The Slovenia Times Spring Edition 2018 by The Slovenia Times

The Slovenia Times Slovenian Magazine in English Language Spring Edition 2018, Volume 15, EUR 4.90

www.sloveniatimes.com

Olympic Games 2018 PyeongChang: 1000 Slovenian vs 500,000 US Hockey Players

Jeremy Browne: "City of London is hosted by the UK on behalf of both Europe and the world"

Imre Balogh: "Demand for SLO assets is increasing however there is still not enough FDIs"

MIPIM 2018: Urbanity: quality of the character of life in a city or town

S&P Regional Insight: European Risks and Imbalances: Brexit, Trade, Market Volatility, Geopolitics, Populism

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The right place for your investment www.investpodravje.si

Editorial

We have prepared the Spring issue of The Slovenia Times as Slovenia records the highest economic growth and lowest unemployment rate since the financial crisis. I’m thrilled to share with you our new projects such as the new section, Investment & Real Estate Opportunities.

Spring Edition 2018 www.sloveniatimes.com

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Traditionally, our first issue of the year highlights the Slovenian projects at MIPIM, the world’s leading property fair held annually in Cannes, France, and our interview with Ronan Vaspart, Director of MIPIM, who shares his perspective on the future of the industry. We also present the City of Ljubljana in its tenth consecutive appearance at MIPIM.

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CEO and Publisher Brane Krajnik

Editor in Chief Tina Drolc, M. Sc., MBA

Editorial Consultant Louise Chatwood

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Contributors Boštjan Lajovic, Justin Young, Tonja Blatnik, Paul Watters, Črt Poglajen, Iztok Petek, Nataša Zajec, Saša Fajmut

AD & D Marko Pentek, www.mgo.si

Cover Photo Solkan Bridge, Branko Borjaški /Wikipedia

Printed by Schwarz Print d.o.o. Circulation: 5.000 copies The Slovenia Times is listed in the Media Register of the Ministry of Culture of the Republic of Slovenia under number 491. All content - texts or pictures - with no author specified are exclusively created by contributors to The Slovenia Times or published in accordance with owner’s instruction. All uncredited materials printed in the Slovenia Times are either created by the Slovenia Times journalists/photographers or acquired from the author/owner in accordance with the legal terms. ©DOMUS d.o.o., 2003. All rights reserved.

During the event in Cannes, the London-based Financial Times will present the awards for the European Cities and Regions of the Future 2018/19. This year, Ljubljana, Maribor and the Drava Region ranked among the top 10, proving that the investment environment has improved and putting an additional spotlight on Slovenia for potential foreign investors. With the strong economic growth, Slovenia currently faces a labour shortage. According to forecasts, to enable future development, Slovenia will need to seek people from abroad to fill the gap. Incompatible with the new economic reality, our legislation prevents a prompt adjustment of the labour market. As we are near the elections, politicians will soon start to make many promises but, unfortunately, once elected and a new government formed, they will take a lot of time to implement the much-needed changes in the labour law and in particular, the incentives to encourage people from abroad to accept employment opportunities in Slovenia. Read about how companies see these challenges and what needs to be done for Slovenia to be more attractive abroad in this issue of The Slovenia Times. In the forthcoming weeks we will launch the Job’s Board on our website, www.sloveniatimes.com, which will provide information about job opportunities in Slovenian companies for professionals from outside Slovenia. Join us in our endeavours to make Slovenia not just a top tourist destination, but also a destination for highly-talented individuals wishing to pursue their business careers among us. I would be happy to hear your comments and thoughts – feel free to send them to me at brane@sloveniatimes.com. Have a pleasant read!

Brane Krajnik CEO The Slovenia Times

Specialist in Business English for when you need to ‘talk-the-talk’ Contact: Louise Chatwood, louise.chatwood@gmail.com, +386 (0)40 424 850

Spring Edition 2018 | The Slovenian Times

Contents Page 4

IN THE SPOTLIGHT

4 1000 Slovenian vs 500,000 US Hockey Players

ECONOMY Page 7

5 Economy Overview: Eurosender announces expansion; Cerar indicates that the government could

shield NLB from Croatian lawsuits; Construction of Emonika train and bus station delayed again 6 Interview: Wim Stalmans, The Blockchain Academy® Founder and Manager 7 Interview: Marko Mlakar, M.Sc., Director and Partner, Amrop Adria 8 Job Opportunities: Meaning of global talent for Slovenia 10 Interview: Professor Peter Verhezen, University of Melbourne (Australia), University of Antwerp (Belgium), Managing Director of Verhezen & Associates regional Insight in association with S&P GLOBAL RATINGS

12 European Risks and Imbalances: Brexit, Trade, Market Volatility, Geopolitics, Populism

POLITICS 14 Political Overview: Changes to the EU budget pose many challenges for Slovenia; Uroš Novak, the Page 10

President‘s choice for Deputy Head of the Anti-Graft Commission; New Military Chief of General Staff taking over 15 Interview: Jeremy Browne, Special Representative for the City of London to the European Union

GLOBAL PITCH 16 Slovenian knowledge is reshaping the future of healthcare

Page 15

18 Column: Slovenia represents a green "escape" in the heart of Europe 19 Interview: Ronan Vaspart, Director of MIPIM 20 Procurement through competition – 10 years of MIPIM 24 Interview: Dr Imre Balogh, CEO & Executive Director, Bank Asset Management Company - DUTB d.d. 26 Would you like to live at the seaside or have a seafront holiday home? 28 Maribor and Drava Region among the Top 10 investment-friendly places

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Contents Page 19

LEADeRSHIP CORNER 32 Interview: Professor Lucija Mulej Mlakar, Director, Budnjani d.o.o.;

Kevin Jackson, Director of Ideas and Innovation, The Experience is the Marketing 34 The dark side of talent

eDUCATION PERSPECTIVE 35 Column: To reduce the Precariat we need a sound Political Will 36 Digital economy has changed the world

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INTERNATIONAL BUSINESS PARTNERS 38 TOPIC: Blockchain technologies and the future of business

American Chamber of Commerce – AmCham Slovenia, British – Slovenian Chamber of Commerce – BSCC, The German-Slovene Chamber of Commerce and Industry – AHK Slowenien, Advantage Austria, Luxembourg-Slovenian Business Club (LSBC), Italian Trade Agency (ICE), Kazakh-Slovenian Business Club - KSBC

EXPERIENCE & LIFESTYLE SLOVENIA 42 Interview: Professor Tanja Mihalič, Faculty of Economics, University of Ljubljana (FELU)

Page 28

Culture 44 On Mladinsko Showcase No Alarms And No Surprises 46 EVENT GUIDE 48 Announcement: New platform - Job’s Board Page 42

Spring Edition 2018 | The Slovenian Times

In the Spotlight

1000

Slovenian vs 500,000 US Hockey Players By Boštjan Lajovic

How successful were Slovenians at the Pyeongchang Winter Olympics? This was the question puzzling the vast majority of Slovenia, with the media analysing and comparing statistics, results, expectations, possibilities and the conditions in which Slovenian athletes practice and compete. Some comments deconstructed the Slovenian character and justified success and failure in terms of the social and anthropologic characteristics of the Slovenian nation. However, not all the media! First and foremost, sport is just sport. It only harms to attribute sport with qualities that surpass it and that have, supposedly, co-shaped the Slovenian nation in terms of character and philosophy.

The Slovenian Times | Spring Edition 2018

Photo: NBC Sports

If anything, the Winter Olympics in South Korea demonstrated, once again, that sport is big business. Spectators at the venues were practically nonexistent, and the competition schedule was dictated by the advertising agenda of broadcasters targeting commercially attractive markets, predominately European audiences. With Europeans watching the Olympic Games from the warm comfort of their homes, the scenes of ski jumpers freezing in strong winds on the in-runs at midnight Korean time, cannot have benefitted the Olympic spirit. However, these are the questions to be answered by Thomas Bach, the President of the International Olympic Committee and the other Olympic oligarchs. Returning to the initial question. In Pyeongchang, Slovenians won two medals whereas four years ago in Sochi, Slovenians won four times as many. Normally, Slovenians rank among the top countries in medals per capita but at Pyeongchang we ranked far lower. Norway, by contrast, was in a category of its own. With a population of a little less than five million, the Nordic country won a staggering 39 medals. Its absolute dominance over other countries is a unique phenomenon that cannot be explained solely by the fact that Norway is an enormously wealthy country. If sport is really all about money, then the Slovenian hockey players should never have made it to the Olympic tournament in South Korea. Following their victory over the US hockey team, many global media outlets reported on the astonishing results, which only increased the spotlight on the Slovenian athletes. Slovenia has fewer than 5,000 registered hockey players, including young competitors, five covered hockey rinks and – excuse the cynicism – less than two hockey clubs, which constantly struggle to make ends meet. The USA, in contrast, has more than 500,000 registered players! After having beaten the US team, the outnumbered but highly motivated Slovenian

To answer the initial question – I believe there is no dilemma whatsoever. In Pyeongchang, Slovenian athletes once again outdid themselves. And they made good business! Interpret that however you like!

athletes also defeated Slovakia, where hockey is basically the number one sport. Though they had been leading for most of the game, the Slovenian team was ultimately defeated by Norway in the sudden-death round. As a Slovene, I am of course biased, but you have to admit that this is nothing short of phenomenal. Almost as phenomenal as biathlete Jakov Fak winning the silver medal after having lost two seasons due to injury; or snowboarder Žan Košir’s dramatic return and bronze medal after he injured his spine and everyone thought his competing days were over. To answer the initial question – I believe there is no dilemma whatsoever. In Pyeongchang, Slovenian athletes once again outdid themselves. And they made good business! Interpret that however you like!

Economy Overview

Eurosender, a London-based Slovenian start-up that provides a leading European online booking system for courier services, has attracted an investment from the mail and telecommunications company, Post Luxembourg. The firm will use the investment for further expansion to foreign markets and new jobs. Eurosender, which was established in 2014 by Jan Štefe and Tim Potočnik, has around 20,000 business users and a number of private users in Europe. Potočnik stated that Post Luxembourg is an exceptional partner with a lot of logistics expertise, a well-developed network of contacts around the world and stable Tim Potočnik, Achim Taylor, Jan Štefe; Photo: Daniel Novakovič /STA

infrastructure. "With their help it will be easier to realise the goal of becoming the largest online centre for logistics services in Europe," he said, adding that the investor was not looking only for quick profit. Achim Taylor, Head of the Logistics Division at Luxembourg’s largest employer, said that they had decided to diversify their portfolio and services, and to increase their presence in the digital market. Eurosender has developed a platform through which users can send a package pallet at a favourable price. It allows the company to negotiate better prices from partner companies, including parcel delivery companies, DPD, DHL and GLS. According to Potočnik, Eurosender is experiencing strong growth. In 2017, revenues grew more than 200 percent, reaching EUR 2.5m. The business currently employs 30 people abroad and intends to employ an additional 40 in Slovenia this year.

Cerar indicates that the government could shield NLB from Croatian lawsuits On 28 February, Prime Minister Miro Cerar said that "the government will have to help NLB in some form" if the Croatian claims related to Yugoslav-era savings deposits develops into "a serious conundrum". He reiterated that any settlement of LB bank claims resulting from the verdicts of the Croatian court is at odds with the law. Cerar stated that "NLB has to do all it can to prevent potential enforcement attempts affecting its assets," adding that "the government will have to help in some form if this develops into a serious conundrum". Slovenia has been rejecting the view that NLB (Nova Ljubljanska Banka) is the successor of Ljubljanska banka (LB), which was determined in a special constitutional law adopted in 1994. The continuing lawsuits in Croatia have raised concerns about the contingent liabilities potentially reaching hundreds of millions of euro. The contingent liabilities were also one of the reasons why Slovenia delayed privatising the bank, despite State aid covenants mandating that it should have been privatised by the

end of 2017. The news that NLB settled at least two claims, which unofficially were to avoid suffering significant business damage in Croatia, is a new development, as is Cerar’s statement about the potential help from the government, which could confirm unofficial reports about the possibility of Slovenia assuming responsibility for any costs NLB would incur as a result of the lawsuits. It comes as pressure is increasing from the European Commission for Slovenia to privatise the bank. Cerar could "not say at this stage how and when the government could help as the final consultations are ongoing". He stressed "that all this needs to be seen in the context of respecting the principles of succession".

Construction of Emonika train and bus station delayed again The construction of a new train and bus station in Ljubljana has been delayed, yet again, as one of the key investors has withdrawn from the project, which should have been completed in late 2009. Dnevnik reported on 27 February that Mas Real Estate, one of the two investors for the shopping mall planned as a part of the station, stated in its year-end business report that the project had been side-tracked. The report said that, in January, it had become clear that some regulatory issues had become insurmountable and that the company would focus on other projects. The cost to end the project would be EUR 1.5m, of which EUR 600,000 would be incurred by Mas Real Estate. Prime Capital, the other investor, is still interested in the project but the land owners, all majority-owned by Granit Polus, have not been persuaded by the timeline for the project, according to Csaba Toth, the project manager. The first investment agreement was signed by the national railways operator and Hungarian developer, TriGranit, in 2007. It was estimated that the project would be completed in 2009. Initially, the project was valued at EUR 220m, but the estimates continued to grow, according to TriGranit, because of ever new demands by the State. By the end of 2012, the cost estimate reached EUR 350m. TriGranit broke the contract in 2014.

Source: STA

Eurosender announces expansion

Initial model of the Emonika project. Photo: Stanko Gruden/STA

Spring Edition 2018 | The Slovenian Times

Economy Interview: Wim Stalmans, The Blockchain Academy® Founder and Manager

Blockchain holds the potential to change fundamentally the economic and business logic By Tina Drolc, M.Sc., MBA

After a career of 15 years in investment management, Wim Stalmans reoriented his professional activity towards Blockchain and created The Blockchain Academy® in 2017. With the conviction that decentralized trust will change profoundly the future of business and society and that important educational efforts will be needed on the path to adoption, he’s building a platform that brings together technical, economical and societal Blockchain-expertise. He is mentoring a series of introductory Blockchain courses and workshops and writes articles with a focus on the vulgarization of critical elements in the understanding of Blockchain. col that implements the internet-of-things on a Blockchain. Hyperledger is a project from the Linux Foundation that aims to integrate global business transactions on Blockchain(s) in order to make the global supply chains more efficient.

Wim Stalmans, The Blockchain Academy ® Founder and Manager

What are the blockchain applications from the assets perspective? Can you share some particular cases? Blockchain is a register that can hold the transactions on any kind of asset: monetary assets, financial instruments, real estate, physical assets, intellectual property, identity, data etc. The Australian Stock Exchange plans for example to transition its clearing system onto a Blockchain. Nasdaq applies Blockchain for the issuance of private security deals. But it’s not all about finance! IOTA is for example a proto-

The Slovenian Times | Spring Edition 2018

interactions between global stakeholders that participate in a distributed decision making process. In the shorter term, the potential of Blockchain to organize business around a common source of truth, will eliminate the need for individual databases and the maintenance and reconciliation that comes with them. Which country is the most advanced in using blockchain technology and what are the main outcomes? Estonia is particularly advanced in the adoption of Blockchain. They have the technology operational in its national health, judicial and legislative systems and they work on implementations in personal medicine, data embassies and cyber security. Many other countries are moving into the space too! Sweden is putting its land registry on a Blockchain. Switzerland has its own crypto-valley where the town of Zug accept local tax payments in crypto-currencies. Dubai is actively looking into putting its entire government archive on a Blockchain. Slovenia has an extremely buoyant Blockchain community and the government moves towards becoming a Blockchain hub within Europe. Luxembourg too plays its role by setting up a public-private project called Infrachain that works on the implementation of a Blockchain infrastructure that is compliant with current legislation. What is the link between chopped-up databases and Blockchain?

