2023 POLICY ROADMAP

GDP growth in the Slovak Republic was expected to reach just over 1% in 2023, while inflation stood at 12%, one of the highest rates in the Eurozone. High inflation was causing uncertainty for entrepreneurs, with price instability identified as a major concern.

Slovakia introduced legislation in 2023 to define family businesses, setting the foundations for future policy support. GEM has been established as an important source of input for entrepreneurship policymaking in Slovakia. Examples using GEM results include the Report on the State of Small and Medium-Sized Enterprises in the Slovak Republic, the Audit of the application of the Small Business Act principles in the Slovak Republic, and an analysis of the effectiveness of government entrepreneurship support programs.

2023 Framework Conditions Review1

The quality of the overall entrepreneurial environment in the Slovak Republic had been improving in recent years from a fairly low base, but took a step back in 2023. The National Entrepreneurial Context Index (NECI) score for the Slovak Republic increased from 4.0 in 2019, placing it 42nd of 54 participating economies that year, to 4.4 in 2022, placing it 31st of 50. It then fell to 4.0 in 2023, back to 39th of 49.

The driver of this decline was reduced scores for 11 of the Entrepreneurial Framework Conditions
(EFCs) between 2022 and 2023, with just one small increase (for Entrepreneurial Education at School). Many of these falls were small, with the largest being for Government Policy: Support and Relevance and
for Commercial and Professional Infrastructure. The Slovak Republic continues to score well for its Physical Infrastructure, the highest of the Level B economies. However, Research and Development Transfers had the lowest score among Level B economies, and in the bottom 10 in GEM 2023.

National experts assessed the quality of social support for women entrepreneurs, and their access to resources compared to their male counterparts (new 2023 questions). The Slovak Republic scored fairly poorly in each, with a score of 3.0 for social support (40th of 49) and 3.8 for access to resources (44th).

2023 Entrepreneurial Activity Review

Slow growth in the Slovak economy was reflected in one in three adults reporting that their household income had fallen in 2023, although this was an improvement on the one in two a year earlier.

The level of Total early-stage Entrepreneurial Activity (TEA) was just over one in 10 adults (10.8%), the same
as the year before but much higher than it had been in 2021 (6.4%), although not yet back to pre-pandemic levels (13.3% in 2019). Men were more likely than women to be starting or running a new business, with three men doing so for every two women, perhaps not too surprising given the lack of social support and unequal access to resources for women entrepreneurs noted earlier. It is not only some women who are losing out here: so is the Slovak economy in terms of lost output, value-added and jobs.

The level of Established Business Ownership had fallen from a year earlier: from 6.4% in 2022 to just 4% in 2023. This implies a hollowing-out of the stock of small businesses, and is a major concern.

The profile of entrepreneurship in the Slovak Republic was reasonably good, with more than three in five adults knowing someone who had recently started a business, one in two adults considering they had the skills and experience to start their own, and one in three seeing good opportunities to start a business locally. However, almost a half of those seeing good opportunities would not start a business for fear it might fail. The proportion of adults not already doing so but expecting to start a business in the next three years was just under one in 10, higher than a year before, but, like TEA, not yet back to pre-pandemic levels.

Earning a living because jobs are scarce was by far the most agreed motivation among new entrepreneurs, who were also export-oriented, with more than one in three having customers beyond
their borders. Two in five of those new entrepreneurs expected to use more digital technology in the next
six months, while job expectations were fairly high, with almost four in 10 anticipating employing at least another six people over the next five years. This was the second highest proportion in GEM 2023, behind only Qatar, made more surprising by the Slovak Republic having the second highest share of solo entrepreneurs (those with one owner and no employees) at more than one in two, second to Israel in Level B and sixth highest in GEM 2023.

1 A brief description of the GEM approach is given in the footnote on p. 107 of the GEM Global Report.