BUSINESS ENVIRONMENT IN SLOVAKIA IN RELATION … · BUSINESS ENVIRONMENT IN SLOVAKIA IN RELATION TO SMEs ... Principal development strategy for the period 2014 – 2020: ... (Horizon

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BUSINESS ENVIRONMENT IN SLOVAKIA IN RELATION TO SMEs

Daniel Pitonak

Visegrad experience for Ukrainian government & business, April 12, 2016

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01 Stimulation of

SME grow

02 Increasing

competitiveness of SMEs

03 Internationalisation of SMEs

01 Extend of SME survival rate on the market

04 Better Access

of SMEs

to finance

2015 1993

02 Extend employm. rate in the private sector

03 Boost innovation performance of SMEs

04 Stimulate entrepreneurial spirit

05 Eliminate the process of SME marginalisation

06 Improve competitiveness of SMEs on intl. markets

SBA Objectives Become more specific over the time in order to address actual needs of SMEs

SBA Activities

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4 5 National Business Center

(NBC) Complex support over the whole life cycle of SMEs on the basis of one-stop-shop concept

Centre for Better Regulation

Part of the national RIA process

Financial schemes for SME

Microloan and risk capital finance

Specific SME support programmes

Mentoring, advisory, capacity development services for SMEs

Monitoring of the business environment

Support for interested in business

Awareness raising and consultancy/ mentoring services

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National Business Centre (NBC)

Systematic support measure to SMEs using the concept of one-stop-shop

FRONT OFFICE Opportunity to obtain a complex information under one roof, complex business support

FINANCIAL SUPPORT Provision of financial resources for growth and development of business (implementation of innovations, technology transfer, expansion)

CREATIVEPOINT Stimulation of creativity

SUPPORT PROGRAMMES Providing entrepreneurs and potential entrepreneurs with a support in each stage of the life cycle

NON-FINANCIAL SUPPORT Creation of favourable environment in order to stimulate creation and development of companies, motivation and education of people interested in business

COWORKING AND INCUBATOR FOR ENTREPRENEURS To reach synergy effect, access to the superior equipment and services

National Business Centre project

ONE-STOP-SHOP (provision of

combined services tailored to SME

needs)

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Implemented by 2 Strategic Partners

NBC = Interface for the knowledge exchange between academia and business sector and

acceleration of cooperation.

Establishment of the National Business Center in Bratislava.

Slovak Business Agency

Providing entrepreneurs and

potential entrepreneurs with a broad

portfolio of services and complex

business support under one roof, so

called one-stop-shop.

Goal

Support for R&D cooperation between the academic and industrial

sphere

Centre for Science and Technical Information

Intensifying cooperation in the field of R&D between academic

institutions and economic practice and increasing innovative activities of technology oriented companies.

Goal


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NBC

Special Support Programmes

• Acceleration programme for

potential SMEs

• Incubation programme for newly

established and existing SMEs

• Internship programme for SMEs

and young people

• Growth programme for existing

SMEs with growth potential

Organisation of networking events,

workshops, seminars, individual and

group counselling

Front office with various

institutions providing

complex business support

Access to finance

Complex support of intellectual and

industrial property, patent protection

and other

Interface between business,

R&D and academic field

Spaces with suitable

infrastructure, Creative Point


Services for SMEs provided by the NBC

Start of operation: June 2016 8

SLOVAKIA – Basic Data

• Number of inhabitants: 5.4 million

• Membership: OECD (2000), NATO (2004),

EU (2004), Euro (2009)

• GDP/person (PPP): €14 000 (77% of EU avg./ 2014)

• GDP growth: 3.6% (2015)

• Share of the private sector in GDP: 93.4% (2009)

• Inflation: -0.4% (Febr. 2016)

• Public debt to GDP: 52,3%

– CZ: 41%, HU: 75.8%, PL: 51.5%, SLO: 83%, A: 86.2% (2015)

• Unemployment rate: 11% (2015)

• Average salary: €956 (2015)

• World largest car producer per capita! (183 pcs in 2014)

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Restructuring of the bank sector, privatisation of banks

Labour market reforms - more flexibility in the employee-employer relationship

Public finance management reform

Strengthening of the rights of creditors, reform of bankruptcy proceedings, register of guarantees

