ICT Business and Investment Climate in the Czech Republic
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ICT Business and Investment Climate in the Czech Republic

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The 2011 Czech ICT Seminar, June 20, New York

The 2011 Czech ICT Seminar, June 20, New York

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  • 1. ICT Business and Investment Climate in the Czech Republic THE 2011 CZECH IT SEMINARJan FriedDirector of East Coast OperationUSA – New Yorkjan.fried@czechinvest.orgLinkedIn: Jan FriedTwitter: JanFried2June 20th, 2011, New York, NY © Copyright, CzechInvest 2011. All rights reserved
  • 2. Agenda╌ Czech Republic / CzechInvest╌ Czech ICT Sector – Attractive Investment Climate ╌ Academic Institutions – R&D Potential ╌ Skilled Workforce – Advanced Domestic IT Market ╌ Favorable Labor Costs ╌ Financial Support ╌ Case Study – Deutsche Post DHL – Global IT Facility (Prague, 2004)╌ Questions and Answers
  • 3. Agenda
  • 4. Czech RepublicTechnology and Innovation Hub in the Heart of EuropeSource: Google, CzechInvest, 2011
  • 5. Czech RepublicTechnology and Innovation Hub in the Heart of EuropeSource: Google, CzechInvest, 2011
  • 6. Czech RepublicTechnology and Innovation Hub in the Heart of EuropeSelected FDI / ICT SectorSource: CzechInvest, 2011
  • 7. TestimonialsPositive Experience and Words of Mouth… “Some Skype people actually went scouting through many Central European countries earlier this year, looking for a new location based on a number of factors. We chose the Czech Republic simply because it had the best mix (I asked if good beer was one of the factors, but didnt receive direct comments).” “The pool of engineering talent within the country’s open source community and the strengths of its universities provide a firm foundation of technical excellence from which to grow our business.” “The language and cultural differences have not been barriers in the work environment. In fact, due to the quality and professionalism of the Czech people, we have effectively had success leveraging the time difference to increase productivity. Each day our confidence in working with the Czech Republic continues to increase due to the ease of recruiting high caliber technical candidates, low attrition rate and the support offered by companies like CzechInvest.” “South Moravia Expands as Information Hot Spot - One of Central Europe’s fastest-growing regions is South Moravia, centered on the city of Brno, in the Czech Republic” (May 22, 2011) Source: CzechInvest, 2011
  • 8. Czech RepublicAttractive Investment Climate – Location in the Heart of Europe╌ Access to Emerging Eastern and Established Western Market╌ Less than Two Hours by Air to most European destinations╌ Advanced Infrastructure – Densest Motorway Network in CEE, High-Speed RailwaysSource: CzechInvest, 2011
  • 9. Czech RepublicAttractive Investment Climate – Projects by Sector╌ 1993 – H2 / 2010 Approved Projects (Total) : 1,565╌ “The highest growth of FDI in 2010 was New Jobs Created: 215,763registered in the Czech Republic, which was Total Investment Amount: 25,909 (USD mil.)the only country where the 2010 inflowsurpassed the 2008 level“. Strategic Services Paper, Wood Manufacture of Center Processing Electronics, Motor Vehicles 5% 2% Electrotechnics 19% 12% Plastics, Rubber 7% Engineering 14% Chemistry, Pharmacy 7% Other Biotechnology, IT and Software 17% Medical Equipment Metal Products Development╌ IT – 40% of Total in 2010 1% 3% 14%Source: CzechInvest – Official Statistics, Vienna Institute for International Economic Studies, FDI in CE&SE 2011
  • 10. Czech RepublicAcademic Institutions – R&D Potential ╌ 1920s – 1930s Czechoslovakia Ranked among 10 Most Developed Countries in the World Technical Universities Students: 80,245 ╌ World Class Technical Universities Graduates: 17,109 PhD grad.: 1,029 ╌ Strong Science and Engineering Disciplines ╌ Focused to Meet the Needs of a Competitive EconomySource: CzechInvest, 2011
  • 11. Czech Republic Academic Institutions – R&D Potential PRAGUE REGION LIBEREC REGION Students: 12,353 Students: 799 Technical Universities Graduates: 2,464 Graduates: 455 Students: 80,245 Graduates: 17,109 PhD grad.: 1,029 HRADEC KRALOVE Students: 782 Graduates: 114 PARDUBICE REGION Students: 1,073 Graduates: 112 MORAVIA-SILESIA Students: 3,935 Graduates: 720Source: Institute forInformation on EducationCzechInvest, 2010 ICT Faculties PLZEN REGION SOUTH MORAVIA ZLIN REGION*Note: according to the selected Students: 2,364 Students: 8,058 Students: 1,794 Students: 32,789educational fields - source Graduates: 539 Graduates: 1,897 Graduates: 418CzechInvest Graduates: 6,575
