A LOW-WAGE labour force and investment incentives from the government cannot guarantee economic growth into the future, according to the government of Prime Minister Iveta Radičová, which said that only by generating innovative ideas within Slovakia can the country propel the economy forward and deliver sustainable growth and prosperity. Since this will not happen without a functional, knowledge-based economy the government elaborated a strategy called Minerva 2.0 that it says will do just that – build an economy based on locally-grown ideas and innovations that will create stable, quality workplaces and generate economic growth in coming years.
“Slovakia cannot be only an assembly hall,” Finance Minister Ivan Mikloš said in late November when the Slovak government adopted its timetable for implementation of the Minerva 2.0 strategy. “Anybody can talk loudly about the need for a knowledge-based economy. I’m glad that the approved document is a set of concrete measures with a precise plan for their realisation. We should see the first tangible results of these steps already during the first half of 2012.”
The author of the Minerva 2.0 strategy – subtitled ‘Slovakia to the First League’ – is Martin Bruncko, the plenipotentiary for a knowledge-based economy, and his team. This strategy is based in some ways on the original Minerva concept from 2005 that was prepared during the term of the second government of Mikuláš Dzurinda in which Mikloš also served as finance minister. The 2005 strategy focused on four key areas: developing an information society; investing in human resources and education; furthering science, research and innovation; and supporting the business environment. After the 2006 parliamentary election the incoming government of Robert Fico presented a new concept for the country’s development called Modernisation Programme Slovakia 21. The Radičová government, in which Mikloš serves again as finance minister, has now returned to many of the original concepts.
“It’s high time to stop talking about supporting an economy based on innovation and start acting,” Bruncko said, as quoted in a press release from the Finance Ministry. “Minerva is one of such steps.”
The overall aim of the Minerva strategy is to build the Slovak economy based on locally-generated ideas and innovations in order to create stable, quality workplaces and economic growth.
The ministries of education, economy, finance, and foreign affairs as well as the Slovak Academy of Sciences, are responsible for implementing Minerva 2.0 and its 26 specific initiatives to improve education, science and innovative businesses and to support interaction between these areas. During 2012, a system of grants for young scientists and a system to draw top global scientists to Slovakia should be launched. In addition the programme seeks to develop a method for swifter transfer of technology so that ideas generated by scientists will move more quickly and easily to businesses. A new international system for technology incubators will create a base for growth of young, innovative companies with courageous ideas, Bruncko said, adding that Slovakia needs companies like Skype or Google to be launched in Slovakia so that the country’s growth is sustainable and investors keep their workplaces here, according to the press release.
Along with a detailed timetable, the Slovak government allocated funds for implementing the strategy in 2012, with €10 million coming from the state budget and an additional €20 million coming from the Education Ministry’s budget. Bruncko said this is enough money to carry out the measures required for next year. During the following years the Minerva strategy will require additional funds, about €100 million annually, and the government also plans to use EU structural funds. The strategy counts on €300 million coming from EU structural funds, the Sme daily wrote.
Earlier this year the Slovak government launched a new institutional board for innovation with the task to coordinate preparation of action plans for building a knowledge-based economy, to supervise their implementation, monitor fulfilment of specific goals and decide on the future direction of the country’s innovation policy.
Why a knowledge-based economy?
Bruncko believes that Slovakia cannot depend on incoming foreign investments forever and must develop its own new ideas and technologies, adding that if it does not do so it could end up like Portugal, which he said counted only on its low-wage labour when it joined the European Union. He noted that this idea worked fine until the EU was expanded to include new member countries that offered even cheaper labour. Bruncko told the Pravda daily that countries like China and Chile also realise this dynamic and are endeavouring to change their economies’ structure.
“If a country wants to grow, it must become among the first league countries,” Bruncko stated, as cited by the Pravda daily. “In these countries the economy is not propelled primarily by massive [external] investments but by home-launched companies, which thanks to their unique goods and services can compete around the globe also when wages are higher.”
What’s next?
Though the strategy is currently being fulfilled according to plan, the fall of the Radičová government and early parliamentary elections scheduled for March 10, 2012 have affected some aspects of its implementation. The Trend economic weekly wrote that Bruncko in late November already said that he felt that the ministries involved in implementing the strategy were losing their original enthusiasm because of the early elections. He also expressed concern to Trend that upcoming tenders, in which the lowest price is not to be the only criterion for assessment, would become political issues.
