CEE in 2020 – Trends and perspectives for the next ... - Roland Berger
CEE in 2020 – Trends and perspectives for the next ... - Roland Berger CEE in 2020 – Trends and perspectives for the next ... - Roland Berger
CEE in 2020 – Trends and perspectives for the next decade Study Vienna, November 2010 CEE_in_2020_Study.pptx 1
- Page 2 and 3: Contents Page A. B. C. D. E. Study
- Page 4 and 5: CEE in 2020 - Trends and perspectiv
- Page 6 and 7: B Ten assumptions for CEE through 2
- Page 8 and 9: Quo vadis CEE? -The region has to r
- Page 10 and 11: 1 EUROPE - IN THE EU OR NOT The div
- Page 12 and 13: 2 CEE AS A GROWTH REGION CEE will n
- Page 14 and 15: 2 CEE AS A GROWTH REGION Business v
- Page 16 and 17: 3 THE GAP WILL REMAIN Although CEE
- Page 18 and 19: 4 BACK UP Efficiency drivers are th
- Page 20 and 21: 4 EFFICIENCY In the medium term, th
- Page 22 and 23: 4 EFFICIENCY/INNOVATION A clear foc
- Page 24 and 25: 5 HUMAN CAPITAL Human capital will
- Page 26 and 27: 5 HUMAN CAPITAL The ongoing brain d
- Page 28 and 29: 5 HUMAN CAPITAL The demand for soft
- Page 30 and 31: 6 PAN-CEE BUSINESS But increasing p
- Page 32 and 33: 7 CEE AS BRIDGEHEAD The geographica
- Page 34 and 35: 7 CEE AS BRIDGEHEAD Russian investm
- Page 36 and 37: 8 TASKS FOR 2020 Renewable energy i
- Page 38 and 39: 9 GROWTH INDUSTRIES Regional growth
- Page 40 and 41: 10 FUTURE BUSINESS BRANCHES The mai
- Page 42 and 43: Summing up the findings - The CEE r
- Page 44 and 45: A SPECIAL LOOK AT AUSTRIA Austria h
- Page 46 and 47: A SPECIAL LOOK AT THE CZECH REPUBLI
- Page 48 and 49: A SPECIAL LOOK AT ROMANIA Romania f
- Page 50 and 51: E Appendix - Study authors CEE_in_2
<strong>CEE</strong> <strong>in</strong> <strong>2020</strong> <strong>–</strong> <strong>Trends</strong> <strong>and</strong><br />
<strong>perspectives</strong> <strong>for</strong> <strong>the</strong> <strong>next</strong> decade<br />
Study Vienna, November 2010<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
1
Contents Page<br />
A.<br />
B.<br />
C.<br />
D.<br />
E.<br />
Study setup 3<br />
Ten assumptions <strong>for</strong> <strong>CEE</strong> through <strong>2020</strong> 6<br />
Summary 41<br />
Appendix <strong>–</strong> Country analysis 43<br />
Appendix <strong>–</strong> Study authors 51<br />
© 2010 Rol<strong>and</strong> <strong>Berger</strong> Strategy Consultants<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
2
A<br />
Study setup<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
3
<strong>CEE</strong> <strong>in</strong> <strong>2020</strong> <strong>–</strong> <strong>Trends</strong> <strong>and</strong> <strong>perspectives</strong> <strong>for</strong> <strong>the</strong> <strong>next</strong><br />
decade<br />
Introductory remarks<br />
> In September 2010, Rol<strong>and</strong> <strong>Berger</strong> Strategy Consultants conducted an onl<strong>in</strong>e survey among<br />
320 senior managers <strong>in</strong> Central <strong>and</strong> Eastern Europe (<strong>CEE</strong>) about <strong>the</strong> future of this region<br />
from a management perspective<br />
> For <strong>the</strong> qualitative part, <strong>the</strong> survey's results have been discussed with lead<strong>in</strong>g economists,<br />
analysts <strong>and</strong> CEOs. For <strong>the</strong> quantitative part, desktop research <strong>and</strong> analyses based on<br />
publically available figures were conducted<br />
> The objective of <strong>the</strong> study was to identify <strong>the</strong> development prospects <strong>for</strong> <strong>CEE</strong> <strong>for</strong> <strong>the</strong> <strong>next</strong><br />
decade<br />
> Topics covered <strong>in</strong>cluded general assessments, corporate strategies, overall economic<br />
challenges <strong>and</strong> <strong>the</strong> effects of global trends on Central <strong>and</strong> Eastern Europe<br />
> Selected results of this survey were compared with <strong>the</strong> outcome of <strong>the</strong> previous study<br />
"<strong>CEE</strong> <strong>in</strong> 2016", which was conducted <strong>in</strong> 2006<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
4
<strong>CEE</strong>-wide participation of around 320 managers <strong>and</strong><br />
<strong>in</strong>-depth analysis of six selected <strong>CEE</strong> countries<br />
Participation structure [%]<br />
<strong>CEE</strong> COUNTRIES PARTICIPATING INDUSTRIES<br />
Countries with <strong>in</strong>-depth analysis<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
Automotive<br />
Eng<strong>in</strong>eer<strong>in</strong>g<br />
Transportation<br />
Bank<strong>in</strong>g &<br />
Public sector<br />
2%<br />
<strong>in</strong>surance<br />
Pharma & healthcare 3% 3%<br />
Metals & m<strong>in</strong><strong>in</strong>g<br />
4% 2% 2%<br />
26%<br />
Chemicals & oil<br />
5%<br />
Energy & utilities 6%<br />
Construction 9%<br />
IT/media/telecom<br />
11%<br />
13%<br />
14%<br />
Services<br />
Consumer goods & retail<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
5
B<br />
Ten assumptions <strong>for</strong> <strong>CEE</strong> through <strong>2020</strong><br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
6
Quo vadis <strong>CEE</strong>? <strong>–</strong>The region has to re<strong>in</strong>vent itself as a<br />
European growth region of global significance<br />
Ten assumptions <strong>for</strong> <strong>CEE</strong> through <strong>2020</strong> (1/2)<br />
1<br />
2<br />
3<br />
4<br />
5<br />
<strong>CEE</strong> <strong>in</strong> its current <strong>for</strong>m will not exist any more <strong>–</strong> Europe will consist of EU <strong>and</strong><br />
non-EU countries, <strong>and</strong> <strong>the</strong> region will be much more diverse<br />
The region will not be among <strong>the</strong> global emerg<strong>in</strong>g markets but will rema<strong>in</strong> <strong>the</strong> ma<strong>in</strong><br />
European growth region. GDP growth will plateau at about 2% above WE level<br />
Although <strong>the</strong> <strong>CEE</strong> countries cont<strong>in</strong>ue to develop from "workbenches" to <strong>in</strong>novation-driven<br />
economies, <strong>the</strong> gap between Western Europe <strong>and</strong> <strong>CEE</strong> will persist<br />
Lack of basic requirements (<strong>in</strong>stitutions, <strong>in</strong>frastructure) will rema<strong>in</strong> <strong>CEE</strong>'s ma<strong>in</strong> weakness,<br />
whereas efficiency enhancement is a competitive advantage<br />
Human capital issues (demographic development, bra<strong>in</strong> dra<strong>in</strong>, education) will rema<strong>in</strong> <strong>the</strong><br />
second bottleneck <strong>for</strong> fur<strong>the</strong>r economic development<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
7
Quo vadis <strong>CEE</strong>? <strong>–</strong>The region has to re<strong>in</strong>vent itself as a<br />
European growth region of global significance<br />
Ten assumptions <strong>for</strong> <strong>CEE</strong> through <strong>2020</strong> (2/2)<br />
6<br />
7<br />
8<br />
9<br />
10<br />
In <strong>2020</strong>, <strong>CEE</strong> will still be dependent on Western Europe <strong>–</strong> Pan-<strong>CEE</strong> bus<strong>in</strong>ess is develop<strong>in</strong>g<br />
fast <strong>and</strong> may become a potential way out<br />
Its unique position as a bridgehead between <strong>the</strong> emerg<strong>in</strong>g markets of Russia, Turkey, Ch<strong>in</strong>a<br />
<strong>and</strong> <strong>the</strong> advanced economies of Western Europe is <strong>CEE</strong>'s future capital<br />
Counteract<strong>in</strong>g <strong>the</strong> scarcity of energy & raw materials, <strong>the</strong> consolidation of public f<strong>in</strong>ances<br />
<strong>and</strong> <strong>the</strong> consequences of technological progress are <strong>the</strong> ma<strong>in</strong> tasks <strong>for</strong> <strong>the</strong> <strong>next</strong> decade<br />
The regional growth <strong>in</strong>dustries will be energy & utilities, IT & telecom <strong>and</strong> pharma &<br />
healthcare <strong>–</strong> Shift toward future <strong>in</strong>dustries needed<br />
The ma<strong>in</strong> future growth drivers are thought to be energy-related (energy efficiency,<br />
renewables) <strong>and</strong> IT solutions<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
8
1<br />
EUROPE <strong>–</strong> IN THE EU OR NOT<br />
The def<strong>in</strong>ition of <strong>the</strong> <strong>CEE</strong> region with<strong>in</strong> Europe will change<br />
substantially by <strong>2020</strong> <strong>–</strong> One region, but very diverse<br />
EU: Economic development from 2010 to <strong>2020</strong>, GDP per capita (EU-27 = 100) [%]<br />
EUROPE AS IT IS TODAY EUROPE <strong>2020</strong> <strong>–</strong> IN THE EU OR NOT<br />
