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Information & CommunicationsTechnology Sectorin SLOVAKIA
ENGLISH EDITIONAUGUST 2019
SARIOSLOVAK INVESTMENT ANDTRADE DEVELOPMENT AGENCY
GOODIDEASLOVAKIA
Paris
London
MadridLisbon
Amsterdam
Dublin
Rome
Vienna
Bratislava
Prague
Berlin Warsaw
Athens
Zagreb
Ljubljana
Budapest
Sofia
Bucharest
Kiev
Moscow
Copenhagen
Bern
Brussels
OsloStockholm
Helsinki
Tallinn
Riga
VilniusKaliningradMinsk
Chisinau
SarajevoBelgrade
Podgorica
Tirana
Skopje
Luxembourg
Edinburgh
300 million clients in a radius
of 1,000 km
600 million clients in a radius
of 2,000 km
Information & Communications Technology (ICT) Sector in Slovakia
The purpose of this publication is to introduce Slovakia's dynamically expanding ICT sector — activities especially related to telecommunication, computer programming or internet services& present why Slovakia is an outstandingdestination for setting up ICT businesses and outsourcing.
total area 49,035 km2
population 5.4 millioncapital city Bratislavamember of European Union,Euro-zone, Schengen, OECD,WTO, NATOtime zone GMT +1 hour
1 www.sario.sk
ICT in Slovakiaat a Glance
Adaptable, educated and cost-effective workforce
Well-developed ICT institutional network
The highest labour productivityin the region
Strategic geographical location from the perspective of time zonation
Political & economic stability
High quality data & network coverage
Special tax regime for intellectual property revenues (patent box)
Additional tax deduction for R&D expenses up to 150% from 2019 (announced by
government)
Euro currency as one of the few in CEE
Attractive investment incentives for the ICT sector
1
3
2
5
6
4
8
9
7
10
Top Reasons to Establish an ICT Company in Slovakia
The ICT sector plays an important role in the Slovak economy and has significant potentialfor the growth. Due to a favorable combination of business advantages Slovakia has become an attractive destination for ICT investors.
ICT's contribution to Slovakia's GDPSignificant footprint in the Slovakeconomy
ICT share on the total employmentThe sector creates more than 67,000 job opportunities
Growing employment in the ICT sectorThe total number of employees in thesector grew by 53% between 2008and 2017
Value added per employeeThe value added per employee of top 100 IT companies ranked by revenue reaches over 70 ths. eur
ICT AdoptionBased on the Global CompetitivenessReport, Slovakia is the best in ICTadoption among Visegrad group countries(Poland, Czechia, Hungary, Slovakia)
4.03%
2.63%
53%
70 THS.EUR
1st So
urce
: Sta
tistic
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ffice
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ompe
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8, S
ARIO
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18
2 www.sario.sk
3 www.sario.sk
The Slovak labour force is perceived by foreign investors as educated, motivated, adaptable to culturally different management styles with great multilingual competences and very positive attitude to work habits.
The Most Common Foreign Languages Taught at Slovak Secondary Schools% of all students learning foreign languages
Source: Slovak Centre of Scientific & Technical Information, 2018, Eurostat, 2017
Source: Digital Economy and Society Index Report, 2018, Eurostat, 2018
93%
English
42%
German
13%
Russian
4%
French
QualifiedLabour Force
LANGUAGE COMPETENCES88% of Slovaks speak at least one other language besides their mother tongue.
Multilingualism is rising also among young generation. Students learn at least one foreign language already at primary school and continue these studies at higher levels.
ICT COMPETENCES OF SLOVAK LABOUR FORCEICT technologies became an integrated part of the daily life in Slovakia.
Their role continues to grow which is reflected by steadily raising adaptability of the Slovak population to ICT technologies.
4GCoverage
Individuals Using Internet
Households with Access to the Internet
% of populationactively using internet is
continuously increasing (+4% in comparison with the
previous year)
More than2/3 of all households
in Slovakia are connected to the internet
4G coverage of households increased to 82% (+11% in comparison with 2017),
furthemore 5G coverageis in preparation
82% 89% 81%
4 www.sario.sk
DUAL EDUCATION*As a pioneer in this field, since the
academic year 2013/2014 T–Systems has implemented ICT dual education initiative
where students receive 70% of practical education.
