Innovation and Innovation Policy in Slovak Republic 

Overview of Innovation Policy

Weak R&D system disables cooperation between academia and industry sectors

A common denominator for poor innovation performance was low spending on R&D. In Slovakia share of gross expenditure on R&D (GERD) in GDP fell to record low of 0.46% (EU27 1.82%) and share of business expenditure on R&D (BERD) in GDP to 0.19% (EU27 1.17%) in 2007. Slovakia accounted for relatively educated labour force, but failed to transit to R&D-intensive employment structure. Employment in knowledge-intensive services, for example, generated 9.86% of workforce (EU27 =14.51%) and the knowledge-intensive services exports accounted for 20.80% of total services exports (EU27 =48.70%). While numbers of undergraduate and PhD students, and enrolment rates rose 3.5 times in , share of public expenditure on higher education in GDP fell from 0.98% to 0.66% in the same period. Decline in real spending on higher education impacted quality of the University research. None of Slovak Universities ranked to top 500 World Universities in 2009. Weak system of applied research disabled cooperation between the industry and academia sectors and was reflected in poor commercial outputs of R&D base. Majority of technology effort was focused on knowledge absorption and diffusion rather than on knowledge generation.

 

Underdeveloped system of innovation governance

In 1990s and 2000s Slovakia coped with difficulties related to introducing market economy and establishing an independent state. Innovation was not considered a priority till 2005. There were ad hoc policy initiatives designed and implemented by the Ministry of Economy, Ministry of Education and their agencies. The fragmented national system of innovation accounted for low efficiency, and underdeveloped mechanisms of coordination and consultation. First innovation strategies and governance bodies were established as late as in 2007.

 

Low shares of innovative enterprises limit competitiveness of the country

Slovakia ranks to countries with lowest rates of innovation activity in the EU. Some 17.9 percent of Slovak firms recorded innovated in-house in 2006 (EU27 average = 30.0 percent). A dual economy established in Slovakia in the late 1990s and early 2000s. Branches of multinational companies (MNCs) form one sector, typically with world-class technology imported from abroad and high productivity levels. Some 80 thousands of Slovak small and medium enterprises (SMEs) account for low productivity levels and low R&D intensity. Branches of MNCs operating in Slovakia have their headquarters and R&D centres located outside Slovakia, and express limited interest in networking with Slovak R&D facilities. Slovak SMEs in general account for low R&D expenditure and compete with low costs of labour. There is a high correlation between the amount of labour costs, and values of the Summary Innovation Index and/or share of GERD in GDP among the EU Member countries. The competitive advantage based on low wages, however, was disappearing over time. In period 1996-2007 labour costs increased three times in Slovakia. This trend is likely to speed-up after adoption of the Euro. Slovak businesses will have to rely much more on introduction of new technologies and managerial practices, and compete with higher level of innovativeness of their goods and services.

Innovation governance and policy trends

Recent years have seen several significant and positive developments in the national and regional innovation governance systems. In 2007 Slovak Government passed the Innovation Strategy and the Long-term Objective of the State S&T Policy up to 2015. In 2008 the Innovation Policy for 2008-2010 was adopted. The 2007 Innovation Strategy and the 2008 Innovation Policy enabled creation of innovation governance bodies and introduced a number of innovation policy measures. The Slovak Innovation and Energy Agency was established in 2007. The Regional Innovation Centres are created in 2009 and should become cornerstone for regional innovation development. The opportunity is to create a fully-fledged and well-coordinated system of innovation governance, which may provide significant help for implementing innovation policy measures. The innovation, human resources and research policy measures heavily rely on European assistance under the Operational Programme Education (OPE), Operational Programme Research and Development (OPRD) and Operational Programme Competitiveness and Economic Growth (OPCEG). Calls under these Programmes invested some €621.1m in human resources, R&D and innovation in 2008. Some €822.7m are planned for these priorities in 2009.

 

Suggested future actions and opportunities for innovation policy

Adoption of Euro and economic recession create both threats and opportunities for Slovak economy. Slovakia no longer can rely on competitive advantage of low wages. Instead, development of high-tech, high value added industries must become a priority. Policy measures envisaged by most important R&D and innovation policy documents involve (a) supporting business-oriented, internationally competitive R&D sector; (b) creating more efficient public support for innovation-oriented activities; (c) promoting young scientists and (d) developing a modern education policy to promote high levels of employment. Support to knowledge-based economy accounts for spectacular increases in period 2007-2013, compare to previous years. Total assistance by Structural Funds to human resources, R&D and innovation was some €436m in planning period 2004-2006, but increases to some €3.5 billion in planning period 2007-2013.

Who Is Who

Senior Official(s) for Slovak Republic
Jan Strelecky
Correspondents for Slovak Republic
Vladimir Balaz




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Innovation Performance

 Performance in Innovation Scoreboard 2008

Find Out More

 List of relevant websites