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FDI Summit: Slovenia as Hub Feasible, Tough Work Ahead

Ljubljana, 13 October (STA) - The chief executives of three mayor companies agreed at a FDI Summit panel on Thursday that Slovenia had the potential to develop as an investors' hub for regional markets, but they underlined that a lot of work will be needed to get there and remain relevant.

Slovenia is considered an excellent hub for the region owing to its skilled workforce, infrastructure, historical links to the Balkans and shared culture.

But as CEO of retailer Mercator Ziga Debeljak pointed out, these advantages will be less important once the Balkan countries join the EU.

"Soft elements will be more important," he said, noting that companies will have to develop competence centres with highly skilled labour and cutting-edge know-how.

He also dismissed the notion that Slovenia could serve as a hub for Eastern Europe, noting that its links to Bulgaria, for example, are not strong enough.

However, Slovenia can be a hub for the Western Balkans, as a springboard for European companies wanting to do business there and for Balkan countries wanting to penetrate EU markets.

Biljana Weber, the director general of Microsoft Slovenija, meanwhile highlighted the Swiss recipe for a successful hub, whose ingredients include high spending on R&D, high rate of innovation, excellent scientific institutions and very efficient public institutions.

Christof Doste, the CEO of German-owned lighting equipment maker Hella Saturnus, noted that many had seen Slovenia as a Switzerland of the Balkans and indeed it had had the potential. However, what was missing was a long-term plan, which should have been followed-up by action.

Doste said that there were three hub models for Slovenia: as a hub for the Balkans, a springboard for Central and Eastern Europe, and, through the Port of Koper, an entry point for goods from across the world.

He suggested Slovenia should place emphasis in its efforts in attracting FDI on sectors such as tourism and alternative energy.

Having closed nuclear power plants, Germany, for example, is forced to invest in R&D on alternative energy, which will give it an edge in the industry. Doste said Slovenia should follow in the same direction, as countries which are not investing will fall behind.

Another opportunity he sees for Slovenia is in attracting medium-sized companies which have expanded sales in the region and are not looking for branches in the region to service their customers.

Mercator having a significant presence across the Balkans, Debeljak provided an interesting insight into the complexity of doing business there.

He said before the Balkans started growing at double-digit rates prior to the crisis, regional players had been shielded from big international players by the sheer complexity of the fragmented markets there, which acted as a repellent.

But now this same complexity is very negative, as it makes the region unattractive to investors compared to other emerging markets, which is a drag on much-needed foreign direct investment in the region.

For Weber, one of the key challenges for the entire region is skills: in 20 years jobs will change so much that completely different skills will be required. She noted that governments needed to motivate students to study technical professions.

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