Strategic Foresight 2023: Western Balkans
editor
The Adriatic Team
The top 3 risks of 2023
The top 3 risks of 2023
1. Growth rates in the Western Balkans have been revised downward since the spring of 2022.
According to economic forecasts, the Western Balkans is being confronted by a series of adverse shocks, stemming from the global energy crisis and the war in Ukraine. Higher energy and food prices have pushed inflation to levels unseen for decades. In 2022 there was double-digit inflation in all countries except for Albania. Purchasing power and business confidence were eroded, as well as an estimated 13% increase in the number of poor in 2023. The region’s export boom has also begun to slow down, widening current account deficits sharply. For example, a decrease from 54.9% of GDP in 2021 to 8.7% of GDP in 2022 and this in turn is putting pressure on currencies and foreign exchange reserves. The data provided by the World Bank suggests that the labour market is beginning to cool down and there is increasing uncertainty about employment growth. Within such a constellation, the strong start made in the first six months of 2022 by the Western Balkans could potentially “be annulled” by mid-2023.
2. Structural reforms are urgently needed, but several uncertainties exist regarding the persistent political capabilities issue.
2. Structural reforms are urgently needed, but several uncertainties exist regarding the persistent political capabilities issue.
Data from the Penn World Table shows that the Western Balkans need structural reforms to boost potential growth. Stemming from this, organizations such as the European Bank for Reconstruction and Development, the World Bank and the International Monetary Fund have indicated that governments should prioritize reforms that would serve to accelerate potential growth with a low fiscal cost. Such reforms should facilitate the rise of standards of governance, including digitalization, level of market competition, removal of entry barriers to business, as well as retention and reinvestment among foreign investors to boost productivity. While such reforms are needed, the biggest risk comes from the field of political capabilities, meaning that the political elite is either unable or unwilling to introduce the needed structural reforms. Cases of BiH, Montenegro and to a certain extent, North Macedonia, show how a gridlocked political situtation can diminish the prospect of introducing the needed reforms.
3. Stagnation on the path towards the EU could exacerbate bilateral tensions in the region.
3. Stagnation on the path towards the EU could exacerbate bilateral tensions in the region.
The war in Ukraine, coupled with accession fatigue, the rise of socio-political uncertainties in Bosnia and Herzrgovina, Montenegro and North Macedonia, and deteriorating relations between official Pristina and Belgrade, are becoming an everlasting challenge for the notion of good neighbourly relations. An unclear European integration perspective, accompanied by the unwillingness of the said countries to join the Open Balkan initiative, could, in turn, exacerbate the already burdened bilateral relations between the countries in the region in 2023.
CROATIA
This year’s assesment of the investment environment shows that Croatia is going to stay moderately stable due to the recovery measures and stimulative economic incentives during the energy crisis. In 2023, Croatia’s economic growth is forecast to be rather low (1%), while inflation should decelerate to 6.5%. Analysts at the Institute for Strategic Solutions will follow the situation closely alongside domestic consumption.
SLOVENIA
Analysts at the Institute for Strategic Solutions estimate that the general Investment Environment Assessment will remain moderately stable as it was in 2022. The biggest risks that could potentially influence the general investment Environment Assessment are related to public debt, the healthcare system, the taxation system, and inflation. The political environment has improved, as the election in 2022 enabled a strong majority between three political parties that can implement the needed reforms in the year to come.
BOSNIA AND HERZEGOVINA
Analysts at the Institute for Strategic Solutions estimate that the general investment environment is going to remain moderately uncertain. Such trajectories could be further accelerated as the general elections in BiH did not bring any significant changes, meaning that the political crisis will stay “locked”. In 2023, the biggest risks – besides the political ones, touch upon the socio-economic dimension, as inflation rises and there is slower economic growth, in tandem with weaker employment, all these factors could worsen the general investment environment of the country in 2023.
SERBIA
Analysts at the Institute for Strategic Solutions estimate that the general investment environment will remain moderately uncertain and could stay so, due to improved economic indicators that are coupled with (relatively) robust growth for 2023. This will be coupled with reducing the deficit and debt-to-gross domestic product ratio, alongside a rise in pensions and minimum wage in 2023. The most troublesome risks that Serbia potentially faces in 2023 are tied to the uncertainties regarding the bilateral relations with Kosovo, which is something that will be monitored closely.
KOSOVO
This year’s assessment of the investment environment shows that Kosovo is going to stay moderately uncertain, mostly due to bigger socio-economic and political risks. Such risks are associated with relatively slow economic recovery after the COVID-19 crisis, and bilateral tensions with Serbia, which is preventing a meaningful dialogue between Pristina and Belgrade. the dialogue received a new impetus following the German and French to accelerate it; this is something that will be closely monitored by the analysts at the Institute for Strategic Solutions.
NORTH MACEDONIA
This year’s assessment of the investment environment shows that North Macedonia is going to stay moderately uncertain, but will worsen due to the political and security situation. The latter corresponds with increased unrest that has both internal and external dimensions; while the internal one pertains to the question of constitutional changes, the external one is inherently tied to the ongoing tensions between North Macedonia and Bulgaria. Analysts at the Institute for Strategic Solutions will closely follow the internal dimension as this has the biggest spill-over potential and could determine the socio-political environment of North Macedonia 2023.
MONTENEGRO
This year’s assessment of the investment environment shows that Montenegro is going to stay moderately uncertain, but will worsen in terms of the political indicators. This was reflected in the second part of 2022, which saw an instalment of the technical government led by Dritan Abazović only to be impeached a few months later. While such an atmosphere is not expected to completely de-escalate in 2023, it is worth mentioning that Montenegro’s general investment environment will improve in part with foreign investments. In 2022, they were 85% higher than in 2021, and projections show that Montenegro will continue on this path of attracting foreign investors.