It is kind of intriguing how cash can be related to a database. If you take all the money bills in circulation in a country and you arrange them What does the use of blockchain technol- in numerical order according to their serial ogy mean for organisations? How demand- number and you take some adhesive tape and ing from organisational culture and finan- scotch them together to a very long sheet of cial point of views is implication process? paper, well, then you have a simple form of a database. As such, we can say that money bills Blockchain holds the potential to change fun- are nothing else than a database cut in pieces, a damentally the economic and business logic. chopped-up database. Now, Blockchain too, is a As the technology allows to write computer database. And that is where we can make kind code around assets and by consequence allows of a connection between traditional money as a business processes to be defined completely database and Blockchain that also holds the seon a Blockchain platform, the current central- rial numbers, but then of crypto-currencies. ized organizational form of companies will be subject to a transition towards a distributed Blockchain holds the potential to nature. This is a long term view, but with huge change fundamentally the implications. The traditional management of a company could be replaced by codified economic and business logic.

Economy Interview: Marko Mlakar, M.Sc., Director and Partner, Amrop Adria

Not only companies but also countries are competing for the top talent By Tina Drolc, M.Sc., MBA

The OEDC’s Skills Strategy Diagnostic Report for Slovenia 2017 has raised concerns about Slovenia’s "brain drain". "Low wages and a lack of modern organisational and management practices in Slovenian workplaces were cited as the reasons why highly skilled workers may choose not to remain in, or return to, the country." It is not surprising that Slovenia is also not attracting foreign talent that brings values and creates a more international environment, which is what is needed in today’s world, according to Marko Mlakar, Director and Partner at Amrop Adria. Beautiful nature and a good and safe location in Europe are not enough for the most talented people who are looking for high calibre business challenges. Q How favorable are the Slovenian labour market and regulatory environment for enticing international, high-performing individuals to emigrate to Slovenia?

A In my opinion, we face competition not only at the company and country level, but already between continents for top talent. Top talent is scarce, negative demography stipulates this fact and countries are spending a lot of time and resources demonstrating why they are attractive for living, and how an individual can develop a successful career there. Slovenia is, unfortunately, losing this battle as we are slow, not innovative and because we are a small market and niche companies are far from the preferred choice. We also have a very small diaspora, which is usually the first factor for creating interest for expatriates. I personally am not very optimistic that we can change the trend in the short term. Long term planning and many positive signals are necessary before you can convince international talent to move to Slovenia.

Q Does Slovenia gain or lose from relocation? A Slovenia is attractive for living but not so much for an international business career. The domestic market is small, our best or largest companies are afraid and not very open to international talent and it is hard to integrate if you are moving with a family. Top talent with diplomas from top schools, seek major career challenges which Slovenian companies cannot provide. This is a fact! In addition, taxation is far from competitive and therefore, combined,

the result is in a very small number of highlytalented people moving to Slovenia. We often think that beautiful nature and a good and safe location in Europe are enough. They are excellent for retirement but not for high performing individuals who are looking for high calibre business challenges.

Q Digitisation, automation and advances in AI disrupt the world of work on the one hand, while according to PwC "the ‘yellow world’ is a world where humanness is highly valued" What is the Human Resource response to these trends? A A lot of research and magazines have recently reported about Artificial Intelligence, but we are yet to see whether the results will only be negative. I am sure that AI will change our lives dramatically, but it will also open the space for new professions, will some dangerous professions be able to be more secure etc…. We need to adapt and evolve, but as computers change our world for better, I am sure that humans will ensure that technology works for and not against us.

Q What are your thoughts on the concept of a universal basic income and Finland’s two year experiment until the end of 2018, from both the labour market and meaningful job perspectives? A In my opinion, everybody should earn enough for a decent living. The differences in society are becoming too wide and we should find ways to somehow get a balance, otherwise conflicts will be more radical and frequent. The

Marko Mlakar, M.Sc., Director and Partner, Amrop Adria

universal basic income is a nice idea if it is not abused by certain groups. Fairness needs to be demonstrated and it can probably work. Countries are already spending significant amounts on social transfers, which leads me to believe that it is in their interest to create a sustainable environment for everybody. UBI is just the next phase in this development. Spring Edition 2018 | The Slovenian Times

Economy

Job Opportunities: Meaning of global talent for Slovenia Žiga Vavpotič

Chairman, Outfit7

Outfit7 is one of the fastest growing entertainment companies on the planet. Our reach, much like our ambition, is global. We want to entertain the world and we are proud to work with an amazing team to make that happen. People from all around the world work with us and we are always looking for new talent. We are a company that takes fun seriously and believes there are no limits to where great ideas can take you.

Sonja Šmuc

Director General, Chamber of Commerce and Industry (GZS)

Slovenia’s job market is becoming more and more open to foreign talent. In the last decade, 48,000 people migrated to Slovenia, increasing the proportion of foreign citizens to 5.5 percent of the total population. Furthermore, the number of daily 'immigrants' from neigbouring countries has risen from 2,300 in 2009 to 2,800 in 2016. According to the Global Talent Competitiveness Index 2018, Slovenia ranks 28th from 199 countries. Ljubljana, on the other hand, is 49th according to the Global City Talent Competitiveness Index, outperforming cities such as Rome, Brno, Beijing and Zagreb. These figures allow for an optimistic forecast for the attractiveness of our country. Therefore, it will be even more important that our business environment becomes more business friendly and attractive to foreigners who could enhance our global competitiveness with their knowledge and expertise. Currently, our labour legislation is still too rigid and so it is urgent that a step forward is made in this area. According to the OECD’s Better Life Index, Slovenia’s 20th place is above that of the Visegrad countries, as well as some developed countries such as Japan and Italy. This confirms the fact that Slovenia is a safe country with a strong emphasis on family and the preservation of nature.

Marjan Trobiš

CEO, Boxmark Leather d.o.o., President of the Employers’ Association of Slovenia (ZDS)

The biggest challenge in this sense is to get experts in Slovenia. At Boxmark, we have an expert from Sweden and we have to pay him 30 percent more so that he has the same income as he would get in Sweden. This is very difficult for companies in Slovenia, from the perspective of being a big and competitive player in the future, to pay more for experts in Slovenia than does our competition in other parts of Europe. Slovenia still lacks a multicultural approach when people from other parts of the world come to us, and Slovenia needs to change that approach within its integration policy.

The Slovenian Times | Spring Edition 2018

Economy

Saša Mrak, MBA

Executive Director, Managers’ Association of Slovenia

Slovenia has a lot to offer: safety, which people in the country too often take for granted; a good quality of life; a competitive education system; and more and more knowledge-based companies. Slovenia ranked ninth from 130 countries in the Global Human Capital Index 2017. When it comes to the Global Talent Competitiveness Index (GTCI), Slovenia ranks 28th. If we want to improve our ranking, we also need to improve in other aspects of attractiveness for talent among which the most important are inclusiveness, a simpler process for employing non-residents and a more encouraging taxation system.

Filip Remškar

CEO, Smart Com

Smart Com group and it‘s team strive to challenge technology and overcome ICT challenges. By applying cutting-edge technologies to the market, our endeavours resonate in the technology community and attracts great technological talent. Strategic investment in knowledge has enabled us, for 28 years, to be recognised as one of the most advanced system integrators in the region. With a focus on cybersecurity and networking, we welcome highly specialised and motivated experts from Slovenia and abroad, who are able to nurture our core values. We are therefore encouraging our officials to implement measures which will further stimulate and simplify the recruitment process for individuals from abroad looking to add value to Slovenian companies and their customers.

Dr Mark Pleško CEO at Cosylab

We are a software engineering company specialising in control system integration for fusion reactors, particle accelerators and telescopes. Worldwide, we employ 180 people from more than 15 different countries and 4 different continents. Of course, most of us come from Slovenia and also work here, but just as Slovenia is only so big, the best talent is also limited which is why we employ local experts in our branches and try to attract people from our neighbouring countries to join us in Ljubljana. How? Our greatest selling point is the fact that our employees get to work on some of humanities most exciting projects and they don’t have to leave Slovenia to do so. And then there are all the benefits: Monday pancakes, sporting activities, team-building, relocation packages and overall support when employees move countries for us. We are proud to say that we are the "reverse brain-drain", not only keeping the best talent in Slovenia but also bringing (back) new, talented people.

"The opinions expressed in this section 'In the Spotlight' are solely those of the contributors and are not necessarily supported by The Slovenia Times or its associates." Spring Edition 2018 | The Slovenian Times

Economy Interview: Professor Peter Verhezen, University of Melbourne (Australia), University of Antwerp (Belgium), Managing Director, Verhezen & Associates

To embrace ambiguity and complexity, leaders have to look at the yin and the yang of issues and challenges By Tina Drolc, M.Sc., MBA

An ambiguous, complex business environment, an inter-connected world and 24/7 society - the life of a leader has never been tougher. And despite the best efforts of many, trust remains fragile. The global Amrop study gauges the current health of leadership decision-making and is based on a 3-pillar model for Wise Decision Making (Self Leadership - Motivational Drivers â&#x20AC;&#x201C; Hygiene Factors). Based on the input of 363 business leaders, the study indicates that the majority of corporate leaders focus too much on short term results and as a consequence, leadership is filled with difficult social, environmental and ethical dilemmas. Professor Verhezen highlights the importance of improving the current health of leadership decision-making, with the aim to support the journey from smart to wise leaders.

Professor Peter Verhezen, University of Melbourne (Australia), University of Antwerp (Belgium), Managing Director of Verhezen & Associates

The Slovenian Times | Spring Edition 2018

Economy Q Among the top-line findings in the area of Self Leadership, the study suggests that "leaders are missing their rear-view mirror: only 10 percent consciously reflect on their experience". It sounds contradictory, for leadership, experience is one of the most important criteria? A Indeed. Reflection is low, but if you look to the report it also says that 44 percent would look at insights from the past that could be a source of knowledge today. Now, if we are talking about wise leadership with regard to this aspect, there are two points that I like to stress: one is that leadership needs managerial experience and wisdom, but only 10 percent of the interviewed leaders consciously reflect on this, and the second is mindfulness about your ability to have a broader perspective. So, 44 percent admitted that they have insights from the past, but only 10 percent really refer to the second component which is really being mindful and self-reflective about that experience. It is not just what you did, it is why you did it and I think the why is lacking – only 10 percent of leaders, according to the study, know why they did something, the majority end up with what they did.

Q What are the reasons that more than half of leaders, according to the study, lack mindfulness and why?

A Business is about making decisions about the future and the pressure is enormous these days. With globalisation, competition comes from all angles, they are pushed by shareholders, stakeholders, etc. and people, in general, are more action-oriented then self-reflective about the issues. Consequently, leaders take action before they think it through. You forget why you are doing it because your function as the CEO is so big when looking at the ROI (return on investment), that you do not necessary reflect on the strategic issues. The stockmarkets do not necessarily treasure the long-term and the big picture, which is about mindfulness, but nurtures short-term profit. Our study highlights that it is not the short or long-term – it is about finding the attitude or decision-making process that looks at both the short and long-term. We have operations and strategy, we have stakeholders including shareholders, and it therefore crucial for wise leaders to embrace ambiguity and complexity, to look from the yin and yang at the issues and challenges.

Q As mentioned, the study encourages leaders to be wise, to take "more holistic decisions with more sustainable outcomes". If we look at the business or institutional sector, there are policies with

Smart means "I just want to make money and if the law allows me to make plastic, I do not care". Wise means: "How to make money based on degradable plastic"? certain goals and in business particularly, the timing. How should leaders maintain their decision-making health?

A Smart leaders are those that make less biased decisions, are innovative, creative and make money for shareholders in the shortterm. Wise leaders add something which is related to the social, ethical and governance issues. If you look to the investment banks, more and more use this criteria to determine whether a company makes money for ROI or also considers the broader perspective of the consequences they create as an organisation. Larry Fink, the CEO of BlackRock, an organisation that invests trillions of dollars – made very clear that responsible investments are crucial. You cannot have a company that makes money and ignores its social or ecological impact. We basically define wisdom as bringing ESG - Environmental, Social and Governance into the financial aspects of any organisation. Smart means "I just want to make money and if the law allows me to make plastic, I do not care". Wise means: "How to make money based on degradable plastic"?

Q According to the study, more than 50 percent of leaders are failing to systematically involve the right people in decisions. Are the corporate governance system and the ownership structure the main bottlenecks – particularly in the case of stateowned companies? A Every country has a history and Slovenia obviously has a history. Any state-owned enterprise usually has a functional objective, which is not the same as the objective of a multinational corporation, which is mainly the creation of shareholder value which is translated into long-term profit. I was an adviser to a national carrier airline and when we told the board that they could reduce staff by 10 percent because they were not doing what they were supposed to do and it was a cost, the answer was: "We are a state enterprise and our objective is not just making money but also to create employment". That is a social aspect which has a long-term application and is a case of a wise decision. However, every state-owned company has a history and often also a political appointment, and so it is not always about looking at a pure organisational objective and the efficiency of using resources in the most appropriate manner. If we look at corporate governance in the US and UK, the Anglo-Saxon

environment, they have dispersed ownership and nobody really controls them, which is very different from Slovenia, Europe or Asia where there is concentrated ownership; family business and state-owned enterprises, which have profound consequences on how you govern the company board.

Q According to Harvard Business Review "The best performing CEOs in the world 2017", Pablo Isla of Inditex (Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Uterqüe, Zara Home) is rated as the best. His preferred management style is to walk around rather than hold formal meetings, in part to maintain an entrepreneurial, small-company culture in such a large business. How do you see this winning leader’s approach?

A He said that motivating people in generating a sense of spirit inside a company is an essential part of any CEO’s role and highlights "…we need to appeal to our employees in terms of emotions to help create an environment where they can innovate and I need to learn to be more emotional and less rational." He raised the sense that we need to embrace the why people do things. 70 percent of Inditex is Zara and A Coruña in Galicia where the company was founded and historically was the place where people met and made clothing for the aristocracy in Spain. There a lot of history in the region where they still make clothes and today, if you are looking to competition, Zara still makes 25 percent or more of the clothes within Spain and that explains the whole philosophy. They have a very flat organisation and they have made an enormous investment in technology. By being a leader who walks around, Mr Isla sees that the social impact and the ethical issues are really an important part because his employees are part of his family – it is a family business. They tend to look at the long-term, however the only issue I have is about their tax-planning, tax evasion. This is why ESG is crucial in all of its aspects.