  • 12. Czech RepublicWorld Class Technical Universities – R&D Potential ╌ Case: CTU – Department of Cybernetics – EU Centre of Excelence Since 2000 ╌ Research Cooperation: ╌ Industrial Contracts and Grants: ╌ Successful Start-Ups ╌ Vienna University of Technology, ╌ Rockwell Automation, ╌ Certicon, ╌ Cambridge University, ╌ BAE Systems, ╌ ProTyS, ╌ Delft University of Technology, ╌ Boeing, ╌ NeoVision, ╌ ETH Zurich, ╌ Google, ╌ Eydea, ╌ University of Pennsylvania, ╌ Medtronic, ╌ Cognitive Security, ╌ University of Minnesota, ╌ Texas Instruments, ╌ AgentFly Technologies, ╌ Milwaukee School of Engineering, ╌ CADENCE Design Systems, ╌ Tokyo University of Agriculture and ╌ US Air Force Research Lab, Technology,… ╌ U.S.Navy Research, U.S. Army, ╌ NASA, ╌ Dedicated and Focused Support of Entrepreneurship:Source: CzechInvest, 2011
  • 13. Czech RepublicR&D Conductive Environment ╌ Total Expenditure on Research and Development (% GDP) 1.46%Source: CzechInvest, 2011
  • 14. Czech Republic Advanced Domestic ICT Market ╌ Promotes Czech ICT Companies Abroad ╌ Foreign Customers/Partners, Outsourcing╌ www.czechict.cz ╌ Defines and Represents Interests of ICT Companies in CR ╌ Development of Information Society╌ www.ictu.cz ╌ Provides Czech Tech SMEs (StartUps) Support in Foreign Countries ╌ Business Development, VC/Angel Funding╌ www.czechaccelerator.orgSource: CzechInves; Czech ICT Alliance; ICT Unie; 2011
  • 15. Czech RepublicFavorable Labour Costs╌ Skills Are the Critical Factor for Success in ICT Sector╌ Creative, Innovative, Skilled and Experienced Professionals╌ At “Fraction of the Cost” of Those in Western Economies Position CR USA IT Top Management 6,500 10,000 MIS Management 4,800 7,400 Systems Analysis 13.19 1,600 3,300 Professionals Programming 1,300 2,700 ProfessionalsSource: CzechInvest, 2011; The Economist Intelligence Unit, 2010;Watson Wyatt Data Services / USD = 16.908 CZK (www.cnb.cz 6-19-2011)
  • 16. Czech Republic Financial Support – EU Structural Funds Until 2013╌ Programme: ICT and Business Support Services╌ Supported Activities: ╌ Development and Creation of IS/ICT Solutions and Applications ╌ Business Support Services ╌ Shared Services Centers with Substantial International Focus ╌ High-tech Repair Centers for Products and Technologies ╌ Data Centers – Planned Call IV (August/September 2011)╌ Allocation: 1 bil CZK / Approx. 60 mil USD╌ Individual Support: 40 – 60 % of Eligible Costs / Regions ╌ Max. 150 mil CZK / Approx. 8.8 mil USDSource: CzechInvest, 2011
  • 17. Czech Republic Financial Support – EU Structural Funds Until 2013╌ Eligible Costs: ╌ Option One: Personal Costs ╌ Gross Wages of employees on Newly Created Positions ╌ Mandatory Social and Health Insurance Payments ╌ Option Two: Investment in Assets ╌ Land, Building, Hardware, Networks, ICT Components, etc. ╌ Software, Licenses, Know-How╌ Binding Conditions (Small – Large Enterprise) ╌ Minimum Amount of Investment in Long Term Assets ╌ 0.5 – 3 mil CZK / 30k – 180k USD ╌ Creation of Minimum Amount of New Jobs within Project ╌ 3 – 40 jobs / ActivitiesSource: CzechInvest, 2011
  • 18. ICT Business and Investment Climate in the Czech Republic Summary╌ EU Funds Until 2013 – ICT&BSS╌ Creative, Innovative, Skilled Professionals at Fraction of the Costs╌ Advanced Domestic Market╌ World Class Technical Universities╌ Attractive Investment Climate╌ CzechInvest – Gateway to the Czech Republic ╌ Services Are Free of ChargeSource: CzechInvest, 2011
  • 19. Case StudyDeutche Post DHL – Global IT Facility (2004)Source: CzechInvest, 2011
  • 20. THANK YOU FOR YOUR ATTENTION Questions? www.czechinvest.org Best Website among All Investment Promotion Agencies, (2009, World Bank)Jan FriedDirector of East Coast OperationUSA – New Yorkjan.fried@czechinvest.orgLinkedIn: Jan FriedTwitter: JanFried2June 20th, 2011, New York, NY CzechInvest, the Investment and Business Development Agency, is an agency of the Ministry of Industry & Trade of the Czech Republic © Copyright, CzechInvest 2011. All rights reserved