Tax reform – transfer from direct to indirect taxes, single rate 19% (income tax, VAT), cancellation of accession tax

Simplification of rules for establishing companies – Points of Single Contact

Key Economical Reforms: 1999 - 2005

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Slovakia - Top reformer for 2003

Results of the Reform Period

11

2005 - Slovakia among the economies

with the best business conditions

� 2015 – Slovakia, 29th place in the Ease of doing business index

Country 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Czech Republic 77 79 80 81 84 82 83 81 83 82 82 85

Croatia 56 57 58 58 61 64 62 59 60 61 61 59

Hungary 62 62 62 62 61 63 64 65 65 65 66 68

Poland 48 49 50 50 53 55 59 62 64 64 67 68

Slovenia 83 86 86 86 87 89 85 83 83 82 82 83

Slovakia 55 57 60 63 67 71 71 73 73 74 75 77

Portugal 78 77 80 80 79 79 81 81 78 76 78 78

GDP per capita in PPS, Index (EU28 = 100)

Alignment to EU Level

Source: Eurostat

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Country 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Czech Republic 3.6 4.9 6.2 6.5 5.0 1.7 -5.4 2.0 2.2 -0.9 -0.7 2.0

Croatia 5.6 4.0 4.1 4.8 5.1 2.1 -7.3 -1.4 0.0 -1.9 -0.7 0.0

Hungary 4.1 5.0 4.5 4.1 0.7 1.1 -6.4 1.0 2.1 -1.0 1.8 4.0

Poland 3.7 5.2 3.6 6.3 7.2 3.9 2.5 2.7 4.7 1.7 1.8 3.5

Slovenia 2.8 4.3 3.8 5.3 6.4 3.1 -8.7 0.9 0.4 -2.8 -1.1 2.9

Slovakia 5.4 5.2 6.4 8.2 10.6 5.3 -5.5 4.6 3.3 1.4 1.3 2.4

Austria 0.3 2.1 1.4 2.8 3.3 1.2 -4.0 1.6 2.7 0.4 -0.4 -0.3

Real GDP per capita growth rate - Percentage change on previous year

Sustainable GDP Growth

Source: Eurostat/ World Bank

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Composition of SMEs in Slovakia (December 2015)

SME - Size Categories

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Source: National Statistical Office

micro-enterprises (0-9 empl.)

515 236 (96.9%)

small enterprises (10-49)

12 984 (2.5%)

medium enterprises (50-249)

2 843 (0.5%)

SME total

531 063 (99.9%)

Large enterprises (250+): 666 (0.1%)

Total all enterprises:

531 729

15 15

1) Natural Persons

• self-entrepreneurs (self trade licences)

• freelance occupations

• independent farmers

2) Legal Persons

• limited liability companies

• joint stock companies

• public commercial company

• special limited partnership

• Cooperative

• European-type companies

SME – Legal Forms


SMEs are divided into 2 basic legal categories:

Share of legal forms

(in number, 2015)

15

16 16

SMEs position in the national economy

SME economical share Share on employment 71.7% Share on added value 54.5% Share on profit 57.5% Share on revenues 53.5% Share on export 29.3% Share on import 42.7%

SME financial situation SMEs with positive operating results (share) 65.6% Return on revenues, based on EBITDA (median) 5.2% Total debt assets (median) 62.5% SMEs with bank loans (share) 17.7%


Financial Statements Register

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SME position in financial indicators (2014):

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Developments in key SME Economic Indicators


17

SMEs distribution by sector (end of 2014)

Zdroj: ŠÚSR

Structure of SMEs in Slovakia


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Source: SBA, on the basis of data of Statistical Register of Organisations