"We need to appeal to our employees in terms of emotions to help create an environment where they can innovate and I need to learn to be more emotional and less rational." Spring Edition 2018 | The Slovenian Times

Regional Insight in Association with S&P

European Risks and Imbalances: Brexit, Trade, Market Volatility, Geopolitics, Populism By Paul Watters, CFA, London, S&P Global

Hope overcoming fear seems to summarize the financial and credit outlook for Europe, the Middle East, and Africa as S&P Global Ratings peers ahead into 2018. The region’s economic fundamentals have reasonably solid legs, and, in the absence of inflationary pressures, the monetary spigot is only gradually tightening. In contrast, political and geopolitical risks continue to grab attention, but generally with limited systemic scratches so far. Investors continue to climb the “wall of worry” in defiance of predictions of an end to the long bull market. It is only a matter of when--not if--something gives or even happens in 2018. Paul Watters, CFA, London, S&P Global

Disruptive Brexit

Top Global Risks

Table 1: Global Risks and Imbalances: Geopolitics, Asset Prices, Trade, Populism, China Debt, Cybersecurity

The Slovenian Times | Spring Edition 2018

Regional Insight in Association with S&P High, Increasing. CHANGED (previously high, stable). At this juncture, a disruptive Brexit continues to represent a material downside risk for the region but only feeds into our base case rating assumptions, in a limited way for now, despite the polarised and divisive nature of the political debate. Why? Because we expect a two-year transition period to be agreed in the next two months to prevent unnecessary disruption in March 2019. The uncertainty involved in this political process is already starting to weigh on business planning for all companies operating in, or selling into, the UK and in our view, the economic impact will become more tangible in the absence of a definitive transition agreement as we progress through 2018. Certainly, private sector business investment has stalled since the start of 2016, although, interestingly, general government investment growth has picked up a little this year. Currently, risk tolerance remains quite low for UK businesses that might increase borrowing to invest in growth. Nevertheless, reaching agreement on the final end state by early 2021 is by no means guaranteed. Therefore, UK and EU governments and businesses still need to make preparations to minimise the dislocation that could materialise in early 2021.

Asset price volatility High, stable. CHANGED (previously elevated, stable). With few signs of inflation moving back toward 2%, we expect the European Central Bank’s main refinancing rate to remain at zero through 2017 and 2018, which is likely to see credit conditions remain highly favorable for borrowers. Long-term negative real government yields in Germany and the UK remain exceptionally low by any historical comparison. This could inflate European asset prices further, with macro-prudential measures deployed, where appropriate, to dampen down excessive risk-taking in specific areas. The clear risk, if the market runs ahead, is that eventually some trigger such as a faster than expected tightening by the US Federal Reserve or tapering by the ECB could cause an abrupt and disorderly repricing of risk. Past experience suggests this could have unexpected real economic side-effects and lead to more constrained credit conditions, including in emerging markets.

Geopolitical risk Elevated, stable. CHANGED (previously moderate, stable). Illegal immigration continues to be one of the most important issues facing the major European countries according to the latest Eurobarometer survey. And lack of sufficient integration among communities fuels the terrorist threat that is another top concern,

albeit heightened in those countries that have experienced terrorist attacks in recent years. More broadly, geopolitical risks continue to evolve, with the latest twist in the Middle East being the risk of political upheaval in Saudi Arabia inflaming relations with Iran, while the North Korea nuclear threat to the Pacific appears no closer to resolution. Any material escalation of any of these risks could trigger an uncertain sequence of events that would quickly lead to rising risk aversion and undermine growth regionally and, potentially, even globally.

is creating an identity problem for smaller coalition parties. The result is greater polarisation and more populist policies being adopted by the smaller parties. The simmering political tension between Catalonia and the Spanish central government is another example. At this stage we have no visibility on the possible composition of a new Catalan regional government or on its policies and approach towards Spain’s central government. As a consequence, we continue to view political fragmentation as a response to the un-

Global trade Elevated, stable. UNCHANGED. The main near-term threat to global trade stems from the US Administration’s pursuit of bilateral trade deals to replace or rebalance long-standing multilateral treaties in favor of the US. The outcome of NAFTA negotiations has become less certain in recent months and any adverse developments would be especially damaging for Mexico. Additionally, this could undermine confidence in the benefits of free trade and in the World Trade Organisation (WTO), leading to a reversal in the recent improvement in global merchandise trade volumes seen in 2017. Well-established global supply chains in sectors such as automotive, aerospace and defence, and transportation would face disruptions. The prospective exit of the UK from the EU could create similar trade disruptions if Brexit talks break down before March 2019. However, our base case remains that as of that date, a two year transition arrangement should provide the politicians sufficient time to negotiate a new long-term relationship with the UK once it has left the single market and customs union.

Populism

The clear risk, if the market runs ahead, is that eventually some trigger such as a faster than expected tightening by the US Federal Reserve or tapering by the ECB could cause an abrupt and disorderly repricing of risk.

derlying causes of populism, namely excessive youth unemployment, high-income inequality and immigration linked to wage stagnation, as a meaningful medium-term risk in Europe. Assuming the Social Democrats in Germany do a volte-face and provide at least maintenance support for a minority CDU/CSU government, the Italian election due by May 2018 will likely provide the next important yardstick. Note: The article is a fragment of the "Hope Overcomes Fears As The Fundamentals Propel Europe Forward" report.

Elevated, stable. UNCHANGED. Appearances can be deceptive. Although no Eurosceptic parties have been elected to government in the major countries in Europe, the growing antiestablishment groundswell (even in Germany)

Sources: Standard & Poor’s Rating Services and Eurostat. Please refer to our website for more information about ratings at https: www.spratings.com/corporates/Understanding-Ratings-2.html and read our disclaimers at www.standardandpoors.com/en_US/web/guest/regulatory/legal-disclaimers Copyright © 2015 by Standard & Poor’s Financial Services LLC. All rights reserved. STANDARD & POOR’S and S&P are registered trademarks of Standard & Poor’s Financial Services LLC. Spring Edition 2018 | The Slovenian Times

Political Overview

Changes to the EU budget pose many challenges for Slovenia As the EU is expected to open negotiations on changes to its multi-annual budget after 2020, Slovenia faces quite a challenge to tap into the available funding with the best possible outcome, was a statement heard at a debate hosted by the European Commission Representation, on 27 February, in Ljubljana. Although the post-2020 multi-annual financial framework has been under debate for a while, negotiations are expected to start in May when the European Commission is due to present its legislative proposal. The Commission would like to complete the negotiations by the spring Euro Bills; Photo: Daniel Novakovič /STA

of 2019, that is, before the next elections for the European Parliament. The impact of Brexit on the EU budget is estimated to be about EUR 10bn annually, the loss of which may be offset through increased contributions by the 27 Member States, a cut in expenditure, additional resources from the EU itself or through a combination of the measures. The European Commission’s preliminary proposals have mentioned between 1.1% and 1.19% of EU27 GNI, while some of the larger contributors insist on keeping it at around 1%. The difference between the two proposals would amount to about EUR 90bn over seven years. Most member states, including Slovenia, support the higher figure. It advocates a reform-oriented budget that can respond to new challenges, including globalisation and the effects of technological changes.

Uroš Novak, the President‘s choice for Deputy Head of the Anti-Graft Commission In February, President Borut Pahor chose Uroš Novak, a 48-year-old tax inspector, to occupy the vacant post of Deputy Head of the Commission for the Prevention of Corruption. This is the second attempt to appoint a deputy head of the commission; President Pahor refraining from appointing anyone in the previous selection round in December. The post has been vacant since Alma Sedlar stepped down in September 2017 due to bitter disputes with Boris Štefanec, the much criticised President of the Commission. President Pahor has been the subject of criticism over his appointment of Štefanec in March 2014, under whose watch the Commission has seen bitter infighting. Štefanec is almost universally seen as a poor choice and although Pahor has faced multiple calls to remove him from office, he has insisted that he would not do so because it could open him to

The Slovenian Times | Spring Edition 2018

allegations of political interference in the work of the Commission. Uroš Novak; Photo: Bor Slana /STA

Major General Alan Geder, the newely appointed Chief of General Staff; Photo: Daniel Novakovič /STA

New Military Chief of General Staff taking over On 5 March, Major-General Alan Geder took over as the Chief of General Staff, four days after Andrej Osterman was dismissed by the government after a battalion battlegroup failed a NATO performance test. Geder had served as Osterman’s deputy since 2015 and both had been trying to get the government to earmark more funds for the Armed Forces, saying that the military lacked funds and soldiers, two problems which seem to have ultimately resulted in the failed test. Upon dismissing Osterman, Prime Minister Miro Cerar and Defence Minister Andreja Katič said that the test had been conducted although the commanding officers should have known that the unit was not ready for the test. The new Chief of General Staff served as Commander of the Force Command between 2006 and 2010, and as the national military representative to NATO and the EU, amongst other posts. He has been with the Slovenian military since its beginnings in the late 1980s. A physical education graduate, he only acquired a military education after Slovenia gained independence.

Source: STA

Politics Interview: Jeremy Browne, Special Representative for the City of London to the European Union

City of London is hosted by the UK on behalf of both Europe and the world By Tina Drolc, M.Sc., MBA

The City of London Corporation appointed Jeremy Browne, former Foreign Office Minister, to the EU as the Special Representative for the City to the EU in September 2015. Mr Browne represents the Cityâ&#x20AC;&#x2122;s financial and professional services industry for engaging with EU institutions and across EU Member States. In this interview for The Slovenia Times, Mr Browne highlights that, regardless of Brexit, London will remain the indispensable global financial centre in the continent of Europe, and that from a regulatory perspective he does not expect fundamental adjustments. working in the City from the EU27 countries, as well as from the US, Japan, Australia and other countries, and sometimes I think the City of London is hosted by the UK on behalf of both â&#x20AC;&#x201C; Europe and the world. It is a mistake to see it too narrowly, we see it as a pan-European asset and not just a British asset.

Q Do you expect some jobs to be lost in the City in the foreseeable future or after Brexit?

Jeremy Browne, Special Representative for the City of London to the European Union

Q How will the dominant position of the City, as the financial centre in Europe, change with regard to Brexit?

A Most people in the City of London wanted Britain to stay in the EU, but I think we also expect that London and Britain will be leaving and there will be some adjustment. However, I am still very confident that London will remain the indispensable global financial centre in the continent of Europe, even outside the EU. We believe that a strong London is in the interest of a strong EU and a strong Europe, providing a valuable service to the wider European economy and we will continue to do that. The City is a highly international centre, there are people

A I think there will be some adjustment to jobs for businesses that need a licensed presence in the EU and currently an operating license, and in order to meet the requirements, to gain that license, they will need a presence in places that do not require a license. So, I think the adjustment will be at the margin and not a fundamental adjustment. The problem is to measure the consequences of Brexit in isolation and there are lots of big changes that are happening; the rise of Asian economies, specifically China, automation, technology, artificial intelligence, etc., and London is constantly involved in order to meet the changing requirements, so people will need to adjust to Brexit as part of that evolutionary process. Q Regarding laws and regulation that affect financial markets and financial institutions, which major differences do you expect between the EU and the UK? Can you share some particular cases?

ly seeking a divergent rulebook, people want to see that we have a partnership approach, based on mutual recognition of systems between the EU and the UK that wants to adopt global standards. We want that the UK and the EU work together and not to create incompatibility between the systems. It is important to retain compatibility for mutual market access.

Q Do you think it is possible that the UK stays in the EU, that Brexit does not happen? A I think it is so unlikely, we should work on the basis that Britain will leave. There are British people, including very notable people in Britain, who would like for Britain to stay in the EU, but we had a referendum in 2016 and the people were told that the result would be respected and implemented. So, I think it would be extremely difficult and divisive to seek to fail to implement the result of the referendum because some people do not like the result. I think the task is to look to the future, not to the past, and think how we can have the best possible external friendship with the EU that will be not the same as we have, but it will be greater than any other we have with any external country. Tower Bridge, London

A The UK will be outside of the EU and so it cannot be expected that we will behave exactly as a member of the EU, however the consensus in the City of London is not in favour of activeSpring Edition 2018 | The Slovenian Times

Global Pitch

Slovenian knowledge is reshaping the future of healthcare Oustanding article in Januaryâ&#x20AC;&#x2122;s issue of Scientific Report The Slovenian based scientific team at Smart Blood Analytics Swiss, have developed a revolutionary algorithm to diagnose diseases based on a blood test. Using this technology to analyze blood test results speeds up and improves diagnostics. The team has proved that blood parameters contain way more information than ever thought. The Smart Blood Analytics algorithm does not and should not substitute doctors. Instead, it is a doctorâ&#x20AC;&#x2122;s best and most loyal assistant and can potentially give the right diagnosis, confirm a diagnosis or expand differential diagnoses. It can, however, greatly improve the diagnostic process as doctors are able to make more accurate decisions more quickly, which means better outcomes for patients and reduced cost to the healthcare system.

The Slovenian Times | Spring Edition 2018

Blood tests play a crucial role in the detection, diagnosis and treatment of a disease. An estimated 60-70 percent of all decisions regarding a patientâ&#x20AC;&#x2122;s diagnosis and treatment, hospital admission and discharge, are based on blood test results. The true power of laboratory test results is frequently underestimated because clinical laboratories tend to report test results as numerical or category thresholds, with physicians mainly concentrating on those values

that fall outside the given reference range. As the health care approach focuses on diagnosis and early intervention, quick and accurate interpretation of blood test results is necessary for the quality of patient care and for cost management. Every disease originates from or causes changes at a cellular and molecular level, which are directly or indirectly almost always

Global Pitch Small changes and/or interactions between multiple different blood parameters that are equally important for detecting pathological patterns (disease "fingerprint"), can easily be overlooked, implying that the overall benefit of blood test results is often underestimated.

detectable by changes in the blood parameter values. These changes can be significant and physicians observe them by monitoring the parameter values that fall outside the normal ranges. However, small changes and/or interactions between multiple different blood parameters that are equally important for detecting pathological patterns (disease "fingerprint"), can easily be overlooked, implying that the overall benefit of blood test results is often underestimated. The Smart Blood Analytics machine learning algorithm is up to three times better than medical specialists at diagnosing diseases based solely on blood tests, and it is already changing the future of diagnostics. Our mission is to empower the interpretation of blood test results in an unprecedented way for the future. A small part of the teamâ&#x20AC;&#x2122;s work was published in the January 2018 Scientific Report (http://rdcu.be/EveV).

Founder and CEO "Healthcare systems are increasingly dependent on reliable blood tests. The true power of a blood test is frequently underestimated, they carry considerably more information than we ever thought. Blood test results are the information, not the knowledge. Both information and knowledge together are the true power of Artificial Intelligence, and are efficiently combined in our Smart Blood Analytics algorithm."

Quality assurance "Physicians use their knowledge, skill, clinical experience and the opinions of their colleagues to determine a differential diagnosis. I believe that our algorithm is their secret and one of the most loyal colleagues. Smart Blood Analytics is launching globally, therefore we have defined a superior strategy to adhere to the very strict

quality controls to meet the regulatory and customer requirements for healthier patients."

Biochemistry "Can we predict a disease based on standard blood tests alone? I thought that sometimes we could. But we, at Smart Blood Analytics, identified that the prediction accuracy exceeded our imagination. It is amazing! Every disease can be tracked at the molecular level and this is reflected in blood parameters."

Health truly is our greatest wealth, and I believe that using technology can improve and speed-up the diagnostic process. Being a Smart Blood Analytics Ambassador doesnâ&#x20AC;&#x2122;t just mean supporting the use of machine learning algorithms in medicine, it also means working and learning from people who strive to do the very best for humanity and use technology in a good and intelligent way."

Artificial Intelligence "Smart Blood Analytics is at the forefront of Artificial Intelligence in medicine. Even for an expert physician it can (and already does) serve as a trusted colleague, providing a personalized diagnosis. Imagine what it could do for you!"