EU: 27 countries<br />
Euro: 16 countries<br />
EU-15 New EU member states<br />
EU <strong>in</strong>tegration<br />
New EU<br />
members<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; International Monetary Fund (IMF) <strong>–</strong> World Economic Outlook 2015; data <strong>for</strong> <strong>2020</strong> extrapolated<br />
€<br />
area growth<br />
EU: >30 countries<br />
151%<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
9
1 EUROPE <strong>–</strong> IN THE EU OR NOT<br />
The diverse economic development with<strong>in</strong> <strong>the</strong> region is<br />
push<strong>in</strong>g toward divid<strong>in</strong>g <strong>CEE</strong> <strong>in</strong>to subregions<br />
Survey results<br />
COUNTRY<br />
TREND TOWARD SUBREGIONS<br />
Austria<br />
79%<br />
Ukra<strong>in</strong>e<br />
Croatia<br />
<strong>CEE</strong> average<br />
Romania<br />
Czech Republic<br />
Pol<strong>and</strong> 42%<br />
Do you see a trend emerg<strong>in</strong>g that is creat<strong>in</strong>g subregions such as CE, SEE, Baltics, CIS?<br />
Yes/no<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
51%<br />
62%<br />
60%<br />
57%<br />
67%<br />
COMMENTS<br />
> Central Europe (CE) consists of <strong>the</strong> Czech<br />
Republic, Slovakia <strong>and</strong> Hungary. Some- Sometimes<br />
Austria, Slovenia <strong>and</strong> Croatia are<br />
<strong>in</strong>cluded<br />
> Sou<strong>the</strong>astern Europe (SEE) consists<br />
of Serbia, Bosnia <strong>and</strong> Herzegov<strong>in</strong>a,<br />
Montenegro, Macedonia, Bulgaria <strong>and</strong><br />
Albania. Sometimes Croatia,<br />
Romania <strong>and</strong> Slovenia are <strong>in</strong>cluded<br />
> The CIS region consists of Russia,<br />
Ukra<strong>in</strong>e, Kazakhstan, Belarus <strong>and</strong> o<strong>the</strong>r<br />
<strong>for</strong>mer Soviet Republics<br />
> Larger countries such as Pol<strong>and</strong> <strong>and</strong><br />
Romania will be addressed separately<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
10
2 <strong>CEE</strong> AS A GROWTH REGION<br />
Due to <strong>the</strong> economic crisis, <strong>CEE</strong> lost its position as a global<br />
growth eng<strong>in</strong>e <strong>–</strong> Structural weaknesses became obvious<br />
GDP development [2000 ≙ 100%]<br />
100<br />
00<br />
01<br />
02<br />
03<br />
Economic crisis<br />
04<br />
05<br />
06<br />
07<br />
08<br />
09<br />
10<br />
11<br />
487%<br />
BRIC 1)<br />
1) Overall growth rate of BRA, RUS, IND, CHN<br />
2) Overall growth rate of BIH, BGR, HRV, CZE, EST, HUN, LVA, LTU, MKD, MNE, POL, ROU, SRB, SVK, SVN, UKR<br />
3) Overall growth rate of AUT, BEL, DNK, FIN, FRA, DEU, GRC, IRL, ITA, LUX, NLD, NOR, PRT, ESP, SWE, CHE, GBR<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; International Monetary Fund (IMF)<br />
COMMENTS<br />
> Dur<strong>in</strong>g <strong>the</strong> first decade of <strong>the</strong><br />
<strong>CEE</strong>2) 378% <strong>CEE</strong> new century, <strong>CEE</strong> has been<br />
2)<br />
378% new century, <strong>CEE</strong> has been<br />
200%<br />
12<br />
WE 3)<br />
one of <strong>the</strong> global growth regions<br />
> Growth was driven <strong>in</strong> particular by<br />
FDIs from WE, but concealed<br />
unsolved structural problems<br />
> <strong>CEE</strong>'s ma<strong>in</strong> problems are<br />
<strong>–</strong> Institutional weaknesses<br />
<strong>–</strong> Inadequate <strong>in</strong>frastructure<br />
<strong>–</strong> Lack of <strong>in</strong>novation<br />
> The absence of FDI dur<strong>in</strong>g <strong>the</strong><br />
crisis revealed <strong>the</strong>se issues<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
11
2 <strong>CEE</strong> AS A GROWTH REGION<br />
<strong>CEE</strong> will not rega<strong>in</strong> its status as a global growth eng<strong>in</strong>e <strong>–</strong><br />
The region is stuck <strong>in</strong> <strong>the</strong> middle <strong>and</strong> has to redef<strong>in</strong>e itself<br />
Survey results<br />
REGION/<br />
COUNTRY<br />
Ch<strong>in</strong>a<br />
India<br />
Turkey<br />
Russia<br />
<strong>CEE</strong><br />
South America<br />
Africa & Middle East<br />
EU-15<br />
North America<br />
EXPECTED DEVELOPMENT<br />
-1 0 1 2 3 4 5<br />
-5 0<br />
5<br />
How will <strong>the</strong> economic situation develop <strong>in</strong> <strong>the</strong> follow<strong>in</strong>g regions from 2010 to <strong>2020</strong>?<br />
-5… deteriorate / 0… rema<strong>in</strong> <strong>the</strong> same / +5… improve<br />
1.0<br />
0.9<br />
0.9<br />
2.0<br />
1.8<br />
1.8<br />
1.6<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study; International Monetary Fund (IMF)<br />
3.0<br />
2.9<br />
Growth<br />
eng<strong>in</strong>es<br />
Grow<strong>in</strong>g<br />
economies<br />
GDP GROWTH 2010-2015,<br />
AVERAGE ANNUAL CHANGE [%]<br />
9.7<br />
8.4<br />
4.5<br />
Moderate<br />
Growth Ch<strong>in</strong>a India Turkey RUS <strong>CEE</strong> North EU-15<br />
America<br />
4.2<br />
3.8<br />
2.6<br />
1.8<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
12
2 <strong>CEE</strong> AS A GROWTH REGION<br />
Polish managers are <strong>the</strong> most optimistic about <strong>the</strong>ir<br />
country's development <strong>–</strong> Croatian managers skeptical<br />
Survey results<br />
<strong>CEE</strong> COUNTRY<br />
Pol<strong>and</strong><br />
Czech Republic<br />
Romania<br />
<strong>CEE</strong> average<br />
Ukra<strong>in</strong>e<br />
Austria<br />
Croatia<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
EXPECTED DEVELOPMENT<br />
-1 0 1 2 3 4 5<br />
-5 0 5<br />
How will <strong>the</strong> economic situation <strong>in</strong> your country develop from 2010 to <strong>2020</strong>?<br />
-5… deteriorate / 0… rema<strong>in</strong> <strong>the</strong> same / +5… improve<br />
0.8<br />
0.8<br />
1.4<br />
1.3<br />
1.7<br />
2.2<br />
1.4<br />
n.a.<br />
2.0<br />
2.0<br />
2.2<br />
2.5<br />
2.5<br />
2010 2006<br />
Optimists<br />
Pessimists<br />
COMMENTS<br />
> Polish, Czech <strong>and</strong> Romanian<br />
managers are optimistic about<br />
<strong>the</strong> upcom<strong>in</strong>g decade<br />
> Ukra<strong>in</strong>ian, Austrian <strong>and</strong> Croatian<br />
managers expect only slow growth<br />
> Optimism has decl<strong>in</strong>ed <strong>in</strong> <strong>the</strong><br />
wake of <strong>the</strong> economic crisis<br />
> Whereas Polish managers are<br />
more optimistic than four years<br />
ago, Croatian managers have<br />
changed from be<strong>in</strong>g very<br />
optimistic to be<strong>in</strong>g pessimistic<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
13
2 <strong>CEE</strong> AS A GROWTH REGION<br />
Bus<strong>in</strong>ess volume <strong>in</strong> <strong>CEE</strong> will <strong>in</strong>crease over <strong>the</strong> <strong>next</strong> decade <strong>–</strong><br />
The number of workplaces will only grow slowly on average<br />
Survey results<br />
BUSINESS VOLUME NUMBER OF WORKPLACES<br />
Romania<br />
Ukra<strong>in</strong>e<br />
Pol<strong>and</strong><br />
Czech Republic<br />
<strong>CEE</strong> average<br />
Croatia<br />
Austria<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
-1<br />
-5<br />
0<br />
1 2 3 4<br />
5<br />
0.5<br />
1.0<br />
1.7<br />
1.6<br />
2.3<br />
2.3<br />
2.1<br />
In which way will your <strong>in</strong>dustry develop <strong>in</strong> your country <strong>in</strong> terms of…<br />
-5… strongly decrease / 0… <strong>the</strong> same / +5… strongly <strong>in</strong>crease<br />
Ukra<strong>in</strong>e<br />
Romania<br />
Pol<strong>and</strong><br />
<strong>CEE</strong> average<br />
Croatia<br />
Czech Republic<br />
Austria<br />
-1 0 1 2 3 4 5<br />
-5 0 5<br />
0.4<br />
0.1<br />
0.0<br />
-0.5<br />
0.6<br />
1.0<br />
1.3<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
14
3 THE GAP WILL REMAIN<br />
Whereas CE countries need to succeed <strong>in</strong> transit<strong>in</strong>g to<br />
advanced economies, SEE has to compete with BRIC states<br />
Economic development <strong>in</strong> 2010<br />
Economic development<br />
Factordriven<br />
UKR<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>, World Economic Forum (WEF)<br />
SRB<br />
CZE<br />
SVK<br />
POLHUN<br />
HRV<br />
RUS<br />
ROU<br />
BGR<br />
SVN<br />
1 Transition 1-2 2 Transition 2-3 3<br />
Efficiencydriven<br />
AUT<br />
Innovationdriven<br />
t<br />
COMMENTS<br />
> Slovenia <strong>and</strong> Czech Republic<br />
have completed <strong>the</strong>ir transition to<br />
advanced economies<br />
> By <strong>2020</strong>, Slovakia <strong>and</strong> Hungary<br />
have a good chance to complete<br />
<strong>the</strong>ir transition. Pol<strong>and</strong> <strong>and</strong><br />
