Strengthening FDI and SME Linkages in the Slovak Republic
This report assesses the linkages between foreign direct investment (FDI) and domestic small and medium-sized enterprises (SMEs) in the Slovak Republic. It provides policy recommendations to national and subnational governments on how to foster productivity and innovation spillovers from FDI to the...
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| Autor Corporativo: | |
| Formato: | Libro electrónico |
| Idioma: | Inglés |
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Paris :
Organization for Economic Cooperation & Development
2022.
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| Edición: | 1st ed |
| Materias: | |
| Ver en Biblioteca Universitat Ramon Llull: | https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009707512906719 |
Tabla de Contenidos:
- Intro
- Preface
- Foreword
- Acknowledgements
- Acronyms and abbreviations
- Executive summary
- 1 Scope of FDI spillovers on SMEs: Conceptual framework
- 1.1. Context and motivation
- 1.2. Conceptual framework to assess FDI spillovers on domestic SMEs
- 1.3. Implementing the conceptual framework in this report
- References
- Notes
- 2 Enabling conditions for FDI and SME spillovers in the Slovak Republic
- 2.1. Summary of strengths, challenges and opportunities
- 2.2. Economic, structural and geographical characteristics of the Slovak Republic
- The Slovak Republic's economy has been performing strongly until the COVID-19 crisis
- The Slovak economy is highly specialised, with a strong industrial base
- The automotive industry drives the performance of Slovak manufacturing
- Half of total exports are high-tech manufactured products, especially motor vehicles
- A number of promising regional industry clusters have emerged…
- … that could help reduce regional economic disparities
- 2.3. Potential for FDI productivity spillovers
- FDI inflows were a key driver of the Slovak Republic's economic catch-up to higher income countries
- There is an important productivity gap between foreign and domestic firms
- Further diversification in FDI's geographic origin could help foster spillovers
- Inward FDI is concentrated in higher technology manufacturing
- The predominance of greenfield FDI in higher technology manufacturing is likely to facilitate productivity spillovers
- Efficiency-seeking FDI in low value-added GVC activities remains prevalent
- 2.4. SMEs absorptive capacities
- The Slovak business population is dominated by myriad low-productivity micro firms
- The very high business dynamism may reflect a lack of scale up capacity in smaller firms
- SMEs are more present in the less technology-intensive sectors.
- The SME sector still underperforms in R&
- D and innovation
- Difficult access to strategic resources and inefficient business conditions weigh down on SME innovation capacity
- Competition conditions and infrastructure deficiencies raise obstacles to SME innovation
- Emerging skill shortages hamper the innovation performance of Slovak SMEs
- References
- 3 FDI diffusion at play for Slovak SMEs
- 3.1. Summary of strengths, challenges and opportunities
- 3.2. Value chain linkages between foreign MNEs and domestic SMEs
- Foreign MNEs source less domestically than their peers in other OECD economies
- Foreign MNEs export most of their output, with only a limited share used by domestic SMEs
- 3.3. Strategic partnerships between foreign firms and SMEs in the Slovak Republic
- R&
- D and innovation collaboration is relatively common among Slovak SMEs, especially with buyer and supplier firms
- Technology licensing agreements with MNEs are diffused in the manufacturing sector
- Joint ventures played an important role in the Slovak transition to a market economy and might still hold potential for productivity spillovers
- 3.4. Labour mobility between FDI and domestic firms
- Overall, job-to-job mobility of science and technology (S&
- T) workers is low by international comparison
- The high wage premia of foreign affiliates are likely to discourage labour mobility towards domestic SMEs
- Lack of training and learning opportunities in the SME sector may also hinder workers mobility
- 3.5. Competition and imitation effects of FDI
- Co-operation with, and information gathering from, competitors are relatively common practices for Slovak SMEs
- Most Slovak SMEs consider however competition as a major barrier to their innovation activities
- References
- 4 The institutional and governance framework for FDI-SME diffusion.