Ambassador, Physician "There is little doubt that Artificial Intelligence and machine learning have significant implications for the future, and medicine is no exception. Smart Blood Analytics uses stateof-the-art AI technologies to interpret blood laboratory results to help physicians make decisions, as it can identify subtle signs of disease in blood laboratory results more quickly and more accurately than most physicians. In our department, the Smart Blood Analytics algorithm has proven useful in some tricky cases by suggesting a diagnosis not previously recognized by physicians, despite the consideration of all of the available clinical data."

Can we predict a disease based on standard blood tests alone? I thought that sometimes we could. But we, at Smart Blood Analytics, identified that the prediction accuracy exceeded our imagination. It is amazing! Every disease can be tracked at the molecular level and this is reflected in blood parameters.

Ambassador, Professional Athlete, Student "As a Laboratory Biomedicine student and professional athlete, Iâ&#x20AC;&#x2122;m aware of the importance of blood tests and their quick interpretation.

The Smart Blood Analytics machine learning algorithm is up to three times better than medical specialists at diagnosing diseases based solely on blood tests, and it is already changing the future of diagnostics. Spring Edition 2018 | The Slovenian Times

Real Estate & Investment Opportunities Column

Slovenia represents a green "escape" in the heart of Europe By Justin Young, Director and Owner, Slovenia Estates

Justin Young, Director and Owner, Slovenia Estates

What a difference a decade makes! At Slovenia Estates we’ve jumped into 2018 with renewed and reinforced excitement and enthusiasm on the back of our most successful year since 2007. Domestically the market continues its trend of improvement, while foreign investors are looking more and more towards Slovenia.

Foreign buyers are coming from more places than ever. Brexit does not seem to have deterred buyers from the UK; if anything, we have seen an increase in British buyers looking to get a foothold within continental Europe before the UK exits the European Union. We are seeing plenty of interest from other EU countries also, as well as the US, Australia and the Middle East. Russian buyers still make up a significant part of our clientele, but whereas five years ago such investors were looking primarily at the luxury end of the market, now the majority of enquiries from Russian buyers are about mid-range properties. Investors from the Middle East come mainly from Dubai, UAE and Israel. For them, Slovenia represents a green "escape" in the heart of Europe. Perceived safety is something that is frequently mentioned by those looking to buy here while the low crime level, favourable geographic position and wealth of both summer and winter activities are also important factors. Buyers like that Slovenia appears relatively unaffected by major incidents, yet its membership of international organisations such as the EU and NATO lends a sense of security and stability. Perhaps because of the "First Lady effect", the number of American tourists rose by 35 percent in 2017, a phenomenon that had a positive knock-on effect for Slovenia Estates because we sold more properties to US buyers in 2017 than ever before. Buyers’ wishlists have changed very little. Mountain areas continue to be the most popu-

lar, with the average budget around €300,000 for a three/four-bedroom house with character and some land. While many buyers are looking for a turnkey property that’s ready to move into, there’s no shortage of buyers willing to take on something in need of renovation, and with the challenges of restoring a property in a foreign country, many purchasers also take advantage of our full renovation services. The whole price scale is represented with some potential buyers with well over the average to spend on a luxury property, while at the other end there are bargain hunters seeking their own little bit of Slovenia for around €100,000. The majority of our buyers are interested in the area around Bled and Bohinj, northern Primorska – more precisely the Soča Valley, and Ljubljana Old Town where apartments of up to 100m2 are sought after – in fact, 90 percent of the enquiries we receive about Ljubljana concern properties in the Old Town. Prices have been slowly rising over the last two years, but most important is that we are seeing a continuous stream of enquiries because buyers firmly believe that Slovenia represents good value for money in comparison with their home countries. Most buyers we deal with are in it for the long-term; we tend not to see so much "flipping" where investors pick up a cheap property, renovate it and quickly sell it on for a profit. The majority are purchasing for their own enjoyment, and some rent out their property as a vacation home when they aren’t there. Typically, by doing so, they can expect

The Slovenian Times | Spring Edition 2018

a return of around four percent, making it a decent, steady investment. Looking forward, 2018 looks set to continue in a similar vein. This winter we have seen our busiest ever period with more sales than in the last four winters put together. Compared to the same time last year, enquiries are up by 60 percent. The signs are very encouraging though this is not to say that there won’t be challenges ahead. One notable feature of last year was the increasing lack of supply; in fact, demand outstripped supply fivefold in 2017. Nevertheless, our experienced team is ready to deal with whatever 2018 brings, and our long-standing presence on the Slovenian market combined with an excellent knowledge of the the real estate scene puts us in a strong position for the future.

The majority of our buyers are interested in the area around Bled and Bohinj, northern Primorska – more precisely the Soča Valley, and Ljubljana Old Town

Real Estate & Investment Opportunities Interview: Ronan Vaspart, Director of MIPIM

MIPIM 2018:

Urbanity: quality of the character of life in a city or town By Tina Drolc, M.Sc., MBA

Ronan Vaspart, Director of MIPIM

"By 2030, 91 percent of growth in global consumption will come from city dwellers and by 2050, 63 percent of people in emerging countries will live in cities. Therefore, there is alot to discuss about the best strategies for building cities in this increasingly globalised world", according to Ronan Vaspart, Director of MIPIM, the annual real estate fair that will take place from 13 - 16 March in Cannes, France. The premier real estate event gathers the most influential players from all sectors of the international property industry for four days of networking, learning and transacting. At MIPIM 2018, for the tenth consecutive year, Ljubljana, Slovenia’s capital city, will once again take part. Q At MIPIM 2018, 97 real estate projects from 24 countries will be showcased. Can you share some highlights? A MIPIM is the annual rendezvous point for the entire real estate industry: developers, architects, investors, brokers, public and private entities etc. This year we expect to welcome over 24,500 participants from 100 countries, including 3,100 exhibiting companies. Over 1,000 real estate projects will be presented at MIPIM and so it is impossible to pick just one! We have drafted a selection of some of the highly anticipated projects that will be on show at this year’s event and which can be found in the project directory.

Q A focus of MIPIM is the hotel and tourism sector. What are the future standout concepts that will be revealed in March? A Hotels with an urban view: room for innovation (10am, 15 March), is a standout conference session that will highlight the new hotel concepts to meet the demands of today’s highly discerning globetrotters. The discussion will range from co-living concepts to generator hostels, as well as new luxury hotel offerings which are taking on a leaner, smarter look. High level speakers will give their perspective on these new trends and include Serge Trigano, Presi-

dent, Mama Shelter (a hotel chain which creates and choreographs lively accommodation and restaurant facilities that are seen as true urban refuges); Guy Nixon, Founder and Chief Executive, Go Native (which provides serviced apartments in the UK for corporate executives and leisure travellers) and Sharan Parischa, CEO, The Hoxton (an open house hotel concept inspired by the streets and scenes that surround them).

Q According to PwC, there is an optimistic outlook prevailing throughout most of Europe’s property industry, however the industry is becoming more complex. New ways of collaborating outside traditional industry boundaries and new business models will therefore be needed to survive and compete in the new real estate ecosystem. What are the trends so far? A With time comes change and a need to adapt and innovate. This brings to mind the theme of MIPIM this year, Mapping World Urbanity, with urbanity defined as the quality of the character of life in a city or town. This theme continues on from our MIPIM 2017 theme, New Deal for Real Estate. This rise of connected urban areas is reconfiguring the map of world urbanity and in many cases, positioning the city, rather than the state,

as the economic powerhouse. By 2030, 91 percent of growth in global consumption will come from city dwellers and by 2050, 63 percent of people in emerging countries will live in cities. So, there is a lot to discuss on the best strategies for building cities in this increasingly globalised world. Public and private stakeholders need to explore, at a global level, the life in cities in the future, the evolving role of local authorities and the creation of new city models. For the real estate professional, the route to maximising returns is to achieve the right balance between a global vision and a local strategy that considers local specificities. New technologies also have an impact on the property industry and we will launch in Paris, in June, a dedicated event, MIPIM PropTech Europe, to bring together property and technology companies.

Q For the tenth consecutive year, Ljubljana, Slovenia’s capital city, will take part in MIPIM. How does the world’s leading property fair perceive Ljubljana’s presence? A We are delighted to welcome back Slovenia’s capital for its tenth consecutive year to MIPIM, as well as Mr Janez Koželj, the Deputy Mayor of Ljubljana. Slovenia is a country with true MIPIM roots. Ljubljana’s loyal presence yearon-year allows international investors to have a long-term view on the urban developments in the country and this is important for them. The presence of the leader of a city also reinforces the communication on the global real estate stage, that is, MIPIM. Project directory of a selection of projects being showcased at MIPIM 2018 http://pressroom.mipim.com/ press-release-en-2018/latest-internationalreal-estate-projects-showcasedat-mipim-2018-0208-5827

Spring Edition 2018 | The Slovenian Times

Real Estate & Investment Opportunities

Procurement through competition – 10 years of MIPIM In the Municipality of Ljubljana, we are publishing design competitions considering that the quality designed urban space significantly determines the community and signifies its culture. We are convinced that for the acquisition of all projects financed by public funds, the method of selecting on public competitions is one of those instruments of democratic decision-making which in particular encourages innovation and thinking outside the box. The public procurement trough design competitions ensures that the principles of equality of the competitors, the impartiality of the jury and transparency of procedures are respected. The goal of acquiring architectural, landscape and urban design solutions on competitions is to provide both public and professional qualified checking of all aspects needed to build sustainable city. This rule is also applied to the construction of buildings on key identity locations in the city, even if they are financed from private funds. Getting design solutions through competitions for private investors on sites sensitive for the city image is prescribed in urban planning documents. "We consider our city as living laboratory from which to manage sustainability in practice. By implementing innovative solutions we have been trying to approach the sustainability as a practical activity to be validated and tested in a real-life context. Good examples and successful pilot projects are giving us inspiration for experimenting with sustainability, as well as learning from mistakes. The most efficient way to sustainability innovations the city is seeking for is strategic use of green public procurements combined with the architectural, urban and industrial design competitions." Janez Koželj Deputy Mayor

Strategic public procurements The Municipality of Ljubljana is taking up strategic public procurements by awarding contracts for architects’ services which are focused on innovative, green and social quality of the projects. "Strategic use of public procurements for innovation is as any kind of procurement practice that is intended to stimulate innovation trough research and development and the market uptake of innovative products and services. Green public procurement is defined by European Commission as a process whereby public authorities seek to procure services and works with a reduces environmental impacts throughout their lifecycle." OECD, Government at a glance, 2017

The Slovenian Times | Spring Edition 2018

the skills of the profession and emphasizes quality based awarding criteria. Architectural design competition is one of the best means to provide for quality. It demonstrates the skills of the profession and emphasizes quality based awarding criteria." Recommendations for Design Contests ARCHITECTS’ COUNCIL OF EUROPE, 2010

Adequate procedures – the power of ideas Ljubljana is recognizing the value of innovative design ideas by implementing procurement procedures that support the creative solutions in architecture and urban design. In this way the city contributes to the understanding of quality design which could save cost in opposite to being considered as unjustified expensive option. The municipal procurement policy is based on believe that successful competitions are beneficial to the organizers, the participants and the community. • For municipality: competitions provide variety of options and design excellence. • For participants: competitions engage fresh thinking architects and designers who are searching for alternative solutions. • For the community: competitions create community interest that can contribute to its identity and understanding of architecture and is role in society. "Architectural design competition is one of the best means to provide for quality which comply with European public procurement law. It demonstrates the skills of the profession and emphasizes quality based awarding criteria. Architectural design competition is one of the best means to provide for quality. It demonstrates the skills of the profession and emphasizes quality based awarding criteria. Architectural competition means the procedure of evaluating the ideas of architects, landscape architects and urbanists in a formalized procedure on a defined program and defined criteria, anonymously weighted by an independent jury. In the case of Public Private Partnerships the design contest can provide optimum results in terms of quality and economic advantages and guarantees the quality of the outcome for the public partner." Recommendations for Design Contests ARCHITECTS’ COUNCIL OF EUROPE, 2010

Real Estate & Investment Opportunities

National Theatre Drama • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 3.904 m2 • GROSS FLOOR AREA: 9.093 m2 • PROGRAMME: Cultural - theatre • ESTIMATED INVESTMENT: € 30 Mio • INVESTOR: Slovenian National Theatre Drama Ljubljana • ARCHITECTURE: Bevk Perović Arhitekti • ESTIMATED COMPLETION: 2020 • CONTACT: info@bevkperovic.com

Athletic center • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 89.000 m2 • GROSS FLOOR AREA: 58.400 m2 • PROGRAMME: Atletski center • ESTIMATED INVESTMENT: € 21 Mio • INVESTOR: Mestna občina Ljubljana • ARCHITECTURE: prof. arh. B.Petrović, prof. arh. I. Rašković, prof arh. M. Đurić, arh. K. Ćuk • ESTIMATED COMPLETION: 2020 Spring Edition 2018 | The Slovenian Times

Real Estate & Investment Opportunities

Retirement Home Regentova • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 2.945 m2 • GROSS FLOOR AREA: 3.544 m2 • PROGRAMME: Retirement home and dwellings for the elderly • ESTIMATED INVESTMENT: € 5 Mio • INVESTOR: Dom upokojencev Center, Ljubljana • ARCHITECTURE: Atelje S. • ESTIMATED COMPLETION: 2020 • CONTACT: dom.center@duc.si

Dobrunje Prison • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 46.000 m2 • GROSS FLOOR AREA: 28.300 m2 • PROGRAMME: State male prison • ESTIMATED INVESTMENT: € 48 Mio • INVESTOR: Republic of Slovenia / Ministry of Justice • ARCHITECTURE: Počivašek Petranovič architects • ESTIMATED COMPLETION: 2020 • CONTACT: davorin@pocivasek.si 22

The Slovenian Times | Spring Edition 2018

Real Estate & Investment Opportunities

Rakova Jelša • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 24.340 m2 • GROSS FLOOR AREA: 5.852 m2 • PROGRAMME: Mixed-use (Residential, Service) • ESTIMATED INVESTMENT: € 15 Mio • INVESTOR: City of Ljubljana • ARCHITECTURE: Nava arhitekti d.o.o. • ESTIMATED COMPLETION: 2020 • CONTACT: saso.rink@ljubljana.si

Novo Brdo • LOCATION: Ljubljana, Slovenia • GROSS PLOT AREA: 54.962 m2 • GROSS FLOOR AREA: 67.036 m2 • PROGRAMME: Residential housing • ESTIMATED INVESTMENT: € 37 Mio • INVESTOR: SSRS – National Housing Fund • ARCHITECTURE: Dekleva Gregoric Architects d.o.o. • ESTIMATED COMPLETION: 2020 • CONTACT: arh@dekleva-gregoric.com Spring Edition 2018 | The Slovenian Times

Real Estate & Investment Opportunities

Interview: Dr Imre Balogh, CEO & Executive Director, Bank Asset Management Company - DUTB d.d.

Demand for Slovenian assets is increasing however there is still not enough FDIs By Tina Drolc, M.Sc., MBA Apartments in Mojstrana

"Demand for Slovenian assets is increasing, however there is still room for expansion in FDIs", says Dr Imre Balogh, CEO and Executive Director of DUTB. Dr Balogh estimates that 2017 was a year of ‘nice’ achievements in the real estate asset management operations. Initial results indicate that DUTB closed the year with 34.6 million commercial and 77.2 million residential properties, a total of 111.8 million. December 2017, DUTB signed long-term loan agreements to refinance its financial liabilities, substantially lowering the financing costs which overall will be around EUR 7m lower in 2018. The funds were used to fully fund DUTB’s obligations stemming from the DUT03 bond of EUR 423m, DUT04 bond of EUR 126m and a bank loan of EUR 169m.

