship. The voivodships where economic growth ws the most intensive were the Lubelskie Voivodship nd the Mzowieckie Voivodship, whereby

7 Incresed Employment Rtes nd the Nture of the Economic Growth 51 the Mzowieckie chieved the highest increse in the gross dded vlue, with growth of the vlue of fixed ssets tht ws smller thn the ntionl verge. References Brtkowik, R Ekonomi rozwoju. Wrszw: Polskie Wydwnictwo Ekonomiczne. Domński, S.R Kpitł ludzki i wzrost gospodrczy. Wrszw: Wydwnictwo Nukowe PWN. Dubkevics, L., nd A. Brbrs The Role of Orgniztionl Culture in Humn Resource Mngement. Humn Resources Mngement nd Ergonomics 4 (1): Fiedor, B., nd K. Kociszewski. eds Ekonomi rozwoju. Wrocłw: Wydwnictwo Uniwersytetu Ekonomicznego. Fisher, C.D., L.F. Schoenfeldt, nd J.B. Shw Humn Resource Mngement. 6th ed. Boston: Houghton Mifflin Co. Jones, C.I The Fcts of Economic Growth. In Hndbook of Mcroeconomics. Volume 2, edited by J.B. Tylor nd H. Uhlig, Sint Louis: Elsevier Science. Mlik, K., nd A. Jsińsk-Biliczk Innovtions nd Other Processes s Identifiers of Contemporry Trends in the Sustinble Development of SMEs: the Cse of Emerging Regionl Economies. Sustinbility 10 (5): doi: /su Morl-Benito, E Determinnts of Economic Growth: Byesin Pnel Dt Approch. Policy Reserch Working Pper (4830): doi: / Pisecki, R Rozwój gospodrczy globlizcj. Ekonomi rozwoju w zderzeniu z rzeczywistością. Wrszw: Polskie Wydwnictwo Ekonomiczne.. ed Ekonomi rozwoju. 2nd ed. chnged. Wrszw: Polskie Wydwnictwo Ekonomiczne. Rnis, G., F. Stewrt, nd A. Rmirez Economic Growth nd Humn Development. World Development 28 (2): doi: /S x(99)00131-X. Woźnik, M.G Wzrost gospodrczy. Podstwy teoretyczne. Krków: Wydwnictwo Akdemii Ekonomicznej.