The paper deals with doing business support on the part of all the towns (138) in the Slovak Republic. It analyses the ways how Slovak towns currently support doing business in their territories. A special attention is paid to the instruments used in a practice on the part of the towns and also a place of doing business support in the strategic documents of the towns. It results from the strategic documents (mainly from the strategies of economic and social development of the towns), but also from own empirical investigations done in the period 2008 – 2010 within solving some projects in which the author was involved.

Renata Jezkova

English

Research Papers in Economics

51stAnniversary European Congress 
of the Regional Science Association International
„New Challenges for European Regions and Urban Areas in a Globalised World“
30th August - 3rd September 2011– Barcelona, Spain
Doing business support on the part of the towns: Case study 
Slovakia
RENATA JEZKOVA
School in Sladkovicovo, Dept. of economy and management, 269 Fucikova  Str., 925 21 Sladkovicovo, SKK.
E-mail: renata.jezkova@vssladkovicovo.sk
INTRODUCTION, AIM AND METHODOLOGY
Development  of  towns  and  municipalities  is c onditioned  by  development  of  business 
activities in primary, secondary and tertiary sectors of the national economy.  Towns  and 
municipalities  start  to  become  abasis  of  business  activities.  More  or  less  favourable 
conditions for doing business are spatially determined by local general tangible conditions in 
an existing settlement or in its surrounding which are determined to a certain measure by 
people activities of acertain community. A level of economic development, employment and 
a living standard  of  inhabitants  are determined  by  business  activities saturation  of  the 
settlement.  That  is areason  why all  the inhabitants of  the  towns  and  municipalities  are 
interested in the activities of their representative bodies to provide necessary assumptions for 
such business activities. 
The aim of this paper is to introduce a wide international professional community the results 
of an empirical research of the representatives of all the towns (138) in the Slovak Republic 
dealt with doing business support from the part of the towns. We will present the results of the 
questionnaire inquiry organized in a period from March to July 2008. From all the 138 towns 
63 participated in the inquiry (rate of return 45,7 %).    DOING  BU SINESS  SUPPORT  ON  THE  PART  OF  THE  TOWNS; GROUPS  OF 
POSSIBLE INSTRUMENTS
The towns can use concrete instruments to support their economic development and also the 
business  activities  in  their  territories.  They  are  the  instruments  which  enable  positively 
influence economic developmentof abusiness environment.
What are the instruments municipal economic policy can use in market economy to influence 
behaviour of companies, households (inhabitants) and other persons involved into regional 
development?
During the last decade in developed countries of the west Europe there has originated a wide 
complex  of  instruments of  municipal  economic  policy.    Individual  instruments differ one 
another depending on their type, their influence force, recipients they are intended for and 
also their content (orientation).
Fürst et al. differs these municipal political instruments from a point of view of their types and 
their influence force:  
► information and consultancy,
► financial stimulations,
► infrastructural measures and
► regulation measures.
Information and consultancy are of a minimum intensity. They are the instruments of so 
called soft influence of behaviour of the people involved. Their influence is dependend on 
knowledge and a value attitude of individual people involved, whereas all the alternatives of 
any  dealing  they  let on considering of  the  person  involved  and  they do not prefer any 
alternative. This is the way how various profiles of individual towns and municipalities can 
origin  through  which  the  enterpreneurs  are  informed  about  strenghts  of  particular 
municipalities and towns or about aquality of individual attitudes. Within atechnological 
consultancy the enterpreneurs are informed about advantages of new technologies and about 
the  programmes,  which can help them with  their  implementation  into practice.  For  new 
formed companies there is the special consultancy offered to help solving specific problems 
of the enterpreneurs – beginners. For the companies which try to find their business partners 
to cooperate there are various types of exchanges (e.g. labour, contacts) or consultancy. Financial stimulations exist in forms of contributions, tax privileges or cheap loans. They 
exceed  the  informational  measures,  because  they  remunerate  certain  dealings  of  the 
