SLOVENIA
COUNTRY REPORT
Title of the topic | Name of the Author | 04.06.2009
Table of contents
1. Overview of SME sector - basic darta
2. Framework situarion………………………………………………………...
3. Analysis……………………………………………………………………….
4. Synthesis: needs…………………………………………………………...
5. Conclusions…………………………………………………………………...
SLOVENIA COUNTRY REPORT
I. Overview of SMEs sector - basic data
Number of employees: Following the data provided by AJPES (Agency of the Republic of Slovenia for Public Legal Records and Related Services), there were 35 530 enterprises registered in Slovenia in 2008 active in industrial sector (NACE codes C-K), with 438 507 employees. Their distribution with respect to the number of enterprises and number of employees is shown in Fig. 1.
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Title of the topic | Name of the Author | 04.06.2009
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Title of the topic | Name of the Author | 04.06.2009
Figure 1: Number of enterprises and employees in Slovenia in 2008 with respect to the size of the enterprise (source: AJPES)
Contribution to the GDP: the SURS (Statistical Office of the R Slovenia) does not provide data on GDP specified regarding the size of the enterprises, just gross income per area of activity. Of total GDP in 2007 (34 471 Mio €), about 69% contributed the industrial sector (NACE codes C-K), with the largest contributions of areas D (Manufacturing, 20.5%), G (Wholesale and retail trade, 10.7%) and F (construction, 7 %). Data on added value specified with respect to the size of the enterprise are available only up to 2005 (Fig. 2, source: SURS).
SME’s relation to (eco)innovation
There were 35.1% innovation active enterprises in the 2004-2006 period, where the share of innovation active enterprises grew with the enterprise size. The largest share of innovation active enterprises was recorded among large enterprises (76.9%), followed by medium-sized enterprises (51.3%) and small enterprises (27.7%). Most of the enterprises developed product and process innovation n (19.5%), followed by enterprises which introduced only process innovation (7.9%) and enterprises introducing only product innovation (6.6%). 50.2% of innovation active
enterprises cooperated with other enterprises or institutions, mostly with the suppliers of the equipment, materials or components, as well as with clients and customers.
Figure 2: Added value per employee in small, medium and large enterprises in Slovenia in 2005 (source: SURS)
In industry (Mining and quarrying, Manufacturing and Energy supply), the share of innovation active enterprises was 6.3% among small and 31.8% among medium-sized enterprises (in services 10.3 and 28.5%, respectively).Among expenditures invested into the innovation activities, large enterprises invested 68.8% of total expenditure, medium-sized 19.5% and small enterprises 11.7%.
The Statistical Office of the R Slovenia has no data explicitly on eco-innovation. The share of eco-innovation in the entire innovation activity can thus hardly be evaluated. More insight into eco-innovation can give data of investment into the environment protection and compliance with environmental legislation. Larger investments in sectors C-E were made before Slovenia entered the EU (38.7 Mio € in 2003). After that they dropped in 2004 by around 30% (25.5 Mio €), but later on they continuously increase. Data is available until 2006, when they reached 31.23 Mio €. The structure of these investments with respect to the size of enterprises is shown in Fig. 3. Total amount of environmental taxes paid in 2006 in sectors C-E was 35.58 Mio € (30.1 in 2003, 34.2 in 2004, 34.9 in 2005). Environmental investments and costs in terms of taxes are shown in Figs. 3a and 3b.
Figure 3a: Investment into the environment protection in Slovenian enterprises in sectors C-E with respect to their size (source: SURS)
Figure 3b: Environmental taxes paid by Slovenian enterprises in 2006 with respect to their size (source: SURS)
SMEs contribution to pollution
In terms of waste production, SMEs produced about 58% of total waste (hazardous + nonhazardous). It is important to note, that the overall waste production in Slovenia is increasing in recent years (2005 – 4.9 Mio; 2006 – 5.4 Mio t; 2007 – 5.8 Mio t), where the share of SMEs is increasing, too (2005 – 44.5%; 2006 – 50.89%; 2007 – 58.4%). The largest waste production was recorded in sectors D (Manufacturing), E (Electricity, gas, steam and water supply) and F (Construction).