THE ADRIATIC
This article was originally published in The Adriatic Journal: Strategic Foresight 2023.
If you want a copy, please contact us at info@adriaticjournal.com.
The Future lies in Innovation and Connectivity
editor
Adriatic team
Ljubljana – On January 24th, business leaders and industry experts gathered at the Maxi Klub in the heart of the city for the annual release of The Adriatic: Strategic Foresight 2023. The magazine, which provides insight into the future of the region’s economy and business landscape, released this year’s edition under the title “Crossing over: Navigating through Innovations”.
The Minister of Labour, Family, Social Affairs, and Equal Opportunities, Luka Mesec, opened a conversation on how to work smarter and better by stating that the role of the state has changed in recent times. In his view, the solution to the challenges facing society lies in cooperation between the state and other spheres, as well as the promotion of social dialogue. He cited Scandinavia as an example of a region where this approach has been successful, noting that the state’s role is to enable such dialogue, rather than dictate it. The Minister also addressed the issue of the four-day working week, acknowledging that no country can exist in isolation in today’s globalized world, and that international competitiveness must be taken into account when making policy decisions.
According to Tine Kračun, the Director of the Institute for Strategic Solutions (ISR), the key to navigating the current crisis and emerging victorious lies in the ability to adapt, cooperate, and innovate. Speaking on the potential for integration within the Adriatic region, Kračun emphasized the importance of the economy and the integration of the region into the European Union. “The well-being of individuals is closely tied to the health of the economy,” Kračun stated. “As such, we see great opportunities for Slovenia in the integration of the Adriatic region within the EU.”
According to Dr. Jure Stojan, Director of Research and Development at the ISR, the current state of the economy is in a period of uncertainty, characterized by volatile market conditions. “Data shows that we are currently experiencing a period of economic fluctuations, with the prices of German producers experiencing a reversal, while remaining high but no longer at record-breaking levels,” said Stojan. He also highlighted that the current pressures on the economy are not just limited to the ongoing pandemic, but also include issues such as climate change and other conflicts. Stojan emphasized the need for swift action and adaptation in order to navigate these uncertain times, stating, “We must not rely on time, and must take proactive measures to address the changes that we ourselves are making to the economy.
Navigating Uncertainty: The Role of Innovation in Shaping the Future
As interest rates continue to rise after more than a decade of being stuck near or even below zero, companies are faced with the reality of limited government borrowing options. Domen Prašnikar, Director of the consultancy Valior, emphasizes the need for businesses to protect themselves and build resilience through the use of modern technologies and management strategies. Prašnikar stresses that innovation is key to adapting to the current uncertain environment.
Maja Krumberger, Director of the Slovenian Insurance Association, also highlighted the pressing issue of demography in Europe, with Slovenia ranking among the highest on the continent. “With an aging population and fewer active workers, we will rely less on pensions,” Krumberger said. “Insurance companies have responded by offering products that ease the burden on public healthcare systems.” Krumberger underscores the importance of collaborating with regulators and finding solutions that benefit society as a whole
In uncertain times, the role of innovation in shaping the future cannot be overstated. This was a sentiment echoed by Andrej Lasič, a member of the NLB board, who emphasized the challenge of demography in the region as a pressing issue that affects many areas. “Just a decade ago, the Slovenian economy was indebted to the extent of 40% of GDP. Today, it is indebted to the extent of 20% of GDP,” Lasič noted. “We can use credit for innovation and investment. In the current situation, Slovenian companies have an exceptional opportunity to make good use of the current turbulent times, as they are among the least indebted in Europe. Not just Europe, but even the world.”
He went on to highlight the importance of diversification, pointing out that the Slovenian economy is one of the most diversified in the world, which means it is not dependent on a single industry. Jože Bajuk, a member of the board of Petrol, concurred, stating that diversification is extremely important for large companies such as Petrol, as it does not limit companies territorially in terms of production and operations. Bajuk also emphasized the importance of innovation in applied technologies, saying, “We are a highly innovative company that runs its business efficiently. You can upgrade solutions and processes through purchases and acquisition of people who have come up with findings and innovative solutions. And new technologies coming to the market mean a new opportunity for us.”
As the world continues to grapple with the impact of technological advancements, the importance of innovation in navigating uncertain times has become increasingly clear. This was the focus of a recent round table discussion hosted by the Atlantic Monthly, featuring leaders from the insurance, energy, and banking sectors in Slovenia.
Aljoša Tušek, founder of Tushek Hypercars, noted that while multiple drive technologies will likely remain available, there will not be a definitive displacement of any one technology from the market. He emphasized the unique strengths of his company’s electric drive, which is 30% more efficient and 50% lighter than other electric drives on the market.
Valentin Hajdinjak, President of the board of DARS, highlighted the importance of innovative leadership, emphasizing the company’s focus on investing in employees and upgrading processes through digitalization. DARS has transformed from a highway builder to an active traffic manager, with a focus on ensuring greater traffic flow and safety for drivers.
Maja Krumberger emphasized the importance of a blended approach, noting that “only digital approach and with the help of artificial intelligence is not the right answer.” The round table agreed that demography, with Slovenia having one of the oldest populations in Europe, is a key challenge in the region, and that the right mix of human and digital approaches is crucial for success.
The conclusion was marked by a networking reception, featuring refreshments provided by Mercator and a selection of wines from Kleti Brda.
The Region more connected
editor
Maja Dragović
JOURNALIST
The recently established Open Balkan initiative aims to make better use of opportunities in the Western Balkans. It currently includes three countries: Serbia, North Macedonia and Albania. Mihailo Vesović, Director of Division for Strategic Analyses, Services and Internationalisation at the Serbian Chamber of Commerce, talks us through the initiative's main goals, benefits it may provide its citizens and the ongoing obstacles for companies in the region.
