Trading pain for gain

A CONUNDRUM faces bureaucrats interested in raising the salaries of Slovaks to match those of Western European countries. While higher wages would raise the standard of living of Slovaks and thus support local economic growth, they would also result in an exodus of foreign direct investment.

A CONUNDRUM faces bureaucrats interested in raising the salaries of Slovaks to match those of Western European countries. While higher wages would raise the standard of living of Slovaks and thus support local economic growth, they would also result in an exodus of foreign direct investment.

One of the primary reasons international companies are currently investing in Slovakia is the highly skilled, low-cost labour the country offers. Business analysts believe that companies, especially manufacturers, will inevitably look further east when Slovak wages reach the levels of Austria, Germany and France.

The Slovak cabinet is thus eager to grow its knowledge economy. Innovation and research and development in fields relating to technology and science do not rely on cheap labour. By encouraging growth in the so-called knowledge sector, Slovakia hopes to attract a new kind of foreign investor.

Four months ago the Finance Ministry introduced Minerva. The Roman goddess of wisdom and education, Minerva is also an acronym for "Mobilisation of innovations in the national economy and the development of research and science activities".

In April, Slovak representatives first presented the public with concrete "action plans" to support Minerva. The cabinet intends to carry out the plans over the next two years.

"The vision of Minerva is to elevate Slovakia's living standards to reach the most developed Western European countries as quickly as possible. We want a Slovakia blossoming with science and research, filled with highly educated and creative people designing and building innovative, high-quality products and services. We want people to think of Slovakia as producers of interesting and technically sophisticated products that are competitive with products from Japan, Finland or even the US," reads an optimistic introduction of the Minerva action plans.

Slovak Prime Minister Mikuláš Dzurinda expressed support for the Minerva project. He emphasized that his cabinet would make a concerted effort to ensure that Minerva is realized. The action plans are the first step helping put the theory into practice.

"I very much want to put Minerva among those projects that this cabinet has fulfilled," Dzurinda said. He added that Minerva is finding support among the opposition as well.

"None of us is interested in theoretical schemes but in concrete measures that will deliver real results. I feel it is important that we set deadlines for fulfilling the tasks and establish criteria for measuring results," Dzurinda said.

The prime minister said that for a small country in the heart of Europe, concentrating on human resources and education "is really an optimal solution".

Minverva's four pillars

Minerva, which stems from the Lisbon strategy adopted by the European Union in 2000, is based on four main pillars: investment in people and education, innovations in the field of science and research, the creation of an information technology-based society, and the development of the business environment.

The purpose of the first pillar - education and employment - is to help Slovak society to think critically, analyse society phenomena and flexibly react to the changing needs of the labour market. The action plan in this pillar is therefore aimed at building a new, modern education programme that is accessible to all citizens, encourages and supports especially talented young people and raises the quality of the country's university. It also aims to cut the tax wedge of the low-income workers and support apartment construction for the needy.

Among the concrete plans in the first pillar are strategies for adult and continuing education, improvements in foreign language teaching, support for IT and communication technologies in school and new financial schemes for universities. They also include a new subsidy for pre-school in poorer regions with high birth rates.

The second Minerva pillar - research and innovations - proposes stronger state support for science to increase motivation of the private sector to enter the field of science. Some of the action plans include creating a strong central agency that supports research and development, a national scientific policy and a system of post-graduate monetary support as well as increasing the mobility of workers in scientific fields.

The cabinet would also like to make science more popular and, at the same time, a highly respected career. A new central Web portal would keep the public informed of the latest scientific happenings, while innovation firms would find support through incubators and venture capital.

Action plans for the third pillar - building an IT-based society - would ensure basic computer skills for everyone and easily accessible Internet connections, both at home and in public places. The action plans include linking the administration of state institutions, reducing the massive duplication of effort that hounds all Slovak citizens. State offices would offer services online, as well.

The forth pillar of Minerva - the business environment - has been recently addressed through the numerous reforms passed by the cabinet. However, officials see a lack of law enforcement and a stagnating capital market preventing further improvement. The action plans in this pillar are therefore aimed at these tasks.

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