According to the latest survey on the economic situation which AHK carries in the 15 CEE countries Slovenia is the best prepared for digital transformation. This rating is of enormous importance for further cooperation between the two countries as it means that there are new venues for work, this time, in advanced technologies. It is a cherry on the top of already successful cooperation between two economies. No wonder then there are strong motives from both sides to add new quality to this relationship, explains Gertrud Rantzen, Chairwoman of the German-Slovene Chamber of Commerce and Industry (AHK Slovenia).
Something like that has happened recently when the Association of German Chambers of Commerce and Industry (DIHK), the Chamber of Commerce and Industry of Slovenia (GZS) and the German-Slovene Chamber of Commerce and Industry (AHK Slovenia) have signed a Memorandum of Understanding which has been described as an important milestone in economic cooperation. The Memorandum will serve as the base for closer cooperation between Slovene and German chambers of commerce, and likewise supports Slovene companies in finding new business opportunities out of 3.6 million German companies, explains Gertrud Rantzen, Chairwoman of the German-Slovene Chamber of Commerce and Industry (AHK Slovenia). It will compliment already excellent relations between two economies.
Within the framework of the signed Memorandum, the Chambers will cooperate in order to support Slovene companies in their market activities on foreign markets.” To this end, they have a worldwide network of German chambers of commerce abroad, Delegations and Representatives of the German economy, called AHK”, says Ms Rantzen. DIHK operates as an umbrella organization on behalf of the bilateral German Chambers of Commerce and Industry abroad. The support is provided by AHK Slovenia as the first contact and intermediary point of German companies. In this regard, AHK Slovenia gets supported by the DIHK network and further 79 regional chambers of commerce (IHK) in Germany.
How would you describe the development of mutual trade relations in the past 13 years? How have the trends in German investments in Slovenia evolved?
While Germany has been Slovenia’s top trade partner for years, the German-Slovene business relations continue to follow a positive trend. Slovenia reached record trade with Germany in 2015, as the exchange of goods amounted to EUR 9.37bn and 2018, with the turnover of nearly EUR 12bn. The turnover is influenced by the high level of exports of Slovene companies to Germany, which is why it is not surprising that Slovene companies have an exceptional interest in gaining access to the global network, as it is ours. If we look on the investment side, Germany invests in the amount of 1,86 billion € and belongs to the top of most important foreign investors. Every year the German foreign chambers (AHK) have been carrying out a joint survey on the economic situation and investment conditions in the Central and Eastern European (CEE) countries since 2006. According to the latest survey (February 2019) 80% of German investors believe in the Slovenian market. However, looking back to the past years and still nowadays the challenge remains business environment. Additional efforts are needed to improve various important location factors that are essential for an investment-friendly environment. The government needs to face a lot of tasks, which includes swifts and consistent implementation of privatization measures and the creation of an investment-friendly climate through tax relief for investments, especially for small investments in R&D, further steps to tax relief, especially through the introduction of additional tax levels, introduction of the social cap to reduce labor costs.
In one of your interviews from 2011 you have suggested that Slovenia needs to do much more in the tourism industry, as well as in new technologies. Have there been any changes in these sectors since then?
According to the already mentioned Survey on the economic situation in Slovenia for 2019, which interrogated 15 CEE countries I am happy to say that Slovenia has convincingly and successfully surpassed 14 CEE countries as the best location for Research and Development (R&D). Thus, Slovenia meets all the conditions for digital transformation, implementation of the industry 4.0 at all levels and likewise opens up new opportunities for cooperation in the field of new technologies. However there is still space for improvements, which is flexibilization of labour law to adapt to new ways of working through digitization and artificial intelligence and investments in education and the educational system, in order to counteract the shortage of skilled workers. As regards the toursim industry for sure progress has been made with the Sustainable Development Strategy for Slovenian Tourism 2017-2021. It is the concept that strives to a positive impact on the environment, society, and economy when it comes to the visits of tourists and that is especially important for a reason to preserve the treasures of natural and cultural heritage of a small country as is Slovenia.
Slovenia is becoming well known for its advancements in robotics, blockchain and AI. What are the perspectives for closer collaboration with German companies operating in the 4.0 industry?
As the Slovenian industry is closely connected with Germany, it is important to adapt the trends that will affect the industry in the nearest future. Therefore AHK Slovenia every year sets the annual theme and for 2019 we have chosen Industry 4.0 with the slogan »Industry 4.0 inspiration for the digital future«. We organize events and activities of various formats with the intention to educate the business community in Slovenia and to share the best practices from Germany in this filed. In January, we also published the results of the “Industry 4.0 survey”, conducted by the Chamber at the end of 2018, which offered an insight into the current state of digitisation and the industry 4.0 in companies in Slovenia. The results show a good basic understanding of the concept of industry 4.0 in companies in Slovenia and its importance for the future development of the industry. Moreover, the respondents confirm with great satisfaction that they are creating new business models with industry 4.0. The challenge arises in the field of awareness of the need to measure the implementation of the industry 4.0 strategy in companies in Slovenia. The survey shows that the reasons are mainly due to the lack of knowledge, competences and qualifications, and a little less due to the lack of financial resources. With high probability, the current state of awareness may mean that problems will arise in monitoring the effects of implementing the strategy in companies in Slovenia. In this context, it is necessary to point out that for good strategic decisions, a key overview and anticipation of the expected effects and consequences of decisions in advance – therefore, the measurement of the implementation of the strategy – should be done on the corporate side on a regular basis and on the basis of monitoring real data.
In your opinion, in which way will the downturn in German economy affect your members and the overall trade relations between the two countries?
Given the strong link of the Slovenian companies with the German automotive industry for sure the members from the automotive will occur some reduction on the supply side. Overall, the start of 2019 was successful: 13.7% more goods were exported in January than in the previous year. The export value rose comparatively by 5.2%. In 2018, the number of German imports from Slovenia also increased by 3.54%. However, after a record high for exports and imports in 2018, it is logical that the strong growth to date has weakened. Now, the German economy is facing less strong growth and consequently Slovenian export growth will grow more moderately but still remain at a high level, although growth will be lower than in the previous year.
How can the Chamber help its members to further advance?
AHK Slovenia has been the first address for German companies and associations regarding information on the Slovenian market and vice-versa ever since its establishment in 2006. Being part of the global network of bilateral German Chambers of Commerce (DIHK), which this year mark 125 years, chambers are located in more than 96 countries around the world. This strong initiative helps to transform national into international success. We build bridges, facilitate access, provide contacts and solve problems. Through the AHK Slovenia’s network and communication hub we offer visibility to our members, not only in Slovenian business environment, bur foremost international, with the special focus on Germany. We offer support in the field of trade fairs by informing the interested parties about suitable trade fairs, we help with preparations and provide on-site support. There are also training courses, such as the “Fit for Export & Fit for the Future”: training for trade fairs, sales training, competence training, digitalization training or Industry 4.0. Furthermore, we offer also individual sales support in the field of sales partner research, customer research, or market analysis. We also offer matchmaking: we bring together Slovenian sellers and German buyers.
WE ACCEPT ONLY THE BEST COMPANIES AS OUR MEMBERS
The AHK Slovenia’s member structure goes in line with the structure of Slovenian economy. At the end of the year 2018 our Chamber had 283 members, of which 46% comes from production (automotive, electronics, metal and machinery equipment industries), 32% comes from services, 8% trade, 7% non-profit organisations and 7% energy sector. “It is important to say that the AHK is very much appreciated and trusted brand in the German market, therefore we are very selective when approving new members”, says Rantzen. “We are looking at the credit rating and the business operations of every individual company, before we accept it as our member”.