Figure 4: Total waste production in industrial enterprises in Slovenia in 2007 with respect to the size of the enterprise
Data on water pollution specified with respect to the size of enterprises are available for sectors C (Mining and quarrying), D (Manufacturing) E (Electricity, gas, steam and water supply) and F (Construction) for 2007 (source: SURS). In total, these sectors produced 761.5 Mio m3 of waste water, of which 99.5% is produced by sectors E (92%) and F. Fig. 5 shows the production of waste water specified with respect to the size of the enterprises. For previous years, only data for sectors C-E is available. In the two sectors with the highest wastewater production (D-Manufacturing and E-Electricity, gas, steam and water supply), the waste water decreased since 2004 by 20 and 5%, respectively. The largest decrease was recorded in large enterprises, whereas the medium-sized generally enterprises increased the wastewater production
while in sector C (Mining and quarrying) it increased, however, in the total waste water production this increase is virtually negligible.
Figure 5: Wastewater production in industry sectors C-F in Slovenia with respect to the size of enterprises
II. Framework situation
In all strategic documents at the national level, such as the National Development Programme and National R&D Programme, the sustainably development, energy efficiency, innovation and green technologies are pointed out as national priorities. On the governmental level, however, a lot of work has only been done in particular on decreasing the administrative burden for SMEs. The government of Slovenia has introduced some direct and indirect measures to support ecoinnovation in enterprises. Environmental taxes comprised 3.3% of the GDP in 2006 and this share is growing (energy taxes 2.6%, traffic 0.5%, pollution/natural resources 0.2%). A green tax reform is seeked, however, in the moment the situation is not transparent. Since 2008, some environmental taxes were abandoned and some new were introduced (such as taxes for high content of VOC in paints and polish, candle tax, F-gas taxes…).
State aids for investment into environment protection, energy efficiency, use of renewable energies, research and development, innovation in small and medium sized enterprises in particular is allowed by the EU and these aids play and increasingly important role in the Slovene economy, too. Medium-sized enterprises are entitled to receive by 10% larger state aids, whereas small enterprises are entitled to 20% larger state aids compared to large enterprises. In Slovenia, state aids dedicated to the environment protection, increased energy efficiency and the use of renewable energy sources are distributed through regional development funds. Nevertheless, the total amount of state aids dedicated to the environmental issues and green technologies is low in relative and absolute terms. Only 3.2% of total state aids in Slovenia were devoted for environmental and energy saving measures (in Sweden, for instance, about 88% of state aids go into this direction). Overall, Slovene enterprises pay very many different environmental taxes, however, their efficiency is questionable as the fate of these financial means is not transparent. Slovenia clearly lags behind developed EU countries in terms of state aids dedicated to green technology and investment into environmentally friendly measures; new measures are of purely administrative nature. Slovene economy is in general characterised by high energy consumption per unit of GDP, and the interventions into the taxation system had very little influence on the ecoinnovation activities in the enterprises.
State aids are awarded in different form – partly as development projects supported by the Slovenian Technology Agency (TIA), which manages the governmental funds, but also some means deriving from the EU Structural and Development Funds, and awards grants to the enterprises for innovative R&D projects, including green technologies and eco-innovation. Governmental funds are mostly contributed by the Ministry of Economy, Ministry of Higher Education, Science and Technology, and Ministry of Environment and Spatial Planning. To a lesser extent, Ministry of Health and Ministry of Defence are also participating, where the share of contributions of different Ministries varies from year to year. The topic of the TIA calls for proposals are generally in line with the National Development Programme and strategic research agendas of the national technology platforms.
JAPTI – Public Agency for Entrepreneurship and Foreign Investment is an executive agency of the Ministry of Economy, managing its funds for support for SMEs, explicitly aiming at improving its competitiveness by supporting innovation activities. It supports SMEs, among others, by providing financial support for employment of researchers and highly qualified specialists in SMEs establishing or developing their own research and development groups, and managing the Register of Innovation Subjects in Slovenia (“Evidenca subjektov inovacijskega okolja – innovation centres, incubators and networks) Funds for high-risk investment into the entrepreneurship are active rather on regional level.