INDIVIDUAL PROGRAMST–Systems Slovakia, in cooperation
with the Faculty of Business Economicsof the University of Economics in Bratislava,
launched the Honoris PM Program withthe focus on project management.
SKILLS FOR SUCCESS —FROM UNIVERSITY TO WORKPLACE
At the Faculty of Economics of theTechnical University in Košice, experts
from T-Systems are involved in teachingthe subject of SAP, used by most
of the centres.
students enrolled in ICT study fields
graduates of ICT study fields per year
10,387 2,855
7 ICT Faculties at 6 Slovak Universities Success Stories of T–Systems In Košice
ICT Related Education in Slovakia
Almost half of secondary school graduateskeep on studying at universities, thus creatingqualified and skilled labour force. Programs includingICT studies are becoming more and more popular& sought after by young generation.
Besides solely ICT programs there are new study trends focused on game
production, digital application design and painting, animation, sound production
and concept art of video and digital games provided by wide range of private and
public educational institutions producing more than 500 graduates yearly.
ACCADEMIC PARTNERSHIPS
*Note: Education and trainingadapted to the employer's requirements
at secondary grammar schools.Source: Slovak Centre of Scientific &
Technical Information, 2018,SARIO, T-Systems
Universities & Academies with Specific Study Fields Related to
Game Industry
10
Inside the SlovakICT Market
5 www.sario.sk
23.9%
IT Service Market in Slovakia
ApplicationSupport
23.9% Other
Tailor-made Software Development
Outsourcing
17.9%
16%
New Application
Projects9%
IT Security
1.1%
Source: Trend, 2019
The majority of IT services in Slovakia arecomposed by application support and othertailor–made services (such as helpdesk, network administration, cloud storage, remote support, etc.) followed by tailor-made software developmentand outsourcing.
8.2%Hardware
Services
6 www.sario.sk
Competitive Salaries in Slovak ICT Sector
Source: Grafton Recruitment Slovakia, 2019
POSITIONAREA
Tech
nica
l Su
ppor
tSW
Dev
elop
men
tIT
Con
sult
ing
Oth
er
Technical Support Team Leader
1,5001,5001,900
MINMINMIN
1,9001,9002,700
MAXMAXMAX
1,4001,4001,600 1,9001,9002,200
2,1002,2002,500 2,9003,0003,200
2,5002,5002,800 3,5003,5004,000
2,0002,0002,200 2,7002,8003,500
1,4001,5001,700 1,9002,0002,200
8008001,200 1,0001,0001,500
1,7001,8002,000 2,8002,8003,500
1,3001,4001,600 2,3002,4003,000
2,1002,2002,500 2,7002,8003,500
1,200
1,200
1,400
1,200
1,500
1,600
2,400
1,800
2,500
1,900
3,000
2,500
Technical Support Level 1
SW Technical Lead
ERP Developer
Network Engineer (3—5 years experience)
Linux SystemAdiministrator
Window Administrator
SW Engineer (C++, .Net, Java, Javascript), 1—3 years experienceSW Engineer (C++, .Net, Java, Javascript),3 and more years experience
Business Analyst (more than 3 years of experience)
BI Consultant
ERP Consultant
AVERAGE GROSS MONTHLY SALARY IN EUR (SELECTED POSITIONS)
OTHER REGIONSKOŠICEBRATISLAVA
Although salaries in the ICT sector are above the Slovak average, in comparison with the Western EU countries remain significantly lower and still competitive in the CEE region.
Differencesin salaries occur
also on the regional levelin Slovakia allowing
the investors to explore regions outside the
main hubs.
7 www.sario.sk
ICT Companies in Slovakia
The ICT Sector has a solid position in the Slovakeconomy, what is demonstrated by the presence of foreign–owned companies as well as strongly growing domestic companies.