companies or the households and so they influence decision making process of individual 
people  involved  through  an  individual  calculation  of  costs  and  benefits.  The  increased 
importance  
Infrastructural measures have the similar effect as the financial stimulations thanks to lower
costs because of the projects for the infrastructure support. Except for that investments into 
infrastructure also directly influence premises for doing business (founding and settling down 
of  the  new  companies).  It  is certain  minimum  territorial  equipment  by  civic  amenities, 
energetic, transport, telecommunication networks etc. Comparing infrastructural measures and 
financial  stimulations,  the  infrastructural  measures  work  more  like  a form  of  a general 
improvement  of aquality of  the  town.  They have some  more permanent effect and they 
influence more reliable than the financial stimulations and they can improve attractiveness of 
the place in the long term.
Regulation  and  administrative  measures  are  the  harder  interferences  comparing  to 
informational measures and financial stimulations. They can prohibit some dealing and ways 
of behaviour. Through these measures it is possible to regulate or to prohibit building and 
founding the companies (investment control) in ecological valuable or ecological non-stable 
areas or in the areas overloaded by human activities. The administrative regulation plays an 
important role by founding the new companies and plants and building industrial halls in 
connection with production technology used (building act and environmental act).
Other, wider instrumentarium as for its content of possible supportive instruments states Ježek 
(some of  the  instruments  we  have already  analysed  above).  It  is  the  classification  into  9 
groups with 46 instruments. 
Table 1:Groups of possible doing business support instruments on the part of the towns
GROUP OF INSTRUMENTS 
AND MEASURES
INSTRUMENTS
1. technical infrastructure ▪ transport infrastructure
▪ telecommunicational infrastructure
▪ technical infrastructure (energy, water, gas, sewer 
  system etc.)
▪  business industrial areas investments▪ create industrial parks, innovation centres, incubators 
   etc.
2. lots and immovables policies ▪ buy-out lots and immovables (create development 
  areas)
▪ privilege rentals
▪ revitalization of industrial premises and waste areas
3. territorial planning and 
building regulations
▪ remove of the industry and industrial areas to the fringe
  of the town
▪ suit building activity regulations to requirements of the 
  business entities
▪ staking out the areas available for business activities in
  municipal plans
4. financial support, tax and 
charge policies
▪ subsidies (e.g. cheap lots)
▪ providing and interfering loans and credits
▪ providing the loans and credits quarantees 
5. promotion ▪ support of general consciousness about enterpreneurs 
  entities
▪ presentations during regional and supraregional actions
▪ consultancy to the plants (comapnies) interested in town 
  investments 
▪ building the positive image about the town in local 
  businessmen and inhabitants
6. soft localisation factors ▪ total care about the look and attrastiveness of the town
▪ development of social infrastructure (housing, 
  education, leasure time etc.)
▪ positive attitude of the town representatives and the 
  inhabitants to doing business
7. consultancy and service ▪ regular information to the plants about the town
  development strategy
▪ new technologies and innovations support
▪ consultancy focused on the possibilities how to support
  doing business
8. improvement of 
administrative activities
▪ transparency, planning and reliability by decision 
  making process about the future of the town
▪ flexibility and openness of the town administration to
  the applications and requests of the business entities
▪  problem –consciousness they make decision about
9. other measures ▪ preference for local companies in a case of public 
  procurements 
▪ transfer an interest of enterpreneurs and inhabitants of 
  the town into the town development strategies
▪  minimisation of prohibitions and directions. 
Source: Ježek, J. Komunální podpora hospodářství vteorii a praxi. In: Zborník referátov zo 
VII. medzinárodného kolokvia o regionálních vědách. MU v Brne, 2004, str. 55 – 56, ISBN 
80-210-3549-8DOING BUSINESS SUPPORT ON THE PART OF THE TOWNS ON THE BASIS OF 
THE RESULTS OF THE QUESTIONNAIRE INQUIRY OF THE SLOVAK TOWNS
REPRESENTATIVES
Use of economic and non-economic instruments
The results of our empirical research show that 49,2 % of the Slovak towns think that they do 
not have enough economic and non-economic instruments how to effectively support local 
eocnomic development and doing business. 41,3 % of the towns are persuaded that there 
