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Czech republic-2016-oecd-economic-survey-fostering-prosperity-for-all
The document summarizes key findings from the 2016 OECD Economic Survey of the Czech Republic. It finds that while the Czech economy is growing again and unemployment has returned to pre-crisis levels, business R&D spending and productivity growth have stalled. It also notes that the public administration could be more effective, procurement processes are not competitive enough, and infrastructure investment is low. The report recommends steps to boost innovation, improve bankruptcy proceedings, increase access to finance for startups, use performance indicators, enhance joint procurement, and coordinate public investments.
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Czech republic-2016-oecd-economic-survey-fostering-prosperity-for-all
- 1. 2016 OECD ECONOMICSURVEY OF THE CZECH REPUBLIC Fostering prosperity for all Prague, 6 June 2016 @OECD @OECDeconomy www.oecd.org/eco/surveys/economic-survey-czech-republic.htm
- 2. 2 The economy isgrowing again GDP growth Source: OECD Economic Outlook database. -6 -4 -2 0 2 4 6 8 -6 -4 -2 0 2 4 6 8 2001 2003 2005 2007 2009 2011 2013 2015 2017 % %% Projections
- 3. 3 Unemployment returned topre-crisis lows Unemployment rate Source: OECD Economic Outlook database. 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 2008 2009 2010 2011 2012 2013 2014 2015 %% Czech Republic OECD
- 4. 4 Deflation risks arereceding Inflation 1. CPI inflation excluding food and energy. Source: OECD Economic Outlook database. -1 0 1 2 3 4 5 6 7 8 -1 0 1 2 3 4 5 6 7 8 2008 2009 2010 2011 2012 2013 2014 2015 2016 y-o-y %y-o-y % Headline inflation Core inflation¹
- 5. 5 Well-being is goodoverall OECD Better Life Index Index scale, 0 (worst) to 10 (best) Note: For each dimension indicators are normalised and averaged. CEE peers are Estonia, Hungary, Poland, the Slovak Republic and Slovenia. Source: OECD (2016), OECD Better Life Index. 0 2 4 6 8 10 Income and wealth Jobs and earnings Housing Work and life balance Health status Education and skillsSocial connections Civic engagement and governance Environmental quality Personal security Subjective well-beingCzech Republic OECD CEE peers
- 6. 6 Inequality is low Ginicoefficient Note: The Gini coefficient is zero if everyone has the same income and is one if a single person has all the income. Source: OECD Income Distribution and Poverty database. 0.0 0.1 0.2 0.3 0.4 0.5 0.0 0.1 0.2 0.3 0.4 0.5 DNK SVK SVN NOR CZE ISL FIN BEL SWE AUT NLD CHE DEU HUN POL LUX IRL FRA KOR AUS ITA NZL ESP PRT EST GRC LVA GBR ISR USA TUR MEX
- 7. 7 Reconciling work andfamily is difficult The impact of young children on women’s employment rates Note: Difference between employment rate of women aged 20-49 years with children up to 6 years old and those without children. Source: Eurostat. -50 -40 -30 -20 -10 0 10 -50 -40 -30 -20 -10 0 10 HUN SVK CZE EST GBR DEU TUR FIN IRL EU AUT POL FRA ESP BEL LUX ITA NLD GRC DNK PRT SVN SWE % pt% pt
- 8.
- 9. 9 Productivity has stalledsince the crisis Labour productivity Source: OECD Economic Outlook database. 60 70 80 90 100 110 120 130 140 150 60 70 80 90 100 110 120 130 140 150 1995 2000 2005 2010 2015 Index 2006 = 100 Output per worker Pre-crisis trend Index 2006 = 100
- 10. 10 Business R&D spendingis low Business R&D as a percentage of value-added in industry Source: OECD (2016), Main Science and Technology Indicators database. Complement grants with co-financing schemes. Increase fiscal incentives for business R&D spending. Streamline the system by unifying the design, assessment and co- ordination of R&D and innovation policies in a single institution. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 MEX SVK GRC POL EST PRT ESP ITA CAN NOR HUN CZE IRL NLD GBR FRA SVN BEL USA DEU AUT DNK SWE FIN JPN KOR
- 11. 11 Business-science collaboration islow Share of higher education R&D financed by industry Source: OECD (2016), Main Science and Technology Indicators database. Increase incentives to develop collaboration between research institutions and businesses. Develop mobility schemes for public researchers to work for some time in businesses’ research centres. 0 5 10 15 0 5 10 15 LUX ITA MEX PRT IRL CZE SVK DNK JPN FRA POL CHL SWE FIN NZL NOR GBR EST ISL AUS USA AUT GRC ESP ISR CAN NLD HUN CHE KOR BEL SVN DEU TUR % %
- 12. 12 Boosting finance forstart-ups is key Venture-capital backed companies Per 1 000 firms with employees Note: These companies are new or young enterprises that are (partially or totally) financed by venture capital. Source: OECD (2015), Entrepreneurship at a Glance. Accelerate implementation of innovation funds and guarantee programmes. 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 CZE ITA ESP SVN POL EST KOR GBR HUN LUX AUS PRT FRA ISR CAN DNK AUT DEU BEL NOR NLD FIN SWE
- 13. 13 Exit barriers arehigh Average cost of bankruptcy proceedings % of estate’s value Source: World Bank, Doing Business database. Reform bankruptcy proceedings to speed up the process. Allow for write-off of debts. 0 5 10 15 20 25 0 5 10 15 20 25 NOR BEL FIN ISL JPN KOR NLD NZL DNK SVN CHE GBR CAN AUS DEU USA EST FRA GRC IRL PRT SWE AUT ESP CHL HUN LUX TUR POL CZE MEX SVK ITA ISR %%