What are the initiative’s main goals?
Albania’s prime minister Edi Rama, North Macedonia’s prime minister Zoran Zaev and Serbian President Aleksandar Vučić have launched the initiative to implement certain principles of free movement of goods, people, services and capital in the three countries and to show how regional initiatives can be implemented.
The goal is to reduce or completely eliminate the waiting times for trucks at border crossings through an ICT system that defines all necessary documentation in advance, harmonizing and recognizing certificates and control mechanisms that ensure compliance with quality standards, stronger risk analysis and introduction of practical controls mechanisms that exist in the EU.
Another goal is to provide access to the labor market for all citizens of these three countries under identical conditions as the citizens of home country.
Citizens and companies within the Open Balkan initiative will get concrete benefits in the form of certain discounts on goods and services.
The aim is also to ensure the free flow of services and, at a later stage, capital within the Open Balkan. Finally, the goal is to create a union based on standards and principles of the EU before joining the EU, and thus enable companies from these three countries to have access to the EU single market in agreement with the EU.
The Open Balkan initiative creates a market of 12 million consumers where administrative barriers have been eliminated and a common economic area is established. What will the region gain from this economic space?
It will provide better business conditions, lower prices of goods and services due to fewer administrative barriers and thus making goods and services from the area more competitive in the global market.
The region will be more connected, providing companies better placement of goods and improving standards to be ready for the EU market. It will also enable full cooperation of institutions, bodies, agencies between these three countries, which will build greater trust both in the administration and at the political level.
At the moment, the biggest obstacles are the Western Balkans border crossings to the EU and long waiting times.
What are currently the biggest obstacles to doing business in the Western Balkans?
At the moment, the biggest obstacles are the Western Balkans border crossings to the EU and long waiting times, especially at the border crossings between BiH and Croatia and the border crossings between Serbia and Croatia and Serbia and Hungary.
Waiting times for trucks at border crossings are a problem we have been trying to solve for years. At the intraregional crossings, within the Western Balkans, after last year’s establishment of the so-called green corridors within CEFTA, waiting times were reduced to a tolerable level. We are trying to reduce them further, and several initiatives initiated by the Serbian Chamber of Commerce have been directed in that direction, both within Serbia and regionally.
Within the region, we would also like to see faster implementation of the Action Plan for the Common Regional Market. From an economic point of view, there are a number of additional costs that we believe can be avoided through mutual recognition of certificates accompanying goods, certificates of conformity, as well as more rational risk control at crossings within the region. In terms of services, all six chambers of commerce in the region want to see full liberalization of service provision, mutual recognition of licenses and the creation of a common market in this segment as well.
For this very reason, the Republic of Serbia, together with Albania and North Macedonia, launched the Open Balkan initiative, in order to remove the remaining barriers in mutual business. It is important for us to point out here that this initiative is also open to the remaining six economies of the Western Balkans, and we hope that they will join soon.
How the Slovenian support Environment for Start-ups is connecting with the Western Balkans
editor
Jan Tomše
JOURNALIST
Slovenia boasts an extremely diverse support environment for start-ups and fast-growing companies. Although it is a small country, Slovenia generates an enviable number of innovative start-ups, a large proportion of which achieve globally successful breakthroughs. The state plays an important role in the development and the global competitiveness of the supportive environment, both through substantive backing and funding.
“Innovative ideas with high added value, which are essentially high-tech, green, sustainable, socially responsible, and digitally supported, lead to the creation of high-quality jobs, economic growth, global competitiveness and, last but not least, can provide answers to the most complex social and other challenges of humanity,” explains Tomaž Kostanjevec, PhD, director of SPIRIT Slovenia, the public agency that exercises programmes for promoting entrepreneurship.
In addition to talented individuals, access to capital is essential for the development of such ideas, throughout all stages of a company’s development. Global rapid growth often requires investments of millions of euros. “Banks do not usually finance such projects due to the high risk involved, so venture capital is key. Without start-up investment and access to capital, even the most promising ideas have little chance of coming to life,” says Kostanjevec.
INFORMATION, WORKSHOPS, IDEA ASSESSMENT, MENTORSHIP
One of the important roles in increasing the chances for good ideas to take off is played by SPIRIT Slovenia, a public agency under the auspices of the Ministry of Economic Development and Technology. The agency has been running several programmes to promote entrepreneurship since the very beginning of the creation of a supportive environment more than a decade ago.
SPIRIT Slovenia currently co-finances 21 innovative entities promoting entrepreneurship in all Slovenian regions. They provide information, workshops, business idea assessment and diagnostics, mentoring, and advice to innovative entrepreneurs, as well as accelerator programmes and competitions for best business ideas, activities to strengthen the entrepreneurial community and other related activities.
“The arrival of the corona has exposed many social structural weaknesses that were previously unconscious or more hidden. Overnight, it became even clearer how important are innovation, sustainability, green approaches, social responsibility, and adaptability to new circumstances. Companies have been forced to innovate to a higher degree, to think outside the box, to adapt their business models, and to digitize,” remarks Kostanjevec. He adds that start-up investments are important not only in stimulating and bringing about the innovation born in start-ups, but also in helping existing companies innovate and adapt their business models. This is where start-up investments can play an important role, provided, of course, that it is not about solving unpromising situations, but about newly discovered opportunities, says Kostanjevec.
SPIRIT Slovenia is also active in promoting women in entrepreneurship, and also provides direct subsidies for digitalization and international business.