TOP ICT EMPLOYERS — IT & Telecommunication Service (TS) Providers in Slovakia
COMPANY NAMECOUNTRY
ORIGINHQ EMPLOYEESFIELD
Germany Košice 3,853
Germany Bratislava 3,526
United States Bratislava 1,996
France Bratislava 1,161
Ireland Bratislava 1,055
Slovakia Bratislava 797
United States
Germany
Czechia
Austria
Israel
Slovakia
United States
Slovakia
France
Germany
Slovakia
Slovakia
Germany
Slovakia
Bratislava
Bratislava
Bratislava
Nitra
Košice
Bratislava
Košice
Bratislava
Bratislava
Bratislava
Bratislava
Bratislava
Bratislava
Bratislava
768
713
679
120
503
447
387
297
269
264
237
237
203
372
Slovak Telekom
T–Systems Slovakia
DXC Technology Slovakia
Accenture
IBM Slovensko
Orange Slovensko
Eset
Siemens
O2 Slovakia
Uniqa Group Service Center Slovakia
Ness KE
Asseco CentralEurope
GlobalLogic
Soitron
Tempest
Atos
PosAm
Slovanet
Datalan
SAP Slovensko
Source: Register of Financial Statements (2018—2019), Trend, 2019, SARIO
IT
TS
IT
TS
IT
IT
IT
IT
TS
IT
IT
IT
IT
IT
IT
IT
TS
IT
IT
IT
Diversification of Telecommunication
Segment
Traditional activities oftelecommunication operators aregradually expanding beyond mere
provision of telecommunication services. Building a diversified portfolio enriched by internet sales or IT services, data centers
or sofware houses, is becoming an integrated part of their
business.
Increaseof profitability
in telecommunicationsector in 2018
13.3%
8 www.sario.sk
Notable Slovak Patents
Did you know that a Slovak companies stands behind numerous globally well-known products? Here are some examples of successful Slovak brands.
Source: SARIO
ESETProtects users in
180 countriesOne of the global leaders in security
software development including awardwinning NOD32® Antivirus
NG AVIATIONOne of a kind software
for safe & smooth aviationNG Aviation is an unique platform for
digitization of aeronautical data making Aviation digital for Airports, Air Navigation
Service Provider and Airlines
RESCOOne of the global leaders in developing
cross-platform mobile software solutionsResco Cloud solution is the ultimate
tool for offline access to data, interactivemaps for businesses & more
PHOTONEOA leading provider of
robotic vision & intelligenceDevelopment of the world's
highest resolution and highestaccuracy 3D camera
solutions
SOITRONSoitron developed
a system for intelligent police carsDeveloper of IT solutions from
integrated communication systems to mobile police units
INNOVATRICSWide range of application — from attendance system to
presidential electionsBiometric Software for identity
management based on fingerprint & face recognition technology
SYGICDeveloper of GPS
navigation software formobile devices and solutions
for businesses. The mostdownloaded offline
navigation in theworld.
Source: SARIO, Deloitte (2018)
9 www.sario.sk
Slovak Fastest Growing IT Companiesof 2018
Ranking positions in top 50 fastestgrowing companies in Central Europe based on the Deloitte Technology Fast 50 Central Europe 2018 programme.
SLI.DOFounded: 2013
An audience-interaction platformfor meetings and events allowing to crowd-source
top questions and engage participants with live polls,currently is used on average at 600
events in U.S. per week.
ITRINITYFounded: 2009
One of the world’s most popularkeyword–analysis tools providing bot
crawlers protection, reliable & affordable email verification and number one SEOtool package with more than 400,000
users worldwide.
ZELENÁ POŠTAFounded: 2012
A Slovak start-up andcurrently the only provider
of 'hybrid' postal transformationservices saving the customer
both cost and time.
INSTAREAFounded: 2008
Specialises in monetising data — processingbig data for mobile providers and banks thanks
to analyzes of people's behavior in the physical world,the main aim is integration of AI into the
automated operations.
PIXEL FEDERATIONFounded: 2007
Developer of browser–basedand mobile games, which are played
by 80 milion users all over theworld on the most popular
social media.