- 14. 14 Skill mismatches arerelatively high Percentage of workers with skill mismatch Note: Mismatched workers are those whose literacy proficiency score is in the top or bottom 5% of self- reported well-matched workers in their country and occupation. Source: OECD (2013), Skills Outlook 2013: First Results from the Survey of Adult Skills. Reduce barriers to mobility of workers, including by improving the rental market. 0 2 4 6 8 10 12 14 16 18 20 0 2 4 6 8 10 12 14 16 18 20 NLD POL FIN CAN SWE BEL EST AUS DNK KOR USA JPN NOR OECD GBR DEU SVK ITA CZE AUT ESP IRL % %
- 15. 15 Self-employment is high Self-employedworkers with no employees % of total employment Source: Eurostat. Align social security coverage of the self-employed and employees. Reconsider the tax advantages of self-employment. 0 5 10 15 20 25 0 5 10 15 20 25 DNK NOR LUX HUN DEU SWE EST CHE AUT FRA ISL SVN FIN BEL PRT EU28 IRL GBR NLD ESP SVK CZE POL TUR ITA GRC
- 16. PROMOTING A MORE EFFECTIVEPUBLIC SECTOR 16
- 17. 17 Government debt islow Government debt (Maastricht definition) Source: OECD Economic Outlook database. Implementing the fiscal framework and fiscal council will help maintain debt sustainability. 0 40 80 120 160 200 0 40 80 120 160 200 EST LUX NOR DNK CZE SWE POL SVK FIN NLD DEU HUN SVN AUT GBR IRL FRA ESP BEL PRT ITA GRC % of GDP% of GDP
- 18. 18 The public administrationcould be more effective Public administration performance indicator Note: Composite indicator based on measures of bureaucracy, quality of justice, level of corruption and government inefficiency. Source: Dutu and Sicari (2016). Use and publish performance indicators for all levels of government. 0 1 2 3 4 5 0 1 2 3 4 5 SVK CZE HUN SVN POL EST OECD AUT BEL DNK SWE FIN
- 19. 19 Turnover in thecivil service has been high Turnover of civil servants with a government change Number of levels of senior civil service that are affected Note: In the countries with no turnover a change of government does not directly affect the employment of public servants. Source: OECD, Government at a Glance. Review the implementation of the new Civil Service Act, including the overall remuneration system and staff engagement. 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 AUS AUT CAN DNK EST GBR IRL JPN NOR NZL SWE BEL CHE FIN ISL KOR NLD POL SVN DEU ESP FRA GRC ISR ITA PRT CZE MEX SVK USA CHL HUN TUR
- 20. 20 Public procurement shouldbe more competitive Share of procurement processes with no call for tender Source: European Commission, Single Market Scoreboard. Increase joint procurement by public entities to increase contract size and improve competition. Increase auditing throughout the process. 0 5 10 15 20 0 5 10 15 20 SWE NOR IRL PRT LUX GRC FIN GBR BEL NLD DNK AUT FRA POL ISL DEU ITA ESP EST HUN SVK SVN CZE %%
- 21. 21 Infrastructure investment islow Source: OECD National Accounts database; International Transport Forum database. Evaluate public investment needs in a standardised way across sectors. Co-ordinate public investment across sectors. Infrastructure investment % of GDP 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1995 1998 2001 2004 2007 2010 2013 Utilities Information and communication Roads, rail, airports and waterways
- 22. 22 Local governments arevery small Average number of residents per municipality Source: OECD (2016), Subnational Governments in OECD Countries: Key Data. Increase joint provision of services and monitoring of performance. Provide more technical assistance to municipalities, particularly for procurement contracts. 0 50 100 150 200 250 0 50 100 150 200 250 CZE SVK FRA HUN CHE AUT ISL LUX ESP EU EST DEU ITA CAN USA OECD SVN NOR POL FIN BEL ISR PRT GRC SWE AUS NLD MEX CHL TUR DNK NZL JPN IRL GBR KOR ThousandThousand
- 23. • Monetary andfiscal policies – The threat of deflation appears to be receding. – The fiscal outlook is sustainable subject to population-ageing related reforms. • Fostering productivity – Business R&D spending is low relative to other OECD countries. – Organisation and administration of R&D and innovation policies are too complex. – The cost of bankruptcy is too high. – Access to finance for SMEs is difficult, particularly for start-ups. • Promoting a more effective public sector – Choices of public investment projects lack co-ordination. – Insufficient information is available about policy outcomes. – The system of territorial administration fragments capacity and hampers delivery of high quality public services. 23 Main findings
- 24. • Monetary andfiscal policies – Exit the exchange rate floor when deflation risk recedes. – Implement the new fiscal framework and the fiscal council. • Fostering productivity – Develop government co-financing schemes to complement grants and increase fiscal incentives for business R&D spending. – Unify the design, assessment and co-ordination of R&D and innovation policies in a single institution. – Limit the possibilities to delay bankruptcy procedures and allow for eventual debt write- off. – Accelerate implementation of innovation funds and guarantee instruments to support SMEs and innovation. • Promoting a more effective public sector – Use and publish standardised performance indicators at all levels of government. – Further improve tools and rules to increase use of joint procurement by public entities. – Designate responsibility for the co-ordination and prioritisation of public investments. – Increase joint provision of municipal services. 24 Key recommendations
- 25. 25 For more information www.oecd.org/eco/surveys/economic-survey-czech-republic.htm Disclaimers: Thestatistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.