FROM SLOVENIA TO THE WESTERN BALKANS
Entrepreneurial success requires a lot of support on different levels: at school, in acquiring knowledge, and in developing both creativity and an entrepreneurial mindset. Later on, when developing an innovative idea, mentors and advisors are essential. Companies need proper interlocutors, often with access to research equipment, capital, business premises, and other infrastructure. “Same as with top athletes, it is difficult for entrepreneurs to succeed on their own, which is why support is a must. Without the right support, there would be significantly less entrepreneurial success,” says Kostanjevec. He gives the example of how entrepreneurship is supported in the early stages by SPIRIT Slovenia. “We have two strong platforms. The first is the national SPOT system, which brings together a range of support services offering free help, information and advice to businesses.The second platform is SIO, which connects business and university incubators, accelerators, technology parks, and other environments that enable the creation and growth of new businesses.” More than 120 mentors and 200 business advisors are connected to SIO centres. Each year, they organise more than 600 workshops, lectures, startup weekends, informal meetings and other training events, supporting more than 100 entrepreneurs on their entrepreneurial journey. “We can proudly say that SPOTs and SIOs represent a solid foundation and a central infrastructure for the creation of new breakthrough entrepreneurial stories in Slovenia,” says Kostanjevec.
But SPIRIT Slovenia’s activity does not stop outside domestic borders. They are also actively involved in the entrepreneurial environment of Western Balkans countries. “We are aware that we should not operate in a bubble, but cooperate internationally. That is why we have strong links and cooperation with the countries of the Western Balkans. Not only at an umbrella level, but also at the level of companies, organizing delegations, visits, promoting international trade. It is important to underline the importance of sharing knowledge, good practices and connecting entrepreneurs. The Slovenian entrepreneurial ecosystem, including SPIRIT Slovenia, has the desire and ambition to see even more of this kind of networking in the future,” explains Kostanjevec.
“In the Western Balkans, we can provide good entrepreneurial support to innovative entrepreneurs, and we can also find niches where we are already leaders. We are very proud that Slovenia is becoming an European leader in the number of the so-called “hidden champions” – many Slovenian companies are world leaders in specific areas in high-tech and niche technologies,” says Kostanjevec, adding that this knowledge, case studies, technology, along with all the support services, are now becoming increasingly available in the Western Balkans, to entrepreneurs and to individuals striving to enter the world of entrepreneurship.
So far, SPIRIT Slovenia has helped numerous high-growth, globally disruptive companies take off through its SIO programme. Here are some of them:
- OLLO Audio, which is developing the Play2Me system for professional low-frequency audio listening outside a studio,
- VIAR, which is developing virtual and augmented reality solutions to enable faster training and the use of simulation in employee training, digitisation and better visualization of work instructions,
- Agitron, which develops and sells Agitron Smart Labels, digital labels based on e-paper technology that offer dynamic display of content on digital labels over several years without refilling.
The Artist Who Dared to Lengthen a President’s Nose
Ciril Horjak: A portrait
editor
Jan Tomše
JOURNALIST AT THE ADRIATIC
Ciril Horjak is one of Slovenia’s best-known and
renowned illustrators. He is also the author
of the cover of The Adriatic magazine you are
reading right now.
Ciril Horjak has been drawn to visual arts since childhood. He grew up and attended primary school in Ravne na Koroškem, where he and his brother, Metod, published their own magazine. He graduated from the Faculty of Education, and later from the Academy of Fine Arts. He is the author of many well-known comics and animated films, a lecturer, and an active observer of the world. He is a regular contributor to the Večer newspaper, C and the author of the first Slovenian textbook on comics. He has received numerous awards for his work.
“Illustrations, and especially caricatures, are a process of subtracting and over-emphasising. These are techniques that help you create a visual image of the person or phenomenon you want to portray. This is how you make the people see and feel your message,” says Ciril, an eloquent interlocutor as much at ease with words as with the lines he is drawing. He dynamically connects different themes throughout his work. He takes the idea about his line of work further: “Our brains work in such a way that they detect certain visual characteristics in people. In this way, this evolutionary tool helps us remember and understand things. That’s why illustrators and cartoonists emphasise certain features. You intentionally exaggerate and try to find the limit. For example, if we make President Pahor’s nose long or his eyelashes three times longer, readers will immediately understand, and the message will come naturally to them.” What does a good illustrator need to have? “You have to be well-read, you have to follow what’s going on, just like a journalist who writes stories. Facts and arguments are the tools you use,” says Ciril, who also collaborated with the Institute for Strategic Solutions on exhibition displays in Bankarium, the Slo venian Banking Museum established a few months ago by NLB on Čopova Street in Ljubljana. Ciril is also a great expert on the Slovenian illustrator Hinko Smrekar and in conversation he will seamlessly take you into detailed stories on the latter’s life and work.
As an artist, Ciril also goes by the nickname Dr. Horowitz. According to the legend, Horjak family’s origin is from the town of Horovice in the Czech Republic, which was founded in the 1300s. The place is particularly famous for the castle, once owned by one family who had nine children, says Ciril, who picked up his nickname after the Hebrew pronounciation of the Czech place, Horowitz.
THE ADRIATIC
This article was originally published in The Adriatic Journal: Strategic Foresight 2021
If you want a copy, please contact us at info@adriaticjournal.com.
Secondary Level of Use of Health Data in Europe
editor
Adriatic team
The global pandemic of COVID-19 shook established social systems, but it was the use of data that played the leading role in coordinating cross-sectoral responses in the field of public health. However, we must not forget that even before the pandemic, optimization and modernisation of health systems were necessary. This is of particular relevance with regard to more efficient management of the limited resources required to cater for the needs of a growing and ageing population. Slovenia is among several European Union member states that are expected to face one of the largest increases in social expenditure relating to the ageing of the population, by 2060.
Where does Slovenia rank on the ODI (Open Data Institute) scale?
