Slovenia: Boost investment and productivity through better skills and regulation


05/09/2017 - The Slovenian economy is rebounding after a long downturn, experiencing stronger growth, declining unemployment, healthier public finances and renewed income convergence with more advanced European economies. Further reforms are now needed to increase investment, boost productivity, improve living standards and ensure that all Slovenians benefit from inclusive growth, according to a new report from the OECD.


The latest OECD Economic Survey of Slovenia points to strong improvements in the Slovenian economy, which is now expected to grow by more than 4½ percent in 2017.[1] It lays out a range of policy options that will help Slovenia sustain the current expansion while managing challenges posed by population ageing and an investment slowdown that has limited productivity growth.        

Photo of launch of Slovenian Economic Survey.


“Having weathered some very tough times, Slovenia’s economic situation has improved tremendously,” Mr Gurría said. “While growth is now exceeding many other European Union countries, there is no time for complacency. Implementing reform must be a never-ending process, particularly for a small open economy like Slovenia, which needs to continuously adapt to changing international circumstances to remain competitive and ensure sustainable and inclusive growth for its people.” Read the full speech.


The Survey says that sustaining the recovery will hinge on addressing labour market bottlenecks, which include persistent long-term unemployment, particularly of low-skilled workers and older workers, as well as skills shortages that prevent more than one-third of all firms from finding sufficient qualified labour.


The Survey recommends greater investment in programmes to help workers maintain skills or re-skill to gain a foothold on the labour market. New policies will be required to prepare young people for successful careers in competitive, innovative and globally integrated firms, including new and improved training for the jobless and strengthening vocational and university education for the next generation of workers.


Sustainable public finances will be another key element of ensuring further economic expansion. While the budget deficit and public debt have both declined as a share of GDP, and are currently on downward trajectories, ageing-related spending pressures will continue mounting in the long-term without further action. The Survey recommends measures to contain the cost increases in pensions, with the primary focus on increasing the statutory and effective pension ages, as well as in health and long-term care.


Continued economic prosperity will also require faster productivity increases and greater investment. To achieve this, the Survey points out the need for regulatory reform, stronger enforcement of competition, simplified judicial procedures, and lower barriers to entry, particularly in regulated professions.


Strengthening governance of state-owned enterprises (SOEs), following through with privatisation plans, notably in competitive activities, and narrowing the list of SOEs considered strategic should remain a priority, the Survey said.


An Overview of the Economic Survey, with the main conclusions, is accessible at:


During his visit to Ljubljana, the OECD Secretary-General met with senior Slovenian Government officials and members of the National Assembly, and presented a second component of OECD country-specific work: the OECD Reviews on Local Job Creation – Employment and Skills Strategies in Slovenia.


The report identifies key actions taken in Slovenia to help workers find better quality jobs at the local level, while also stimulating productivity and inclusion. It looks at local activities in the case study regions of Drava and South-East Slovenia, both of which are investing in skills, training and entrepreneurship activities to increase overall competitiveness and raise the productivity of firms.


The OECD points out that uneven implementation capacities across regions in Slovenia can hamper job creation and economic development efforts. Moving forward, OECD recommendations include:


  • Creating pilot local boards comprised of key municipalities, employers, employment services, and training organisations under an action plan for jobs, and tasking them with coordinating regional employment and economic development policies.


  • Strengthening employer ownership in skills development programmes by providing more work-based training and apprenticeship opportunities, while enabling local governance platforms for employers to advise Vocational Education and Training (VET) providers on their future skills needs.


  • Working closer with employers to improve the use of skills in the workplace through management training programmes and the promotion of high-performance workplace practices (HPWPs), which would raise the quality of human capital in Slovenia.


For further information, journalists can contact the OECD Media Division (+33 1 4524 9700).

[1] Note: new data released by the authorities led the authors to revise their estimate upwards after the OECD Economic Survey of Slovenia went to print. This recent development explains any discrepancy with the printed edition, which points to GDP growth of 3.8% in 2017.


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