Dr Imre Balogh, CEO & Executive Director, Bank Asset Management Company - DUTB d.d.

The Slovenian Times | Spring Edition 2018

Q Is demand to invest in Slovenia higher or lower compared to previous years? Are investors seeking a higher return?

for loans and operating enterprises, and less so for real estate. Now demand for the various types of real estate is also increasing.

A Demand for Slovenian assets is increasing, however there is still room for expansion in FDIs. 2017 was, for Slovenia’s size, quite good and we perceive that there is definitely ongoing demand. There is a shift in demand for DUTB’s assets. At the beginning, interest was mostly

Q What has been the Return on Investment in different asset classes? A I cannot, as yet, fully disclose as we are in the process of preparing the annual accounts for last year, but from the preliminary results

Real Estate & Investment Opportunities We have already returned in four years of our operation more than half of the capital that was provided to DUTB.

decisive value driving factor is the business story of the particular asset. Additionally, we do not expect higher interest rates in the next two years.

we can say at the operating income level, which means income realised on transactions, 2017 was an outstanding year. DUTB was highly profitable in all asset classes, i.e. loans, equity and real estate.

Q Do you expect any other equity positions

Q Are there perhaps other facts and figures that can be shared for last year?

A Last year we generated EUR 443m of inflows, which is 22 percent of the company’s cumulative transfered assets. Since the commencement of DUTB’s operations, aggregate realisation in 4 years is almost 65 percent of total transferred, merged and acquired assets.

Q Was the return greater than expected? A The return is quite an interesting issue here because DUTB had an initial fair valuation of all assets that were transferred, and the (negative) difference was charged against capital. On average, the transfers were at higher value than the fair value. So the capital partially covered the original losses, and from the operations we ensure recovery of investments by the taxpayers through two streams: the profit stream which is above expectations if looked at as the cumulative average annual return (according to the last public disclosure it was 14% p.a. on average from the beginning until 30 June 2017); and the interest premium we were paying on the bonds to the state-owned banks plus the guarantee fee which we pay to the budget. In the initial years the latter were a significant burden on DUTB’s profitability, but it was an income for public sector entities. If you take into account both streams, we have already returned in four years of our operation more than half of the capital that was provided to DUTB.

for attractive greenfield plots, we are looking for joint venture partners, and we have calculation for the price level of each. As for commercial real estate, the market has not yet fully revived, there has been a further significant drop in the prices and not many transactions even in 2016. However, our experience in the last two years has been quite different from the general trend – there is rising interest, supported by a lot of targeted marketing from our side, and we achieved higher than expected prices and volumes in sales to local and foreign investors. There is vivid interest for lower value assets from local investors, nevertheless as we go up on the size-ladder the proportion of foreign investors share is higher.

in your portfolio in 2018?

A Not many because of the manner how we acquire equity positions. One way is when equity is pledged as collateral for our loans - in that respect yes, there will be some transactions. The other way is debt to equity conversion, where there is a wipe-out of original owners and then the conversion of loans. We have only a couple of such processes in the making which we will finish soon and there are still cases where further financial restructuring is needed, but a very limited number, since in vast majority of the viable cases the implemented restructurings are already bringing positive results.

Q Geographically, the majority of investor interest comes from Europe. With higher interest rate forecasts, how would the individual asset classes be impacted?

A It is extremely hard to predict because if you have a fixed return on an asset and the interest rates go up, then the relative return on alternative investment shrinks and the price drops in a text-book case. However, the value of our assets could be affected differently by the market, especially because we are talking about exposures to operating companies, real estate that is in the production sector, etc., where the

If we exclude Ljubljana and its surroundings and the coast, the price level of real estate in Slovenia is still below its peak 10 years ago.

The Nokturno residential complex

Q Regarding Slovenia’s prevailing real estate price cycle which is quite high, do you prefer to sell real estate fast or do you wait? A We have an assessment of the potential value for each piece of real estate. If we exclude Ljubljana and its surroundings and the coast, the price level of real estate in Slovenia is still below its peak 10 years ago. However, a number of transactions in residential real estate are already higher than before the crisis which means that we hopefully will not have bubble of comparable size and it will not burst as it did last time. Unfinished or almost finished buildings such as Nokturno or Celovški dvori, and Spring Edition 2018 | The Slovenian Times

Real Estate & Investment Opportunities

Would you like to live at the seaside or have a seafront holiday home? Apartments in the Nokturno Complex for a Better Quality of Life Temperate springs, hot summers, warm falls and mild winters, make it possible to grow a variety of fruits and vegetables throughout the year. Ingredients such as olives, citrus fruits, figs, almonds and grapes are grown locally for the Mediterranean cuisine which is among the healthiest in the world.

The Slovenian Times | Spring Edition 2018

Some of the new apartments in the Nokturno residential complex are still available for purchase. In contrast to older properties, these apartments are available to move into immediately, require no additional investment for renovation and are furnished with all the modern equipment necessary for comfort. In addition to a storage room, each apartment also features a parking spot in the underground parking garage. Amenities like these are a true rarity in the Slovenian Littoral. Regardless of how many rooms there are, all apartments in the Nokturno complex are spacious and bright. Their flexible design allows for the easy subdivision of rooms with partition walls. Each of the apartments features either a terrace or a balcony with a view of the sea, accessed through a sliding glass door. The terraces have wood flooring and are mostly furnished with planters for flowers or herbs. All of the apartments are equipped with the connections for modern household appliances and communication devices, have air conditioning and feature video intercom systems. The floor is laid with quality oak flooring. The bathrooms and toilets are spacious and equipped with modern equipment from renowned global brands.

Due to favorable economic conditions and low interest rates on housing loans, demand for residential property is on the rise. This is particularly so in the Littoral region of Slovenia, where residential units represent not only the chance for a comfortable life but also the opportunity for investors who wish to rent to local and foreign visitors.

DUTB d. d. (Bank Asset Management company) DavÄ?na ulica 1, 1000 Ljubljana, Slovenia w realestate.dutb.eu e real-estate@dutb.eu t +386 1 429 38 95

REAL ESTATE

DUTB, d.d., Davčna ulica 1, 1000 Ljubljana, Slovenia w nepremicnine.dutb.eu e real-estate@dutb.eu t +386 1 429 38 95

ATTRACTIVE REAL ESTATE FOR SALE

NEW HOLIDAY APARTMENT PROJECT “MOJSTRANA” NET FLOOR AREA OF UNITS: 72.29 m² to 119.64 m² BUILDING NET FLOOR AREA: 931.44 m² YEAR OF CONSTRUCTION: 2011 YEAR RENOVATED: 2015 ENERGY PERFORMANCE CLASS: C (35-60 kWh/m²a) PRICE: 99,528.00 EUR to 127,483.00 EUR + tax

9 NEW RESIDENTIAL RESIDENTIAL HOUSES IN A PEACEFUL LOCATION IN THE TABOR DISTRICT, VRANSKO BUILDING NET FLOOR AREA: 105.00 m² to 107.00 m² COMBINED FLOOR AREA OF LAND PLOTS: 178.00 m² to

258.00 m²

YEAR OF CONSTRUCTION: 2008 ENERGY PERFORMANCE CLASS: D (60-105 kWh/m²a) PRICE: 130,453.00 EUR to 143,567.00 EUR (incl. tax)

GABROVO NASELJE AND ZELENI GAJ ROW HOUSES, DIVAČA These row houses are located in a peaceful, new residential neighborhood on the outskirts of the town of Divača. BUILDING NET FLOOR AREA: 2,435.90 m² FLOOR AREA OF HOUSES: 153.50 m² to 204.80 m² YEAR OF CONSTRUCTION: 2008 ENERGY PERFORMANCE CLASS: Energy performance

certificate not needed (Article 334 of the EI-1 Act) PRICE: 119,968.00 EUR to 142,799.00 EUR (incl. tax)

NOKTURNO APARTMENT COMPLEX ON THE MARKOVEC HILL OVERLOOKING THE CITY OF KOPER APARTMENT NET FLOOR AREA: 91.00 m² to 134.00 m² YEAR OF CONSTRUCTION: 2010 ENERGY PERFORMANCE CLASS: B2 (35 kWh/m²a) PRICE: 159,500.00 EUR to 255,900.00 EUR (incl. tax)

UNDEVELOPED BUILDABLE LAND PLOT IN AN EXCELLENT LOCATION IN THE CITY OF KRANJ Suitable for construction of a multi-apartment residential building with appertaining amenities. TOTAL LAND PLOT FLOOR AREA: 26,622.00 m² PRICE: 3,000,000.00 EUR + tax

CELJE BUILDABLE LAND PLOT A buildable land plot suitable for residential development, service and supply-focused businesses, and garages TOTAL LAND PLOT FLOOR AREA: 8,583.00 m² PRICE: 471,500.00 EUR + tax

HISTORIC TOWNHOUSE IN KRANJ GROSS INTERNAL AREA: 498.80 m² TOTAL LAND PLOT FLOOR AREA: 165.00 m² YEAR OF CONSTRUCTION: 1949 YEAR RENOVATED: 2005 ENERGY PERFORMANCE CLASS: pending PRICE: 200,000.00 EUR + tax

BUILDABLE LAND PLOT IN MARIBOR URBAN AREA The land plot is situated in a peaceful location and has a building permit for residential development TOTAL LAND PLOT FLOOR AREA: 19,092.00 m² PRICE: 1,690,000.00 EUR + tax YEAR OF CONSTRUCTION: 2011 YEAR RENOVATED: 2015 ENERGY PERFORMANCE CLASS: C (35-60 kWh/m²a) PRICE: 99,528.00 EUR to 127,483.00 EUR + tax

TWO BUILDABLE LAND PLOTS IN FIESA TOTAL LAND PLOT FLOOR AREA: 1,364.00 m² and

3,486.00 m² PRICE: negotiable

Real Estate & Investment Opportunities

Maribor and Drava Region among

the Top 10 investment-friendly places The Municipality of Maribor and the Drava Region are both ranked among the top ten on the Financial Times fDi’s European Cities and Regions of the Future. Specifically, they are in the Strategy category, ranking small European regions and micro-European cities based on their strategy for attracting investment. At the end of March, the British-Slovenian Chamber of Commerce will host a business conference where attendees will be able to exchange best practices, make new connections, learn how Manchester attracted investments, and more.

fDi’s European Cities and Regions of the Future 2018/19 According to fDi Intelligence, fDi’s European Cities and Regions of the Future 2018/19 ranking is not limited to the European Union, it seeks to find the most promising cities and regions across Europe. To create a shortlist for its ranking, the fDi Intelligence division of the Financial Times collected data using specialist online FDI tools – fDi Benchmark and fDi Markets – and other sources. Data was collected for 489 locations (301 cities, 150 regions and 38 LEPs) in five categories: Economic Potential, Labour Environment, Cost Effectiveness, Infrastructure and Business Friendliness. The locations scored up to 10 points for each data point, which were weighted by their impor-

The Slovenian Times | Spring Edition 2018

tance in the FDI decision-making process, in order to compile the subcategory rankings, as well as the overall European Cities and Regions of the Future 2018/19 ranking.

Municipality of Maribor and the Drava Region The efforts of not just Maribor but also the broader Drava Region did not go unnoticed by the Financial Times magazine. The city and its encompassing region were included on the list of European cities and regions with a well-developed strategy for attracting investment. Maribor was ranked seventh most investor-friendly micro-European city, while the Podravje region was sixth in the most investorfriendly small European region category.

Real Estate & Investment Opportunities According to Andrej Fištravec, Mayor of Maribor, Maribor and the Drava Region ranked among the fastest developing and most prospective cities and regions in Europe: I am thrilled that Maribor and the Podravje Region are on the Top Ten list for investment attraction. We have put a great deal of effort into the latter for the past three years. The titles that we have been awarded prove that our strategy was well received. Miha Leskovar, Director of the Maribor Development Agency, believes the titles awarded indicate that the operations of the investment office established in 2017 have been fruitful: In receiving this award, we have placed ourselves on the map of Europe. In the forthcoming year we will focus on two goals – internationalisation and attracting foreign investors. We wish to bring the regions closer together as we believe unity would make us stronger. Božidar Pučnik, Head of Invest Podravje, emphasised the importance of the investment office’s dual goals: On the one hand, we strive to generate more jobs and on the other, we wish to help existing companies. The decision to create the Invest Podravje platform was made systematically. We checked what we had – the properties, offices and halls – and began compiling databases. The system of investment acquisition comprises everything from the first meeting to the final investment. The Municipality of Maribor considers Aerodrom Maribor, Vila Mari, RTS24, Serioplast, Aros Mobili – which was restructured with municipal aid – and Brobo Evropa, to be its major investments. Marko Kovačič, Economic Advisor to the Mayor of Maribor, stated: We have TAM Europe developing an electric bus which we think will be the turning point in the company’s development. We also helped the Florjančič Tisk company by amending the zoning plan. And in terms of the Magna investment, we initially wanted to help by finding the optimal location. In October 2008, the companies in Maribor generated 68,000 jobs. What followed was a loss of 13,000 jobs by the end of March 2013. Since then, there have been 4,700 new jobs and the declining trend has stopped. According to Kovačič, IT company EON Reality is expected to be the next investor in the city. They have expressed their interest in coming to Maribor, but the Municipality is still waiting for a response from the Slovenian government regarding a subsidy.

04 05 Photos 01 Maribor, Main Square; Photo: Jure Kralj 02 Maribor, Dravska Villa; Photo: Gregor Mursec 03 Maribor, Lent; Photo: Jurij Pivka 04 Maribor, Old Grapevine Festival; Photo: Vesna Male 05 Maribor, Old Grapevine; Photo: Domen Groegl 06 Maribor, Plague Column; Photo: Marko Petrej 07 Maribor, Cathedral; Photo: Navdih.net

Maribor was ranked seventh most investor-friendly micro-European city, while the Podravje region was sixth in the most investor-friendly small European region category.

Spring Edition 2018 | The Slovenian Times

Investment Opportunity

Bumbar Park The largest children´s park in Slovenia with 4,500 m2 playground area located on the outskirts of Maribor city. Over 25,000 children in the market-gravitational area make this property a long-term investment opportunity. Address: Type of use: Land: Year of construction: Renovated: Energy consumption: Floors: Net useable area: Parking place: Occupancy: Asking price:

Miklavčeva ulica 5, Maribor Hospitality 7,117 m2 1980 2009 56 kWh/m2a GF and partly 1st floor 2,188 m2 75 in front of the building 100% 1,200,000 EUR

In 2009, the former industrial hall was converted into the largest children park in Slovenia. It covers 2,000m² indoor and 2,500m² outdoor play area. The property includes pirate ship, sports arena, trampolines and inflatable playground, family picnic garden and small go-karts course. Part of its hospitality offer is also a bar with small kitchen, suited to cater children’s birthday parties. The hall with 9.6 metres high ceiling and large private parking lot could easily be converted back to logistic or industrial use. The real estate is situated in Studenci district in a predominantly residential area only 2 km from shopping centres and several elementary schools. The property is located at regional road connecting Maribor with Koroška region only 4 km from the city centre and 8 km from the E57 highway connection Maribor - center. The region ranked second as regards the contribution to the national GDP with the average EUR 11,464 yearly disposable income per capita out of which EUR 565 is spend for children’s recreation and entertainment. In addition to over 260,000 yearly tourist visitors the market-gravitational area of the children park covers 20 elementary schools with over 25,000 students.