The Institute for Strategic Solutions, together with representatives from key organizations in the Slovenian healthcare system, validated a report on the secondary use of healthcare data in Slovenia; matrices were checked and updated based on the initial research into the Secondary use of Health Data in Europe and Slovenia’s ranking was estimated. We also exchanged views and opinions on the challenges and opportunities facing the stakeholders. Statistics is the language of science and our purpose was to translate the numerical results into words and to provide additional insight into the minds and attitudes of local medical experts.
The informative value of the report validation brings to the fore local insight into specific key areas, namely – infrastructure, capacity, innovation, justice, ethics and inclusion. All of which a modern and credible healthcare system in Slovenia is dependent on. The report is intended for key decision-makers in the field of healthcare, enabling them to discuss and implement new initiatives that will enhance the Slovenian healthcare system and make for a better future. The baseline survey was prepared by the Open Data Institute (ODI) and published in September 2021. Its main contributor was Mark Boyd. The ODI is an independent and not-for-profit consultancy founded in 2012 by Sir Tim Berners-Lee and Sir Nigel Shadbolt. The ODI offers training, research and strategic advice to organizations seeking to explore the applied value of data. It works from its headquarters in London, as well as through its global network of start-ups, members, and hubs. Its research report, The Secondary Use of Health Data in Europe, is based on the importance of the secondary use of health data in improving and enhancing the European health system of the future. The main theme of the research is based on the idea that transparent and trustworthy data systems relating to healthcare are the key to helping countries respond to the many challenges facing society and the economy. The vital question is, how well equipped are the individual countries of the European Union prepared for the transformation?
Secondary Level of Use of Health Data in Europe
The concept of the secondary use of data includes the utilisation and processing of data collected in medical records for efficient patient treatment – both for primary use at the doctor-patient level as well as using anonymized data to identify phenomena and trends. It can also play a key role in the development and planning of the health system through various analytical approaches and the grouping of data into meaningful data sets.
The authors of the initial research focused on several key areas, namely, infrastructure, capacity, innovation, equity, ethics and inclusion, all of which a modern and credible health system is based on. The research also identifies the main components and indicators of success that are necessary to optimize the health systems of individual EU countries from secondary level use of health data. In addition to the data that is created at the patient-doctor level i.e. the primary, secondary or tertiary level of health care, there is also the health data that individuals create for themselves, for example, daily activities, such as exercise and sleep levels. This is also very significant, however, even more important is the awareness that the aforementioned data can be anonymized and combined in a way that serves to identify phenomena and trends for more effective treatment leading to increased accessibility to good quality and safe health services. This all culminates in a more sustainable health system. The results of the baseline survey showed that European countries can be classified and organized into the four main groups shown below.
According to The Secondary Use of Health Data report, the ODI classified the countries into four groups, each group occupies a quadrant on the graph above:
Leading Countries: Policy quality is strong and the implementation level is advanced. This category includes Austria, Belgium, Czech Republic, Denmark, Estonia, European Commission, Finland, France, Israel, Italy, Luxembourg, Norway, Portugal, Spain, Sweden, and the United Kingdom.
Energy-constrained Countries: Policy quality is good, but the level of implementation is less advanced. None of the countries under consideration meet these criteria.
Countries with Limited Vision: The quality of policy is weak but the level of implementation is more advanced. This category includes Croatia, Ireland, Germany, Netherlands, Poland, and Slovakia.
Less Prepared Countries: The quality of policy is weak and the level of implementation is less advanced. This category includes Bulgaria, Greece, Hungary, Latvia, Romania, Slovenia and Switzerland.
Local Insights
Individual interviews with key stakeholders who are part of the Slovenian healthcare system confirm the assessment attributed to Slovenia by the authors of the initial research into Secondary Use of Health Data in Europe. This is most noticeable in the absolute numbers we calculated as the statistical means of the ratings of the Slovenian experts interviewed. The overall assessment of the quality of Slovenian healthcare was 39 out of a possible 88, which is only slightly better than the ODI score, namely 38. Slovenian experts rated Slovenia better than the London researchers in the following categories – Infrastructure (23 versus 20 points out of a possible 52 points) and Justice (4 versus 2 points out of a possible 8 points). However, Slovenian experts rated Innovation worse than the London researchers (1 versus 4 points out of a possible 8 points). Slovenian experts also rated Ethics worse (6 points versus 8 points out of a possible 8 points), which is in line with international research in other areas. For example, in perceptions of corruption, domestic experts generally perceived more ethical slippages and violations than foreign observers. The Slovenian evaluators and evaluators from London gave the same ratings regarding the quality of Performance (both scored 0 out of a possible 4 points) and Inclusion (4 points out of a possible 8 points). As for the Implementation assessment, the overall assessment of Slovenian experts (46 points out of a possible 88 points) is only slightly better than the ODI assessment (44 points out of a possible 88 points). The average scores of Slovenian evaluators were better in the areas of Infrastructure (28 points versus 25 points out of a possible 52 points) and Justice (4 points versus 1 point out of a possible 8 points), but they were worse in terms of Innovation (3 points versus 4 points out of a possible 8 points), Ethics (7 points versus 8 points out of a possible 8 points) and Inclusion (4 points versus 5 points out of a possible 8 points). There were equal scores in the field of Capacity implementation (1 point out of a possible 4 points).
The openness to health data in Slovenia according to the ODI assessment compared to the average assessment of the Slovenian experts interviewed by the Institute for Strategic Solutions (ISR)
The state of implementation with regards to the openness of health data in Slovenia according to the ODI assessment compared to the average assessment of Slovenian experts
To summarise, there are encouraging signs that the Slovenian healthcare system is maturing in the context of effective use of the secondary level of data. However, the method in which the data is stored is still fragmented and a lot of work will be needed to get the secondary data infrastructure utilized to ensure an up-and-running strong and resilient healthcare infrastructure. Throughout the validation, Slovenian evaluators also expressed their own opinions regarding the international comparison, most specifically about which countries to look to in terms of good practice in the use of secondary data in healthcare, and identified Finland, Belgium, Sweden, Denmark, France and the Netherlands.
