In the latest Digital Competitiveness Ranking by the Swiss Institute for Management Development (IMD), Slovakia fell by five places to 57th out of 69 assessed countries, with the top spots taken by Switzerland, the United States and Singapore, while the other Visegrad Group countries (Czech Republic, Hungary and Poland) ranked above Slovakia.
The IMD ranking evaluates countries in three key areas – knowledge, technology and readiness for new technologies – covering nine sub-factors and using 61 specific criteria. According to ISP, Slovakia's lag in digitisation is evident even in absolute terms: it obtained 50.72 points, roughly half of Switzerland's score. This trend suggests that other economies have advanced more rapidly in key areas of digitisation.
Among Slovakia's neighbours, Austria performed best, taking 24th place. The Czech Republic ranked 35th, while Poland and Hungary finished next to each other in 45th and 46th places. In absolute terms, with Switzerland achieving the maximum of 100 points, the region's countries lag behind – with scores ranging from 60 (Poland and Hungary) to nearly 80 (Austria).
Slovakia achieved its best results in the legal protection of privacy (1st place) and in the student–teacher ratio in tertiary education (16th place). In the category of High-Tech Patent Grants, its 25th place indicates good capacity for creating intellectual property in advanced technological fields, said ISP. Slovakia also appeared in the top half of the ranking for smartphone ownership (26th place) and performed relatively well in total spending on research and development (38th place).
Conversely, Slovakia ranked bottom for flexibility and adaptability (69th place). It also lacks highly qualified foreign personnel (68th place) and achieved the same result in the development and application of technologies. The country remained near the bottom (67th place) in immigration law and cyber-security.
Slovakia is caught in a so-called middle-income trap, and the only way forward is to transform its economy from a model based on cheap labour and the quantity of foreign investments to one built on a highly skilled workforce and higher-quality foreign investments, Deputy Prime Minister for the Recovery Plan and Knowledge Economy Peter Kmec (Hlas–SD) said at a press conference of the Institute for Freedom and Entrepreneurship on Tuesday.
“Slovakia is not in an ideal position, but this is a challenge to transform the Slovak economy, which stands at a crossroads. Until now, we have largely relied on the quantity of foreign investments, based on the low cost and availability of labour. As Slovakia integrated into Western European and transatlantic structures, a very favourable business environment emerged here, encouraging foreign investors to relocate some of their production capacities from more demanding markets and economies to Slovakia and, more generally, to Central Europe,” Kmec explained.
However, he noted that this model is no longer sustainable. “Slovakia is in a so-called middle-income trap. The only way is to transform our economy from a model of cheap labour and high-volume foreign investment to one based on a more qualified workforce and higher-quality foreign investments,” Kmec underlined.
He described the middle-income trap as a complex model that is difficult to escape. “The Digital Competitiveness Index clearly shows where Slovakia must improve, as this represents the path toward transforming the Slovak economy,” he emphasised.
As part of the Recovery Plan, from a package of €6.4 billion, Slovakia was required to allocate 20 percent to digitalisation. “We are striving to create an environment that motivates not only the public but also the private sector to innovate more through digital transformation,” Kmec added.
He stated that Slovakia aims to reach 2 percent of GDP for science, research, and innovation support by 2030. “At present, we are at 1.04 percent. The EU average is 2.2 percent. Slovakia's goal is to allocate 0.8 percent of GDP from public sources and 1.2 percent from private sources. The greatest challenge is to motivate and encourage the private sector to invest more. Today, private sector spending stands at around 0.5 percent to 0.6 percent, meaning it must significantly increase its allocation by 100 percent,” Kmec concluded.
The ranking is determined with one-third coming from subjective assessments from a survey of company owners and managers, and two-thirds from objective statistical data. The subjective evaluations were drawn from the responses of 6,162 top managers in 69 countries.
Source: TASR