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General SME Development

Development of numbers of SMEs according to legal forms

10 0

55

9 4

72

8 8

86

8 5

34

8 1

91

8 0

17

7 7

28

7 4

95

7 5

79

7 8

49

13 6

83

12 7

52

15 1

75

16 7

25

17 1

89

17 9

74

18 3

78

19 0

69

20 3

82

21 9

25

24 4

83

73 5

54

83 0

89

92 7

82

100 9

16

119 2

60

126 7

50

142 4

17

153 2

83

164 1

57

181 2

90

195 7

273

36 6

40

344 8

70

364 1

85

374 3

82

392 8

41

387 8

76

384 2

02

375 7

22

359 5

74

352 7

07

337 1

82

433 9

32

450 1

83

481 0

28

500 5

57

537 4

81

540 6

17

552 7

25

555 6

08

551 6

08

563 5

01

565 2

41

7 5

34

0

100 000

200 000

300 000

400 000

500 000

600 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

indepemdent farmers freelancers legal entities small trade licensees total SMEs


20

SME Development – Legal Entities


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SME Development – Natural Persons

Structure of SMEs – Legal Entities

Structure of SMEs - legal entities, by sectors

14,1

%

7,5

%

39,7

%

33,6

%

5,2

%

13,4

%

7,5

%

38,8

%

35,4

%

4,9

%

12,6

%

7,1

%

37,6

%

38,1

%

4,6

%

12,0

%

7,2

%

36,1

%

40,3

%

4,4

%11,2

%

7,4

%

34,3

% 43,2

%

4,0

%10,3

%

7,7

%

33,0

%

45,2

%

3,8

%9,8

%

8,0

%

31,5

%

47,0

%

3,5

%9,5

%

8,1

%

30,5

%

48,5

%

3,4

%9,1

%

8,1

%

29,8

%

49,6

%

3,3

%8,8

%

8,0

%

29,1

%

51,0

%

3,2

%8,6

%

8,0

%

28,3

%

51,7

%

3,5

%

0%

10%

20%

30%

40%

50%

60%

industry construction trade services agriculture

Sh

are

s

20042005200620072008200920102011201220132014

Source: SBA, on the basis of data of Statistical

Register of Organisations

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Structure of SMEs – Natural Persons

Structure of small trade licensees, by sectors

17,3

%

17,0

%

34,2

%

29,4

%

2,1

%

17,1

%

18,1

%

32,9

%

29,4

%

2,5

%

19,0

%

18,3

%

32,6

%

26,8

%

3,3

%

19,5

%

19,3

%

31,4

%

26,1

%

3,7

%

19,6

%

21,0

%

29,6

%

26,2

%

3,6

%

16,7

% 22,8

% 28,1

%

29,0

%

3,4

%

16,4

%

23,0

% 27,4

%

29,8

%

3,4

%

16,3

%

23,0

% 27,0

%

30,3

%

3,4

%

16,1

%

22,6

%

26,6

% 31,2

%

3,5

%

15,9

%

22,7

%

26,2

% 31,5

%

3,7

%

16,4

%

22,8

%

25,8

% 31,2

%

3,9

%

0%

10%

20%

30%

40%

industry construction trade services agriculture

Sh

are

s

20042005200620072008200920102011201220132014

Source: SBA, on the basis of data of Statistical

Register of Organisations

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Structure of SME, LE – Industry Sector

Source: SBA, on the basis of data of Statistical Register of Organisations State at the end of 2014 24


Structure of SME, LE – Services Sector

State at the end of 2014 25

Source: Eurostat, processed by SBA

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SME Characteristics – Birth Rate

SME Economics – Gross Production


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SME Economics – Added Value


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SME Economics – Profits

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Shares of SMEs (including natural persons-entrepreneurs)

in employment in the business economy in 2013

42,9%

14,6%

14,2%

28,3%

micro (0-9) small (10-49) medium (50-249) large (250+)

Source: SBA, on the basis of data of Statistical Office of the Slovak Republic

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SME Characteristics – Employment

Shares of SME on employment in the business economy, 2015 (including Natural Persons)

Source: SBA, on the basis of data of Statistical Office of the Slovak Republic

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SME Characteristics – Export

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SMEs Support System – Legal Framework

Legal framework

Principal development strategy for the period 2014 – 2020:

- Smart Specialisation Strategy (cross cutting)

Different economic strategies applied by line ministries:

- ICT Development strategy

- Industrial strategy (Industry 4.0)

- Conception for support of start ups

- Foreign Economic Relations strategy

- Etc.

