Towards an innovative and inclusive society Slovak Republic 2019 OECD economic survey

1. 2019 OECD ECONOMIC
SURVEY OF THE SLOVAK
REPUBLIC
Towards an innovative and inclusive society
Bratislava, 5th February
@OECD
@OECDeconomy
www.oecd.org/economy/surveys/slovak-republic-economic-snapshot

2. The economy is flourishing
2

3. 3
Growth has been robust
GDP index, volume
Source: OECD (2018), OECD Economic Outlook: Statistics and Projections (database).
100
110
120
130
140
150
160
170
180
190
2001 2003 2005 2007 2009 2011 2013 2015 2017
SVK CZE HUN POL OECD

4. 4
Public debt is low and stable
Gross public debt, % of GDP
Source: OECD (2018), OECD Economic Outlook: Statistics and Projections (database).
0
20
40
60
80
100
120
2001 2003 2005 2007 2009 2011 2013 2015 2017
Slovak Republic, Maastricht definition OECD

5. 5
The labour market is strong
The unemployment is at historic lows
Unemployment rate (%)
Source: OECD (2018), OECD Economic Outlook: Statistics and Projections (database).
0
5
10
15
20
25
1995 2000 2005 2010 2015 2020

6. 6
Capacity constraints are beginning to bite
Labour shortages are already limiting production
Share of manufacturing firms pointing to labour shortages as a factor limiting production, (%)
Source: Eurostat, Industry Database.
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016 2017 2018

7. Diversification and more innovation will
help sustain Slovakia’s economic success
7

8. 8
The production is narrowly specialised
and based on downstream activities
The economy is specialized in the car production with very little value added
Source: OECD STAN Database.
0
5
10
15
20
25
30
35
SVK
FRA
HUN
ESP
CZE
ITA
POL
SVN
GBR
AUT
DEU
% Domestic value added ratio to gross output
0
2
4
6
8
10
12
14
FRA
GBR
ITA
AUT
ESP
POL
SVN
DEU
CZE
HUN
SVK
% Share of car production in gross output

9. 9
Slovakia’s employment looks vulnerable
to the likely increase in automation
Source:L. Nedelkoska and G. Quintini (2018), “Automation, skills use and training”.
0
10
20
30
40
50
60
70
NZL
SWE
USA
GBR
NLD
CAN
BEL
IRL
EST
KOR
ISR
OECD
AUT
CZE
FRA
POL
ITA
ESP
SVN
DEU
JPN
TUR
SVK
%
High risk of automation (>70%)
Risk of significant change (50-70%)
More than 60% of jobs are at risk of automation
Percent of jobs at risk by degree of risk

10. 10
The Slovak workforce is not sufficiently
prepared for the digital transition
Source: OECD (2017), Education at a Glance 2017: OECD Indicators.
0
5
10
15
20
25
30
GRC
POL
SVN
IRL
ISR
KOR
SVK
EST
USA
CZE
AUT
OECD
GBR³
DEU
CAN
BEL³
DNK
AUS
NOR
NZL
JPN
NLD
SWE
FIN
%
Proportion of adults having high-level skills
16-65 year olds

11. 11
Improving education outcomes should be
a priority
PISA average of mean scores in science, reading and mathematics
Source: OECD (2016), PISA 2015 Results (Volume I): Excellence and Equity in Education.
460
470
480
490
500
510
2006 2009 2012 2015
OECD Slovak Republic

12. 12
Tertiary education needs to improve so fewer
students choose to study abroad
Percentage of total tertiary students studying abroad, 2016
Source: OECD (2018), Education at a glance 2018: OECD Indicators.
0
2
4
6
8
10
12
14
16
18
20
USA
AUS
CHL
JPN
MEX
TUR
DEN
NLD
POL
ESP
GBR
OECD
BEL
CAN
ISR
KOR
NZE
CZE
FIN
FRA
DEU
HUN
ITA
PRT
SVN
SWE
AUT
GRC
CHE
IRL
LVA
NOR
EST
ISL
SVK
LUX
74

