“We are witnessing a global brain circulation and so Slovenia will have to strengthen its attractiveness for talent. We need to be able to reverse the brain drain, and attract young people to return home to use their experience gained abroad,” was one of the key messages of the 7th FDI Summit Slovenia 2016 which was attended by 100 leading representatives from business and politics.

“No company can be competitive without talented individuals, and no country can be a welfare state without competitive businesses,” stated Professor William Lazonick, University of Massachusetts Lowell (USA) and visiting Professor and Honorary Doctor of the Faculty of Economics in Ljubljana. But where the talent comes from and how it is transformed into competitive products and services, and under what conditions competitive products are transformed into sustainable prosperity with stable and sustained economic growth, were the questions asked by Professor Lazonick, whose lecture was meaningfully titled the ‘Wealth of nations’, concluding: “In the welfare economy there are well developed labour and financial markets as the consequence, not the cause, for the wealth of nations.”

“This year, in the Global Prosperity Index, Slovenia is placed 20th among 149 countries in the world, ahead of Japan and Hong Kong. When measuring prosperity, we monitor more than 100 factors. Whilst Slovenia is first in terms of environment and also ranked well in social capital (well-functioning social networks based on reciprocity, trust and cooperation; with a high level of volunteering) and in personal freedom.”, said Alexandra Mousavizadeh, Director of the Prosperity Index, the Legatum Institute based in London.

“In the EU you will not find a government that does not want to talk about their plans for raising competitiveness. However, the fact remains that some succeed in these terms but others do not. The reason for this lies in the very limited view of what affects competitiveness. It is not only politics or the real economy and finance – but together they have an impact! And it becomes dangerous if any of them is overlooked,” emphasised Dr Jure Stojan, Director of Research and Development at the Institute for Strategic Solutions.

“I see progress in corporate governance and in raising investment, both domestic and foreign,” said Imre Balogh, CEO at DUTB (Bank Assets Management Company) during the panel on competitiveness led by Tine Kračun, Director, Institute for Strategic Solutions. “Slovenia is still too much thinking about itself,” stated Branislav Vujovic, Founder and President of the New Frontier Group, “you must be open to the world and need to understand the revolution of digital transformation. This will significantly alter the functioning of all the activities in all spheres of society.”

“We are facing a war for talent, 36 percent of the largest companies around the world have problems with employment because they cannot find talented individuals who would be engaged. On the other hand, there are many young people in the EU is without a job,” said Dr Andreja Kodrin, strategist and founder of collaboration platform, Challenge:Future.

“We are not talking about the competitiveness of companies anymore, but the competitiveness of continents, a good example is Malta which has on its list of priorities that it should be attractive for young talent,” said Matej Potokar, General Manager Customer Service and Support, Microsoft Western Europe. “We have enough knowledge, but are we able to use it efficiently”, highlighted Dr Maja Makovec Brenčič, Minister for Education, Science and Sport. “Slovenia needs young talent who go abroad, but also repatriate with more experience, more knowledge. From this perspective, fear of a brain drain is unnecessary but the problem is that we must ensure that these people return,” stressed panel moderator for talent, Marko Mlakar, Director and Partner, Amrop Adria.

The closing remarks of the Summit were presented by Sonja Šmuc, Managing Director at The Managers’ Association of Slovenia, and long-time journalist of the BBC and Director of Communications at the Legatum Institute, Giles Dilnot. They agreed that prosperity, competitiveness and talent are decisive factors for foreign investment and Slovenes need to change their attitude towards these drivers and not miss the opportunities when they come!

By Tonja Blatnik

Foto Anže Krže, Mediaspeed

The conference will open with a keynote address from Professor William Lazonick, University of Massachusetts Lowell (USA) and visiting professor at the University of Ljubljana. Lazonick’s research focuses on the social conditions of innovation and economic development in advanced and emerging economies. His book, “Sustainable Prosperity in the New Economy: Business Organization and High-Tech Employment in the United States” was awarded the 2010 Schumpeter Prize. Professor Lazonick explores the origins of the new era of employment insecurity and income inequality, and considers what governments, businesses, and individuals can do about it. His Harvard Business Review article “Profits Without Prosperity: Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,” was awarded the HBR McKinsey Award for outstanding article in Harvard Business Review in 2014. In February 2016 Oxford University Press published his co-edited book China as an Innovation Nation. Lazonick is currently completing a book, The Theory of Innovative Enterprise, to be published by Oxford University Press.

