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Inclusive growth

IZ Bratislava support inclusive participation of all into the growth of the economy, as is defined in Europa 2020 strategy. This strategy has three pillars:

  • smart growth – improving the EU's performance in education, research/innovation and digital society
  • sustainable growth – for a resource efficient, greener and more competitive economy
  • inclusive growth – a high-employment economy delivering economic, social and territorial cohesion

Structure of inclusive market

Inclusive market

A great part of non-working people in Slovakia has very low chances as open labour market. This is due to their very low labour productivity which makes them uninteresting for standard employers. Therefore, in order to give this target group a chance at labour market, some sort of positive discrimination is needed. In case this target group is not participating at labour market, there will be shortage of labour supply within several years. As a form of positive discrimination we propose inclusive market, which is a separate parallel market of services and workers. Positive discrimination is hence not by subsidies but rather by sufficient demand for services.

Inclusive employees

The target population of the inclusive labour market are those who fail to find a job (or are not given the chance to find any) in the open market for 1 or 2 consecutive years because of their lack of working experience. Long-term unemployed, people after serving their sentence and part of the economic inactive (those who would be normally unemployed, but do not fulfil formal criteria) fulfil this definition. The total volume of the target population in Slovakia amounts to 300 000 people. The inclusive labour market should be adjusted in a way that 50 000 job opportunities could be created for those from the target population.

People from the target population would apply for jobs in inclusive enterprises. Employees of inclusive enterprises are subject to the standard work contracts with limited duration. The inclusive employees could work in this labour market for at most 2 years, after this time it is assumed they could obtain enough work experience needed to transit to the open labour market.

Inclusive enterprises

Inclusive enterprises are registered institutions; the main condition for an enterprise to be inclusive is that ¾ of its employees are from the target population. Other employees are standard employees, who train fixed-term employees (inclusive) and are responsible for long-term management of an inclusive enterprise. Anyone can set up this kind of enterprise, but the condition for employing the inclusive holds. The only advantage is that these enterprises can compete for inclusive services. With regard to the number of inclusive employees, we expect the number of inclusive enterprises to be approximately 1000 enterprises distributed across the SR. Inclusive enterprises would compete to get an inclusive service order. The price of these services arises in the process of competition. They would also compete to get inclusive employees, so they could carry out inclusive services. It is up to an inclusive enterprise to level the difference between the geographical location of the target population and the carried out services. In regard of the large amount of small public contracts of inclusive services, each of the enterprises would have several orders and would not rely on just one project.

Inclusive services

Inclusive services are chosen services, which only the inclusive enterprises could carry out. Because of the parallel nature of this labour market, no other institutions could carry them out. Public institutions would be obliged to call for tenders of inclusive services. The same applies for private institutions carrying out projects/orders financed by the public institutions. The resources would come mainly from transfers between public institutions (due to funds saved from social benefits and rise of tax yields) and EU funds. We expect tens of thousands of smaller public contracts yearly.

Effects of the inclusive labour market

Setting the number of inclusive employees to 50 000 (from the target population of 300 000) we expect during the next decade the rise in the employment rate by 3.7 percentual points (of which 1.5 p.p. is caused by statistical effect of 50 000 inclusive employees) and the decrease of rate of unemployment by 5 p.p. (of which 2 p.p. due to statistical effect of 50 000 inclusive employees). Already in the first year, 70 % of the volume of contracts would be paid back in form of taxes. After 9 years the direct effect on the public finances would be positive (and already after 5 years when also taking into account indirect effects). The results are based on the realistic probability of 10-20 % for an inclusive employee to find a job in the open market. Besides these quantifiable changes, we also expect the acceleration of GDP growth, improvement of territorial cohesion, the growth of income of target population and the general improvement of economic and ecological environment.

inclusive market, scheme inclusive-market-scheme

Most of the information is available only in Slovak language.

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