13. Capacity to innovate and adopt new
technologies should be strengthened
13
Innovative large firms
High R&D spenders, % of all large businesses (250 employees or more)
Source: OECD (2017), OECD Science, Technology and Industry Scoreboard 2017.
0
20
40
60
80
100
CHL
SVK
HUN
EST
POL
JPN
NZL
TUR
LVA
GBR
AUS
DNK
ESP
CZE
NOR
NLD
FIN
KOR
SWE
LUX
PRT
FRA
ITA
IRL
BEL
GRC
LTU
SVN
CHE
AUT
ISL
DEU

14. 14
Facilitate immigration of skilled workers
Source: OECD International Migration Database.
0
1
2
3
4
5
6
7
OECD average EST CZE HUN SVK
Immigrants in population
Net flows, per 1000 inhabitants, 2016

15. 15
Strengthen the quality of public services
Source: Gallup World Poll (database).
Low trust in the judicial system and courts
Share of "yes" answers to the question: Do you have confidence in judicial system and the courts?
0
10
20
30
40
50
60
70
80
90
100
CHL
ITA
SVN
MEX
SVK
PRT
LVA
GRC
ESP
USA
TUR
HUN
POL
CZE
BEL
FRA
OECD
ISR
EST
AUS
ISL
CAN
GBR
NLD
JPN
AUT
SWE
NZL
DEU
IRL
LUX
FIN
CHE
DNK
NOR
%

16. 16
Recommendation on moving up the global
value chain
 Increase the time spent on general and digital training in vocational
education.
 Strengthen initial and continuing teacher training.
 Create larger, internationally visible research units and reorient tertiary
education funding to foster research at high international standards.
 Include research collaboration with innovative companies in the assessment
of universities and public research institutions.
 Continue to work with the ongoing Council of Europe project on judicial
reform, and implement its suggestions.
 Accelerate the handling of insolvency procedures.
 Lower licensing restrictions for legal services, architects and engineers.
 Continue to simplify work visa and residence procedures for highly skilled
workers.

17. Making growth inclusive
17

18. 18
The Slovak Republic has one of the
continent's largest Roma populations
Estimated number of Roma in the EU
Note: The shares represent the average of different estimates.
Source: Council of Europe, https://www.coe.int/en/web/portal/roma/
0
2
4
6
8
10
12
FRA EU GRC ESP CZE HUN ROM SVK BLG
%

19. 19
Roma face social exclusion in almost
every aspect of everyday life
Selected indicators of Roma exclusion
Source: EU (2016), Second European Union Minorities and Discrimination Survey, Roma – Selected findings, European Union,
Agency for Fundamental Rights; B. Gavurová et al. (2014), “Meranie zdravia a zdravotných rizík vo vybraných rómskych osadách na
Slovensku – fakty a reflexie”, in Nerovnost’ a chudoba v Európskej únii a na Slovensku, 22-24 October, Košice.
General population Roma
At-risk-of-poverty rate (%) 13 87
Employment rate, 20-64, (%) 68 25
NEET rate - neither in work nor in education, aged 16-24, (%) 14 65
Drop-out rate from education, (%) 7 58
Share of households living without a toilet, bathroom and shower inside
the dwelling 0.6 43
Share of households living in areas affected by crime, violence and
vandalism 8.7 30

20. 20
Social exclusion is exacerbated by mistrust
between Roma and non-Roma groups
Note: Out of all Roma respondents at risk of discrimination on grounds of Roma background in at least one of the domains of daily
life asked about in the survey in the past 5 years.
Source: EU (2016), Second European Union Minorities and Discrimination Survey, Roma – Selected findings, European Union,
Agency for Fundamental Rights.
More than half of the Roma felt discriminated when looking for job
Discrimination based on Roma background in the past 5 years (%)
0
10
20
30
40
50
60
Education (self or
as parent)
At work Housing Other public/
private services
Looking for work
%

