Martina Slabejová (source: Courtesy of AmCham )
Although Slovakia is falling in international rankings for innovation and competitiveness, Martina Slabejová, the new executive director of AmCham in Slovakia, says the country has a lot of positives to highlight.
“Slovakia is a country full of talented people, so let’s not beat ourselves up so much. Let’s take a look at what’s good instead,” she says, adding that Slovakia, especially its eastern regions, should be more self-confident and assertive.
The Slovak Spectator spoke with Slabejová about the current economic situation, the challenges that are likely to emerge after September parliamentary election, and how AmCham is helping to improve the business environment in Slovakia.
How do American companies operating in Slovakia view the current economic situation in the country?
Macroeconomic indicators show that the situation is not very good. But the way our individual member companies see it varies, depending on their size and the sectors in which they operate. For example, in the mechanical engineering sector there’s been a drop in supply. Of course, the summer holidays have played a role, but in some cases demand decreased by as much as 50 percent, which is alarming. On the trans-Atlantic level, we’ve registered a change in regional setting within the IT sector, which is reducing its staff. This is down to the excessive recruitment of new workers during the Covid-19 pandemic, the increasing use of artificial intelligence, automation and robotisation, and the economic impacts of the war in Ukraine. These factors all seem to be reshuffling the cards within the structures of this sector and in the large corporations’ thinking and strategy. This has implications for Slovakia, because when the regional structure of a corporation changes, it usually also has an impact on its Slovak operation. The result is, unfortunately, a reduction in staff.
Has this affected business shared service centres (BSCs) operating in Slovakia?
So far, we see some volatility, however we still do have strong positions in areas of productivity, loyalty and highly skilled workforce. Slovakia has the sixth highest productivity in the European Union within the BSCs sector.
What are the biggest challenges American investors face in Slovakia in terms of the business environment?
Weak law enforcement, and the heavy levy burden on employers – the whole levy system is too robust, bureaucratic and uneconomic given the rising cost of labour. Another issue is the unpredictable legislative environment with new laws often adopted in parliament without proper interdepartmental review or discussion with affected parties. Laws that have been adopted this way have sent budgetary expenditures ballooning, subsequently putting enormous pressure on the business sector. The Labour Code does not reflect the new needs of the digital world, being insufficiently timely and lacking flexibility. Complicated procedures for hiring foreign workers are another big challenge and red tape and complications associated with accessing EU funds also need to be addressed.
Does the business environment in the west of the country differ from the east?