Croatia will cont<strong>in</strong>ue to catch up<br />
> Russia, Romania, Bulgaria <strong>and</strong><br />
Serbia will compete on a global<br />
level with Brazil, Ch<strong>in</strong>a <strong>and</strong> Turkey<br />
> Ukra<strong>in</strong>e has to establish itself as<br />
an attractive workbench <strong>for</strong><br />
Western companies<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
15
3 THE GAP WILL REMAIN<br />
Although <strong>CEE</strong> will cont<strong>in</strong>ue to catch up <strong>the</strong> gap will persist<br />
<strong>–</strong> Attractive opportunities <strong>for</strong> consumer products<br />
GDP based on purchas<strong>in</strong>g power parity (PPP) per capita (EU-15 = 100) [%]<br />
110<br />
100<br />
90<br />
80<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
00<br />
01<br />
02<br />
03<br />
04<br />
05<br />
06<br />
07<br />
08<br />
09<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; International Monetary Fund (IMF)<br />
10<br />
11<br />
12<br />
13<br />
14<br />
15<br />
16<br />
17<br />
18<br />
19<br />
20<br />
Austria<br />
EU-15 = 100<br />
Slovenia<br />
Czech Republic<br />
Slovakia<br />
Pol<strong>and</strong><br />
Hungary<br />
Russia<br />
Croatia<br />
Bulgaria<br />
Romania<br />
Serbia<br />
Ukra<strong>in</strong>e<br />
COMMENTS<br />
> In 2000, Slovenia (64%), <strong>the</strong><br />
Czech Republic (55%) <strong>and</strong><br />
Hungary (44%) were <strong>the</strong> most<br />
developed <strong>CEE</strong> countries<br />
> Today, Slovenia reaches 79%<br />
of Western European average,<br />
followed by <strong>the</strong> Czech Republic<br />
(72%) <strong>and</strong> Slovakia (58%)<br />
> In ten years, Slovenia will reach<br />
more than 80% of <strong>the</strong> EU-15<br />
average. Czech Republic<br />
(>75%) <strong>and</strong> Slovakia (>70%)<br />
will follow<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
16
4 INTERNATIONAL COMPETITIVENESS<br />
Compared to 2006, <strong>CEE</strong> countries are los<strong>in</strong>g significantly on<br />
competitiveness <strong>–</strong> Only Pol<strong>and</strong> is improv<strong>in</strong>g cont<strong>in</strong>uously<br />
International competitiveness: Global Competitiveness Report (2004-2010) 1) [rank]<br />
2004 2006 2010 Change 2004-2010<br />
AUT<br />
SVN<br />
HUN<br />
CZE<br />
SVK<br />
BGR<br />
POL<br />
HRV<br />
ROU<br />
RUS<br />
UKR<br />
SRB<br />
17<br />
33<br />
39<br />
40<br />
43<br />
59<br />
60<br />
61<br />
63<br />
70<br />
86<br />
89<br />
AUT<br />
CZE<br />
SVN<br />
SVK<br />
HUN<br />
POL<br />
HRV<br />
RUS<br />
ROU<br />
BGR<br />
UKR<br />
SRB<br />
17<br />
29<br />
1) The Global Competitiveness Report has only existed <strong>in</strong> this <strong>for</strong>m s<strong>in</strong>ce 2004<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; World Economic Forum (WEF)<br />
33<br />
37<br />
41<br />
48<br />
51<br />
62<br />
68<br />
72<br />
78<br />
87<br />
AUT<br />
CZE<br />
POL<br />
SVN<br />
HUN<br />
SVK<br />
RUS<br />
ROU<br />
BGR<br />
HRV<br />
UKR<br />
SRB<br />
18<br />
36<br />
39<br />
45<br />
52<br />
60<br />
63<br />
67<br />
71<br />
77<br />
89<br />
96<br />
AUT<br />
CZE<br />
POL<br />
SVN<br />
HUN<br />
SVK<br />
RUS<br />
ROU<br />
BGR<br />
HRV<br />
UKR<br />
SRB<br />
-1<br />
+3<br />
+21<br />
-12<br />
-13<br />
-17<br />
+7<br />
-4<br />
-12<br />
-16<br />
-3<br />
-7<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
17
4 BACK UP<br />
Efficiency drivers are <strong>the</strong> region's competitive advantage,<br />
but basic requirements will rema<strong>in</strong> weak<br />
International competitiveness: Global Competitiveness Report 2010-2011<br />
COUNTRY<br />
Austria<br />
Czech Rep.<br />
Pol<strong>and</strong><br />
Slovenia<br />
Hungary<br />
Slovakia<br />
Russia<br />
Romania<br />
Croatia<br />
Ukra<strong>in</strong>e<br />
Serbia<br />
OVERALL<br />
RANK<br />
18<br />
36<br />
39<br />
45<br />
52<br />
60<br />
63<br />
67<br />
77<br />
89<br />
96<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; World Economic Forum (WEF)<br />
Key <strong>for</strong> factor-driven<br />
economies<br />
BASIC<br />
REQUIREMENTS<br />
15<br />
44<br />
56<br />
34<br />
59<br />
53<br />
65<br />
77<br />
50<br />
102<br />
93<br />
> Institutions<br />
> Infrastructure<br />
> Macroeconomic stability<br />
> Health <strong>and</strong> primary education<br />
Key <strong>for</strong> efficiency-driven<br />
economies<br />
EFFICIENCY<br />
ENHANCERS<br />
19<br />
28<br />
30<br />
46<br />
41<br />
37<br />
53<br />
54<br />
76<br />
72<br />
93<br />
> Higher education <strong>and</strong> tra<strong>in</strong><strong>in</strong>g<br />
> Goods market efficiency<br />
> Labor market efficiency<br />
> F<strong>in</strong>ancial market sophistication<br />
> Technological read<strong>in</strong>ess<br />
> Market size<br />
Key <strong>for</strong> <strong>in</strong>novation-driven<br />
economies<br />
INNOVATION AND<br />
SOPHISTICATION<br />
13<br />
30<br />
50<br />
35<br />
51<br />
63<br />
80<br />
91<br />
85<br />
88<br />
107<br />
> Bus<strong>in</strong>ess sophistication<br />
> Innovation<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
18
4 BASIC REQUIREMENTS<br />
Major challenges will rema<strong>in</strong> bureaucracy, corruption <strong>and</strong><br />
legal uncerta<strong>in</strong>ty as well as <strong>the</strong> lack of <strong>in</strong>frastructure<br />
Survey results, Global Competitiveness Report 2010-2011<br />
FACTOR<br />
Geographical position<br />
Cultural similarity to Western countries<br />
Higher education <strong>and</strong> tra<strong>in</strong><strong>in</strong>g<br />
Primary education<br />
Language skills<br />
Work<strong>for</strong>ce resources<br />
Political <strong>and</strong> social stability<br />
Labor costs<br />
Infrastructure<br />
Innovation, R&D<br />
Fiscal framework<br />
Legal framework<br />
Corruption<br />
Bureaucracy<br />
DISADVANTAGE/ADVANTAGE<br />
-5 0 5<br />
-2.1<br />
-0.4<br />
-0.5<br />
-1.8<br />
2.8<br />
2.1<br />
1.8<br />
1.7<br />
1.3<br />
1.1<br />
0.6<br />
0.6<br />
0.4<br />
0.3<br />
Compared to o<strong>the</strong>r countries, what are <strong>the</strong> advantages/disadvantages of your country regard<strong>in</strong>g<br />
long-term <strong>in</strong>vestments? -5… strong disadvantage/ 0… <strong>the</strong> same / +5… strong advantage<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study; World Economic Forum (WEF)<br />
Basic requirements<br />
BASIC REQUIREMENTS WEF<br />
AUT<br />
CZE<br />
HRV<br />
POL<br />
ROU<br />
UKR<br />
INSTI- INFRA-<br />
# (out of 139) TUTIONS STRUCTURE<br />
15<br />
44<br />
50<br />
56<br />
77<br />
102<br />
15<br />
72<br />
86<br />
54<br />
81<br />
134<br />
20<br />
39<br />
41<br />
72<br />
92<br />
68<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
19
4 EFFICIENCY<br />
In <strong>the</strong> medium term, <strong>the</strong> ma<strong>in</strong> advantage of <strong>CEE</strong> will still be<br />
its competitive labor costs<br />
Unit labor costs <strong>in</strong> % of EU-15, 2009 [%] <strong>–</strong> "Erste Group" analysis<br />
Slovakia<br />
Pol<strong>and</strong><br />
Hungary<br />
Croatia<br />
Bulgaria<br />
Czech Republic<br />
Romania<br />
Austria<br />
Slovenia<br />
Source: Eurostat; Erste Group<br />
70<br />
74<br />
80<br />
81<br />
81<br />
84<br />
94<br />
102<br />
103<br />
COMMENTS<br />
> Unit labor costs put<br />
productivity <strong>in</strong> relation to<br />
compensation<br />
> The <strong>CEE</strong> average with<strong>in</strong> <strong>the</strong><br />
EU is about 83% of <strong>the</strong> EU-15<br />
average<br />
> Especially Slovakia, Pol<strong>and</strong><br />
<strong>and</strong> Hungary will rema<strong>in</strong><br />
attractive production locations<br />
> Countries like Austria <strong>and</strong><br />
Slovenia have to score with<br />
<strong>in</strong>novation <strong>and</strong> bus<strong>in</strong>ess<br />
sophistication<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
20
4 EFFICIENCY<br />
Efficiency improvement <strong>and</strong> <strong>in</strong>novation will be on top of<br />
managers' agendas dur<strong>in</strong>g <strong>the</strong> <strong>next</strong> decade<br />
Survey results<br />
GENERAL STRATEGY<br />
Efficiency improvement<br />
Innovation<br />
Enhancement of cost structures<br />
Increase <strong>in</strong> service share<br />
Br<strong>and</strong> differentiation<br />
Enter<strong>in</strong>g new markets<br />
Penetrat<strong>in</strong>g new customer segments<br />
Consolidat<strong>in</strong>g supplier structures<br />
Location shifts<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
RELEVANCE FOR <strong>CEE</strong><br />
-1 0 1 2 3 4 5<br />
-5 0 5<br />
