Why We Altered the DNA of Our Organization to Transform Propulsion into a European Player
In the heart of the Balkans, where the spirit of Sarajevo and Belgrade intertwines with our business endeavors, lies a tale of deep-rooted affection. These cities, where we’ve grown and created wonders, have long been the backdrop to our fleet of vehicles, proudly bearing the “VW” emblem – a symbol, if not of Balkan patriotism, then I’m at a loss for what is!
Yet, in a twist of fate, humor turned to gravity when Russia’s invasion of Ukraine sent shockwaves across the globe. I’ve written here about the collective fear gripping us – a fear of famine, shortages, and the crumbling of the global system as we know it. This anxiety paralyzed decision-makers in world forums. My colleagues and I were not immune, with the Balkan flair adding an extra layer of uncertainty.
The question loomed: Is the Western Balkans truly on the European path, or are we caught in limbo? Can we maintain a delicate balance in this geopolitical tightrope walk? Are we “here” or “there”? Does Europe even want us? Are we entering or merely pretending? These questions have always been a tightrope walk for us, now more than ever. We envisioned a business horror scenario, one that had already befallen our creative peers in Moscow and St. Petersburg: arriving at work to find Facebook, Instagram, Dropbox, Slack, Google services, cards, and global financial transactions – all the lifelines to the global economy – suddenly inaccessible.
Thus, a decision was made. It was time to alter the DNA of our organization, to transform Propulsion, this defiant speck of golden dust, into a European player, not just in ambition and clientele, but in pedigree. This meant establishing a European hub and transferring all assets, licenses, and rights to this new entity. We delved into a thorough analysis of legal, tax, and living conditions across the European Union, consulting with lawyers, advisors, and accountants. This led us to an unexpected player: the country quietly making giant strides, known in their tongue as the Slovak Republic. To quell any pan-Slavic fervor, we simply call it Slovakia.
In the early 90s, this small nation emerged on the international stage as an independent state after the Velvet Divorce of an asymmetrical federation. This separation marked the beginning of Slovakia’s economic transformation, transitioning from a planned to a market economy. High unemployment rates, inflation, and the urgent need for a new regulatory and institutional framework characterized this journey.
We all know the state of affairs in our region during the 90s. Yet, by 1997, Slovakia and Serbia stood shoulder to shoulder in terms of gross domestic product: Slovakia produced around 27 billion dollars, and we produced slightly over 25 billion. We started from similar positions, but where are they now, and where are we?
A pivotal moment in Slovakia’s history was its accession to the European Union in 2004. Membership immediately opened new markets, increased foreign direct investment, and provided structural funds for development. The country underwent rigorous economic reforms, focusing on privatization, liberalization, and improving the business environment, laying the foundation for a more dynamic, competitive, and diverse economy.
The pride and joy of Slovakia’s economic prosperity is undoubtedly its automotive industry. The country attracted major global players like Volkswagen, Kia, and Peugeot, earning the title of the world’s largest car producer per capita. One of Volkswagen’s three Slovak plants alone spans two million square meters, the only factory in the world producing four different brands under one roof: luxury VW SUVs, Audi Q7 and Q8, Porsche Cayenne, and the latest Škodas, with 99% of its production exported, primarily to China, the USA, and Germany. (Our fleet of VWs might have been a premonition of our destined connection with Slovakia!)
Beyond automobiles, and despite political differences, successive Slovak governments have invested in an economy focused on education, research, and development, creating a nurturing environment for all high-tech sectors. The introduction of the Euro and entry into the Schengen Area rounded off Slovakia’s success story as a small yet ambitious economic powerhouse (steering clear of the ‘tiger’ title, which is closer to home for some).
We in the Balkans often toss around the terms ‘small’ and ‘big’, so let’s look at the numbers in comparison to Slovakia: this year, the six economies of the Western Balkans will generate goods and services worth about 154 billion dollars, nearly half of which will be from Serbia. For the eighteen million of us in the region, it’s not a bad figure. However, it pales in comparison to the performance of five and a half million Slovaks: their GDP in 2023 will be a staggering 85% of the Balkan total, amounting to over 133 billion dollars. Let’s not delve into per capita calculations – why dampen the holiday spirit? Instead, let’s share some exciting news from the entertainment world.
Sometime in late May, Lepa Brena will hold a grand concert in Bratislava. I was told I was among the first ten to purchase tickets for this spectacle, a fact I take great pride in because who would want to miss it if she arrived by helicopter again! But even if her entrance is less glamorous, it raises the question: is our place in the European Union? We might not have a definitive answer for the Balkans, but for Propulsion, there’s no doubt: “Uđi slobodno” (Enter Freely), as evident to Brena as it is to Europeans.