The keynote speaker for the first pillar of the FDI Summit – Prosperity – will be Alexandra Mousavizadeh, Director of the “Global Property Index” at the Legatum Institute, who will exclusively present their latest research findings and offer a unique insight into how prosperity is forming and changing across the world. In November 2016, the London-based Legatum Institute released its annual Prosperity Index research, which gauges the wealth and wellbeing of 142 countries. In the 2016 rankings, Slovenia is placed 20th on the world prosperity scale. The “Global Prosperity Index” can be found at www.prosperity.com & the Legatum Institute: www.li.com

I. Moderated Panel Discussion
The keynote speaker for the second pillar of the FDI Summit – Competitiveness – will be Jure Stojan, Director of Research and Development at the Institute for Strategic Solutions, from the Institute for Strategic Solutions, who will share with you the latest forecast of changes in the stability of the investment environment, as well as anticipated political, social and economic uncertainties. Dr. Stojan will present the annual strategic foresight about the stability of the investment environments of the 16 Central and South East European countries. Slovenia, next to Slovakia, is the most stable investment environment among the analysed countries.

II. Moderated Panel Discussion
The keynote speaker for the third pillar of the FDI Summit – Talent – is Andreja Kodrin, Economic Advisor and Cabinet Member to EU Commissioner Violeta Bulc. She has led multiple mergers and acquisitions and has been a member of several supervisory boards of companies, venture funds, banks and pension funds in the Netherlands, USA, UK, Switzerland, Luxemburg, Serbia, and Slovenia. In 2009 she founded Challenge: Future, a global platform for youth innovation with 36,000 members from 213 countries. She has created a new paradigm and restored hope for the future of humanity as a whole. She firmly believes that young people are the most valuable source for creating a future with fresh, inspired and revolutionary ideas – and Slovenia certainly has the potential to be a talent hub.

III. Moderated Panel Discussion
Wrap-up from Giles Dilnot (Legatum Institute London) & Sonja Šmuc – Managing Director of Managers’ Association of Slovenia.

FDI Summit Slovenia organizers are proud to announce that on the occasion of 2016 FDI Summit, which will be held on Tuesday, 6 December, participants will have a unique opportunity to listen to Alexandra Mousavizadeh, director of Property Index at The Legatum Institute, who will exclusively present the latest research findings and offer a unique insight into how prosperity is forming and changing across the world.

For more details about “Global Prosperity Index” http://www.prosperity.com

& Legatum Institute http://www.li.com

Ljubljana based Institute for Strategic Solution prepared its 4th annual foresight of political, social and economic trends titled ‘Strategic Foresight 2016: Central and South East Europe’. It includes a forecast of changes in the stability of Investment Environments as well as expected political, social and economic uncertainties in 16 Central and South East European countries. In its Foresight ISR concludes the economic situation in the last four years has improved significantly but it emphasises it will take some time before the citizens will feel the positive effects. The problem of disharmony and disunity among the EU Member States, could due to their inability to reach consensus on specific matters in the next year become even more evident. In 2016 ISR considers Slovakia and Slovenia as most stable Investment Environments among the analysed countries.

»Out of all 16 analysed countries Slovakia, Slovenia and Czech Republic have the most stable Investment Environments in 2016. This comes as no surprise as the three countries are politically relatively stable. Apart from that Slovakia and Czech Republic also have one of the strongest economic growths in the EU. Slovenian economy is also expected to strengthen further and stabilise, mainly due to export and domestic consumption growth, in 2016,« claim the representatives of The Institute for Strategic Solutions.

“If in the past we were constantly looking at negative or minimal economic growth in the relatively stable political environment, we can clearly see this trend is turning around,” said the director of ISR Tine Kračun, while at the same time adding that “political and social uncertainties are strengthening, which clearly shows that positive effects of the economic recovery are not yet seen in the social sphere.”