2.5<br />
2010 2006<br />
n.a.<br />
Which general strategies will shape your <strong>in</strong>dustry <strong>in</strong> your country dur<strong>in</strong>g <strong>the</strong> <strong>next</strong> ten years?<br />
-5… much less / 0… <strong>the</strong> same / +5… much more<br />
1.8<br />
1.5<br />
1.5<br />
1.4<br />
1.4<br />
1.4<br />
0.9<br />
1.9<br />
1.4<br />
2.1<br />
2.4<br />
2.5<br />
n.a.<br />
2.5<br />
2.3<br />
2.8<br />
COMMENTS<br />
> Efficiency improvement is at<br />
<strong>the</strong> top of <strong>the</strong> agenda <strong>in</strong><br />
all countries surveyed<br />
> In <strong>the</strong> advanced economies<br />
(AUT, CZE, HRV), <strong>in</strong>novation<br />
is thought to be more important<br />
than <strong>in</strong> o<strong>the</strong>r <strong>CEE</strong> countries<br />
> Compared to 2006, costrelated<br />
topics became more<br />
important than <strong>in</strong>novationdriven<br />
topics<br />
> Location shifts are not on <strong>the</strong><br />
agenda of <strong>CEE</strong> managers<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
21
4 EFFICIENCY/INNOVATION<br />
A clear focus on high tech offers <strong>the</strong> best possibilities <strong>for</strong><br />
productivity ga<strong>in</strong>s <strong>–</strong> Hungary <strong>and</strong> Czech Republic lead<br />
Share of high-tech exports <strong>in</strong> 2009 [% of total exports] <strong>–</strong> "Erste Group" analysis<br />
0-5%<br />
5-8%<br />
8-15%<br />
15-18%<br />
18-59%<br />
Source: Eurostat; Erste Group<br />
COMMENTS<br />
> A clear focus on high tech<br />
offers <strong>the</strong> best possibilities <strong>for</strong><br />
high productivity ga<strong>in</strong>s <strong>and</strong><br />
boosts development toward<br />
<strong>in</strong>novative-driven economies<br />
> Hungary <strong>and</strong> Czech Republic<br />
are already overtak<strong>in</strong>g Western<br />
European competitors<br />
> Pol<strong>and</strong>, Romania <strong>and</strong> Bulgaria<br />
are lagg<strong>in</strong>g beh<strong>in</strong>d<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
22
4 INNOVATION<br />
A structural problem of <strong>the</strong> <strong>CEE</strong> countries is that R&D<br />
spend<strong>in</strong>g cont<strong>in</strong>ues to be far below Western European levels<br />
Innovation <strong>–</strong> Research & development <strong>in</strong> 2006 1) [% of GDP]<br />
AUT 2.45<br />
SVN 1.59<br />
CZE 1.54<br />
RUS 1.18<br />
HUN 1.00<br />
<strong>CEE</strong> average 0.87<br />
HRV 0.80<br />
POL 0.60<br />
SLK 0.49<br />
BUL 0.47<br />
ROM 0.45<br />
SRB n.a.<br />
UKR n.a.<br />
1) Latest available data, published 2008<br />
Source: WEF; Eurostat; Rol<strong>and</strong> <strong>Berger</strong><br />
excl. AUT <strong>and</strong> RUS<br />
3% EU target<br />
COMMENTS<br />
> The Europe <strong>2020</strong> strategy<br />
recommends that 3% of <strong>the</strong> EU's<br />
GDP should be <strong>in</strong>vested <strong>in</strong> R&D<br />
> In 2008, only F<strong>in</strong>l<strong>and</strong> <strong>and</strong> Sweden<br />
achieved this goal<br />
> Austria, Germany & Denmark are<br />
on <strong>the</strong>ir way to meet<strong>in</strong>g this target<br />
> Only Slovenia, Czech Republic<br />
<strong>and</strong> Hungary have R&D spend<strong>in</strong>g<br />
over 1%<br />
> Although R&D spend<strong>in</strong>g is go<strong>in</strong>g<br />
up, all o<strong>the</strong>r countries are lagg<strong>in</strong>g<br />
far beh<strong>in</strong>d<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
23
5 HUMAN CAPITAL<br />
Human capital will rema<strong>in</strong> a major bottleneck <strong>for</strong> <strong>the</strong> region's<br />
economic development<br />
A grow<strong>in</strong>g <strong>and</strong> a shr<strong>in</strong>k<strong>in</strong>g Europe <strong>–</strong> Projected change: 2008-2030 [%]<br />
More than -10%<br />
-10 to -5%<br />
-5 to -2%<br />
-2 to 0%<br />
0 to +2%<br />
+2 to +5%<br />
+5 to +10%<br />
More than +10%<br />
Source: Eurostat; UN; EIU; Erste Group<br />
COMMENTS<br />
> Demographic development, an ongo<strong>in</strong>g<br />
bra<strong>in</strong> dra<strong>in</strong> <strong>and</strong> "at best" average education<br />
systems are limit<strong>in</strong>g factors<br />
> The population will decl<strong>in</strong>e by 2030 <strong>in</strong> all<br />
<strong>CEE</strong> countries<br />
> Economic growth will be generated<br />
through productivity ga<strong>in</strong>s<br />
> Austria profits from migration from<br />
Germany, Central Europe <strong>and</strong><br />
Sou<strong>the</strong>astern Europe<br />
> Shr<strong>in</strong>k<strong>in</strong>g populations will be a<br />
phenomenon of rural areas, regional <strong>and</strong><br />
urban centers will grow or stagnate<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
24
5 HUMAN CAPITAL<br />
A decl<strong>in</strong><strong>in</strong>g population <strong>in</strong> <strong>CEE</strong> will be compensated <strong>for</strong> by<br />
additional productivity <strong>–</strong> Wealth is spread<strong>in</strong>g<br />
Economic growth: GDP vs. GDP per capita <strong>–</strong> "Erste Group" analysis<br />
ECONOMIC GROWTH UP THROUGH <strong>2020</strong><br />
AUT<br />
-8%<br />
HRV<br />
<strong>2020</strong> GDP growth<br />
Source: EIU; Erste Group<br />
0%<br />
+3%<br />
CZE<br />
+5%<br />
HUN<br />
<strong>2020</strong> growth <strong>in</strong> GDP per capita<br />
+7%<br />
ROU<br />
+9%<br />
RUS<br />
0%<br />
SVK<br />
+14%<br />
UKR<br />
COMMENTS<br />
> Economic growth <strong>in</strong> <strong>CEE</strong> will<br />
be generated also through<br />
productivity ga<strong>in</strong>s<br />
> The effect is that GDP per<br />
capita will grow stronger than<br />
GDP. The wealth of <strong>the</strong><br />
population will rise more<br />
quickly than GDP<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
25
5 HUMAN CAPITAL<br />
The ongo<strong>in</strong>g bra<strong>in</strong> dra<strong>in</strong> to Western Europe <strong>and</strong> North America<br />
will rema<strong>in</strong> a limit<strong>in</strong>g factor <strong>for</strong> economic development<br />
World Economic Forum, Bra<strong>in</strong> Dra<strong>in</strong> Index 2010-2011<br />
COUNTRY<br />
Austria<br />
Slovenia<br />
Czech Republic<br />
Pol<strong>and</strong><br />
Russia<br />
Hungary<br />
Slovakia<br />
Ukra<strong>in</strong>e<br />
Croatia<br />
Bulgaria<br />
Serbia<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study; World Economic Forum (WEF)<br />
BRAIN DRAIN RANK (out of 139)<br />
30<br />
48<br />
61<br />
79<br />
82<br />
99<br />
101<br />
115<br />
122<br />
127<br />
136<br />
COMMENTS<br />
> Especially <strong>in</strong> Sou<strong>the</strong>astern<br />
Europe, <strong>the</strong> bra<strong>in</strong> dra<strong>in</strong> to<br />
Western Europe <strong>and</strong> North<br />
America is a serious problem<br />
<strong>for</strong> <strong>the</strong> country's fur<strong>the</strong>r<br />
development<br />
> In Central Europe, Austria is<br />
<strong>the</strong> ma<strong>in</strong> target of pan-<strong>CEE</strong><br />
migration <strong>–</strong> Austria is <strong>the</strong> only<br />
country <strong>in</strong> <strong>CEE</strong> with a grow<strong>in</strong>g<br />
population<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
26
5 HUMAN CAPITAL<br />
Education currently seen as a competitive advantage <strong>–</strong><br />
Good school systems but universities need to improve<br />
Survey results<br />
FACTOR<br />
Geographical position<br />
Cultural similarity to Western countries<br />
Higher education <strong>and</strong> tra<strong>in</strong><strong>in</strong>g<br />
Primary education<br />
Language skills<br />
Work<strong>for</strong>ce resources<br />
Political <strong>and</strong> social stability<br />
Labor costs<br />
Infrastructure<br />
Innovation, R&D<br />
Fiscal framework<br />
Legal framework<br />
Corruption<br />
Bureaucracy<br />
DISADVANTAGE/<br />
ADVANTAGE<br />
-5 -4 -3 -2 -1 0 1 2 3 4 5<br />
-1.8<br />
-2.1<br />
-0.4<br />
-0.5<br />
Compared to o<strong>the</strong>r countries, what are <strong>the</strong> advantages/disadvantages of your country regard<strong>in</strong>g<br />
long-term <strong>in</strong>vestments? -5… strong disadvantage / 0… average / +5… strong advantage<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study; PISA study 2006; QS world university rank<strong>in</strong>g 2010<br />
2.8<br />
2.1<br />
1.8<br />
1.7<br />
1.3<br />
1.1<br />
0.6<br />
0.6<br />
0.4<br />
0.3<br />
RANKINGS<br />
> In QS world university rank<strong>in</strong>g<br />
2010, <strong>CEE</strong> countries did not<br />
achieve any top results <strong>–</strong> Only<br />
AUT <strong>and</strong> CZE have<br />
