The Czech economy has very dynamic and attractive business possibilities. It is an ideal investment destination with a strategic location at the centre of Europe, a skilled and productive labour force, political stability and a well-laid infrastructure.
This is a comprehensive list of the major business opportunities within the Czech economic sector, as well as trends.
Macroeconomic environment: Why the Czech Republic
Strategic EU Member: One of the EU single market, which is easily accessible to Germany, Austria, Poland and Slovakia.
Very industrialised economy: Tradition of manufacturing, especially in automotive and machinery.
Political and economic stability: A developed democracy where the banking system is stable and the inflation level is low.
Government incentives: Strategic projects, particularly technology and manufacturing, are subject to investment incentives. These are usually in the form of tax reliefs and grants.
Strong sectors/traditional (established opportunities)
Advanced Engineering and Manufacturing. The Czech Republic is reputed to be the workshop of Europe. This is not the mere assembly.
Automotive Mobility: One of the foundations of the economy. It is the home of Skoda Auto (VW Group), Hyundai and TPCA (Toyota/PSA) plants, hundreds of tier-1 and tier-2 suppliers.
Opportunity: Electricity (battery manufacturing, EV parts, charging systems), driverless driving software, light materials, sophisticated robotics on production lines.
Aerospace: It is an ancient industry that is known to be very precise.
Opportunity: Supply chain elements of large manufacturers such as Airbus, commercial and industrial development of UAVs (drones).
Opportunity: IoT (Internet of Things) and AI-based predictive maintenance integration, the creation of solutions for a smart factory, and robotics.
ICT & software development
Prague, Brno and Ostrava also have a rich tech scene with a rich talent pool of software engineers and at a cheaper rate than in Western Europe.
Cybersecurity: Both government and commercial interests have a high demand as digitalisation is on the rise.
SaaS (Software as a Service): Designing niche B2B software to serve the international markets.
Gaming: Video game development (e.g. Bohemia Interactive, Warhorse Studios) is a strong tradition.
Opportunity: Game development, QA, VR/AR experiences and outsourcing.
AI and Machine Learning: Research and development, especially in combination with the powerful manufacturing base.
Business Process outsourcing (BPO) and Shared Services.
The Czech Republic is among the leading European countries to set up shared service centres (SSCs) of finance, human resources, IT support and customer care.
They have drivers: Multilingual talent (German, French, English), good quality of service, and a central time zone.
Emerging and high-growth sectors
Green Technology, Sustainability. Prompted by EU Green Deal policies and a national campaign to be energy independent.
Renewable Energy: Development of solar and wind projects, and agricultural wastes into biogas plants.
Energy efficiency: Industrial energy efficiency consulting, technology, smart grid technology, building insulation and retrofitting.
Circular Economy: Sustainable product manufacturing, recycling and upcycling.
E-Mobility: As noted, an enormous portion of the car change. Possibilities in charge point networks, charge point management software, and battery recycling.
Consumer & Services Sector
E-commerce & Logistics: The e-commerce market is expanding at a fast pace, yet less saturated compared to Western Europe.
Opportunity: The opening of niche web stores (B2C or B2B), the creation of last-mile delivery options, and the offering of SaaS opportunities to e-commerce.
Logistics: The location is central to the country, hence an ideal place to store warehouses and distribute them to the entire Central and Eastern Europe.
Tourism and experience economy
Tourism represents a very significant contributor, with very special attention given to Prague, but with a lot of potential in other areas.
Opportunity:
Out of Prague: Building of tourism infrastructure in such regions as the Bohemian Paradise, South Moravia (wine tours), and spa cities of Karlovy Vary and Marianske Lazne.
Experience Travel: Curated tours (culinary, historical, adventure), agrotourism and luxury travel segments.
Prague is a huge meetings, incentives, conferences and exhibitions destination.
Considerations and problems
Very tight labour market: The level of unemployment is one of the lowest in the EU. The most important challenge that businesses face is attracting and retaining talented employees. Benefits and competitive salaries are a requirement.
Bureaucracy: Although it is getting better, it may take some time and be cumbersome to negotiate the government administration and the permits. It is highly recommended that a local legal or consulting firm be employed.
Regional Inequalities: Prague is a very developed and competitive area, but other regions can have huge incentives and lower prices, but the number of talents can be less.
How to get started
Find a Local Collaborator: a local lawyer or accountant, or consultant is worth a lot to you to learn the business culture and the law.
In conclusion, the Czech economy is a strong mix of traditional industry power and exciting modern innovation. The intersection of its core competencies-engineering and manufacturing- with the trends of globalisation, digitalisation, globalization, and automation is the source of the best opportunities. There is a need to have a strategy that is well researched and a willingness to be part and parcel of the local business environment to succeed.
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