HETA Asset Resolution d.o.o. Dunajska cesta 167 • SI-1000 Ljubljana

Mario Lukić

Real Estate Transaction Manager T: +386 (0)1 580 46 39 mario.lukic@har.si www.aaaplatform.com • www.har.si

More information about investment opportunities is available at www.nepremicnine-har.si

Investment Opportunity

Commercial Premises in Koper Fully rented premises right in the middle of old city centre. The 3-stories high commercial building is long-term leased to tenants from public sector. Address: Type of use: Year of construction: Last renovation: Energy consumption: Land plot: Floors: Net useable area: Parking: Occupancy: Asking price:

Trg Brolo 12, Koper Office, Class B 1960 2014 92 kWh/m²a 862 m2 from 1st to 3rd floor 1,466 m2 public parking area in the vicinity 100% 1,500,000 EUR

The commercial building lies in Koper´s old town centre at Trg Brolo. On the ground floor of the building there are retail premises owned by the biggest retailer in the region and a reception with own street entrance. The first floor is used for public offices and the further two floors are used for professors’ cabinets and university lecture rooms. In the basement there are small storage premises owned by the retailer and heating room owned by HETA. Floor area is divided into smaller office units with meeting room, lecture room, lavatories, kitchenette and archive premises. The property is located in the mid of Koper´s old city centre. Koper is the administrative, commercial, educational, political and cultural centre in south western Slovenia. It is the largest, most developed city along the Slovenian coast. This historic city is located only 20 kilometres south of Trieste, Italy and about 30 kilometres north of the Croatian border. The location is considered as prime due to vicinity of the beach. The real estate is easily accessible via A1 highway connecting Koper with Ljubljana and Italy (Trieste) only 1 km away. On-site parking is limited; however there are public parking areas in the neighbourhood.

HETA Asset Resolution d.o.o. Dunajska cesta 167 • SI-1000 Ljubljana

Polona Prosen

Real Estate Transaction Manager T: +386 (0)1 580 46 59 polona.prosen@har.si www.aaaplatform.com • www.har.si

Leadership Corner Interview: Professor Lucija Mulej Mlakar, Director, Budnjani d.o.o. Kevin Jackson, Director of Ideas and Innovation, The Experience is the Marketing

Q Both of you have a mission to help your clients achieve their growth potential. How do you turn dreamers into achievers?

We are ready to create

Lucija: I believe that true transformational

a better world! By: Tonja Blatnik, TST Digital Editor / Communication Hub Host

There is no doubt we are facing a new wave for the economy, business and leadership. In order to shed some light on the future trends, get some fresh insights and provide clarity, we challenged two great minds – Kevin Jackson and Professor Lucija Mulej Mlakar. The concept of this interview is to offer readers two perspectives – a business-marketing point of view and a more holistic leadership angle. Kevin Jackson is at the forefront of experiential marketing, an expert in sales, a leader in branding and a sought-after keynote speaker. He has been a significant player with respected marketing services groups including Interpublic, Grey and Saatchi, and has worked on campaigns for brands such as Budweiser, British Airways, Coors, McDonalds and Coca-Cola. As the Director of Ideas and Innovation at The Experience is the Marketing, Kevin recently gave a lecture in Ljubljana at the invitation of the British-Slovenian Chamber of Commerce, presenting his rare understanding of every conceivable touchpoint between a brand and its most valuable audiences. Professor Mlakar is an anthropologist, sociologist, writer and lecturer, and innovator of human capital; her passion is vivid and full of insights for the 21st century economy. Her moto is "Perceive. Awaken", and she combines hard-core science with subtle spiritual and subconscious concepts of new science, actually of a new paradigm. For companies she provides added value as an observer, co-creator and chief spiritual officer, taking care to ensure the right synergy and harmony, which is not possible without discontinuities. She is the author of seven books and numerous articles, claiming that a new paradigm confesses "objectivity" as a design of classical mechanics and opens to an existential ability to see beyond. We face this in every way, most profoundly through the digitalisation of professional and daily life. We are losing solid ground and the future leaders will have to have strong personalities. "Because personalities are the future advocates of stability; the world, in general, has lost its simplicity," she observes.

knowledge, alive and meaningful, thus helpful, creates a sphere of mutual trust. Of course, our clients test us which is good because trust needs to be earned. Dreamers lack self-esteem and action; achievers lack creativity and spontaneous touch, and this is where I play a role. I combine subtle with solid, invisible with obvious, spirit with matter, and I call it business anthropology from within.

Kevin: Great question, there are so many different levels of answer to this question, where do we start from? Where are we trying to get too? Simply put its this, read any biography of any sportsperson who has become world class, they all say the same thing, talent gets you so far, but hard work, dedication and focus gets you to the top. The same is true in business. Business leaders need to inspire their colleagues - leadership is about inspiration, management is about control. We need to set one simple objective with a deadline. Everyone in the organisation should be involved and understand what their individual and collective role is, and then it needs to be fun, engaging and everyone needs to be able to tell their story, their fit in the overall narrative. It’s simple to say but difficult to do because it means change, and change has complexity woven in. Q Kevin, as an advocate of the experience economy, could you summarise how the marketing industry is changing? What is an absolute must in terms of knowledge for companies? The industry has changed and is changing because great marketing is no longer about just saying things to people, it’s about doing things for people. Successful brands understand the importance of engagement, creating meaningful and rewarding experiences, whether online or in the real world. The absolute must is to treat people as people, whether they are consumers, corporate clients, partners or employees. Entertain them, educate them, connect them with each other and above all, listen to them. Make them part of the story.

Q Lucija, as an advocate of multiple intelligences, could you summarise what kind of practices and business models bring greater added value for all stakeholders? Certainly openness to the new and unusual. Business is great but it generates clusters of customs that are no longer serving the everchanging reality. The air that we breathe is full

The Slovenian Times | Spring Edition 2018

Leadership Corner of ideas and potential, but we must reinvent the methodology for our leaders to see this potential. If they just cope with multiversity in every area of business and their personal life, there is no space left for fresh and simple. My concept is Budnjani 4Q, (Iq, Eq, Sq, Pq), the connectivity of intelligences and the methodology inherent to the development of human potential is transposing the classical approach.

Q What is your view about the development of artificial intelligence which is profoundly changing business and society? Lucija: Medicine is, from my point of view, already AI with all the miraculous solutions where special machines and well-defined materials are used to serve the genetic imperfections of humankind. We are part nature and also nurture. We already substitute our biological defects with culture and technology. AI is the logical successor of old science; the world is changing very quickly and our capacity to follow the currents and pitfalls of growth are very limited. We need AI. Alongside ethics and strong personalities, AI is great and not dangerous in this respect.

Kevin Jackson, Director of Ideas and Innovation, The Experience is the Marketing

Kevin: Hmmm, yes! AI is the new electricity, try and imagine a time before electricity and look at what it has done for everything. AI is the same, it will be in everything. It is going to change all of our lives for the better. It is going to move us in fantastic ways, it is a resource to be used. Q What will the future bring in terms of business and leadership? What trends do you predict in the next five years? Kevin: The next five years are going to be as exciting as the last five. Where are we going? As Sir Issac Newton said, for every action there is an equal and opposite reaction. We are moving to more human skills and thoughts. Where now is the reaction to 2007 and the financial crisis, the thought was that people made mistakes but we can believe in data and algorithms. Hence the growth of social media and the fascination with Big Data. We are shifting to more human skills, like insight. Don’t take my word for it, look at the World Economic Forum‘s prediction of the top skills for the next five years. Creativity, complex problem solving, collaboration and people management.

Lucija: Certainly change will be in the rise of ethics and interdisciplinary approaches in all spheres of our lives, since the unexpected side effects of science and society are every day’s agenda and nightmare all over the world. And my Budnjani 4Q is one possible answer.

Professor Lucija Mulej Mlakar, Director, Budnjani d.o.o.

Q What do you believe in with every cell of your body? Lucija: That we live in a great era and that just now we are ready to create a better world. We need to start building bridges instead of walls, and we have to start with ourselves. We need to evolve from being outcasts to being involved. We need to wake up!

Kevin: I believe in S. O. F. O. Stand Out or F**k Off. We spend all of our time trying to fit in, to adjust to those around us, it is the worst thing ever. If you don’t stand out, how will anyone know you. If you don’t stand out, how will you get your promotion, your pay rise, that new

client everybody is after? One of the crowd means you are not doing a great job for you, your family or your company. There are loads of similar people, loads of similar companies, don’t be judged as one of them, be one of one!

We spend all of our time trying to fit in, to adjust to those around us, it is the worst thing ever. If you don’t stand out, how will anyone know you. Spring Edition 2018 | The Slovenian Times

Leadership Corner

The dark side of talent By Saša Fajmut, M.Sc.

Talents usually represent top 5% of employees in an organisation. They are considered to be the smartest, most capable and promising individuals who will eventually take on company‘s leadership positions. To help them prepare for leadership role, organisations often institute formal talent development programs (Zenger and Folkman, 2017). However, statistics show that companies consistently fail at identifying talents. Data suggests that up to 40% of individuals in high-potential programs may not belong there (Zenger and Folkman, 2017). A major reason for this is that scientific and objective methods for talent identification are rarely used. Talents are usually identified by managers who rely on their instinct and vary widely in their criteria on what is a talent. Not only do false positives cost money, it is also self-deceiving for both the person and the organisation.

What are the reasons for this? Let‘s take an example of how a typical talent-to-be looks like. Have you ever met a person who is extremely charismatic, self-confident and speaks flawlessly in front of an audience? In addition to strong performance, their every move radiates self-assurance and competence? This kind of people are definitely the first to be identified as the most promising individuals in the company. When they become leaders, it is very easy to believe everything they say and to blindly follow them. Well, you will probably be dissapointed because the aforementioned characteristics of high selfconfidence and so-called charisma are strongly connected to narcissistic personality disorder and psychoticism. Research in this area confirms that such traits are found much more often in boardrooms than in the average population (Chamorro-Premuzic, 2017). One might even notice that people generally tend to prefer self-confident leaders as opposed to humble and lowprofile managers. We simply like „charismatic“ leaders, despite the fact that they often put other people down. However badly it may sound, the less self-confident and lost we are, the more we are likely to follow them. This creates toxic organisational cultures where such fatal characteristics are even rewarded and enable poisonous personalities to thrive. The dark side of narcissism and over-confident people is that they have a huge blind spot and deluded selfviews. As a consequence, they are not ready to change their perspective and are thus not coachable. They strongly resist personal development or any other kind of intervention. They even react aggressively to negative

The Slovenian Times | Spring Edition 2018

feedback. Unfortunately, without being able to see your true self, there is no real progress in life. A shiny side of talent that once served as a career boost may, due to its dark side, become a tragic derailer for many leaders. In addition to narcissistic traits, there are also other types of flaws in talented people. For example, creative people are usually less reliable with poor attention to detail; diligent people are prone to procrastination and micromanaging; people with extremely developed social skills may use them to manipulate people. One needs to be aware that extremely positive characteristics always come with their downsides; the most important rule of thumb is to place those talents in a job position where their strengths contribute the most value and their weaknesses create as little damage as possible. Finally, the highest self-deception for organisations are talented people who are not reaching their true potential. If performance is a function of effort (motivation) and talent (ability) (Chamorro-Premuzic, 2017), then an individual who is highly talented but shows weaker performance than their less talented colleagues is questionable for further development. Such people are literally wasting their potential due to poor motivation. It is worth looking at many possible reasons for this, as it may also be the manager‘s failure to properly engage such challenging individuals. In other words, if a talented person is not trying hard enough to develop to their best and the reasons are not within the organisation, it might

be better to invest in somebody less talented but more willing and capable to progress. In the end, it is talent plus motivation that matters. This is why it makes sense to deeply investigate whom you regard as talented and what is their true potential for future development. Maybe it‘s time to look deeper into organisational selfdeception on talent management and to start looking objectively for stable, passionate and genuinely dedicated people instead.

Sources: • Chamorro-Premuzic, T. (2017). The Talent Delusion: Why Data, Not Intuition, Is key to Unlocking Human Potential. London, Piatkus. • Effron, M., Ort, M. (2010): One Page Talent Management. Eliminating Complexity, Adding Value. Boston, HBR Press. • Leadership and Self-Deception: Getting Out of the Box (2010). The Arbinger Institute. Oakland, Berret-Koehler Publishers, Inc. • Zenger, J., Folkman, J. (2017). Companies are Bad at Identifying High Potentials. Harvard Business Review: https://hbr.org/2017/02/ companies-are-bad-at-identifying-highpotential-employees?utm_campaign=hbr&utm_ source=facebook&utm_medium=social

Saša Fajmut, M.Sc., Director Leadership Services at Amrop, is responsible for leadership assessments and development. She holds a Master’s Degree in Clinical Psychology and an Executive MBA.

Education Perspective Column

To reduce the Precariat we need a sound Political Will Slovenia might just turn out to be the first country that finds viable social ways to stop the growth of precariat. It has several strong predispositions for the sucess. The first advantage it has is its historical experience of workers self-management. Many have studied it, and Scandinavian countries were interested in it while modernizing the social state. The second advantage is the developed civil society and strong academic infrastructure, needed to find solutions on interdisciplinary level, namely through the standing points of sociology, economics, political science, law, psychology and occupational medicine.

By Črt Poglajen, Political Analyst; Photo: Miha Fras

people, of which 754,000 are employed, the number of precarious workers is 322,000. Their future remains unresolved, concealed from the eyes of the public and far from being of any interest to the major media outlets.

The main problems of the precariat At the Institute for Precariat Studies, we have studied the consequences of precarity from all aspects. Our research showed that precarious work is increasing social insecurity, the risk of falling below the poverty line and declining working conditions. But the negative impacts of precarious work are wider still. According to Professor Aleksandra Kanjo Mrčela – it is leading to the de-professionalisation of professions. And at the same time, as macroeconomist Professor Jože P Damjan warns, precarity is also reducing economic freedom. "In an environment without equal opportunities, only those individuals who come from wealthy families can be economically free," as he says. According to Metoda Dodič Fikfak, Head of the Institute of Occupational, Traffic and Sports Medicine the main problem we have is a lack of professionally recognised measures and the necessary standards to reduce the level of precarity in the public and private sector.

By Črt Poglajen, Political Analyst

All social partners need to act now

Precarity is a still river that runs deep. Every now and then a public discussion is started about it. Some ten people gather in front of the ministry demanding better working conditions for individual groups of workers who are in especially difficult situations. And that’s about it. The State is meanwhile busy promoting competition and economic growth, and labor unions are trying to rise the salaries of full-time workers. In a country with 2 million

To make a breakthrough and turn the trends of precarisation around it is mandatory that all those involved in the social discourse take their share of responsibility. Labour unions know that the ongoing rise of precariat and the precarisation of full-time employment are processes that remove their power and influence. Companies, with vision and insight into medium-term future, know that they can get more from full-time employees than they can

from outsourced workers, possibly appointed by employment agencies. High ranking ministry representatives know that precarity, along with the ageing population, is forcing the State into higher social expenditure and lower revenue. The result is the falling standard of services for full-time employees and ultimately debt. The interest for solutions has to be mutual therefore.