universities <strong>in</strong> <strong>the</strong> top 300<br />
> In <strong>the</strong> latest PISA rank<strong>in</strong>g, CZE<br />
is number 10, followed by<br />
Austria (12), Hungary (15),<br />
Pol<strong>and</strong> (17) <strong>and</strong> Slovakia (22)<br />
<strong>–</strong> o<strong>the</strong>r <strong>CEE</strong> countries did not<br />
participate<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
27
5 HUMAN CAPITAL<br />
The dem<strong>and</strong> <strong>for</strong> soft skills will <strong>in</strong>crease <strong>–</strong> Language skills are<br />
on top of <strong>the</strong> agenda<br />
Survey results<br />
REQUIREMENT<br />
Language skills<br />
Personal development<br />
Complexity h<strong>and</strong>l<strong>in</strong>g<br />
Project management<br />
Creativity<br />
Commercial <strong>and</strong><br />
market<strong>in</strong>g abilities<br />
Sales abilities<br />
Technical abilities<br />
Corporate mgmt. abilities<br />
Intercultural abilities<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
2.6<br />
2.6<br />
2.6<br />
2.5<br />
2.4<br />
2.3<br />
2.2<br />
2.1<br />
2.0<br />
1.9<br />
LANGUAGE SKILLS<br />
English<br />
Russian<br />
German<br />
Ch<strong>in</strong>ese<br />
Spanish<br />
French<br />
-5… strongly decreas<strong>in</strong>g /0 … same level /+5 … strongly <strong>in</strong>creas<strong>in</strong>g<br />
3.1<br />
1.7<br />
1.5<br />
1.2<br />
0.3<br />
0.2<br />
COMMENTS<br />
> Good language skills <strong>–</strong><br />
especially German <strong>and</strong><br />
Russian <strong>–</strong> are an advantage<br />
<strong>for</strong> <strong>CEE</strong> countries<br />
> English is develop<strong>in</strong>g from a<br />
<strong>for</strong>eign language to a valuable<br />
bus<strong>in</strong>ess tool<br />
> Nearly all countries <strong>–</strong> with <strong>the</strong><br />
exception of Austria <strong>–</strong> neglect<br />
<strong>in</strong>tercultural abilities<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
28
6 PAN-<strong>CEE</strong> BUSINESS<br />
<strong>CEE</strong> will depend predom<strong>in</strong>antly on Western Europe <strong>in</strong> <strong>the</strong><br />
upcom<strong>in</strong>g decade as well <strong>–</strong> Ch<strong>in</strong>a may be a "bl<strong>in</strong>d spot"<br />
Survey results<br />
North America<br />
1.81<br />
South America<br />
0.62<br />
4.01<br />
EU-151) EU-151) 3.29<br />
<strong>CEE</strong>2) <strong>CEE</strong><br />
1.45<br />
Turkey<br />
Russia 2.85<br />
India<br />
1.42<br />
Ch<strong>in</strong>a<br />
COMMENTS<br />
> Managers view EU-15<br />
countries as <strong>the</strong>ir ma<strong>in</strong><br />
trade partners <strong>and</strong><br />
<strong>in</strong>vestors<br />
1) EU-15: Austria, Belgium, Denmark, F<strong>in</strong>l<strong>and</strong>, France, Germany, Greece, Irel<strong>and</strong>, Italy, Luxembourg, <strong>the</strong> Ne<strong>the</strong>rl<strong>and</strong>s, Portugal, Spa<strong>in</strong>, Sweden <strong>and</strong> <strong>the</strong> United K<strong>in</strong>gdom 2) Excl. Russia<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
2.17<br />
How strong will <strong>the</strong> <strong>in</strong>fluence of <strong>the</strong> follow<strong>in</strong>g regions be on <strong>the</strong> economic development of <strong>the</strong> <strong>CEE</strong> region?<br />
0… no <strong>in</strong>fluence /5… strong <strong>in</strong>fluence<br />
> Pan-<strong>CEE</strong> bus<strong>in</strong>ess will ga<strong>in</strong><br />
importance over <strong>the</strong> <strong>next</strong><br />
decade<br />
> Russia <strong>and</strong> Ch<strong>in</strong>a will play<br />
a significant role<br />
> Turkey is not perceived as<br />
overly important<br />
29
6 PAN-<strong>CEE</strong> BUSINESS<br />
But <strong>in</strong>creas<strong>in</strong>g pan-<strong>CEE</strong> bus<strong>in</strong>ess will reduce <strong>the</strong> dependance<br />
on Western Europe <strong>–</strong> Grow<strong>in</strong>g shares of imports<br />
Imports from <strong>CEE</strong> countries <strong>in</strong> 2009 [%]<br />
22<br />
60<br />
29<br />
17<br />
10<br />
61<br />
Source: Eurostat; Rol<strong>and</strong> <strong>Berger</strong><br />
31<br />
28<br />
10<br />
15<br />
53<br />
62<br />
20<br />
25<br />
51<br />
42<br />
29<br />
33<br />
41<br />
27<br />
25<br />
39<br />
23<br />
36<br />
54<br />
40<br />
19<br />
37<br />
Avg.<br />
2005<br />
Avg.<br />
2009<br />
Imports from new EU-12 ("<strong>CEE</strong>") Imports from old EU-15 Imports from o<strong>the</strong>r countries<br />
16<br />
44<br />
17<br />
21<br />
28<br />
29<br />
52<br />
50<br />
+26%<br />
-4%<br />
+2%<br />
[%]<br />
COMMENTS<br />
> S<strong>in</strong>ce 2005, <strong>the</strong> share of<br />
imports from o<strong>the</strong>r new EU<br />
member countries <strong>in</strong>creased <strong>in</strong><br />
most <strong>CEE</strong> countries by 26%<br />
> The share of imports from<br />
EU-15 decreased by 4%, but<br />
rema<strong>in</strong>s high<br />
> In six countries, <strong>the</strong> share of<br />
imports from o<strong>the</strong>r <strong>CEE</strong><br />
countries is still below 20%,<br />
provid<strong>in</strong>g huge potential <strong>for</strong> <strong>the</strong><br />
future<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
30
6 PAN-<strong>CEE</strong> BUSINESS<br />
The share of exports to o<strong>the</strong>r new EU member countries is<br />
still less than 20%, provid<strong>in</strong>g huge potential <strong>for</strong> <strong>the</strong> future<br />
Exports to <strong>CEE</strong> countries <strong>in</strong> 2009 [%]<br />
15<br />
65<br />
31<br />
20<br />
16<br />
54<br />
31<br />
17<br />
52<br />
32<br />
32<br />
36 26<br />
Exports to new EU-12 ("<strong>CEE</strong>") Exports to old EU-15 Exports from o<strong>the</strong>r countries<br />
Source: Eurostat; Rol<strong>and</strong> <strong>Berger</strong><br />
21<br />
21<br />
59<br />
15<br />
64<br />
20<br />
14<br />
56<br />
30<br />
26<br />
38<br />
14<br />
60<br />
36<br />
35<br />
14<br />
51<br />
Avg.<br />
2005<br />
Avg.<br />
2009<br />
18<br />
21<br />
25<br />
26<br />
53<br />
57<br />
+16%<br />
-7%<br />
+6%<br />
[%]<br />
COMMENTS<br />
> In most <strong>CEE</strong> countries, <strong>the</strong><br />
share of exports to <strong>the</strong> o<strong>the</strong>r<br />
EU-12 states has <strong>in</strong>creased<br />
> In POL, CZE <strong>and</strong> SVK, <strong>the</strong><br />
distribution of exports did not<br />
change significantly<br />
> The share of exports to o<strong>the</strong>r<br />
<strong>CEE</strong> countries is still relatively<br />
low <strong>and</strong> provides potential <strong>for</strong><br />
more <strong>in</strong>tense trade relations<br />
between neighbor<strong>in</strong>g countries<br />
<strong>in</strong> <strong>the</strong> <strong>CEE</strong> region<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
31
7 <strong>CEE</strong> AS BRIDGEHEAD<br />
The geographical position between WE <strong>and</strong> Russia <strong>and</strong><br />
similarities to Western countries viewed as ma<strong>in</strong> advantages<br />
Survey results<br />
FACTOR<br />
Compared to o<strong>the</strong>r countries, what are <strong>the</strong> advantages/disadvantages of your country regard<strong>in</strong>g long-term <strong>in</strong>vestments?<br />
-5… strong disadvantage /0… average /+5… strong advantage<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
Geographical position<br />
Cultural similarity to Western countries<br />
Higher education <strong>and</strong> tra<strong>in</strong><strong>in</strong>g<br />
Primary education<br />
Language skills<br />
Work<strong>for</strong>ce resources<br />
Political <strong>and</strong> social stability<br />
Labor costs<br />
Infrastructure<br />
Innovation, R&D<br />
Fiscal framework<br />
Legal framework<br />
Corruption<br />
Bureaucracy<br />
DISADVANTAGE/<br />
ADVANTAGE<br />
-5 0 5<br />
-1.8<br />
-2.1<br />
-0.4<br />
-0.5<br />
2.8<br />
2.1<br />
1.8<br />
1.7<br />
1.3<br />
1.1<br />
0.6<br />
0.6<br />
0.4<br />
0.3<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
32
7 <strong>CEE</strong> AS BRIDGEHEAD<br />
Russia has a major economic <strong>in</strong>fluence on <strong>CEE</strong> <strong>and</strong> will<br />
keep a strong role as <strong>in</strong>vestor<br />
Survey results<br />
RUSSIA'S INFLUENCE ON<br />
THE COUNTRIES<br />
Ukra<strong>in</strong>e<br />
Croatia<br />
Romania<br />
<strong>CEE</strong> average<br />
Austria<br />
Czech Rep.<br />
Pol<strong>and</strong><br />
-1 0 1 2 3 4 5<br />
-5 0 5<br />
0.5<br />
1.4<br />
1.3<br />
1.3<br />
1.3<br />
1.1<br />
Political<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
2.0<br />
1.3<br />
2.2<br />
2.1<br />
2.4<br />
2.1<br />