- 4.1. Summary of findings
- 4.2. Overview of the Slovak governance framework for FDI-SME diffusion
- Multiple ministries and government agencies are involved in implementing policies that act upon FDI-SME diffusion channels and enabling conditions
- The regional footprint of government agencies has been strengthened but policy coherence between national and subnational levels could be further improved
- Subnational governments have been given substantial responsibilities, but often lack the capacity and own resources to support local FDI-SME ecosystems
- 4.3. Policy coordination across institutions and tiers of government
- High-level government councils are generally proactive about bringing together different line Ministries, but fulfilling their coordinating role remains challenging
- Synergies for implementing the FDI-SME diffusion policy agenda could be strengthened through dedicated national strategies on innovation and SME policy
- Policy coordination among implementing agencies is not frequent and takes place either informally or in a centralised manner through line ministries
- 4.4. Evaluation of policy impact and engagement with stakeholders
- The Slovak Republic has a well-developed framework for undertaking policy evaluations but ministries and implementing agencies should improve their analytical capacities
- The Slovak Republic has a well-established practice of consulting with business and other stakeholders on legislative proposals and national policy frameworks
- References
- 5 The policy mix for FDI-SME diffusion
- 5.1. Summary of findings and recommendations
- 5.2. Overall balance of the policy mix for FDI-SME diffusion
- SME absorptive capacities, strategic partnerships and value chain linkages are the main objectives pursued by the Slovak policy mix.
- FDI-SME diffusion channels and their enabling conditions are supported mainly through financial incentives and technical assistance
- Market openness and a balanced labour market policy regime may facilitate FDI spillovers on Slovak SMEs, but the regulatory burden on business could be reduced
- 5.3. Policies acting upon the enabling environment
- Attracting and facilitating productivity-enhancing FDI
- Financial incentives are the main policy instrument used to attract foreign investment into productivity-enhancing and R&
- D-intensive activities
- Strengthening the absorptive capacities of Slovak SMEs
- Financial support for business R&
- D and innovation is among the lowest in the OECD area
- SME growth and upgrading is supported by a comprehensive set of technical assistance services
- however policy coherence could be further improved
- There is room to improve the regulatory environment for SMEs, especially for start-ups
- The knowledge transfer infrastructure could be further supported with the necessary financial and technical resources to promote science-to-business collaboration
- Mainstreaming economic geography considerations into FDI-SME diffusion policies
- Place-based approaches could be leveraged to strengthen the impact of FDI-SME diffusion policies on least developed regions
- Support to industrial clusters has increased, but a more comprehensive approach will be needed to strengthen the internationalisation of local FDI-SME ecosystems
- 5.4. Policies acting upon the FDI-SME diffusion channels
- Promoting FDI-SME linkages and strategic partnerships
- Matchmaking services are available to foreign and domestic firms, but more could be done to support supply chain development and promote R&
- D and technology partnerships
- Facilitating the mobility of workers from foreign MNEs to local firms.
- The Slovak Republic has a rather balanced legal framework for employment protection
- Addressing workforce skills gaps and mismatches has been a key priority for the Slovak economy
- Creating market conditions for fair competition and knowledge exchange between foreign MNEs and Slovak SMEs
- Regulatory barriers to competition are limited, but there is room for improving product market regulation in some sectors and domains
- The intellectual property protection framework is well-developed
- however enforcement procedures can be further improved
- References
- 6 Regional focus: Banská Bystrica and Košice
- 6.1. Summary of findings
- 6.2. Economic geography in Košice and Banská Bystrica
- Two regions at the crossroads of Central Europe
- Two regions in a process of deindustrialisation, with shifting specialisation
- The regional socio-economic performance in Košice and Banská Bystrica is still lower
- Ageing population, brain drain toward the west and a general skills challenge weigh on regional imbalances
- There are deficiencies in transport and digital infrastructure, especially in Central and Eastern regions
- 6.3. FDI spillover potential
- Inward FDI is concentrated in Bratislava while Košice drives the FDI performance of the East
- Productivity premia of foreign firms are low across all Slovak regions
- Greenfield investors in Košice and Banská Bystrica target a limited number of industries
- 6.4. SMEs absorptive capacity
- Both regions count mostly micro firms and SMEs are unevenly distributed across economic sectors and regional districts
- Lower business survival and scale up capacity can prevent the formation of linkages with MNEs…
- R&
- D capacity concentrates in the capital region
- Firms in Eastern and Central Slovakia are relatively well integrated in international patent co-operation networks.
- 6.5. Regional governance and policy mix for FDI-SME spillovers.
