By: Spletni časopis
“Slovenia ranked 46th this year on the competitiveness index of the Swiss IMD institute among 69 countries. This means it retained last year’s position, after having dropped eight places in total during 2023 and 2024. The country’s ranking continues to be dragged down the most by indicators related to the business environment and society’s openness to adaptation and change.”
This was published on the website of the Slovenian Business Club (SBC), which warns that Slovenia has retained its lowest ranking in the past five years. Last year, this position was among 67 countries; this year, it is among 69.
The millstones dragging down Slovenia’s position on the IMD ranking are government efficiency (48th place) and business efficiency (55th place). In the area of government efficiency, Slovenia has lost 10 positions during this decade. It scores especially low in tax policy (57th place) and in the effectiveness of legislation affecting businesses, where it reached a historically low 51st place this year.
This is how SBC summarised the situation:
“Among EU member states, just above Slovenia are Italy and Cyprus in 43rd and 44th place, respectively. Below Slovenia are Hungary (48th), Romania (49th), Greece (50th), Poland (52nd), Croatia (53rd), Bulgaria (57th), and Slovakia (63rd). Poland also recorded the biggest drop among European countries, losing 11 spots.”
Switzerland and Singapore swapped positions
At the top of the ranking is Switzerland, which swapped positions with Singapore. They are followed by Hong Kong, Denmark, the United Arab Emirates, Taiwan, Ireland, Sweden, Qatar, and the Netherlands. The United States is in 13th place. Among other major European economies, Germany is 19th, the United Kingdom is 29th, and France is 32nd.
Among Slovenia’s neighbours, Austria is ranked the highest at 26th. Among the countries that joined the EU in 2004, Lithuania is highest at 21st, followed by the Czech Republic at 25th.
At the bottom of the ranking is Venezuela. The bottom five also include Namibia, Nigeria, Turkey, and Mongolia.
The IMD survey has been conducted since 1989, and Slovenia has participated since 1999. The countries are ranked primarily based on their ability to utilise their resources to strengthen competitiveness and prosperity. It reflects short-term changes in a given business environment.
The overall index is based on 262 indicators across four areas: economic performance, government efficiency, business efficiency, and infrastructure. About two-thirds of the indicators are statistical, and one-third is based on surveys of top managers. In Slovenia, this survey is conducted by the Institute for Economic Research (IER) and the Faculty of Economics in Ljubljana. The study is supported in Slovenia by the Spirit agency.
Rankings above 35th place in any indicator are considered a competitive advantage; rankings below that are a competitive disadvantage, summarised Mateja Drnovšek from the Faculty of Economics.
Across the four key areas, Slovenia’s best rankings are in economic performance (37th) and infrastructure (39th).
In economic performance, the score dropped due to indicators related to the domestic economy, mainly slower economic growth and a sharp decline in investment activity, especially among companies. However, the country has slightly improved its position in GDP per capita (PPP), technological sophistication, and economic resilience. Employment indicators also contributed positively.
As a small and open economy, Slovenia ranks highest in international trade (10th), although Sonja Uršič from IER noted there is still room for improvement in the export of high-tech products and knowledge-based services. Thanks to easing inflation, Slovenia also ranks high in price indicators (17th). However, foreign investment indicators remain very weak.
In infrastructure, Slovenia is still relatively well-ranked, but in recent years this area has shifted from a competitive advantage to a potential disadvantage.
This year, particular weaknesses are noted in basic infrastructure, such as air connectivity, traffic infrastructure capacity, the green transition in energy, and electricity costs for industrial users. There are also weaknesses in some aspects of technological infrastructure, although scientific infrastructure and education are still achieving relatively better results despite recent declines.
Government and business efficiency – the millstones
As mentioned, government efficiency (48th) and business efficiency (55th) are the weakest areas for Slovenia.
In government efficiency, Slovenia has lost 10 spots in this decade. Especially poor are scores in tax policy (57th) and the effectiveness of legislation affecting businesses (51st).
In business efficiency, Slovenia has also lost 10 spots in recent years and, despite a slight improvement this year, remains near the bottom of the list. While there were improvements in productivity, financing, and adaptability of businesses, the overall position is weakened by managers’ assessments of societal attitudes and values.
In this last category, Slovenia ranks a very low 64th, mostly due to society’s limited support for entrepreneurship, adaptation, change, and reform.
The world is changing exponentially
Damjan Kavaš, director of IER, warned that the world is changing exponentially, and it is necessary to internalise the need for change. According to him, it is becoming increasingly clear that Slovenia’s current development model is exhausted. The country must face technological and other changes and set new priorities.
The only path to maintaining and increasing prosperity is through raising added value, which requires changes across all sectors – government, business, and citizens. “There is no crisis yet, but with each year we fail to respond, we miss the opportunity to make a difference,” Kavaš concluded.