2.1<br />
2.1<br />
Economic<br />
RUSSIA'S INFLUENCE AS AN<br />
INVESTOR<br />
Croatia<br />
Ukra<strong>in</strong>e<br />
Czech Rep.<br />
<strong>CEE</strong> average<br />
Austria<br />
Romania<br />
Pol<strong>and</strong><br />
-1 0 1 2 3 4 5<br />
-5 0 5<br />
COMMENTS<br />
> Especially Croatian <strong>and</strong><br />
Ukra<strong>in</strong>ian managers expect<br />
stronger Russian <strong>in</strong>fluence<br />
In your op<strong>in</strong>ion, how will <strong>the</strong> <strong>in</strong>fluence of Russia on <strong>CEE</strong> develop with<strong>in</strong> <strong>the</strong> <strong>next</strong> ten years?<br />
Russia's role <strong>in</strong> <strong>2020</strong> as an important <strong>in</strong>vestor <strong>in</strong> <strong>CEE</strong> will be… -5… less relevant /0… <strong>the</strong> same /+5… more relevant; multiple answers possible<br />
2.4<br />
2.2<br />
2.1<br />
2.0<br />
1.9<br />
1.8<br />
0.8<br />
> Polish managers are skeptical<br />
of Russia's emerg<strong>in</strong>g power<br />
> Except Ukra<strong>in</strong>e, <strong>CEE</strong><br />
managers expect only a small<br />
<strong>in</strong>crease <strong>in</strong> Russian political<br />
<strong>in</strong>fluence<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
33
7 <strong>CEE</strong> AS BRIDGEHEAD<br />
Russian <strong>in</strong>vestments <strong>in</strong> Europe will concentrate on <strong>CEE</strong> <strong>–</strong><br />
Focus on resource-driven <strong>in</strong>dustries<br />
Survey results<br />
TARGET COUNTRY<br />
Ukra<strong>in</strong>e<br />
"New" EU members<br />
Belarus<br />
Serbia<br />
EU-15<br />
O<strong>the</strong>r SEE countries<br />
Turkey<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
30%<br />
21%<br />
34%<br />
46%<br />
45%<br />
65%<br />
61%<br />
TARGET INDUSTRY<br />
Energy & utilities<br />
Chemicals & oil<br />
Metals & m<strong>in</strong><strong>in</strong>g<br />
Real estate<br />
Bank. & <strong>in</strong>surance<br />
Tourism<br />
IT/media/telecom<br />
Eng<strong>in</strong>eer<strong>in</strong>g<br />
Automotive<br />
Cons. goods & retail<br />
Pharma<br />
What will be <strong>the</strong> ma<strong>in</strong> target countries/<strong>in</strong>dustries <strong>for</strong> Russian <strong>in</strong>vestments?<br />
-5… less relevant / 0… <strong>the</strong> same /+5… more relevant; multiple answers possible<br />
14%<br />
11%<br />
8%<br />
6%<br />
15%<br />
31%<br />
26%<br />
56%<br />
46%<br />
87%<br />
79%<br />
COMMENTS<br />
> Ukra<strong>in</strong>e <strong>and</strong> <strong>the</strong> <strong>CEE</strong> EU<br />
members lead <strong>the</strong> rank<strong>in</strong>g<br />
> Belarus <strong>and</strong> Serbia, <strong>the</strong><br />
traditional target countries, are<br />
viewed as not that important<br />
> Russian <strong>in</strong>vestments ma<strong>in</strong>ly<br />
concentrate on resource <strong>and</strong><br />
energy-<strong>in</strong>tensive <strong>in</strong>dustries <strong>–</strong><br />
Diversification needed<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
34
8 TASKS FOR <strong>2020</strong><br />
Raw material shortage will have a major impact on <strong>the</strong><br />
region <strong>and</strong> will boost <strong>in</strong>novation <strong>in</strong> <strong>the</strong> energy sector<br />
Survey results<br />
TENDENCY<br />
IMPORTANCE ∆<br />
0<br />
1 2 3 4 5<br />
Raw materials/energy<br />
3.12<br />
Consolidation of public f<strong>in</strong>ances 2.78 2.97<br />
Technological progress<br />
2.91<br />
Capital markets <strong>in</strong>fluence<br />
2.62 2.96<br />
Demographic development<br />
2.34 3.02<br />
Grow<strong>in</strong>g social imbalance<br />
2.18 2.76<br />
Migration & labor mobility<br />
2.17 2.69<br />
Grow<strong>in</strong>g <strong>in</strong>fluence of <strong>the</strong> state<br />
2.14 2.26<br />
Change of values<br />
2.07 2.35<br />
Climate change<br />
1.76<br />
2.70<br />
Political conflicts/terrorism<br />
1.43<br />
2.63<br />
3.56<br />
0.44<br />
-0.19<br />
0.48<br />
0.34<br />
0.68<br />
0.58<br />
0.52<br />
0.12<br />
0.28<br />
0.94<br />
1.20<br />
Local Global<br />
Which of <strong>the</strong> follow<strong>in</strong>g lead<strong>in</strong>g tendencies will <strong>in</strong>fluence <strong>the</strong> global <strong>and</strong> local economy with<strong>in</strong> <strong>the</strong> <strong>next</strong> ten years?<br />
0… no importance / 5… high importance<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
3.39<br />
COMMENTS<br />
> Raw material shortage<br />
<strong>and</strong> <strong>the</strong> dependency on<br />
fossil fuels are on top of<br />
<strong>the</strong> agenda<br />
> The consolidation of<br />
public f<strong>in</strong>ances has only<br />
regional importance<br />
> Demographic development<br />
<strong>and</strong> climate<br />
change are only<br />
important on a global<br />
level <strong>–</strong> <strong>CEE</strong> managers<br />
underestimate <strong>the</strong><br />
relevance <strong>for</strong> <strong>CEE</strong><br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
35
8 TASKS FOR <strong>2020</strong><br />
Renewable energy is viewed as <strong>the</strong> primary task <strong>for</strong> <strong>the</strong> <strong>next</strong><br />
decade <strong>–</strong> Investment boost needed to reach EU targets<br />
Europe <strong>2020</strong> target <strong>–</strong> RES 1) as share of energy supply [%]<br />
34.0<br />
23.3<br />
13.0<br />
6.1<br />
25.0<br />
16.0<br />
2005 <strong>2020</strong> target<br />
1) RES = Renewable Energy Sources<br />
Source: Rol<strong>and</strong> <strong>Berger</strong>; Eurostat<br />
7.2 15.0<br />
4.3<br />
6.8<br />
13.0<br />
14.0<br />
24.0<br />
17.8<br />
9.4<br />
16.0<br />
COMMENTS<br />
> The "20/20/20" climate/energy targets<br />
should be met <strong>–</strong> <strong>in</strong>clud<strong>in</strong>g an <strong>in</strong>crease<br />
to 30% <strong>in</strong> emissions reductions if <strong>the</strong><br />
conditions are right<br />
> Goal of EU is to realize a "Resourceefficient<br />
Europe" to help decouple<br />
economic growth from <strong>the</strong> use of<br />
resources, support <strong>the</strong> shift toward a<br />
low-carbon economy, <strong>in</strong>crease <strong>the</strong><br />
use of renewable energy sources,<br />
modernize <strong>the</strong> transport sector <strong>and</strong><br />
promote energy efficiency<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
36
8 TASKS FOR <strong>2020</strong><br />
<strong>CEE</strong> managers view <strong>the</strong> consolidation of public f<strong>in</strong>ances as<br />
very important <strong>–</strong> Debt rates below WE, but grow<strong>in</strong>g quickly<br />
General government debt 1) , 2009 [% of GDP]<br />
Change<br />
2008-<br />
2009 [%]<br />
Country<br />
rat<strong>in</strong>g<br />
S&P<br />
+5.1 +6.6 +6.0 +2.0 +8.4 +6.8 +9.3 -5.7 +9.9 +3.9 +0.7 +0.1<br />
78.0<br />
69.3<br />
46.8<br />
46.5<br />
37.1<br />
34.1<br />
31.8<br />
31.3<br />
30.0<br />
24.0<br />
14.8<br />
HUN AUT HRV POL SVK CZE SVN SRB UKR ROU BGR RUS<br />
BBB<br />
neg.<br />
AAA<br />
stable<br />
BBB<br />
neg.<br />
Source: Eurostat; CIA World Factbook; Rol<strong>and</strong> <strong>Berger</strong><br />
A<br />
stable<br />
A+<br />
stable<br />
A<br />
pos.<br />
AA<br />
stable<br />
BB<br />
stable<br />
B+<br />
stable<br />
BB+<br />
stable<br />
BBB<br />
stable<br />
1) The general government sector comprises central government, state government, local governments <strong>and</strong> social security funds<br />
6.3<br />
BBB<br />
stable<br />
COMMENTS<br />
> With <strong>the</strong> exception of<br />
Hungary, government<br />
debt rates are much less<br />
than those of <strong>the</strong> EU-15<br />
> Governmental debt saw<br />
relatively moderate<br />
growth of 4.2% <strong>in</strong> 2009 <strong>–</strong><br />
But <strong>in</strong> some countries,<br />
deficits are grow<strong>in</strong>g<br />
much faster<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
37
9 GROWTH INDUSTRIES<br />
Regional growth <strong>in</strong>dustries are energy & utilities, IT & telecom<br />
<strong>and</strong> pharma & healthcare <strong>–</strong> Implementation?<br />
Survey results<br />
INDUSTRY<br />
Energy & utilities<br />
IT & telecom<br />
Pharma & healthcare<br />
Consumer goods & retail<br />
Eng<strong>in</strong>eer<strong>in</strong>g<br />
Bank<strong>in</strong>g & <strong>in</strong>surance<br />
Construction<br />
Public sector<br />
Automotive<br />
Oil & gas<br />
Chemicals<br />
Metals & m<strong>in</strong><strong>in</strong>g<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
DEVELOPMENT<br />
-5 0 5<br />
-0.3<br />
How relevant will <strong>the</strong> follow<strong>in</strong>g <strong>in</strong>dustries be <strong>for</strong> your country?<br />
