Alexander Šrank
The quality of education in Slovakia has caused a slowdown in the introduction of new technologies and has reduced Slovakia’s competitiveness
Every technological revolution brings tension in society, companies face the consequences of populism and become dependent on the competitive quality of education provided by the public sector. Leaders who invest in education and are able to handle social responsibility and thus contribute to the respect for education and facts, and to a reduction of populism and, as a result, to the development of society, will be able to attract more talent and better succeed in business. In our survey, CEOs stated that the introduction of artificial intelligence will cause a bigger revolution in business and society then the Internet. Today, we can already observe the implementation of automation by our clients using software robots with some elements of artificial intelligence. Mass implementation has the potential to cause dramatic changes to the labour market and to the competitiveness of businesses and even countries.
It is essential to our small open export-dependent economy that we are part of this global competitive trend. Already now, we can perceive the potential impact of the transition to electric mobility on the strategically important automotive industry. Very soon, concerns may arise about shared corporate service centres.
The only answer is the ability to move on towards higher added value quicker than the competitors. This must be supported by educating technological talent. Even though our Bratislava “silicon mountain” of FEI, FIIT and MatFyz are still producing high-quality graduates, the truth will show out in comparison. The fact that half of all the students of Informatics at the University in Brno are from Slovakia is not a good sign in this context. According to the latest OECD study, as many as 15% of Slovak students, approximately 36,000, studied at universities outside the country, which is more than for any other country, except for Luxembourg and Iceland. Recently, I had the opportunity to talk to an enthusiastic Chancellor, Dean and Sub-dean of one of the Slovak Technical Universities and the issue is not that they do not know what they want, they know this exactly, but they do not have appropriate conditions. As regards the effectiveness of allocating funds and the control of their use, the public sector must, as a minimum, get closer to the standards that are normal in the private sector in Slovakia.
Not all the impacts of technologies are about a bright tomorrow. It seems that countries are not able to deal with the emerging populism and the challenging of facts strengthened by social networks with individually-targeted lies and distorted facts and other cyber threats. Societies are closing themselves into media bubbles of republicans and democrats, leavers and remainers, or system
and anti-system and are not communicating with each other and elections themselves can change into races in the most radical mobilisation of my tribe.
Existing business agreements are being challenged under the influence of a growing populism and firms must prepare for diversification of the sales market. An increase of the labour tax burden cannot be a magic source of budget balancing and be used every time when needed, as we will lose our competitiveness. In general, populism ranks very high among CEOs’ concerns.
After some years, the time of cost optimisation is returning and we will see businesses implementing new technological tools. If people performing simpler replaceable activities are displaced, this will strengthen populist and protectionist movements. PwC’s survey found Slovakia ranks first in the share of jobs replaceable by automatisation and robotisation, as many as 44% of jobs are potentially replaceable, in particular manual and administrative work.
Eventually, all industrial revolutions brought mankind progress, prosperity and a standard of life that previous generations were unable to imagine. Businesses have always had to adapt to new conditions with agility. The pressure of global competition and the fundamental change of the business model of many industries and services in combination with the ability of businesses to absorb changes, which is not unlimited, will ensure that CEOs will not be bored in the near future.
Alex Šrank
Country Managing Partner PwC
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