→ No specific strategy for SMEs

Act on the support of SMEs - basic legal norm for providing support for

SMEs » in progress

Application of the EU Small Business Act » slow progress

Regulatory impact assessment » applied/ SME test performed by SBA

→ Frequent changes of legislation

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SMEs Support System – Legal Framework

Application of Think Small Principle

So far rather few examples

- Online registration of a new company (Points of Single Contact)

- Micro accounting units set by the Accounting Act

- Simplified joint stock company introduced from 2017 by Commercial Code

- Simplified processing and application of VAT for small companies

- Exception from statistical duties for micro-companies

Situation is expected to improve after full operation of RIA & SME test

- Ex ante assessment of regulations

- Ex post assessment of regulations

- Consultancy with business stakeholders

- Preparation of alternative solutions

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Institutional framework:

Governmental level - central government bodies – policy development, sourcing of

support mechanisms, implementation of EU and national programmes

Key ministries involved:

Ministries of Economy, Education and Science, Agriculture, Labour and Social Affairs

Specialized agencies, funds and financing institutions – implementation of specific

support instruments

Support agencies: Slovak Innov.&Energy Agency, Sario, CVTI, Agency for Support of

Research&Development

Public financing institutions: Eximbank, Slovak Guarantee and Development Bank, Slovak

Investment Holding

Regional level – regional self-administration, universities, agencies – implementation

of regional tools and activities

(regional self-governments, regional devel. agencies, VTP Zilina, RAICs)

SBA (former NADSME) - specialized agency for provision of comprehensive support for

SMEs

(National Holding Fund – venture capital)

SMEs Support System – Institutional Framework

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SME Support System - Financing

EU Structural Funds

EU horizontal programmes

State budget

Private initiatives

grants, financing instruments (e.g. JEREMIE)

grants, financing instruments (Horizon 2020, COSME, EaSi, EIB/ EIF)

EU Common Agricultural

Policy

subsidies/ grants, advisory, direct payments

subsidies, tax incentives, public fin. institutions, advisory programmes, active labour policy

mentors, business angels, start up hubs etc.

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Financing - according to the scope of importance

Ways of SME Financing in Slovakia

Source: Report on the State of SMEs in the SR 2013, SBA

23,8%

5,7%

2,1%

14,0%8,1%

1,0%

7,3%

36,4%

1,7%

EU grants EU Support to Rural Development State budget grants

Active Labour Market Policy EU supported loans State budget supported loans

Guarantees Venture Capital Incentives

Structure of SME Financial support (2013)

23,8%

5,7%

2,1%

14,0%8,1%

1,0%

7,3%

36,4%

1,7%

EU grants EU Support to Rural Development State budget grants

Active Labour Market Policy EU supported loans State budget supported loans

Guarantees Venture Capital Incentives

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zdroj: ŠBA

Assessment by Global Entrepreneurship Monitor

Attitudes of respondents to entrepreneurship, GEM APS Survey (% of positive responses)

Successful entrepreneurs are respected in community

Entrepreneurship represents a recommendable career choice

Possession of skills and competences required for entrepreneurship

Media interested in presenting of successful entrepreneurs

There are suitable business opportunities available in my area

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Source: European Commission

Assessment of SME Conditions based on SBA

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SBA = Small Business Act – principal EU initiative in support of SMEs

Slovakia SBA profile 2015

EU average +/- 0,5 standard deviations

Slovakia

Key Challenges for SMEs in Slovakia

Initiate the trend of grow from micro-level

Increase expansion to EU, and in particular to non-EU markets

Expand innovation, development of sectors with high rate of added value

Foster cooperation with academia, engage in commercialisation of R&D results

Greater involvement in supply-chains/ value-chains with large multinational companies

Attraction and sustainment of skilled workforce

Improvement of business cooperation and networking 39

Thank you for your attention!

www.sbagency.sk T: +421 2 502 44 500

@: [email protected]

Slovak Business Agency

Miletičova 23

821 09 BRATISLAVA

Slovakia

Documents

BUSINESS ENVIRONMENT IN SLOVAKIA IN RELATION … · BUSINESS ENVIRONMENT IN SLOVAKIA IN RELATION TO SMEs ... Principal development strategy for the period 2014 – 2020: ... (Horizon