10 www.sario.sk
ITAS
Košice IT Valley
ZAICT
Source: ITAS, Košice IT Valley, ZAICT
ICT SupportingPlatforms
KOŠICE IT VALLEY• Headquartered in Košice• Established in 2007• Slovak association of 55 members and
sympathizers, including the private, public and academic sector
• Cluster Management Excellence Gold Label — in 2015 certificated as the 1st in Central Europe
Activities of Košice IT Valley are carried out in Eastern Slovakia:• Over the years focus on education stays
as one of the priorities, but scope of the cluster itself has gone beyond
• Innovations, research & development, support of collaboration within the cluster and support of investments become an integral part of the cluster
ITAS• Headquartered in Bratislava• Established in 1999• Slovak association of 100+ ICT
companies representing about 80% of the Slovak IT market
• Members employ more than 30,000 people
ITAS runs several projects including:• Digital transformation of private sector
interlinking the ICT sector with other Slovak industries
• Digital transformation of public sector via active cooperation on Digital Coalition project
• Support of educational iniciatives at all levels — from academic programs to requalification
• IT Testing — verification of IT skills among population in Slovakia among population in Slovakia
Bratislava
Trnava
Trenčín
Nitra
BanskáBystrica
Prešov
Košice
Žilina
ZAICT • Headquartered in Žilina• Established in 2008• Slovak association of 14 members,
including the private, public and academic sector
• In 2014 certificated as European Cluster Excellence Initiative Bronze Label
ZAICT activities that are mainly in the Žilina region at:• Interconnection of private sector and
R&D institutions• Supporting lectures of ICT companies
at secondary schools• Offering educational programs and
organizing school camps for raising IT skills
Clusters &
Associations
11 www.sario.sk
Emerging Slovak GameIndustry
The game industry in Slovakia has been gainingpace by uniting a wide range of game developmentstudios. This rapidly growing market with nearlydoubled revenues in the past two years is a result ofthe world's top industry professionals presence and together with relevant educational programs areshaping new generations of game developers.
YEARLY REVENUE (IN MILLION OF EUR)
NUMBER OF PROFESSIONALS
Source: Slovak Game Developers Association, 2019, SkillValue, 2018
Slovakia as a countrywith the best developers in the
world based on the World Rankingof Countries by IT Skills
Number of gamedevelopment companies
& studios in Slovakia
2016 2017
20172016
2018
2018
2019(forecast)
2019(forecast)
Games released since 2001, 108 games in development
Number of employeesplanned to be hired in 2019
1ST
38
444
476436 580 682 158
Distribution ofGame Studios in
Slovakia
47%
21%32%
WEST
MIDDLE
EAST
24.1 36.142.7
56.6
Source: FinStat, Slovak Game Developers Association, 2019
12 www.sario.sk
Top Game Studios in Slovakia — Based on Turnover
Game Development Platformin Slovakia
Game Events in Slovakia
STUDIO EMPLOYEES HQ TURNOVERYEAR OF
ESTABLISHMENT
206
50
45
<20
<20
30
<20
<20
<20
<20
2007
2007
2014
2016
2016
2001
2004
2010
2005
2010
Bratislava
Bratislava
Bratislava
Bratislava
Bratislava
Košice
Košice
Michalovce
Košice
Košice
28,131,334
2,320,058
1,750,123
1,223,043
1,073,318
871,228
315,901
241,789
220,210
186,518
Pixel Federation
PowerPlay Studio
Bohemia Interactive
Blue Brain Games
Cellense
Games Farm
Matsuko
Cypronia
3Division Entertainment
Eastworks
As a civic association supports digital game development as wellas game developers and start–ups in Slovakia. The association helps new talents to improve their artistic, technological and business skills, and promotes education of professionals and general publicin the field of digital games.
ART & TECH DAYSKOŠICE (ANNUALLY)An international platform explaining the impact ofDigitalization, AI and Industry 4.0 on our communicationand work through workshops, networking activities, exhibitions and interactive installations.
BRATISLAVA GAME JAMBRATISLAVA (ANNUALLY)A contest for individuals and teams of programmers, scriptwriters, graphics, philosophers and illustrators whose main aimis to make a video game prototype in just 40 hours and to experiment with bold game design.
GAME DAYSTRNAVA (ANNUALLY)The only international videogame festival in Slovakiaproviding opportunities for leading figures of the sector topresent their experience with progressive video game creation.The event combines digital games with artistic qualities.
SLOVAK GAME DEVELOPERS ASSOCIATIONBRATISLAVA, KOŠICE (MONTHLY)Community meetings of digital game developers topresent their work, to exchange know-how and to encourage networking among them, creating a compact and collaborative meetup platform.
BRATISLAVAGAME JAM
2018
13 www.sario.sk
The primary role of the investment incentives is to motivate investors to placetheir new projects in regions with higher unemployment and to attract projects with higher added value. The positive impact of a new investment shall be proved by job creation, improved chances for the graduates to get a job, as well as by creation of new entrepreneurial opportunities for local companies.