5… lose importance / 0… rema<strong>in</strong> on same level / +5… ga<strong>in</strong> importance<br />
2.2<br />
2.0<br />
1.9<br />
1.8<br />
1.5<br />
1.4<br />
1.1<br />
0.6<br />
0.6<br />
0.6<br />
0.4<br />
COMMENTS<br />
> Current focus on automotive,<br />
metals & m<strong>in</strong><strong>in</strong>g <strong>and</strong> chemicals<br />
> <strong>CEE</strong> also successful <strong>in</strong><br />
mach<strong>in</strong>ery <strong>and</strong> food<br />
process<strong>in</strong>g<br />
> Future <strong>in</strong>dustries play only<br />
a m<strong>in</strong>or role<br />
> Shift toward future<br />
<strong>in</strong>dustries needed<br />
!<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
38
9 GROWTH INDUSTRIES<br />
The service sector will see a boom <strong>in</strong> <strong>the</strong> <strong>next</strong> decade <strong>–</strong><br />
More <strong>and</strong> more mature economies push development<br />
Survey results<br />
COUNTRY<br />
Pol<strong>and</strong><br />
Czech Republic<br />
Austria<br />
<strong>CEE</strong> average<br />
Croatia<br />
Ukra<strong>in</strong>e<br />
Romania<br />
EXPECTED DEVELOPMENT<br />
Shift toward<br />
Shift toward<br />
<strong>in</strong>dustries -1 4 services<br />
In <strong>the</strong> <strong>next</strong> decade, will <strong>the</strong>re be a tendency <strong>in</strong> your country toward <strong>in</strong>dustries or services?<br />
-5… strong shift to <strong>in</strong>dustries / 0… rema<strong>in</strong> on same level / +5… strong shift to services<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
1.3<br />
1.3<br />
1.6<br />
1.5<br />
1.9<br />
1.8<br />
2.1<br />
COMMENTS<br />
> Over <strong>the</strong> <strong>next</strong> ten years, <strong>CEE</strong><br />
will not experience "re- "re<strong>in</strong>dustrialization"<br />
> Pol<strong>and</strong>, Czech Republic <strong>and</strong><br />
Austria will face a strong shift<br />
toward services with<strong>in</strong> <strong>the</strong> <strong>next</strong><br />
decade<br />
> Croatia, Ukra<strong>in</strong>e <strong>and</strong> Romania<br />
will see only a moderate shift<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
39
10 FUTURE BUSINESS BRANCHES<br />
The ma<strong>in</strong> future growth drivers are viewed as be<strong>in</strong>g energy<br />
related topics (energy efficiency, renewables) <strong>and</strong> IT solutions<br />
Survey results<br />
<strong>CEE</strong><br />
Energy efficient construction<br />
Renewable energies<br />
IT solutions<br />
Susta<strong>in</strong>able tourism<br />
Secondary healthcare market<br />
Biotechnology<br />
Organic <strong>and</strong> ethical products<br />
E-mobility<br />
RELEVANCE<br />
How relevant will <strong>the</strong> follow<strong>in</strong>g future topics be <strong>for</strong> your country?<br />
0… not relevant /5… extremely relevant<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
Not<br />
Extremely<br />
0relevant relevant5<br />
1.9<br />
2.2<br />
2.2<br />
2.5<br />
2.8<br />
2.7<br />
3.0<br />
3.0<br />
COMMENTS<br />
> Energy-related branches will<br />
be <strong>the</strong> ma<strong>in</strong> future <strong>in</strong>dustries <strong>–</strong><br />
Energy-efficient construction<br />
<strong>and</strong> renewables are top 3 <strong>in</strong><br />
every country<br />
> IT solutions lead <strong>the</strong> rank<strong>in</strong>g <strong>in</strong><br />
Pol<strong>and</strong> <strong>and</strong> Ukra<strong>in</strong>e <strong>and</strong> are<br />
ranked No. 2 <strong>in</strong> <strong>the</strong> Czech<br />
Republic<br />
> E-mobility <strong>and</strong> organic<br />
products are not viewed as<br />
important future bus<strong>in</strong>ess<br />
models<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
40
C Summary<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
41
Summ<strong>in</strong>g up <strong>the</strong> f<strong>in</strong>d<strong>in</strong>gs <strong>–</strong> The <strong>CEE</strong> region has chosen its<br />
path <strong>and</strong> to pick up speed considerably<br />
Conclusions<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
<strong>CEE</strong> has to redef<strong>in</strong>e itself <strong>–</strong> Austria's <strong>and</strong> Russia's roles as gatekeepers are chang<strong>in</strong>g<br />
Companies must consider <strong>the</strong> EU as one home market with 500 m <strong>in</strong>habitants. Additionally,<br />
<strong>the</strong>y should put a focus on pan-<strong>CEE</strong> bus<strong>in</strong>ess based on self-susta<strong>in</strong><strong>in</strong>g bus<strong>in</strong>ess models<br />
Governments will have to (f<strong>in</strong>ally) do <strong>the</strong>ir homework: streng<strong>the</strong>n <strong>the</strong>ir <strong>in</strong>stitutions (less<br />
bureaucracy, corruption), develop<strong>in</strong>g public services (health system, educational system, social<br />
& pension system) <strong>and</strong> improv<strong>in</strong>g <strong>the</strong> <strong>in</strong>frastructure<br />
<strong>CEE</strong> should not copy bad budget behavior of Western Europe<br />
The importance of global growth markets <strong>and</strong> growth <strong>in</strong>dustries has not yet been<br />
adequately recognized as such so far. Companies will need to redesign <strong>the</strong>ir bus<strong>in</strong>ess<br />
models <strong>and</strong> footpr<strong>in</strong>ts <strong>for</strong> a globalized world<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
42
D<br />
Appendix <strong>–</strong> Country analysis<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
43
A SPECIAL LOOK AT AUSTRIA<br />
Austria has to redef<strong>in</strong>e its role as a gatekeeper to Eastern<br />
Europe<br />
Austria<br />
COUNTRY FACTS<br />
> Population (millions) 8.4<br />
> GDP/capita (USD) 45,989<br />
> Unemployment rate 4.8%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 1.5%<br />
<strong>–</strong> Industry 29.8%<br />
<strong>–</strong> Services 68.7%<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> study; CIA World Factbook, WEF GCR 2010<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Political <strong>and</strong> social<br />
stability<br />
> Legal framework<br />
> Infrastructure<br />
> Geographical position<br />
> Cultural similarity to<br />
Western countries<br />
> Primary education<br />
> Corruption<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Fiscal framework<br />
> Innovation, R&D<br />
> Language skills<br />
> Work<strong>for</strong>ce resources<br />
> Bureaucracy<br />
> Labor costs<br />
CONCLUSIONS<br />
> Due to <strong>the</strong> economic crisis,<br />
Austria has lost <strong>the</strong> benefit of<br />
<strong>the</strong> boom<strong>in</strong>g <strong>CEE</strong> region<br />
> Austria's economy will see only<br />
moderate economic development<br />
<strong>–</strong> bus<strong>in</strong>ess volume will stagnate<br />
<strong>and</strong> <strong>the</strong> number of jobs will decl<strong>in</strong>e<br />
> Especially <strong>the</strong> stable markets of<br />
Central Europe will be <strong>the</strong> ma<strong>in</strong><br />
markets until <strong>2020</strong><br />
> The ag<strong>in</strong>g society will be <strong>the</strong> ma<strong>in</strong><br />
challenge over <strong>the</strong> <strong>next</strong> decade<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
44
A SPECIAL LOOK AT CROATIA<br />
Croatia has to start structural re<strong>for</strong>ms immediately <strong>and</strong><br />
position itself as a hub <strong>for</strong> Sou<strong>the</strong>astern Europe<br />
Croatia<br />
COUNTRY FACTS<br />
> Population (millions) 4.4<br />
> GDP/capita (USD) 14,243<br />
> Unemployment rate 16.1%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 6.3%<br />
<strong>–</strong> Industry 28.1%<br />
<strong>–</strong> Services 65.6%<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Geographical position<br />
> Cultural similarity to<br />
Western countries<br />
> Infrastructure<br />
> Primary education<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Language skills<br />
> Political <strong>and</strong> social<br />
stability<br />
> Innovation, R&D<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> Study; CIA World Factbook, WEF GCR 2010<br />
> Work<strong>for</strong>ce resources<br />
> Fiscal framework<br />
> Labor costs<br />
> Legal framework<br />
> Bureaucracy<br />
> Corruption<br />
CONCLUSIONS<br />
> Croatia switched from <strong>the</strong> most<br />
optimistic to most pessimistic <strong>–</strong><br />
Bus<strong>in</strong>ess volume <strong>and</strong> jobs will<br />
grow slowly from a low basis<br />
> The consolidation of public<br />
f<strong>in</strong>ances will be on top of <strong>the</strong><br />
