Bratislava, Slovakia – After listing the Czech Republic’s most resounding achievements, the time has come to take a closer look at its neighbour’s: Slovakia, Central Europe’s smallest country, skilfully concealed behind its high peaks and inconspicuous charm, nevertheless tops the charts in a number of noteworthy – and sometimes startling – areas. Here’s our top five.
1. Making cars
The auto industry is the pillar and lifeblood of the Slovak economy: it represents no less than 13% of its GDP, 40% of its industrial exports and employs, both directly and indirectly, 300.000 people in the country.
With over 1 million cars coming out, every year, of its assembly lines, Slovakia produces 180 cars for every 1.000 citizens, making it the uncontested world leader in car production per capita. In addition to the three well-established carmakers (Volkswagen, Kia and Peugeot), Slovakia’s production capacities will increase thanks to the recent arrival of Jaguar Land Rover who, after long negotiations, chose Slovakia – over Poland and the Czech Republic – for the base of its new production site.
However, there are growing concerns regarding the sustainability of Slovakia’s automotive industry, which is facing a number of challenges, including increasing labour costs, ruthless competition from other Central and Eastern European countries, as well as difficulties to find qualified workers. The fact that most of the carmakers’ plants are concentrated in Western Slovakia (Kia’s is located near Žilina, Peugeot’s in Trnava, and VW’s in Bratislava) where the unemployment is already at all-times low, instead of jobless-hit regions in the East, surely doesn’t help to tackle this issue.
To address these shortages, the industry has two main answers: turning to foreign workers, and investing in the automation of their production sites.
Which brings us to our second point.
2. Being replaced by robots
Slovakia is considered the most vulnerable country in the world to automation. According to OECD figures, 33% of jobs are considered highly automatable, and 70% of them are considered more or less exposed to automation (compared to an OECD average of 45%). The other most vulnerable countries in the world are Lithuania, Turkey, Greece, Japan and Germany.
The explanation is painfully simple: Slovakia’s economy relies heavily on its manufacturing sector (30% of GDP), itself largely based on low-skilled, routine industrial jobs. These are the most easily replaceable by robots, as an extensive PwC study pointed out. To sum up the scope of the challenges lying ahead, the “median Slovak worker” has a 62% probability of being automated, according to this same analysis. Contrary to what many people would like to admit, automation is not a problem for the next generations: it’s happening right now. The fact that Kia’s and VW’s Slovak plants already widely rely on robots should be an obvious wake-up call. Not a very efficient one, apparently: most experts underline the unpreparedness of Slovakia’s economy and policy-making (education policy, re-training programs, financial incentives, etc.) to this major economic and sociological shift.
By the way, did you know that the English word “robot” finds its roots in a 1920 science fiction play by Czechoslovak writer Karel Čapek?
Oh, the irony…
3. Going unnoticed by foreigners
For many people, Slovakia‘s appeal lies in its unassuming charm. Looking at asylum applications figures, one can only wonder if they’re not being a tiny bit too unassuming.
Slovakia received the lowest number of asylum applications among OECD countries: 18 applications per million of inhabitants, which makes a whooping total of… 100 applications in 2016, mainly from citizens of Pakistan, Algeria and Ukraine. In the last quarter of last year, the country received 8 applications per million of inhabitants, followed by Poland (13 per one million), Latvia (18) and Estonia (20). During that same time, Germany received 46.000 asylum applications.
With approximately 93.000 migrants and foreigners currently living in the country (the population of Slovakia’s third city, Prešov), foreign-born people represent 1.7% of the total population, one of the lowest rates in Europe. To give you an idea, foreigners account for about 5% of the Czech Republic’s population… and 0.3% of Poland’s. Although Ukrainians are the biggest foreign-born minority in the country (13.000 people), more than half of all foreigners living there come from other EU Member states.
4. Having the worst orientation counsellors
First off, we should say that Slovakia performs very well in terms of “basic” education: around 90% of its adult population has completed at least an upper-secondary education, a score only topped by the Czech Republic (93%) but far ahead of the OECD average of 75%. It also has one of the lowest share of low-skilled workers among developed economies, after Japan: less than 5% of its population has low skills in literacy and numeracy, compared to 10% in Germany or 15% in France, for instance.
On the other hand, Slovakia also has one of the lowest rates of high-skilled workers, in a context where a growing number of industries (including the all-mighty carmakers) require employees to have a higher level of education and perform more complex tasks than what was needed, say, fifteen years ago.
So what’s wrong with their orientation counsellors, you ask? Well, an interesting OECD survey focused on the correlation between a population’s academic training and professional occupations. In Slovakia, 37% of the workforce is employed in a job that doesn’t match their field of study, the highest rate after the U.K. and Greece.
Obviously, we’re being a bit rough, it’s not the orientation counsellors’ fault: an inadequacy of this magnitude cannot simply be the expression of (a lot of) bad career choices. It’s the symptom of a structural inexpediency, a deeply-rooted mismatch between the country’s education policy and the needs of its economy and labour market.
5. Making as much money as their neighbour
Let’s finish on a more positive note: Slovakia, along with its Czech neighbour, boasts one of the lowest income inequality in all OECD countries, with a Gini coefficient of 0.25. Quick reminder: the Gini index is the most widely used instrument to measure inequalities, and the closer to 0 the score, the more equal the society (with a score of 1 describing a country where one person owns 100% of the wealth). The OECD average stands at 0.315. In other words, Slovakia is doing pretty well, both before and after taxes or other social mechanisms of wealth transfer.
The 40% poorest in OECD countries own, on average, less than 5% of the country’s wealth. In Slovakia, they own around 15%. Reciprocally, if the top 10% own around 70% of the wealth in the U.S. or 60% in Austria, they “only” own 30% of Slovakia’s riches. There’s obviously still room for improvement, but considering the situation in the rest of the world, we thought it was something worth mentioning.
This list doesn’t purport to be exhaustive. Slovakia has many other outstanding – or infamous – achievements which we couldn’t include in this article. So, off the top of our head, you should also know that Slovakia is one of the country where women marry the youngest, has one of the lowest birth rates and one of the highest dwelling ownership rate, as well as the biggest gap in life expectancy for elderly people depending on their educational level (4.4 years gap for men over 65!). Some also call Slovakia the country with the most castles per capita, but that’s a controversial topic (particularly with our Welsh friends) and really depends on your definition of “castle”.