ABSTRACT
Poland, together with other Central European countries, does not resemble most of the characteristics associated with peripherality in terms of manufacturing and the wider socio-economic system today. There is a large complex of different activities, with a great number of producers, economies of scale and scope, and an extensive network of suppliers. Processes of industrial, especially global production network, product and process upgrading, as well as selective functional upgrading, have been underway in recent decades. The enhanced role of Polish manufacturing reflects the co-evolution of firms and industries on the one hand, and the economic, social and institutional environment in which they operate on the other. This can be interpreted in terms of localised capabilities as an element of sunk cost and thus a mediating factor in the territorial embeddedness of manufacturers, contributing to resilience to political and economic shocks. Most importantly, industrial upgrading has been accompanied by social upgrading with real wage growth, low income inequality and improved employment conditions. The fundamental weakness of Polish manufacturing remains its limited potential for product innovation, which makes it dependent on research and development activities carried out abroad.