21. 21
Roma can be trapped in a cycle of poverty
for generations
Probability of ending up in poverty according to parents' economic and ethnic status
Source: OECD calculation based on J. Rizman (2018), "Jablko padá ďaleko od stromu", Institute of Financial Policy, Ministry of
Finance of the Slovak Republic, Policy Brief, No. 09.
0
10
20
30
40
50
60
70
80
General population General population - 5% of
the poorest households
Roma from concentrated
areas
Probability, %

22. 22
Demographic trends underline the importance
of Roma integration
Source: Šprocha, B. (2014), Reprodukcia rómskeho obyvateľstva na Slovensku a prognóza jeho populačného vývoja, INFOSTAT –
Výskumné demografické centrum.
-2.5 -1.5 -0.5 0.5 1.5 2.5
1
11
21
31
41
51
61
71
81
91
101
A. Roma population by age, 2015
Men Women
-2.5 -1.5 -0.5 0.5 1.5 2.5
1
11
21
31
41
51
61
71
81
91
101
B. Non-Roma population by age, 2015
Men Women

23. 23
Social inclusion of Roma will have positive
effect on the economy
Estimated effect of Roma integration by 2060 as a % of GDP
Increasing the Roma employment rate and their productivity to the level of the general population
Source: Geva, A., S. Hidas and G. Machlica (2018), “The benefits of social inclusion of Roma in the Slovak Republic”, Technical
background paper, forthcoming.
0
2
4
6
8
10
12
14
Effect on GDP Effects on fiscal revenues
% pts of GDP

24. 24
The education system should become
more inclusive
Pre-school attendance is low, especially for Roma
Share of children age 4-6 (%) who participate in pre-school education
Source: OECD Family database; EU (2016), Second European Union Minorities and Discrimination Survey, Roma – Selected findings,
European Union, Agency for Fundamental Rights
0
10
20
30
40
50
60
70
80
90
100
Roma General population EU 2020 target
%

25. 25
Improving living conditions for Roma is key
% of Roma vs Non-Roma living in substandard housing or slums
Source: United Nations Development Programme (2016), Database on vulnerability of Roma based on UNDP/WB/EC Regional
Roma Survey 2011 and Pilot survey 2011 conducted by the EU Agency for Fundamental Rights (FRA); EU (2016), Second European
Union Minorities and Discrimination Survey, Roma – Selected findings, European Union, Agency for Fundamental Rights.
0
10
20
30
40
50
CZE HUN SVK
Non-Roma Roma
%

26. 26
Access to health care should be bolstered
Infant mortality is high for Roma
Source: MoF (2018), “Spending Review on Groups at Risk of Poverty or Social Exclusion”, Expenditure reviews, (forthcoming);
OECD Family database.
0
2
4
6
8
10
12
14
SVN
FIN
JPN
ISL
NOR
CZE
EST
SWE
KOR
ESP
LUX
ITA
PRT
AUT
ISR
AUS
DEU
IRL
NLD
BEL
EU
DNK
FRA
CHE
GBR
OECD
GRC
POL
HUN
LTU
SVK,non-Roma
CAN
NZL
SVK
USA
TUR
SVK,Roma
MEX
Deaths per 1000 live births

27. 27
Recommendation on enhancing the social
integration of Roma
 Give the office of the Plenipotentiary a bigger role in coordinating national
policies and ensuring integrated provision of public services to Roma where
they live.
 Scale up successful EU-funded pilot programmes and ensure sustained
financing through the national budget.
 Continue expanding the provision of high-quality early education.
 Provide more funding for disadvantaged schools and higher salaries for
teachers teaching in disadvantaged schools.
 Increase the number of teaching assistants speaking Roma, and provide
Slovak language support for Roma children.
 Expand health-care mediator programmes, with more mediators
specialising in maternal health information and preventive check-ups for
mothers.
 Provide support to formalisation of Roma property rights, including legal,
financial and technical support to municipalities and Roma households.

28. 28
For more information
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www.oecd.org/economy/surveys/slovak-republic-economic-snapshot