Investment Incentives
ELIGIBLE PROJECTSThe Act on Investment Aid divides the projects which may be supported into four categories:• Industry• Technology Centers• Combined Projects of Industrial
Production and Technology Center• Shared Services Centers
ELIGIBLE COSTS• Costs of land acquisition• Costs of buildings acquisition & construction• Costs of new technological equipment
and machinery acquisition• Intangible long-term assets —
licences, patents, etc.• Rent of new land/buildingOR• Wage costs of new employees for the
period of 2 years
FORMS OF INVESTMENT INCENTIVES• Tax relief• Cash grant • Contributions for the newly created jobs• Rent/Sale of real estate for a discounted
price
TECHNOLOGY CENTERS• Minimum investment of 200 ths. EUR
on fixed assets in all regions• Minimum of 20 newly created jobs• Minimum 1,7 fold of average salary in
the district paid to new employees
SHARED SERVICES CENTERS• Minimum of 50 newly created jobs• Min 1,5 fold of average salary in the
district paid to new employees
SUPERDEDUCTION — SPECIAL R&D TAX REGIMECompanies with the R&D activitiescan benefit from the special tax regime. By the calculation of the income tax, the additional 100% of the R&D expenses can be deducted from the tax base. As a result, for every 100 EUR spent on the R&D activities, company can save 21 EUR (respecting the current income tax rate 21%). Moreover, the 'super–deduction' rate should be increased to 200% by 2021.
SUPERDEDUCTION RATE GROWTH
MAXIMUM REGIONAL INTENSITIES OF INVESTMENT AID IN SLOVAKIA
for SMEs additional 10 to 20 %
EXAMPLES OF DEDUCTIBLE COSTS• Wages and related contributions• Material and inventory• Power and utility supplies• Tax depreciation of long–term assets• Certification expenses• Specialised software licence, etc.
25%
35%
35%
Bratislava region excluded
*Conditions differ for projects from 'Priority areas'. Please contact us at [email protected] for more information.
2015 2018 2019 2020
25% 100% 150% 200%
14 www.sario.sk
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INVESTMENT SERVICES
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INNOVATION SUPPORT
SERVICES FOR POTENTIAL INVESTORS
IF YOU ARE LOOKING FOR
SERVICES FOR EXPORTERS
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• Investment environment overview• Assistance with investment projects implementation• Starting a business consultancy• Sector and regional analyses• Investment incentives consultancy• Site location and suitable real estate consultancy
• Slovak supplier or subcontractor• Information about Slovak export/trade environment• Sourcing opportunities• Forming a joint venture, production cooperation or other forms of partnership
with a Slovak partner
• Identification of local suppliers, service providers• Assistance with expansion preparation and execution• Relocation assistance, work/stay permits• Support of innovation and R&D activities• Social networking
number of SARIOinvestment projects from
2002 — 2016
number of SARIO investment projects in
ICT sector 2002 — 2018
500+
25
• Support activities for development and popularization of Slovak innovations and R&D environment
• Establishment of relations with domestic and foreign well–established innovative companies
• Interconnection of Slovak R&D capacities with industrial production and investors' needs in order to transfer leading innovative technology processes closer
to production praxis• Encouragement for foreign investors
to bring investments with substantial R&D components to the SR
• Ecosystem analysis of local investment opportunities as well as domestic and foreign investors in order to support acquisitions and joint ventures projects
• Specific information from the field, in order to obtain capital and foreign markets penetration
Slovak Investment and Trade Development Agency (SARIO) is a governmental investment and trade promotion agency of the Slovak Republic. The agency was established in 2001 and it operates under the Ministry of Economy of the SR.
CEE & TURKEY REGIONBest Investment Promotion
Agency in 2016
1
PUBLISHERSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 [email protected]
GRAPHIC DESIGNSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 [email protected]
AUTHORSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 [email protected]
SARIO I Slovak Investment and Trade Development AgencyTrnavská cesta 100 I 821 01 Bratislava I Slovakia
Copyright © 2019 SARIOThe information in this publication needs to be in every case double–checked to ensure that it is up to date.
ISBN 978–80–89786–36–7
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[email protected] I [email protected] I www.sario.sk
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