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Industrial transition model Case Slovakia

Bulgaria, Latvia, Lithuania and Slovakia – Comparison of industrial transition models Sofia, Bulgaria, 6-7 October 2008 Consultative Commission for Industrial Change , EESC. Industrial transition model Case Slovakia. Jaroslav Vokoun.

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Industrial transition model Case Slovakia

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  1. Bulgaria, Latvia, Lithuania and Slovakia – Comparison of industrial transition models Sofia, Bulgaria, 6-7 October 2008 Consultative Commission for Industrial Change, EESC Industrial transition model Case Slovakia Jaroslav Vokoun

  2. Economic transformation process in Slovakia - dependency on the political cycle - Development in 90’s • creation of market economy • splitting of Czechoslovakia • imbalances (inflation, high interest rate, external imbalance, unemployment etc.) • weak reforms • strong influence of domestic lobbies • preference of domestic entrepreneurs in privatization – „Slovak way“ • weak transparency • weaker orientation to EU

  3. Development after 1998 • new government with new ideas • stabilization programs • clear orientation to EU, influence of EU • creation favorable business environment • starts reform process • recovery of bad debts in banks and banks privatization to the foreign banks • active support of FDI • government sold the controlling interest in companies

  4. Selected economic indicators Source: Statistical office, 2006.

  5. The evolution of industrial policy in 90’s • slow changes in the Ministry of economy of the Slovak Republic • industrial policy was isolated part of economy policy • direct support tothe large noncompetitive companies • protection of the strategic companies • focus on privatization

  6. The evolution of industrial policy after 1998 • new government changes policy and makes market oriented reforms • the standardization of the industrial policy: influence of a Community action programme to strengthen the competitiveness of European industry (96/413/EC) and Industrial policy in an enlarged Europe (COM(2002) 714 final) • gap between ideas and realization of industrial policy (policy is more declarative) • active support of FDI

  7. Present targets of industrial policy • favorable business environment • knowledge transfer, R&D • education and skills • ICT

  8. The example of a highly successful policy measure • FDI support • focus on automotive sector, electrical engineering, services (logistic, call centers) • support from EU structural funds Positive results: • new corporate culture • technology transfer • employment • labour productivity • export • partial change of economy structure • pressure on education system

  9. The example of a less successful policy measure • gap between ideas and realization of industrial policy • insufficient coordination among different policies • general support without focus strategy • support of non competitive firms • high portion of non-innovative firms in SME • national innovation system with a weak links among participants • low R&D expenditure • strong metal and chemical industries with high energy consumption and significant ecological influence

  10. Summary innovation index and trends (2005) Source: European Innovation Scoreboard, 2006.

  11. Summary innovation index and trends(2007) Source: European Innovation Scoreboard, 2008.

  12. Innovation performance Positive development: • Applications • Sales of new-to-market products • Medium-tech/ high-tech manufacturing employment Weaknesses: • Knowledge creation • Low business R&D expenditure

  13. Thank you. Ďakujem.

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