maybe  such  the  instruments;  only  one  town  is p ersuaded  about  the  existence  of  such 
instruments. According to the resto of the towns inquired  (7,94 %), thier activities are of less
significance not only from the point of view of their extend, but also the content and influence 
in  comparison  with  the  activities  on  the  regional,  national  or  the  European  level.  The 
representatives of the towns evaluate their possibilities of how to support local economy as 
significantly  limited  (65,1  %  of  the  towns).  Only  two  towns  are  persuaded  about  their 
significant possibilities how to support effectively economic development and doing business 
in  their  territories.  Most  of  the  towns  inquired  (88,9  %)  are  prepared  to  support  their 
development mainly through knowledge and from the planning point of view, further from the 
organisational and personal point of view; they are not prepared to support their development 
via the property or finance.  
Doing business support success factors
The  most  important  factors of  the success of the  municipal doing business support  and 
economy are mostly: high quality managemetn of the town, knowledge and innovation skills, 
information  and  communication.  Next  important factor  is the  existance of  the  long-term 
development strategy.
Analysis of the doing business support instruments used
The key part of the research is the analysis of the individual instruments used in the Slovak 
towns to support their local economic development. We used experience and data from some 
of  our  earlier  done  researches.  The  most  frequently  used  instruments  to  support local 
economic development are: providing technical infrastructure, building the positive image and 
the total look of the town as well as development of the transport infrastructure.   Doing business support as a part of the strategic documents of the towns
The strategic documents where it is possible to find a formulation of the starting points for 
local economic development support are the plans of economic and social development of the 
towns and the strategies of the industrial development coming out from the National Strategic 
Reference  Framework  2007-2013.  The  analysis  showed  that  22,2  %  of  the  local 
municipalities in Slovakia have elaborated the clear and separate strategy or the programme of 
the local economic development support.  In a case of 69,8 % of the municipalities it is a part 
of the wider strategy or the program of the social and economic development and usually it is 
generally formulated. There are also some municipalities (7,9 %) which do not have such the  
strategy elaborated. The least attention is paid to the question of the activation of the local 
people involved, although its expression in percentage (73 %) is a relatively high number. On 
the other hand, the  main  aim  of their  creation  in  the  Slovak  towns  is, depending  on our 
research, obtaining some extra financial resources from the EU Structural funds, and forming 
the clear aims for the future development.
Target groups of doing business support in the Slovak towns
Within the local economic development support the Slovak towns pay the main attention to 
the potential investors support (79,4 % of the towns). On the contrary, relatively low attention 
is paid to the support of the cooperation of the local companies and the support of some 
concrete branch –only one of the Slovak towns inquired mentioned the support to the selected 
target group, but without any details about it. 
Roles of the municipalities in doing business support
The Slovak towns understand their role mainly in doing business support in alignment of the 
local development strategies with  the  regional,  national  and  European strategies  with the 
effort to achieve maximum effect for local communities, and so to create conditions for doing 
business of the private entities, in alignment of the interests nad strategies of the important 
persons involved from the public as well as from the business and civil sectors with the effort 
to use more effectively the local resources (horizontal coordination), and then doing business 
with the lots and immobilities in the town´s ownership. The towns understand their weknest 
role as for providing other functions, e.g. building the infrastructure for new enterpreneurs
areas.  The  less  attention  is paid to  providing  other  functions  (rental  measures,  building 
infrastructure for development of new enterpreneurship areas).Evaluation of the doing business support in the Slovak towns
To evaluate the current situation of the local economic development support we offered some 
opinions   t o  the  towns  and  asked  them  to  express  their  ideas  – which  of  them  best 
characterizes the approach of the town leaders to the local economic development support. In 
