Advancing the Development of Producer Services in Slovenia with Foreign Direct Investment

Producer services in Slovenia need to be upgraded to fully exploit their potential for increasing the efficiency of the economy, and for accomplishing market-oriented reforms. The lag in producer services development in Slovenia refers to insufficient development of specialised managerial, organisational and marketing know-how and skills and to poor competition. These features are common for all countries in transition. Foreign direct investment is suggested as a means to enhance producer services development. Empirical analysis supports the view that the largest benefits of foreign direct investment in business services could be expected from spillover effects to local economy, related to the transfer of knowledge and skills, to indirect productivity of business services and to the improvement of their quality and range.