History, Politics, Economy and Startups in Slovenia.

Slovenia is a wonder-kid country.
For the past two thousands years the territory of present-day Slovenia had been part of so many kingdoms, duchies, empire and states that listing all of them looks like reading the brief history of Europe: the Roman Empire, Samo Kingdom, Avar State, the Carolingian Empire, Habsburgs Realm, Ottoman Empire, the Republic of Venice, the Austrian Empire, Austria-Hungary, Kingdom of Serbs and Kingdom of Yugoslavia, Nazi Germany, Fascist Italy and Socialist Yugoslavia.
Slovenia had obtained its full independence after the Then-Day War with the Yugoslav People’s Army in 1991. With only 10% of Yugoslavia’s population, Slovenia, however, generated more than 25% of Yugoslavia GDP. Slovenia economy is well diversified. Unlike most of its neighbors, economy of Slovenia is only 5% agriculture based. Other contributors are machinery production, pharmaceutical, financial services, tourism. Slovenia has an export orientated economy which provides this country with both benefits and downsides of the globalization.
Financial crisis of 2008 lead to significant decrease in Slovenian growth rate (-6%). However, the Republic quickly recovered from this shock and today with its per capita exceeding $21,000 (85% of the European average) Slovenia is one of the most prosperous economies in Eastern Europe.
Slovenia is a stable multi-party democracy where the Parliament — unicameral, 90-members National Assembly — includes six political parties: pro-government liberal Modern Center Party (35 seats), centrist Democratic Party of Pensioners (11 seats), Social Democrats (6 seats), opposition Slovenian Democratic Party (19 seats), United Left (6 seats) and New Slovenia (5 seats). Borut Pahor is the current President of Slovenia.
Slovenian competitive manufacturing sector provides a long-term demand for fledgling high-tech startups exploring B2B module. Internet penetration rate in Slovenia is one of the highest in Eastern Europe, reaching more than 70% of the population, and mobile phone usage is also closing fast there. Geographical proximity to EU, high-middle income population, growing economy as well as open-mined politics of local government have built a strong base for prosperous startup ecosystem in Slovenia.
On the other hand, in a past several years, many young Slovenians had made a decision to relocate in Western European countries as unemployment rate continued to rise up to 10% (now stands at 8%). That created a shortage for qualified personnel for local tech enterprises. Additionally, taxes are high there (reaching 50% on larger wages, which are characteristic for IT sector) and Slovenian 2 million population isn’t large enough to foster the fast expansion of Internet companies.
Many Slovenian founders have been looking to explore European Union markets but the competition has proved to be much steeper there. Eastern Europe presents now a better opportunities for them in a variety of Internet and mobile based services such as e-commerce, FinTech, marketplaces and entertainments.
Business Notes for Startups Founders:
- political climate: friendly;
- economic climate: moderately friendly;
- regions to focus: Eastern Europe;
- industries to focus: FinTech, marketplaces, e-commerce, entertainment, tourism;
- major limitations: small population, brain drainage, high taxes;
- stimulus: manufacturing base, expanding economy, middle-income population (per-capita over $20,000), strong links to EU;
- opportunities: to compete on Easter European markets.