2022: A year marked by numerous crises
editor
Adriatic team
Epidemic, pandemic, energy crisis, health crisis, climate crisis! In the last few years, we have all had to go through changes that have significantly affected our everyday lives. The summation of these changes can be felt most in the economy, in rapidly escalating inflation and price rises in almost everything!
Is there anything we can do about it?
Let’s look at the latest crisis in this sequence of global crises, the energy crisis between Russia and the European Union. Just when we thought it couldn’t get any worse, it has! The impact of the energy crisis has deepened the economic and financial insecurity of the European Union countries and has further burdened state coffers causing dramatic changes in governmental priorities all over Europe. If we thought that this was a problem that could be solved quickly without major repercussions, we were delusional. Due to sanctions imposed by the European Union against Russia, Russia has stopped supplying gas through the Nord Stream 1 gas pipeline, the predominant gas line for the European Union. It supplied 40% of natural gas to the EU. It has also led to scarcity and rising prices of raw materials, creating a shortage. A large number of European Union countries have begun to take urgent measures to reduce energy consumption, while also searching for alternative sources of gas supply and raw materials. Undoubtedly, difficult times are coming for society, as well as businesses.
However, these times can also create opportunities for new businesses. Why? Because challenging times create new opportunities. Everything from innovations and additional jobs with higher earnings. Through creative and innovative thinking, we can financially help not only corporates but also individuals, by providing additional jobs demonstrating that we are a society-friendly country. Happy workers, happy company, happy country!
But because we live in uncertain times, decision makers need a rudder to manage potential risks. Especially in business, it is difficult to predict the future. Nevertheless, it is expected to predict one. This is precisely why we present you Strategic Navigator.
What is Strategic Navigator?
Strategic Navigator is a tool Institute for Strategic Solutions (ISR) has created. It is a tool for decision makers to help manage business decisions in uncertain and unpredictable times. It supports strategic decisions necessary for successful navigation in the business field. Both in-depth and quick decisions.
With the help of the strategic navigator, we move the boundaries. The tool combines two key approaches for modern management: Big Data and Data Science. It provides an index of the information and skills required for successful management.
The final document of the strategic navigator consists of different scenarios for strategic decisions, stakeholders and also arguments, and is supplemented with a visual matrix and its qualitative interpretation. Scenarios are the key part on which the strategic navigator stands. Within the scenarios, it is possible to define indicators on the basis of which we can determine which of the scenarios is the one taking place in reality – whether we like the current scenario or not.
The strategic navigator gives a different and complementary view of what is happening in the world itself, which opens up new perspectives and thus a new consideration when making decisions. It offers a unique and fresh perspective for strategic decision-makers, grounded in original methodology and untapped and current data sources. At the same time, it detects intangible knowledge in the company and its mapping into a form suitable for making strategic and operational decisions.
For more information about Strategic Navigator please contact us at info@adriaticjournal.com.
Footsteps toward Footprints: Calculating the Carbon Footprint
Sustainable Future
editor
The Adriatic Team
Presentation of the methodology for calculating the Carbon Footprint
The “carbon footprint” is the common term for the total amount of carbon dioxide (CO2) and greenhouse gas (GHG) emissions released into the atmosphere as a direct result of the activities of a particular individual, organization or community. The carbon footprint can be calculated and evaluated. It measures the impact on the environment of our actions and decisions. For example, based on data obtained, we can lead a more sustainable existence by changing our lifestyle or purchasing habits. Organizations can also improve energy efficiency in business or production processes and use renewable energy sources. The carbon footprint of organized events can be reduced by careful consideration of the method of transportation of participants and organizers, the choice of location and locality of food providers, economical use of packaging, recycling of garbage and the use of electricity from renewable sources.
From Words to Actions
At the Institute for Strategic Solutions (ISR), we designed the “From Words to Actions Project”, which gave us the opportunity to organize the first regional Net-0 carbon event in Slovenia. The purpose of the project was to gather and connect representatives of corporations and companies, politicians, non-governmental organizations, international agencies, as well as innovators of breakthrough solutions and representatives of the financial community, at one event.
The co-organizers of the event were the Ministry of Foreign Affairs of the Republic of Slovenia and Spirit, the public agency of the Republic of Slovenia for the promotion of entrepreneurship, innovation, development, investment and tourism.
The red thread of the program was carbon neutrality and zero emissions. All important stakeholders and partners agreed that these are the key proponents of a sustainable future. However, strategies differ and seldom apply to entire organizations as well as their supply chains, and this inclusion presents unique and difficult challenges. The participants and guests at the event gained access to new ideas and integrated solutions – and most importantly, a network of potential partners. When organizing the event, we were committed to careful monitoring, as well as to planning measures to reduce emissions and thus benefit our environment. We also made sure that we balanced emissions released into the atmosphere by planting trees so that there was a Net-0 end result.
The ISR’s Approach to the Challenge
The participants helped each other using international standards for planning low-carbon projects and using international conversion factors. These established standards do not exist yet for Slovenia, except in the electricity grid. However, we followed the ISO 14064-2:2019 standard and guidelines for quantification, monitoring and reporting of greenhouse emissions for each individual part of the project. As part of the methodological framework, we compared the basic (business as usual) and alternative (Net-0) scenarios for the event organization, preparation and implementation. We carefully evaluated and verified all data based on each identified activity and took the steps necessary for the successful implementation of the Net-0 event. This included the arrival and transportation of organizers and participants, careful selection of the local and energy-efficient cooling of the space. In addition, we served local food and drinks, gave local gifts to the guests, recycled garbage, monitored transportation of local food, to and from the event and used low-emission electronic devices in sound and lighting the event.