The keynote speaker at the summit was Professor Arturo Bris, Chairman of IMD World Competitiveness Center , who highlighted how competitive Slovenia is, the strengths and the weaknesses. He explained that a competitive country has a good, transparent and efficient government, good infrastructure (physical, education and health) and an efficient private sector, which creates jobs. “Slovenia has good infrastructure, especially in terms of labour – the human talent – which is an important pillar. However, two other areas, the government and the private sector are easier and quicker to develop than infrastructure. This should be the main pillar for Slovenia to become a more competitive country”.

During the discussions between high profile business leaders, ministers and the Prime Minister of Slovenia, Dr Miro Cerar it was agreed there is a lot of talent in Slovenia but also a lot of room for improvement. In the private sector, business leaders rate themselves quite low in the IMD competitiveness ratings. To improve, we need to learn a lot from each other, from the foreign companies operating in Slovenia and Slovenian companies in other countries. Slovenia therefore needs to improve the credibility of management on corporate boards and access to finance, particularly for SMEs.

With regard to the government, Slovenia needs to reduce bureaucracy and improve the speed of decision-making. Slovenia could position itself as the regional R&D hub but would need a better taxation system to enable that. Slovenia also needs to create job possibilities for highly educated people; the high income taxes unfortunately limit the number of high value jobs that can be created.

The inclusion of people in the education system is also important and Slovenia must do this, especially in the context of smart specialisation –with talent trained in the green economy in order to meet the needs of the future. If Slovenia does not provide this talent with good governance and good jobs, including professional development opportunities on top of their salary, the risk is that they will leave. The brain drain in Slovenia is still a recent phenomenon and there is a lack of good data to measure the numbers but it is happening. Other countries are competing for Slovenia’s talent.

AS THEY SAID… FDI SUMMIT SLOVENIA 2015

“In the European Union, competitiveness means: Let’s export more, let’s lower prices and salaries, let’s make sure that we can produce at the comparative advantage with respect to other countries and once we are cheap, then we will export more and we’ll become competitive. And that is completely wrong!”

Dr Arturo Bris, Director, IMD World Competitiveness Center

“In terms of the challenge of how Slovenia can be more competitive on a global scale, we – the government and the business sector – are one team. As a team, we must work together and foster open dialogue and mutual trust.”

Dr Miro Cerar, Prime Minister of the Republic of Slovenia

“We live in a society of young global people. They communicate differently than we do; they use many new competencies, which we probably do not even know; they create new skills because they live differently and because they perceive the world differently. The world is just one world for them.”

Dr Maja Makovec Brenčič, Minister of Education, Science and Sport

“Slovenia would like to be a reference country in a digital Europe – green. We are strongly integrated in the global economy; we are one of the rare countries which exports 80% of GDP.”

Boris Koprivnikar, Minister of Public Administration of Slovenia

“The pool of talent that stays here is less and less and we have to turn this around – foreign capital is free, it is free of charge and we have to think how to attract it very quickly before our neighbouring countries do.”

Tomaž Lanišek, General Manager OEM Europe & CIS, Knauf Insulation

“We are too small to do everything. We need to specialise and we need to figure out what our competitive advantages are, which finally we are doing in the industries which have the largest capabilities and competencies. I think this is the right way to produce very tangible results in the next five years.”

Iztok Seljak, PhD. Managing Director of Hidria

Photo: Aljaž Hafner

Mramor will present the government’s fiscal consolidation plans and measures to improve the business environment, the Finance Ministry said.

The investors at the round table will also be briefed on the budget financing plan for this year and debt management guidelines.

For Slovenia 2016 is a key year in terms of borrowing, as it has to roll over EUR 4.6bn in debt due through the year. The figure includes a billion euros in interest.

The treasury has already borrowed EUR 1.5bn with 16-year benchmark eurobonds issued in February with annual interest of 2.25%.

The treasury can borrow up to EUR 6.8bn this year, which includes borrowing for current spending and for front-loading the budgets for the next two years.

Mramor will also visit the headquarters of the Financial Times to accept The Banker’s award for best finance minister of the year for Europe.

