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The year is coming to an end and our final event for the year 2010 was Business Breakfast with Mrs. Darja Radić, Minister of economy. Both, our President Tomaž Lovše and our Executive Director Ajša Vodnik, emphasized that AmCham had a very successful year and they expressed thanks to all our members.

Minister Radić adressed us with speech: “Contribution of the State to the Increase of the Competitive Position of Economy”.

Darja Radić, Minister of the Economy of the Republic of Slovenija

“One of the main tasks of the Ministry of the Economy is to create business environment that would enable creation of new ideas, increasing competitiveness and development of the Slovene economy as a whole.”

In this sense I would like to stress four key words: creativity, innovation, entrepreneurship and internationalization.

Why creativity?

Creativity is a process that involves creative problem solving and exploring new ideas, concepts, or establishing new connections between them. Creativity is the starting point for innovation. It is the first necessary but not sufficient condition for the latter. Talking about creativity we talk about experimenting, inventing, growth, risk-taking, making mistakes. Creativity means a deviation from existing patterns and looking at things from a different perspective. Things that we fear most in organizations – imbalances, volatility and disruptions – are the primary sources of creativity.

Another key word is innovation.

Innovation and creativity go hand in hand. Ideas that arise from creativity are a source of innovation and innovation is a source of change, improvement and progress of mankind. Steve Jobs, co-founder of Apple points out that “innovations are those that distinguished leaders from our competitors.” Innovations are one of the most important drivers of economic growth and also the answer to solving the social and societal challenges. Innovation is not only science and technology. The appearance of new products and services in all sectors of the economy, new marketing methods, changes in the way of organizing business and their business practices and relationships with external stakeholders. In this context, the creation of new businesses through entrepreneurship and innovation, is gaining a central role.

So we got to the third key word: entrepreneurship.

Entrepreneurs and businesses are in fact those that play a central role in the innovation process, as ideas and knowledge that add commercial value to the products or services and generate employment. The establishment of effective business-innovation infrastructure is extremely important for the development of a competitive economy.

And last but not least: internationalization. We use this word quite often but despite its importance for the global economy there is no commonly agreed definition of internationalization. So what is internationalization? Internationalization has been viewed as a process of increasing involvement of enterprises in international markets. And taking into account the size of Slovene market and traditionally export-oriented economy internationalization, mainly in form of export, import, foreign investments, plays an important role in improving competitiveness of our economy.

Entrepreneurial and innovation infrastructure includes government executive institutions such as the SPS (the Slovenian Enterprise Fund), JAPTI (Public Agency for Entrepreneurship and Foreign Investments) and TIA (Technology Agency of Slovenia), entities supporting environment such as technology parks, university and business incubators and VEM points, as well as other public and private institutions and financial intermediaries, which represent the support of entrepreneurs and enterprises in developing their business ideas. At the Ministry of the Economy, we strive to make this system most comprehensive and transparent at the same time, so that it can provide effective support to the economy. In particular, we would like to go in the direction of greater transparency and eliminating unnecessary duplication.

Despite the fact that entrepreneurial and innovation infrastructure is very important for the development of the economy, strengthening the culture of creativity, innovation and entrepreneurship requires a wider view. That is a change in thinking, the mentality of people. Encouraging creativity, innovation and entrepreneurship must begin in kindergarten and continue throughout the school system. For example, the Ministry of Economy is very in favor of idea to establish a creative network of schools modeled on ecological schools. Only in this way we can become an innovative society and “innovative Slovenia“.

Managers play a central role here. Long-term restructuring of business models, product strategies and management systems is necessary in order to achieve higher added value. Ministry of Economy in this context examines possible measures to strengthen the managerial organizational and technological capabilities of enterprises, for example promote business excellence, implementation of new technologies and processes, and similar.

The central question to which you expect me to respond at this meeting is “How can the State contributes to increasing the competitiveness of Slovenian economy?” The answer is to conduct more ambitious industrial policy of Slovenia. Industrial policy can be defined as coordination of various State Measures to enhance competitiveness of the overall economy and individual sectors within it. The process of globalization and technological advances led to the revival of the role of an active industrial policy as a mechanism to promote international competitiveness.

You should take into consideration a fact that the need to conduct industrial policy is not a responsibility of only one ministry, as the entire legislative environment, especially fiscal policy, labor policy, environmental policy, development policy and the education system among others have significant impact on the competitiveness of the economy.

In Slovenia, a small, export-oriented country is currently dominated by horizontal (neutral) approach to industrial policy, which creates and maintains a competitive framework for the entire economy and not to selected areas or sectors. The State thus creates equal opportunities for all market participants. Measures to increase competitiveness, aimed at promoting research and development of new technologies, promoting innovation, enhancing skills, measures to promote entrepreneurship and small and medium-sized enterprises, measures of direct foreign investment and internationalization of companies, and other measures provide rapid technological progress.

As in other countries affected by the recession, also in Slovenia a dilemma aroused whether to lead a more active and focused industrial policy, thereby raising the status of the leading and most promising sectors and increase their competitiveness in global markets. A country may attempt to form targeted industrial policies to create conditions that would optimize conditions for corresponding sector, which it wants to help or create a new one, and thus achieve an improvement in competitive advantage in these sectors. More and more countries support the concept of so-called “Smart specialization”, which exploit local strengths, gifts and knowledge, and past investments in capacity and thus builds on the quality of domestic competencies.

In this direction, the Ministry of Economy published in the summer of invitation to tender for the establishment and operation of research centers of the Slovenian economy for long-term development in specific areas. It should be noted also the invitation to tender for the development of competitive centers of the Ministry of Higher Education, Science and Technology.

At this point I would like to mention a new Research and Innovation Strategy of Slovenia, prepared by the Ministry of Higher Education, Science and Technology in cooperation with our ministry. This new strategy will establish a modern research and innovation system that will address the challenges the society is facing and allow for higher value added per employee and provide jobs. Compared with previous national research and innovation program greater emphasis will be put on the economic aspect and the commercialization of knowledge. Incentives for innovative projects, where the private sector is involved, will be increased.

Due to the characteristic of Slovene market there is another important issue that have to be addressed when we are talking about competitiveness of the Slovene economy. That is definitely openness of the Slovene market. In the July this year the Ministry of the Economy prepared a new program for internationalization of Slovene companies that introduced some new instruments that can additional assist Slovene companies to enter new markets or to expand their activities on existing ones. We would especially like to assist SMEs in all phases of their internationalization. Together with other institutions we are for the first time preparing Operation Plan for internationalization for 2011 with guidelines for 2012 where we will define activities that will be implemented, target markets and also some activities for defined sectors. We are certain that this more focused approach will give even better results and be more useful to companies using various instruments for internationalization.

And we cannot forget about FDI. Slovenia may not be the most successful at attracting foreign investors but we hope that this will improve in the future. New program for promoting FDI is under preparation and will bring some solutions and new tools for attracting foreign investors. We are well aware of the importance of foreign investments for Slovene economy: they bring new knowledge, new technologies, new experiences, new jobs and new way of thinking. Through all this they contribute to better competitiveness of Slovene economy. At the Ministry of the Economy we are doing our best to create stable and business-friendly environment that would enable all companies to focus on what they are doing best – their business. But as I mentioned before we are not alone in creating business environment – but let’s hope for the best!

Of course just governmental endeavors are not enough for raising competitiveness of Slovenia – we would need also your cooperation, your support, your ideas, your creativity. Acting hand in hand we could do something for improving competitiveness of Slovene economy.