EKO Sklad (Slovenian Environmental Public Fund) was established to support investment into different kinds of environmentally friendly measures through a convenient low-interest credits. A part of the budget is explicitly dedicated for the investment into environmentally friendly solutions in enterprises (in the area of energy and water saving, waste reduction, reduction of emissions…). In 2007, the EKO Sklad awarded loans in total amount of about 23 Mio €.
III. Analysis
STRENGTHS
· Supportive framework for increasing investment into the R&D
· Adaptability (small country)
· Structure of investment in machinery and equipment and investments in market activities
· More intensive development of services
· Good geographical position and situation in trans-European transport corridors
· Gradual strengthening of factors for a knowledge-based society
· High spending on education
· Developed research and information infrastructure
· Improvement in the educational structure of the population
· Relatively high share of the business sector in investments in research and development
· Low “brain-drain”
· High level of scientific research in public sector, including basic research
· Good international cooperation in the area of research and participation in the ERA
WEAKNESSES
· Low level of entrepreneurial activity
· Low investment of private enterprises into the R&D
· Accessibility to sources of financing
· Low level of foreign direct investment
· Excessive burden on economy from administrative barriers
· Slow establishing of competition in the majority of network activities
· Low share of innovative and high-tech enterprises
· Inadequate role of the financial sector in supporting the entrepreneurial sector
· Lagging behind in investment in knowledge, especially in R&D and ICT
· Weak cooperation and inadequate transfer of knowledge between the public research sector, higher education and commercial sector
· In places outmoded equipment, inappropriate premises and inadequate spatial allocation
· Insufficient exploitation of innovation potentials for economic competitiveness and consequently low proportion of innovative companies
· Weak position of natural and engineering sciences in the education system
· Low level of awareness of the importance of technological development and innovation in the public
· Lack of support for high-risk investment into R&D
· Lack of financial discipline
· Non-flexible labour marked in the area of R&D
· Insufficient collaboration between public and industrial sector in R&D
· Poor legal protection
· Low governmental funding of applied research, into research infrastructure and research potential of academia
· Lack of opportunities for reintegration of successful researchers from abroad
· Lack of interest of small enterprises for employing educated R&D staff
· Insufficient use of EU development programmes and structural funds
OPPORTUNITIES
· National development policy supports competitiveness of the entrepreneurial sector
· Reform of the regulatory framework, which will contribute to dynamising the economy
· Investments in knowledge, R&D, innovation and information technology
· Increasing investment in factors of knowledge and increasing the effectiveness of such investment
· Incentives for cooperation between the commercial sector and research sphere through both intervention and regulation
· Exploiting opportunities of international links, especially in research and development
· Employment in flexible forms of work
· Transfer of knowledge and cooperation with other EU countries
· Better access to the infrastructure and resources through the networking within the EU
· Increasing investment into human resources
· High level of innovation in some sectors (chemistry, pharmacy, communication, optical instruments)
· Potentials of information society are not yet fully exploited
THREATS
· Outsourcing of business sectors to third countries
· Uncompetitive costs
· Ineffective use of funds for research and development with reduced investment dynamic
· Education system that is not geared to the needs of the economy
· Loss of jobs owing to uncompetitive costs of companies and globalisation
· Continued structural mismatches in the labour market owing to low mobility of the workforce on the one hand and a brain drain, especially of highly qualified workers and experts
· Non-fulfilment of internationally adopted obligations in the area of efficient energy use and renewable energy sources
· Decreasing competitively within the EU and on global markets
· brain-drain in the case that the supporting framework for R&D is not efficient
IV. Synthesis: needs
The needs of SMEs are synthesised in a document issued by the Chamber of crafts and small business in Slovenia, which prepared an Action plan for compliance with Small Business Act, emphasising first of all the legislation, which is too restrictive for small businesses. For instance, only the area of waste management is regulated by more than 40 Decrees and Rules. Requirements regarding the compliance with environmental legislation and energy saving strategies are also elaborated. Following problems were pointed out:
1. reducing the administrative burdens in the area of environmental legislation, regulating environmental taxes: it is proposed that the number of required reports and calculations per year is reduced (now reports and calculations are to be submitted every 3 months)