agenda, grow<strong>in</strong>g social imbalance<br />
is ranked No. 4<br />
> Croatian managers expect more<br />
Russian <strong>in</strong>fluence <strong>and</strong> a<br />
stagnat<strong>in</strong>g EU<br />
> Ma<strong>in</strong> future <strong>in</strong>dustry will be<br />
susta<strong>in</strong>able tourism<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
45
A SPECIAL LOOK AT THE CZECH REPUBLIC<br />
The Czech Republic is on <strong>the</strong> way towards an advanced<br />
economy with a focus on high tech<br />
Czech Republic<br />
COUNTRY FACTS<br />
> Population (millions) 10.4<br />
> GDP/capita (USD) 18,557<br />
> Unemployment rate 8.1%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 2.3%<br />
<strong>–</strong> Industry 37.2%<br />
<strong>–</strong> Services 60.5%<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Geographical position<br />
> Cultural similarity to<br />
Western countries<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Political <strong>and</strong> social<br />
stability<br />
> Primary education<br />
> Labor costs<br />
> Work<strong>for</strong>ce resources<br />
> Fiscal/legal framework<br />
> Innovation, R&D<br />
> Infrastructure<br />
> Language skills<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> Study; CIA World Factbook, WEF GCR 2010<br />
> Bureaucracy<br />
> Corruption<br />
CONCLUSIONS<br />
> Czech managers are optimistic<br />
about <strong>the</strong> <strong>next</strong> ten years <strong>–</strong><br />
Bus<strong>in</strong>ess volume will <strong>in</strong>crease<br />
but <strong>the</strong> number of jobs will<br />
stagnate<br />
> Tech. progress viewed as <strong>the</strong><br />
ma<strong>in</strong> trend over <strong>the</strong> <strong>next</strong> decade<br />
> Czech Republic will cont<strong>in</strong>ue to<br />
establish itself as a high-tech<br />
bus<strong>in</strong>ess location<br />
> Institutional re<strong>for</strong>ms needed <strong>–</strong><br />
Corruption <strong>and</strong> bureaucracy are<br />
<strong>the</strong> ma<strong>in</strong> hurdles <strong>for</strong> development<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
46
A SPECIAL LOOK AT POLAND<br />
Pol<strong>and</strong> will cont<strong>in</strong>ue to catch up <strong>–</strong> Infrastructure <strong>and</strong><br />
<strong>in</strong>stitutions will rema<strong>in</strong> weaknesses<br />
Pol<strong>and</strong><br />
COUNTRY FACTS<br />
> Population (millions) 38.1<br />
> GDP/capita (USD) 11,288<br />
> Unemployment rate 8.9%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 4.6%<br />
<strong>–</strong> Industry 28.1%<br />
<strong>–</strong> Services 67.3%<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Cultural similarity to<br />
Western countries<br />
> Geographical position<br />
> Work<strong>for</strong>ce resources<br />
> Primary education<br />
> Language skills<br />
> Labor costs<br />
> Political <strong>and</strong> social<br />
stability<br />
> Innovation, R&D<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> Study; CIA World Factbook, WEF GCR 2010<br />
> Legal framework<br />
> Corruption<br />
> Infrastructure<br />
> Fiscal framework<br />
> Bureaucracy<br />
CONCLUSIONS<br />
> Pol<strong>and</strong> will cont<strong>in</strong>ue its catch-up<br />
process <strong>–</strong> On <strong>the</strong> one h<strong>and</strong>, <strong>the</strong><br />
country will rema<strong>in</strong> an attractive<br />
workbench, but on <strong>the</strong> o<strong>the</strong>r, it will<br />
face a strong shift toward services<br />
> Higher education <strong>and</strong> <strong>the</strong> market<br />
size are Pol<strong>and</strong>'s ma<strong>in</strong><br />
advantages<br />
> Infrastructure <strong>and</strong> <strong>in</strong>stitutions as<br />
well as tax regulations are a<br />
disadvantage <strong>–</strong> Re<strong>for</strong>ms needed<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
47
A SPECIAL LOOK AT ROMANIA<br />
Romania faces a challeng<strong>in</strong>g decade <strong>–</strong> Attractiveness as a<br />
workbench decl<strong>in</strong>es, capital market represents a hurdle<br />
Romania<br />
COUNTRY FACTS<br />
> Population (millions) 21.3<br />
> GDP/capita (USD) 7,542<br />
> Unemployment rate 7.8%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 12.4%<br />
<strong>–</strong> Industry 35.0%<br />
<strong>–</strong> Services 52.6%<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Language skills<br />
> Labor costs<br />
> Geographical position<br />
> Cultural similarity to<br />
Western countries<br />
> Work<strong>for</strong>ce resources<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Primary education<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> Study; CIA World Factbook, WEF GCR 2010<br />
> Innovation, R&D<br />
> Fiscal framework<br />
> Political <strong>and</strong> social<br />
stability<br />
> Legal framework<br />
> Bureaucracy<br />
> Corruption<br />
> Infrastructure<br />
CONCLUSIONS<br />
> Romanian managers are most<br />
optimistic about bus<strong>in</strong>ess volume<br />
<strong>and</strong> <strong>the</strong> number of jobs <strong>in</strong> <strong>the</strong>ir<br />
country; <strong>the</strong>y believe <strong>in</strong> <strong>CEE</strong> as<br />
one management region<br />
> But high unit labor costs (94% of<br />
WE average) are a disadvantage<br />
as a production location<br />
> Capital markets are an important<br />
topic <strong>–</strong> Access to f<strong>in</strong>anc<strong>in</strong>g is <strong>the</strong><br />
ma<strong>in</strong> problem <strong>for</strong> companies<br />
> Lack of <strong>in</strong>frastructure <strong>and</strong><br />
<strong>in</strong>stitutions<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
48
A SPECIAL LOOK AT UKRAINE<br />
Ukra<strong>in</strong>e will stabilize on a low level <strong>and</strong> has <strong>the</strong> chance to<br />
develop <strong>in</strong>to a bridgehead between <strong>CEE</strong> <strong>and</strong> Russia<br />
Ukra<strong>in</strong>e<br />
COUNTRY FACTS<br />
> Population (millions) 45.7<br />
> GDP/capita (USD) 2,542<br />
> Unemployment rate 8.8%<br />
> GDP composition<br />
<strong>–</strong> Agriculture 9.8%<br />
<strong>–</strong> Industry 30.7%<br />
<strong>–</strong> Services 59.5%<br />
MANAGER ASSESSMENT<br />
Above <strong>CEE</strong> average Below <strong>CEE</strong> average<br />
> Geographical position<br />
> Labor costs<br />
> Work<strong>for</strong>ce resources<br />
> Higher education <strong>and</strong><br />
tra<strong>in</strong><strong>in</strong>g<br />
> Primary education<br />
> Language skills<br />
> Cultural similarity to<br />
Western countries<br />
Source: Rol<strong>and</strong> <strong>Berger</strong> <strong>–</strong> <strong>CEE</strong> <strong>2020</strong> Study; CIA World Factbook, WEF GCR 2010<br />
> Innovation, R&D<br />
> Infrastructure<br />
> Political <strong>and</strong> social<br />
stability<br />
> Fiscal framework<br />
> Legal framework<br />
> Bureaucracy<br />
> Corruption<br />
CONCLUSIONS<br />
> Ukra<strong>in</strong>ian managers are slightly<br />
optimistic <strong>–</strong> bus<strong>in</strong>ess volume <strong>and</strong><br />
<strong>the</strong> number of jobs will rise<br />
> Ukra<strong>in</strong>ian managers are most<br />
skeptical about <strong>the</strong> fur<strong>the</strong>r<br />
development of <strong>CEE</strong> as one<br />
management region <strong>and</strong> expect<br />
a strong shift toward subregions<br />
(CIS)<br />
> Political <strong>in</strong>stability, corruption,<br />
bureaucracy <strong>and</strong> access to<br />
f<strong>in</strong>anc<strong>in</strong>g are considered to be<br />
<strong>the</strong> ma<strong>in</strong> disadvantages<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
49
E<br />
Appendix <strong>–</strong> Study authors<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
50
About <strong>the</strong> authors<br />
DR. VLADIMIR<br />
PREVEDEN<br />
> Partner <strong>in</strong> <strong>the</strong> Vienna Office<br />
<strong>and</strong> Manag<strong>in</strong>g Partner <strong>for</strong><br />
Sou<strong>the</strong>astern Europe<br />
MATTHIAS<br />
STURM<br />
Contact: office_vienna@rol<strong>and</strong>berger.com; Freyung 3/2/10, 1010 Vienna, Austria<br />
Source: Rol<strong>and</strong> <strong>Berger</strong><br />
> Market<strong>in</strong>g Coord<strong>in</strong>ator <strong>for</strong> <strong>CEE</strong>,<br />
based <strong>in</strong> Rol<strong>and</strong> <strong>Berger</strong>'s<br />
Vienna office<br />
MARLENA<br />
KOPPENDORFER<br />
> Global Market<strong>in</strong>g<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
51
It's character that creates<br />
impact!<br />
<strong>CEE</strong>_<strong>in</strong>_<strong>2020</strong>_Study.pptx<br />
52