We successfully reduced our carbon footprint by:
- using public train service as transport for participants and organizers (round trip)
- selecting an inner space that did not require cooling
- choosing a local food provider and a vegetarian menu for the banquet
- economical use of packaging and recycling of garbage
- using electricity from renewable sources
When collecting data, we adhered strictly to the concepts of relevance, completeness, consistency, accuracy, transparency and conservatism. We took special care when choosing food for the event. As a starting point, we used specific modules in the Gastronomy and Hotel Services Guide (Zalar et al 2008), which systematically outlines all the guidelines and know-how that eco-friendly chefs utilise. It also prescribes energy-efficient technological processes of food preparation, which helped us to select suitable food providers and vegetarian menus. It also showed us how to calculate the carbon footprint of the banquet. By choosing a local food provider, we saved as much as 90% of the carbon footprint and we also saved 31% of the carbon footprint by deciding to serve only vegetarian food at the event, in comparison to the basic, business-as-usual scenario, and through the economical use of packaging and recycling, we succeeded in reducing the carbon footprint by as much as 87%, again, compared to the basic, business-as-usual scenario.
Committing to the organization of a carbon-free event was a brave decision, which is why we prioritized reducing the event’s carbon footprint, which we successfully achieved using all the strategies above. We undertook the final calculation of the footprint ourselves, as existing tools are insufficiently accurate, be it that they are intended for the overall operations of companies or multi-day events. We attributed data to certain activities and multiplied them by two conversion factors. In the basic (business-as-usual) scenario, we used the International Hydropower Association as a source of data, and in the alternative (Net-0) scenario, we used the conversion factor used by the Energy Agency in the document Total Remaining Composition of Production Sources for 2021. This takes into account the share of electricity production from fossil fuels, based on the rest of the European composition of production sources and according to the data of the International Hydropower Association. We succeeded in achieving total residual CO2 emissions of 0.023kg CO2/kWh and in the case of the Energy Agency 0.872kg CO2/kWh.
At the Event – Details Matter
Or to put it another way, is it permissible for one single participant to arrive on a trans-oceanic flight, and release carbon emissions into the atmosphere? In addition to the choice of transport used, the other most important factor to consider is catering. Careful attention should be paid to the choice of the food provider, and also to the food that is served. It makes eco-sense to avoid meat, even if local beef has a smaller carbon footprint than Patagonian beef!
However, even the lowest amount of carbon produced must be removed from the atmosphere, and this can be attained by planting trees, not alien species, but indigenous ones from Slovenia. In the case of our event, the Carbon produced amounted to 506kg of CO2. To counteract this, we will plant 51 saplings of native Maribor tree species and thereby “return” the CO2 we emitted back to nature.
EXPORTERS 2022 business conference
Exporters 2022
editor
Adriatic team
Ljubljana, September 28, 2022 - Labor Business Exporters 2022: Lessons from the Winners.The business conference was opened with welcome speeches given by Bojan Budja, Editor-in-Chief of Delo Media House, Mag Aleš Cantarutti, General Director of the Chamber of Commerce of Slovenia, Dr Jure Stojan, Director of Development and Research at the Institute for Strategic Solutions and Matjaž Han, Minister of Economic Development and Technology.
The conference focused on risk management during one of the most turbulent and uncertain periods in recent history. Directors of the most successful Slovenian companies and foreign guests from the sphere of economy, finance, diplomatic relations and associates from neighbouring countries discussed ways of managing risk during the three recent global shocks. The question was asked, are there opportunities for the Slovenian economy in this rapidly changing environment? Marjan Drmota, Director of Kolektor Mobility emphasised that if electricity prices continue to rise, companies will only have to work harder to cover their costs. Tibor Šimonka, Vice President of Sij and President of the Chamber of Commerce of Slovenia, added that the high cost of energy could also cripple the Sij group, and that Slovenia is now importing energy from countries that have cheaper energy sources, but are significantly worse in terms of carbon emissions than suppliers from the EU. He was also convinced that if the conditions regarding energy output change significantly, the Slovenian economy will have big problems and the forecasted results of Slovenian export companies will no longer be realistic.
In the long term, dependence on non-EU suppliers will diminish.
Dr Alexander-Nikolai Sandkamp, Professor of Economics at the University of Kiel and a researcher at the Kiel Institute for the World Economy, noted that the economy is currently facing two major challenges, the pandemic and the war in Ukraine. He argued that giving up dependence on Russia is feasible for the EU. The scenarios prepared at the university show that if dependence on business with Russia were to be broken, imports and exports would decrease, and production would move to other locations outside of the EU. In addition, the division of work and specific skills would decrease, while production costs for semi-finished products would grow. As a result, reducing dependence on Russia could work, but exports would suffer, and Slovenia, as an export-oriented economy, would certainly feel the pain, he said. They should strengthen their resilience by connecting with several different suppliers in different regions, with enhanced storage strategies and recycling, which would reduce raw material dependance. The EU must strategically plan its reserves and strengthen international relations as well as removing trade barriers, Professor Sandkamp stated.
The Anti-crisis Recipe: Big Projects that Keep the Momentum Going.
How to Manage Risks During Three Global Shocks was moderated by Dr Slobodan Šešum from the Ministry of Foreign Affairs.