The same title went in 2005 to the Slovenian finance minister of the time, Andrej Bajuk.

EUR 5m will be spent on the internationalisation programme this year and EUR 8m in 2017. Additionally, EUR 1m is budgeted for attracting foreign investors, surging to EUR 6.5m next year.

Počivalšek said it was “warranted to dedicate so much attention to international issues,” which he said needed to be expanded.

Slovenia’s economy is already heavily export-oriented but the country still has to do a lot to attract foreign investors.

“We have to undertake structural reforms in three key areas to make our companies more successful abroad and make the country more attractive to FDI,” he said, singling out taxes, labour law and administrative obstacles.

The overarching goal is to attract about EUR 400m-worth of foreign investments per year.

Slovenia recently participated in a 13-country International Trade Centre (ITC) study examining investments in the promotion of exports.

ITC official Jose A. Prunello said the analysis showed every dollar spent on the promotion of internationalisation generated 87 dollars in extra exports and has a multiplying effect on GDP of 384 dollars.

Source: The Slovenia Times

Photo: MGRT

This year, the EIB will focus on finding projects suitable for backing from the European Fund for Strategic Investments, EIB vice-president Laszlo Baranyay told reporters in Ljubljana on Thursday.

The bank and the affiliated European Investment Fund will try to recognise such projects in cooperation with Slovenia’s SID export and development bank, which is involved in the European Investment Advisory Hub.

“We won’t be doing just consulting, we might set up a joint investment platform with the SID bank. There are plenty of opportunities,” Baranyay said.

The EIB group provided EUR 7.5bn in funds secured with budget guarantees as part of the investment plan for Europe last year, enabling more than EUR 50bn worth of investments.

In Slovenia alone the financing approved by the EIB hit a record level at EUR 798m, with the overall amount of investment at EUR 4.4bn.

The country benefited from the highest level of investment per capita compared to other European countries at 2,125 euro, which Baranyay said was a very good result.

Out of EUR 798m in financing approved to Slovenia, EUR 500m was allocated to EU funds priority projects in the 2014-2020 period. The funds went to virtually all business sectors, and for the first time to projects aimed at easing the migration crisis.

Baranyay highlighted a EUR 145m loan for motorways, a EUR 133m credit for electricity distribution and a loan of EUR 20m that went to small and medium-sized businesses.

The EIB will seek potential for extra financing in Slovenia. Baranyay is meeting Ljubljana Mayor Zoran Janković today to discuss options for cooperation with the capital city.

As a further opportunity the EIB vice-president offered the financing of investments by enterprises after undergoing privatisation.

Announcing the opening of an EIB office in Slovenia, Baranyay described it as yet further confirmation of good cooperation with Slovenia.

Source: The Slovenia Times

Photo: EIB rights free

Crowdfunding contributed EUR 1.6m, EUR 806,000 came from business accelerators and another EUR 983,000 were angel investments.

The state chipped in EUR 2.2m.

Most of the investment, some EUR 10.4m, came from Slovenia. The US followed with EUR 17.3m and China with EUR 9.4m. The remaining EUR 1.6m came from other countries.

This was the first time that China nvested in Slovenian start-ups and Špetič expects the investment from the country to continue this year.

Among the receivers of the Chinese investment was also Ulu, a start-up that has developed a solution for connecting all cars to the internet. It was backed by a half-a-million investment from Chinese fund Fang.

The most money, EUR 36m, was invested in British-Slovenian start-up Lyst specializing in on-line sales of high fashion, which was co-founded by Slovenian Sebastjan Trepča.

Investment in start-ups founded or co-founded by Slovenians between 2006 and 2015 reached some EUR 233m, with half of the investment made in 2015 alone.

Špetič noticed that it was currently easier to get funds in Europe than the US, where financial funds became more conservative.

The start-up sector is still too small compared to the problems of the Slovenian economy, so it is not receiving a lot of attention from the state, he believes. However, the state is investing in promotion campaigns and is opening doors to entrepreneurs, he said.

According to Špetič, the state should remove obstacles to investment while companies should be buying start-ups with innovative solutions, which is currently not happening in Slovenia.

Source: The Slovenia Times

Photo: Lyst Facebook