most of the Slovak towns (79,4 % of the towns) their representatives think that the doing 
business support in their territories should be indirect, that means that the towns create the 
environment, which enables doing business development rather than the certain support to the 
companies. Almost half  of the Slovak  towns  have elaborated a long-term  doing business 
support strategy including their visions they try to meet by the certain measures – projects in 
practice. Some Slovak municipalities also try to evaluate their individual measures from the 
point of view of their effectiveness and efficiency.  It was pleasant for us to find out that all 
the towns  inquired  were persuaded  that  it  is necessary to support doing business  in  their 
territories.   
SUMMARY AND CONCLUSION
The results of our questionnaire inquiry offer us a comprehensive view of the instruments and 
activities of the  doing  business support,  which are  implemented  in  individual towns  with 
a clear aim to create apositive business environment in their interest territories. The number 
of the instruments and measures is not insignificant. The towns in the Slovak Republic use 
a whole spectrum  of  the  instruments and  measures to support  doing business; of  course 
questioned can be a final effect. 
The analysis showed us that the representatives of the towns evaluate their possibilities of the 
doing business support in their territories as limited and with significantly less influence than 
the  measures on the level  of  the  region  or  the state. The  most  high quality  factor of the 
successful doing business support from the part of the towns was labeled management of the 
town, knowledge and innovations and communication, and development strategy. The most 
frequently used instruments of doing business support from the part of the Slovak towns are
providing the technical infrastructure, building the positive image and the total look of the 
town as well  as  infrastructure  development.  In a case of majority of  the  municipalities a 
formulation of starting points for municipal doing business support is formulated in the social 
and economic development programme in a rather general form. The main reason why to 
form these strategies in the Slovak towns is obtaining the extra financial resources from the Structural EU funds and forming the clear aims of the future development. The most frequent 
target groups for the support are foreign investors; on the other hand, relatively low attention 
is paid to the support of cooperation between the local companies and to the support of the 
concrete branch. The Slovak towns understand their role in doing business support mainly in 
alignment  of  the  local  development  strategie  with  the  regional,  national  and  European 
strategies  with  the  effort  to  achieve  maximum  effect  for  local  communities.  The  towns 
understand their weknest role as for providing other functions, e.g. building the infrastructure 
for new enterpreneurs areas. The representatives of the towns think that the doing business 
support  in  their  territories  should  be  indirect,  that  means  that  the  towns  create  the 
environment, which enables doing business development rather than the certain support to the 
companies. Almost half  of the Slovak  towns  have elaborated a long-term  doing business 
support strategy including their visions they try to meet by the certain measures – projects in 
practice. All the towns inquired were persuaded that it is necessary to support doing business 
in their territories.   
REFERENCES
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VII.  mezinárodního kolokvia o regionálních vědách. MU v Brně, 2004, s. 55 – 56, 
ISBN 80-210-3549-8.
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Inovativní přístupy a koncepty v socioekonomickém rozvoji územních jednotek. 
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In: Maier, G. – Tödtling, F.: Regionálna aurbanistická ekonomika 2. Regionálny rozvoj a regionálna politika: Bratislava: Elita

Komunální podpora hospodářství v teorii a praxi. In: Sborník referátů ze VII. mezinárodního kolokvia o regionálních vědách. MU v Brně,

Podnikanie a jeho komunálna a regionálna podpora. Bratislava: Eurokódex, s.r.o. a Paneurópska vysoká škola,

Regionální management aneb jak efektivně řídit regionální rozvoj? In: Inovativní přístupy a koncepty v socioekonomickém rozvoji územních jednotek. Ostrava: Ostravská univerzita, katedra sociální geografie a regionálního rozvoje,

Teoretické otázky regionálneho a mestského marketingu. ZČU v Plzni,

Doing business support on the part of the towns: case study Slovakia

http://www-sre.wu.ac.at/ersa/ersaconfs/ersa11/e110830aFinal01121.pdf

Doing business support on the part of the towns: case study Slovakia

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