2018 - High time for contemplating precarity In June 2018 Slovenia will have parliamentary elections. A new government will be formed and new ministers chosen, providing an opportunity to make political change and implement social responsibility as a necessity to enable a long-term development. It is essential that we make use of the advantages mentioned at the beginning od this article, and that we start regulating work by finding a solution at both the national and international levels. If anywhere, Slovenia can be an innovator in the area of preserving and improving the quality of work. But it is, as Dodič Fikfak stressed, of vital importance that we take a step forward in the political sense first (at the party level). To start the process of real solution, the situation must be acknowledged and concrete solutions must be found in cooperation with experts and citizens before the next crisis. Spring Edition 2018 | The Slovenian Times

Education Perspective

Digital economy has changed the world

Digital economy is a reality that creates immense opportunities but also significant challenges for all organizations. The near future will bring driverless cars and trains, flying drones that deliver our packages, internet through your contact lenses and sensors in your clothes. In such new reality, one thing is for sure: we will have to understand it to be able to facilitate our lives as much as possible. An integrated understanding and a toolset to lead digital transformation of your business you can get by attending a 3-module Program that covers most important topics that every company should be aware in the process of digital revolution: Digital Business Model, Executing Digital strategy, Digital Marketing. Modules of Digital Transformations are organized and held at IEDC-Bled School of Management in Slovenia, one of the leading international management development institutions in Europe.

The new Intelligence Digital promises significant financial upsides. Digital leaders can expect to grow revenues by 5-15%, reduce costs by 1020% and realize potential bottom-line improvements of over 30%. Digital revolution is "democratic" because even small companies and small countries can lead and disrupt the big ones. Digital revolution enables a new kind of globalization and new global start-ups or global players are disrupting local companies. Examples are What’s app, Viber, Skype, Amazon, Apple pay, Alibaba Express to mention some of them. There are differences in region by region and country by country in the way that clients adapt new channels, new payment methods, new brands and how fast digital companies manage to build trust. Germany is still a country with high usage of cash, while India is promoting very fast online and mobile payments. Tanzania is the first country that introduced the same mobile payment process through all mobile operators enabling total coverage. Branislav Vujović, New Frontier Group, Austria

Main factors a company should consider before executing it’s digital strategy The big risk for any company executing its digital strategy is to focus too much on the technology and its deployment. Yes, the technology will undoubtedly be important, it may even be the inspiration for a new business model or process design that would not be possible without technology, but it is only one element of what will be a complex change process. It is as important to recognise that the opportunity for technology for businesses lies in the changes, both operational and strategic, that it enables and shapes. For any investment made to implement a digital strategy, the changes must be understood and managed. For example, a change in a business model is likely to require a change to the company’s operating model. As history has taught us, projects to execute a digital strategy usually don’t fail because the technology doesn’t work; they fail because the people and organisational changes were not effectively managed. Professor Joe Peppard, MIT Sloan School of Management, USA

The Essence and Impact of Digital Marketing The term "digital marketing" marks a growing trend in B2B and B2C contexts alike to acquire, retain, and engage customers across multiple technologically mediated means – search engines, e-mail campaigns, social media, websites, and mobile apps. In essence, firms’ digital marketing initiatives reflect their efforts to "be there" for the right customer at the right time and place with the right offering. The preceding characteristics – profitability and "trackability" – represent the crown jewels of digital marketing, and lie at the very foundation of its promise. The effective practitioner of digital marketing is in a position to evaluate with a previously unavailable level of granularity the bottom line impact of his or her efforts. As more and more firms embrace the promise of digital marketing, it is critical to get to know the "nuts and bolts" of how digital marketing is done, and to what effect. True to its principles of embarking on bold initiatives, IEDC-Bled has chosen to design and deliver a "trifecta" of digital marketing offerings. It is indeed my privilege to be associated with this creative world-class business school, and to assist with delivery of one of these courses. Professor Kersi D. Antia, Ivey Business School, Western University, Canada

The Slovenian Times | Spring Edition 2017

DIGITAL TRANSFORMATION

3 MODULES 6 DAYS 1 PROGRAM

Get an integrated understanding and a toolset to lead digital transformation of your business M1

Digital Business Model

March 15, 2018

Executing Digital Strategy

April 16, 2018

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May 17, 2018

www.iedc.si/digital

International Business Partners TOPIC: Blockchain technologies and the future of business

American Chamber of Commerce – AmCham Slovenia Blockchain technology is among the biggest technological innovations of the past decade, and it has great potential to change existing processes and the way we work at all levels of society: state administration, the private sector and public life. At AmCham Slovenia, we believe that at a time when the Slovenian economy is being rebranded as "green, creative, and smart", in line with the government’s initiative "Slovenia, the Green Reference Country in Digital Europe", and considering the knowledge present in Slovenia, that Slovenia has an exceptional opportunity to become one of the world’s leading countries in the development

and implementation of blockchain technologies. Blockchain technology and the business environment have many opportunities and connections and we need to spread the knowledge about the impact of this new technology,

as well as open a dialogue and ensure transparent collaboration. At the same time, we need to exercise caution with cryptocurrencies as many experts warn that the cryptocurrency bubble is going to burst.

means that it provides end users, companies and countries with an additional level of security in e-commerce. As a Chamber of Commerce, we will always be at the forefront of innovation that will make

business simpler, more transparent and more secure. We believe that blockchain technology is an innovation that will bring additional benefits to e-commerce.

British – Slovenian Chamber of Commerce – BSCC We welcome blockchain technology as this is an important technological advance that will make online business easier and more secure. The technology itself enables the effective introduction of smart contracts which are initiated automatically when conditions are met. The whole system is decentralised which means that it is much more stable and more resistant to possible attacks. At the same time transactions, once executed, are recorded in the transaction chain and thus become permanently recorded in the chain along with other transactions. In so doing, the likelihood of misappropriation is nearly eliminated which

The Slovenian Times | Spring Edition 2017

International Business Partners

The German-Slovene Chamber of Commerce and Industry â&#x20AC;&#x201C; AHK Slowenien

In 2018, the German-Slovene Chamber of Commerce and Industry will focus on new technologies, smart factories and digital integration of processes, with special emphasis on the understanding and application of blockchain technologies within companies. In order to address this topic of broad and current interest, the Chamber will organise several events. The first two will take place in March: The very first

conference on law 4.0 in Slovenia will focus on the legal framework of blockchain technologies, and at the Empower Production 4.0 Conference, production managers will be shown the benefits of automation and robotisation processes, and lean production. In April, managers and experts from different industries will join together at the Smart Business, Smart People Conference, where renowned international

experts will talk about the impact of blockchain technologies on digitisation in SMEs. Furthermore, the German-Slovene Chamber of Commerce invites all companies engaged in German-Slovene economic relations and with innovative concepts and best practice examples of digitalisation to apply for the German Economy Award. The winner will be named at the Gala Award Ceremony in May.

Advantage Austria

Dr Peter Hasslacher, Director, Advantage Austria Ljubljana

Non-financial industries are ripe for the Blockchain disruption! Blockchain technology is now more and more common, also outside the financial sector, and contributes to leaner processes, potentially massive cost reductions and a smoother customer experience. The pioneering technology, known as 'blockchain', not only accelerates processes but also substitutes very complex systems with automated procedures and actions.

Partners in transactions will be communicating very directly and will also be able to entrust their data into a completely decentralised environment. This will create countless opportunities for Slovenian and Austrian companies to work together, while implementing many blockchain-driven solutions into business. In other words, until 2020, the European Com-

mission will set aside more than EUR 300m for projects involving blockchain, forming a substantial financial framework for future cross-border partnership projects between Slovenia and Austria. We hope that such opportunities will link the two economies even closer together.

Spring Edition 2017 | The Slovenian Times

International Business Partners Economy

Luxembourg-Slovenian Business Club (LSBC) Think forward, Think Blockchain By Iztok Petek, Nataša Zajec Photo: Nemanja Glumac

Blockchain technology can be compared to the internet, when it was launched people thought that it could only be used for email, they could never have imagined the endless possibilities of its use today. The blockchain revolution has only just begun and it’s set to infiltrate all industries. Its potential to redefine our interactions in business and society and create new business models seems unlimited. Blockchain based technologies will, in the future, have influence on all business, through payments, governance, B2B service platforms, etc. However, there is still a long way to go before blockchain technology will really

Italian Trade Agency (ICE) Blockchain is often considered as one of the most important breakthroughs in international technologies since the discovery of the internet, and it might become one of the most important revolutionary technologies of the future. From its first application in cryptocurrencies in 2008, it’s utilisation has been blooming quickly during recent years. The European Commission has been funding blockchain projects through the EU’s research programs, FP7 and Horizon 2020, for the last five years and will continue to do so until 2020, with up to EUR 340m available for blockchain solutions. The recent launch of the EU Blockchain Observatory and Forum is a further step toward the reinforcement of blockchain technologies, the stimulation of its development and introduction of cross-border projects. With increasing trust, speed, decentralisation, traceability and security on the one hand, and reducing transaction costs on the other, blockchain technologies have huge potential for making social and economic online transactions more secure by protecting against attacks and removing the need for intermediates. Blockchain technologies can be applied in many areas, from

The Slovenian Times | Spring Edition 2018

infiltrate business and society. It would be a mistake to jump into the innovation potential of blockchain without understanding the technology, its possibilities and constraints. Many people associate blockchain to cryptocurrencies such as Bitcoin and nothing else. Business leaders and innovators need to see beyond that and identify the trends and disruption opportunities of blockchain in their industry or market. LSBC has taken an active role in raising the awareness about blockchain by connecting enterprises for projects, promoting business cases and educating managers about its transformative power for business and society. financial transactions to smart contracts, tokenising real estate, e-elections, audits, monitoring the origin of tradeable goods, trading services, goods, energy and many others. When the question of its regulation, legal protection and tax framework will be solved, we may have a new winner on the market. And Europe, with its startups, has the potential to become a leading world blockchain region. For this and other areas of innovation, ITA have dedicated a platform on how the most innovative companies meet the opportunities for internationalisation: http://www. innovationitaly.it/en/

International Business Partners

Plan your future Become a Doctoral Student at the FELU.

At KSBC we are sure that supply and demand already recognised cryptocurrency as the ofwill always shape business, how and with what ficial means of payment, while others are still technology the goods and services will be paid deciding, however Kazakhstan has to find its we will see in the future. Some countries and place in the segment. institutions have already adopted blockchain Maybe President Nazarbayev had in mind technology and also Kazakhstan is not lag- also blockchain technology when, in his speech ging. Despite differing views for registering the to the nation at the beginning of the year, he Blockchain Association as a legal entity and warned of rapid changes in the world which regulating cryptocurrencies, the overall goal increasingly concern Kazakhstan. He warned is to promote the technologysession and its use. -The that oil will longer be 2018 enough and inThe information Monday, 19noMarch at 5thepm Association warns that some countries have dustrialisation of the country is needed as

Kazakh-Slovenian Business Club - KSBC

the world has found itself in the fourth industrial revolution, which the State must follow. Presiding over the UN Security Council since the beginning of the year and to host EXPO 2017, of which KSBC was an official partner, are important achievements for Kazakhstan and therefore it is necessary to continue the reforms of the third modernisation and follow the Kazakhstan 4.0 program, industrialisaintion.. the MBA classroom (P-119).

DOCTORAL PROGRAMME IN ECONOMICS AND BUSINESS

2 - 20 July 2018

Attend academically challenging courses in English in the field of business and economics, taught by international lecturers. Join the group of 500 students from 40 different countries and gain international and intercultural experience. Application deadline: 8 June 2018. Website: www.ef.uni-lj.si/ljubljanasummerschool Contact: summer.school@ef.uni-lj.si

Experience&Lifestyle Slovenia Interview: Professor Tanja Mihalič, Faculty of Economics, University of Ljubljana (FELU)

Local acceptance of tourism is a precondition for the sustainability and competitiveness of any tourism destination By Tina Drolc, M.Sc., MBA

International tourist arrivals grew by a remarkable seven percent in 2017 to reach a total of 1,322 million, according to the latest United Nations World Tourism Organization (UNWTO) Barometer. Furthermore, according to the UNWTO, this strong momentum is expected to continue in 2018 at a rate of four to five percent. The cost to society from the growth of tourism, and how destinations can manage to stay profitable, competitive and attractive, are the issues highlighted by FELU Professor Tanja Mihalič, the coordinator of the Tourism Master’s Program and Head of the Erasmus Mundus European Master in Tourism Management. She is also a member of the UNWTO World Committee on Tourism Ethics and a board member of the International Association of Tourism Economics. Q According to the World Economic Forum, emerging markets are becoming more attractive destinations. Between 2016 and 2026, the top 10 fastest growing destinations for leisure travel spending are expected to be India, Angola, Uganda, Brunei, Thailand, China, Myanmar, Oman, Mozambique and Vietnam. What would you highlight in terms of efficient tourism management?

A Predictions about the fastest growing tourism markets are popular and do a lot of good for the image and recognition of the tourism sector as they recognise the economic importance of the sector through economic growth. Nevertheless, the economic and management perspective of tourism has moved away from physical flows and total spending metrics, and has developed more sustainable key performance indicators based on the economic efficiency, profitability, social and environmental costs and benefits of tourism flows and growth. These emerging destinations are at the beginning of their growth path and tourism impact and nothing is known about the sustainability of tourism growth. At this stage, high growth rates are expected, which is the normal development path before the destination matures and the total visitation volume becomes more Professor Tanja Mihalič, Faculty of Economics, University of Ljubljana (FELU)

The Slovenian Times | Spring Edition 2018

substantial, as well as the impact of tourism. However, the question remains as to how economically efficient and socially and environmentally responsible these growth models are, that is, the cost to society caused by the growth in tourism and how to stay financially profitable and at the same time competitive and attractive. Let’s hope that these destinations take the excellent opportunity and do well in all aspects of full sustainability.

Q By 2022, according to Euromonitor, it is expected that China will be the world’s largest source of outbound tourism with 128 million trips. Outside of Asia, the US and France are likely to benefit the most due to their China-ready approach. Can you share some background on the approach from the competitiveness perspective? A Indeed! China is a sleeping outbound tourism country, it is becoming the number one outgoing tourist country of tomorrow, however the tourism performance metrics we so often use are playing with us. China is a country of almost 1.4 billion people and represents the world’s number one potential outgoing tourism market purely due to the size of the country. However, for the receiving countries, this argument becomes less relevant as they have to absorb the additional tourist demand. This might be the opportunity for the emerging tourism destinations previously highlighted.

Experience&Lifestyle Slovenia At the same time, it may be a threat to already overcrowded tourism destinations that have reached maturity. 128 million international trips represent almost 10 percent of world travellers. Such growing volume is rapidly changing the established segmentation map in many destinations. For receiving countries, this means a new market orientation and adjustment of tourism products to meet the needs and tastes of Chinese travellers, new transport connections and new tourism products. New demand from China also means additional growth, with all the opportunities and threats of tourism growth, its positive and negative impacts. Depending on the existing tourism volume in the receiving destinations, additional pressure might lead to over-tourism and anti-tourism, as witnessed in many destinations in 2017 when many mature destinations such as Dubrovnik, Mallorca, Barcelona and Amsterdam reported anti tourism movements and actions due to the tourism growth resulting in local residents marching against it. Modern competitiveness and performance tourism metrics have already recognised that, among other environmental considerations, social acceptance of tourism growth by the local population is a precondition for the sustainability and competitiveness of any destination.