Nuša Pavlinjek, Director of the company Roto, explained that Roto is overcoming broken supply chains by recycling, with as much as 70 percent of their products containing recycled materials. They have new products prepared in advance for the market, which enables them to respond and adapt quickly to new conditions. They have also increased product diversification by cooperating with different industries and regions. They are increasingly visible on the African market, where they are already doing business in 11 countries.
Julijan Fortunat is a Strategic Consultant in the Wietersdorfer Group, which is the majority shareholder of Salonita Anhovo, a construction company that is energy intensive. He said that the petrochemical products used in construction processes cause them headaches. Their supplies have been greatly diminished and they need to find new solutions to the crisis by themselves. The reduced consumption of electricity will have dramatic impact on their business, and the strategy to prevent bankruptcy will be dependent on the company’s large construction projects having a stabilising effect, according to Julijan Fortunat.
The President of the Board of Sava Re, Marko Jazbec, said that the year 2022 has already brought a number of new problems, which correspond to pre-pandemic levels and high inflation. The insurance industry is not among the winners of this period, many insurance products are no longer attractive. The US, for example, will fight inflation by slowing down the economy, which will include a recession, which is more daring than what the European Central Bank is doing, Marko Jazbec stated.
Marjan Drmota, Director of the company Kolektor Mobility, which is part of the Kolektor Group, notes that although the characteristics of the crises are similar, the world is constantly changing, so past experience cannot just be simply mapped onto the present day. It is always necessary to look for new and innovative solutions, he emphasised. In the future, the impact of energy on industries could be increasingly problematic. At Kolektor Mobility, energy accounts for 2.5 percent of total costs, which means 10 million euros per year of the company’s costs. The price of energy could double or triple, but if it quadruples, it means that electricity costs will negate any profit whatsoever, M. Drmota warned.
Deglobalization is not only a Threat, it is also an Opportunity.
The data shows that Slovenia is strengthening the added value of exports, the key to improved export results is the trade and service exchange of our country within the EU area, said Bojan Ivanc, Chief Economist of the Chamber of Commerce and Industry. In 10 years, Slovenia has increased exports to EU countries by around 15 billion euros, this year is estimated to peak at 33 billion euros.
According to Rok Capl, Acting Director of the public agency, SPIRIT Slovenia, an important factor for local companies is assistance in finding new foreign markets. At Spirit, they can promote and strengthen the visibility of Slovenian companies, as companies that can offer foreign partners alternatives to achieve business goals.
Saša Keleman, Executive Director of SID Banka, which supports Slovenian exporters with financial tools, emphasised the fragility of today’s global equilibrium, highlighting the prices of energy products, the availability of raw materials and inflation. All of these factors bring advantages and opportunities as well as disadvantages to small businesses, and at the same time, deglobalization is taking place, which again brings forth both opportunities and threats.
Eva-Ricarda Willems, Deputy Ambassador and Head of the Economic Department at the German Embassy, presented a forecast predicting that the economic situation in Germany in the coming period, will be analogous to that of the other European countries. The economic conditions in Slovenia and Germany are similar, which is the result of the countries strong connection in production and development.
According to Serenella Marzoli, Director of the Agency for the Promotion and Internationalisation of Italian Companies at the Department of Economic Promotion of the Italian Embassy, stated that Slovenia is an important partner of Italy. Slovenia usually helps between 300 and 350 Italian companies interested in doing business with Slovenia. Cooperation between the two countries did not stop even during the pandemic, the reason being proximity, historical ties and the good business environment in Slovenia, in addition to research and development and a circular economic. An important anti-crisis approach for Slovenia could also be a blue economy, which is relevant mainly for maritime countries, but could also apply to Slovenia.
Alenka Hudek, Minister Plenipotentiary at the Embassy of the Republic of Croatia, said that entrepreneurs from Slovenia and Croatia know each other and cooperate well in business. It is expected that the business relationship will improve further with Croatia’s entry into the Euro area. She also sees opportunities in the field of infrastructure and energy.
About Proper Business Etiquette.
The shock of recent years have completely changed the world and what is permitted to do or say, and what is not. In the final part of the event, Dr Jure Stojan, Deputy Mayor of the Municipality of Ljubljana, Tjaša Ficko and Janez Škrabec, Director of the company Riko pointed out behaviour, that, in their opinion, do not belong in the business world, but that people revert to more and more these days. For example, men wearing suits without a tie, being unpunctual, contentious topics are amongst the many mines in todays business world. There are rules that should not change and must be preserved. It is also important to remember that when you compete in the business world, you should treat your fellow human beings with courtesy and respect, as it is a small world and you may encounter these people again, in very different circumstances. Therefore, it’s very important to build and maintain good relations at all times. Tjaša Ficko also emphasised that when travelling abroad, one must adapt to local rules or as the saying goes, “When in Rome, do as the Romans do.”. Janez Škrabec added that it is important to be curious and interested, but not judgemental and to be free of preconceptions and prejudices because people can feel the negative energy.
Business conference EXPORTERS 2022
Exporters 2022
editor
Adriatic team
On 28 September 2022, the media house Delo, together with the co-organizer Chamber of Commerce of Slovenia and the Institute for Strategic Solutions (ISR) as a program partner, is organising a business conference EXPORTERS 2022 entitled "Lessons from the Winners". The event will feature three panel discussions, covering risk management in times of three global shocks, the opportunities for the Slovenian economy in a changing environment, and international business relations as well as new trends in global business etiquette.
Successful Slovenian entrepreneurs and businessmen will gather at the conference and share their views on management during the global crisis, as well as the risks that accompany it. They will cover the advantages and disadvantages, challenges and opportunities of international business cooperation. Business etiquette is also important for success, which we will touch on in the concluding part of the event.
The business conference will be held in Slovenian and partly in English. Due to the limited number of places available for live attendance, the general public will be able to follow the conference via a live broadcast on the website of the Delo newspaper.