Q Slovenia is following a sustainable tourism development path. Is the concept competitive and which tourists are attracted to Slovenia? A The sustainable tourism developmental concept is competitive by definition, as the right understanding of sustainability refers to three pillars: environmental (natural), socio-cultural and economic sustainability. For Slovenia, the economic sustainability has been the weakest. The analyses from the researchers at FELU, as a part of a project on a new Slovenian developmental tourism strategy for 2017-2021, confirmed that Slovenia is known globally as a green, sustainable and responsible destination, as proven by the many international green tourism awards that Slovenia has received over the past decade. The work promoting green tourism in Slovenia has been impressive, as are the results and recognitions from global tourist guiding organisations, such as Lonely Planet, National Geographic, World Travel Market, the United Nations World Tourism Organisation, etc. However, in terms of average hotel prices and spending, Slovenia is well below the average prices of the neighbouring countries; profitability is low or even negative, ownership structure inappropriate. All these character-

istics reduce the economic competitiveness position of Slovene tourism. Consequently, on the visitor side, the purchasing power or willingness to pay for the holiday experience in Slovenia is not in line with the high green quality; and tourism infra- and superstructure in many cases and does not justify higher prices. This needs to be changed soon! Slovenia must truly commit to increasing competitiveness and attracting visitors that are able and willing to spend more and stay longer.

Q What would you say is the hidden potential of Slovenian tourism? A In the context of the above debate, I would point out the gap between the opportunity to experience and offer a five star experience and existing services that we offer to support this experience. By this, I mean the quality of accommodation, infrastructure and attractions and their accessibility for potential visitors. Many best practice cases and successful fivestar stories have emerged across Slovenia in the last decade yet, overall, Slovenia needs to overcome the lack of quantity and quality with accessibility, infrastructure and commercialisation of attractions, social and cultural experiences.

Plan your future Become a Doctoral Student at the FELU.

DOCTORAL PROGRAMME IN ECONOMICS AND BUSINESS The information session - Monday, 19 March 2018 at 5 pm in the MBA classroom (P-119). Spring Edition 2018 | The Slovenian Times

Culture

PROGRAMME: Thursday, 5 April, at 19:00

Our Violence and Your Violence Directed by Oliver Frljić Inspired by Peter Weiss’ novel The Aesthetics of Resistance Commission and production: HAU Hebbel am Ufer, Berlin Co-production: Mladinsko Theatre (Ljubljana), Wiener Festwochen (Vienna), Zürcher Theater Spektakel (Zürich), Kunstfest Weimar (Weimar), Croatian National Theatre Ivan pl. Zajc (Rijeka) Regional co-producer: MESS Sarajevo Supported by: German Federal Cultural Foundation The performance Our Violence and Your Violence observes the Europe which was – how naively – surprised by the refugee crisis, the Europe that unscrupulously forgets its colonial past while closing borders to those escaping the consequences of the European and American politics. As if the 20 th century stubbornly did a single thing – fuelling the national narcissisms that taught one mass that it’s better than others, while forgetting on purpose that ostracism is a form of violence. The 21st century continues to teach the same lessons, but uses the indispensable weapon: fear. And fear is the most reliable condition for hatred. For this reason, the performance Our Violence and Your Violence will ask a couple of very unpleasant questions: Are we aware that our welfare depends on thousands of dead in the Middle East? Do we cry for the victims of terrorist attacks in Paris and Brussels the same way as we do those in Baghdad and Kabul? In which moment did we start to believe that we are masters of truth and that our God is mightier than others?

ON MLADINSKO SHOWCASE NO ALARMS AND NO SURPRISES From 5 to 8 April 2018

4 days, 6 performances, English surtitles Mladinsko Theatre invites you to visit this year‘s SHOWCASE. You will have opportunity to see the most acclaimed performances from the Mladinsko’s recent production, take part in talks, workshops and parties in the theatre club. This is this year‘s programme.

Friday, 6 April, at 18:00

The Ristić Complex Friday, 6 April, at 20:30 Directed by Oliver Frljić Co-production: Mladinsko Theatre (Ljubljana), CNT Ivan pl. Zajc (Rijeka), BITEF (Belgrade), MOT (Skopje) The project was initiated on the occasion of Mladinsko anniver¬sary – sixty years. We think that this jubilee demands from us to look behind and start a debate about our most relevant performances and directors whose work turned SMG into the cult it is today. The Ristić Complex is based on the re-contextualization of the performances directed by Ljubiša Ristić in the Mladinsko Theatre, and the idea behind Ristić’s KPGT, a unique federative Yugoslav theatre of a permanent revolution. We believe that this starting point will enable us to carry out a new theatre study of a former context, a common theatre heritage and its influence, its direct consequences on contemporary theatre scene of post-Yugoslav states.

The Republic of Slovenia All the authors of the performance will remain anonymous. In this context, the individual simply isn’t important. What is important is the stat(ur)e. This is a performance The Republic of Slovenia. In it, a retired intelligence officer tells a story about counting millions, then six important men ponder the fate of Slovenia which is turning into a mafia state, then six important men, presidents and ministers play with arms and human destinies around the round table, and finally a group of soldiers takes on a spy. This is a performance The Republic of Slovenia. It has been running for twenty-five years and it has been produced with your money. And all this time you have been – as an extra or as a big player – its part.

The Brave New World award bestowed by the Dani magazine at the MESS Sarajevo Festival

Radovan Marušić award for best overall design, award for best direction and Grand Prix for best production at the B&H Drama Festival in Zenica

Special award for outstanding political engagement at the Maribor Theatre Festival and Šeligo award for best overall production at the Week of Slovenian Drama festival

Photo: Sandi Fišer

Photo: Nejc Saje

The Slovenian Times | Spring Edition 2018

Culture Looking forward to greeting you in our theatre! All performances pass (6 + 2 gratis tickets) 36 € One performance: 9 €/*6 € * students, pensioners

Saturday, 7 April, at 21:00 Bara Kolenc:

Metamorphoses 4°: Blackholes Saturday, 7 April, at 19:00

Hitchcock Agnieszka Jakimiak (text and dramaturgy), Katarzyna Leks (set and costume design), Agata Maszkiewicz (choreography), Weronika Szczawińska (director), Piotr Wawer jr. (dramaturgy and music selection) On 2 July 1962, the young French director François Truffaut sat down at his desk and wrote a letter to Hitchcock. He suggested a meeting, during which he’d conduct an in-depth interview with the adored master. On the basis of this 50-hour long interview, Truffaut published a book in 1967, which turned the master of genre into the ultimate film artist. In the years after the book was published, Hitchcock became the uncontested artistic hero of the new Hollywood. But the history of the key interpretations of his work doesn’t end in the 1960s. The breakthrough of the Ljubljana Lacan School (Žižek, Dolar, Zupančič, Božovič, Salecl, etc.) to the American book market in the 1990s presents a very particular encounter with Hitchcock’s film opus: it lays Lacan’s concepts of psychoanalysis on the famous couch, and sits Hitchcock’s film corpus on the analyst’s chair. So Hitchcock becomes an analyst that can provide the interpretation for Lacan’s complex psychoanalytical concepts, and does it in an extremely entertaining and clear way. Photo: Nejc Saje

Co-produced by: Mladinsko Theatre (Ljubljana), Schauspiel Dortmund, Kino Šiška Centre for Urban Culture (Ljubljana) A black hole is a point of pure singularity. It is the impossible condition of the possibility of both, matter and anti-matter, it is a point of total destruction and a place of creation. Using a black hole as a metaphor, the project deals with the erosion of the Western tradition of humanism that has, throughout the history of imperialism, acquired aggressive characteristics, and whose collapse into itself we can currently observe in the re-structuring of the positions of power, the status of truth and of ethical values. Are we today still able to be humane? Are we able to look into another person’s eyes, into the black hole of his pupils? Are we able to understand the point zero, the metaphysical point of the phenomenon of a black hole in order to transcend the stereotyping and prejudice? What if humanity is not an emphatic gaze into a fellow human’s pupil of the eye, but a radical confrontation with the possibility that the eye of the other is merely a screen reflecting our own dreams, desires and fears? What if a black hole is not somewhere on the other side but rather a rupture within ourselves? Metamorphoses 4°: Blackholes has been awarded the "Werkauftrag des Theatertreffen Stückemarkts 2016", funded by the Bundeszentrale für Politische Bildung (bpb). Photo: Voranc Vogel

Mladinsko Theatre main box office Trg francoske revolucije 5, Ljubljana Weekdays: 12.00–17.30 Saturdays: 10.00–13.00 T: 01 425 33 12 E: smg.blagajna@siol.net

Sunday, 8 April, at 19:00

The Man Who Watched the World Directed by Žiga Divjak Four decades have passed since the neoliberal ideology, with its mantras about the free markets that would adequately self-regulate practically all the institutional sub-systems of the state and social and political organisms, entered the economic and political map through the economy. In the new globalised world the capitalist spectre has relatively quickly occupied all the territories of social activities and political systems, including education, science and arts. In this depressing global moment, surrounded with the technology of CCTV and security systems, the young director Žiga Divjak and his team pose questions on how to act as an artist in the world for which it seems that the future has been abolished. What place can an artist and art have in it? Or, as a protagonist of the revolution asked in the time of the Red October: "What is to be done?" Awards for best direction and for acting (acting ensemble) at the Maribor Theatre Festival Photo: Nejc Saje

Spring Edition 2018 | The Slovenian Times

Event Guide

 Culture / Dance Spectacle Photo: Joan Alsina

Lord of the Dance 7 April 2018, Stadium Stožice, Ljubljana In the spring, Ljubljana will host the most popular dance spectacle with Irish charm - Lord of the Dance! The extravagant dance performance with the Irish tradition has for the past 20 years, been one of the most visited shows in the world, breaking all sales records and leaving enthusiastic crowds. More than 100 million people have seen the performance in 67 different countries, including on the West End, Broadway, USA, Canada, Mexico, South Africa, Australia and New Zealand.

 Culture / Musical Performance

Camille 18 April 2018, Cankarjev dom, Ljubljana The internationally renowned artist, award winning singer and composer Camille, also known for her collaboration with Nouvelle Vague (contributing four songs to their first album), has released 'OUĎ', her fifth studio album. Recorded over a year in La Chartreuse, a 14th century monastery-turned-artist’s residence in Avignon, 'OUĎ' is a cornucopia thrumming with folk, hymns, ballads, pop, lullabies and breathtaking a cappella (in French and English). "The story of the album is like this, moving from the arcane drums" – percussion is used throughout as the bedrock – "to the treble and harmonics and light in my voice." An instrument of exhilarating range and phenomenal power, Camille’s voice provides all the vocals on 'OUĎ'. "All the voices are telling a story," she says, "and I am all the voices".

The Slovenian Times | Spring Edition 2017

 Culinary Event / Festival

 Culture / Concert

Olive Oil and Chard Festival

Enrique Iglesias

28 – 29 April 2018, Padna In April, a lovely atmosphere will liven up the streets of Padna, as the beginning of summer holidays will be highlighted by the Olive oil and Chard festival, organised by the Portorož Tourist Board. Visitors to the festival will be invited to walk through the village, taste various homemade specialties offered on stands and buy the local olive oil. Visitors will also have the opportunity to join a hiking tour and enjoy the traditional village feast in the evening when visitors will be entertained with traditional Istrian music and popular local music will encourage everyone to dance.

Enrique Iglesias will visit Slovenia for the first time and perform his unique musical spectacle as part of his world tour "SEX and LOVE". Iglesias started his musical career with his first album in 1995 and quickly ranked among the most recognisable names in world pop music. He recorded his first album in Toronto, Canada. Since the beginning of his career, he has received numerous awards for his musical achievements and among his most popular songs are Bailamos, Away, Hero, Be With You, Takin 'Back My Love, Rhythm Divine and many other hits.

Culture / Concert Staging 

From the Good Times (1898 – 1907), Cankar on Cankar Festival 10 May 2017, Cankarjevdom , Ljubljana Ivan Cankar’s Letters to Anica Lušinova* * All performances will be in Slovene. Selection, dramatisation: Ivo Svetina Cankar’s first love interest was Anica Lušinova, a sweet girl with a mutilated right arm. He started writing letters to her in the summer of 1898, when he was staying in Pula for a number of months. He was 22 and she was 17; he was translating Shakespeare’s Romeo and Juliet and writing Romantic Souls, his first play. Cankar’s letters display great literary quality and include a series of allusions, and include verbatim sentences from the works he was focusing on at the time. Svetina’s dramatisation first premiered on 16 June 1976.

12 & 13 May 2018, Stadium Stožice, Ljubljana

Event Guide

 Sport/ Exhibition

 Cuture

Internautica - International Boat Show

12th Medieval Days at Bled Castle

17 - 20 May, 2018, Portorož Marina, Portorož From 17 - 20 May 2018, boating professionals and enthusiasts from all over the world will gather at Marina Portorož to enjoy the friendliest and best organised boat show in the Adriatic region. Exhibitors will meet thousands of customers (old and new), and be able to trade, network and collaborate with a variety marine experts at the very start of 2018’s summer season. From the gleam of marine power to the flap of sails, visitors are "transported" to the open sea. Internautica will showcase the latest and greatest from the world of boating with many premieres next season.

2-3 June 2018, Bled It has been over 1,000 years since on 10 April 1004, the German King Henry II conferred the estate of Bled, located in the Province of Carniola, to Bishop Albuin of Brixen and his church. In 1011, King Henry II awarded Albuin’s successor, Adalberon, the castle on the cliff (castellum Veldes) in a charter in which the castle was first explicitly mentioned. Bled Castle was the administrative seat of the Brixen Estate in the Gorenjsko Region. Medieval documents refer to Bled by its German name, Veldes. According to written documents, Bled Castle is the oldest castle in Slovenia. Castle buildings are arranged around the lower and upper courtyards.

 Flower Festival  Music Festival

34rd International Druga Godba Festival 24 – 26 May 2017, Piran, Ljubljana Druga Godba is one of the most prominent music festivals in Central Europe, with a concept and approach that sets it apart from other festivals in this part of the world. Primarily started in the socialist days as an alternative to the drab offerings served up by State run festivals, this festival has always prided itself as being on the cutting edge. It is usually accompanied by other art forms such as film, poetry, lectures and exhibitions. Druga Godba brings together music from across the world and audiences of all generations and musical tastes, for three days of serious fun.

12th International Wildflower Festival 25 May – 10 June 2018, Bohinj Paradise for all those who adore flowers, both fans and professionals Not many regions in the Alps can boast of a more diverse flora than the area of Bohinj! This relatively small area is characterised by several altitudinal belts up to the highest peaks reaching far above the tree line. Vast forests, fields, mountain meadow sand various wetlands – from the shore of Lake Bohinj to the high moors … all gives the attentive nature lover the chance to experience unforgettable beauty and discoveries. The richness of flora also invites butterflies and bees. Bohinj and its surrounding areas are a wonderful place for watching butterflies flying from blossom to blossom and for apiculture, which has a long tradition in the area.

Event Guide

 Sport / Festival

Drava Festival 2018 May-July 2018, Maribor, Ptuj The Drava Festival will take place across the entire region of the Drava River. The festival will include numerous environmental and tourist events which will be organised by various associations and organisations from the Koroška, Maribor and Ptuj regions. The festival will be coordinated by the Initiative for Drava organisation. River trips on the Drava and cycling tours on the cyclist-friendly Drava Cycling Route, will take place at several locations during the festival. Visitors will also be able to taste local delicacies and get to know the traditions and customs of the diverse region of the Drava River. In Maribor, events will take place at Lent and in the landscaped park, Mariborsko jezero, where a temporary "beach" will be arranged during the festival. Spring Edition 2017 | The Slovenian Times

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