Modern business operations in the Czech Republic …..since 1989

An appreciation of dates Pre 1914 –Austro-Hungarian empire; Czechoslovakia created –German occupation –Communist regime (Influenced by Russia) –“Prague spring” 1968 –“Velvet revolution” November 1989 Post 1989

Traditional industries (1) “Heavy industry” –Engineering Skoda Tesla –Mining “Black” coal “Soft” coal Clay Graphite Silver  Uranium

Traditional industries (2) Specialised –Chemical –Medical –Shoes –Glassware –Contact lenses –Films –Musical instruments etc, etc, etc………

Traditional industries (3) Other –Brewing …….also, wines and spirits –Agribusiness Livestock  milk/cheese/meat Timber Fruit/vegetables etc, etc, etc………

During the years up to 1939 Czech business was oriented towards the west Czechoslovakia was the 10 th most developed industrialised country in the world

After 2 nd World War: Communist era Czechoslovakia became the “workshop of the Soviet bloc” 70% of exports went to Soviet bloc Series of yearly and 5-yearly plans

In more detail….in 1974: Skoda Tesla Bata

In more detail….in 1974: Skoda Tesla Bata

Europe in the 1970’s

70% 30% Europe 1978: Czechoslovakia was considered the workshop of the Soviet bloc

Europe in % 30%

Europe in % 30%

Europe in % 30% Lost exports eastwards

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

Europe in 1993 Czech (and Slovak) Republics have to look for other markets

After 1989 Local companies needed to find new business partners Foreign trade re-oriented towards western markets

Nowadays European Union is the biggest trade partner In 2005, more than 84% exports went to the EU-15 countries Sharp increase of foreign investment, especially from Germany

Current Czech manufacturing industries include: Automotive Aerospace Electrical engineering and electronics High-tech engineering Life sciences Medical devices

Automotive industry in the Czech Republic

Passenger car production (per 100 residents) Source: Automobile Industry 4/2006

Some recent foreign investments in the Czech automotive industry Volkswagen – sole owner of Skoda Toyota-Peugeot-Citroen Iveco

Some Czech automotive component suppliers

Current Czech manufacturing industries include: Automotive Aerospace Electrical engineering and electronics High-tech engineering Life sciences Medical devices

Aerospace industry in the Czech republic 10,000 people working across the country10,000 people working across the country

Current Czech manufacturing industries include: Automotive Aerospace Electrical engineering and electronics High-tech engineering Life sciences Medical devices

Electrical engineering and electronics

Examples of who does what: (1) consumer electronics Panasonic –flat-panels TVHitachi –flat-panels TVIPS Alpha –LCD modules Bang & Olufsen –various consumer electronics Candy –refrigerators

Examples of who does what: (2) automotive Kostal –electronic modules Visteon/Autopal –lighting Tyco Electronics –various components Siemens VDO –Automotivecontrol modules, sensors, panels

Examples of who does what: (3) IT Foxconn –PC routers Asus –PC –High-tech repair centre FIC –PC Inventec –PC

Current Czech manufacturing industries include: Automotive Aerospace Electrical engineering and electronics High-tech engineering Life sciences Medical devices

High-tech engineering Between 80% and 90% of production is exported R&D driven Includes: –Instrumentation –Machine tools –Railway industry

Instrumentation Around 4,000 specialised workers in this sector, eg: –Central Bohemia region 13.9% Siemens and Linet –Olomouc region 12.5% Meopta – optics and Invensis appliance controls –Prague 12.4% Honeywell

Machine tools Approx 50 companies About 90% of production are specialist cutting machines. Approx 80% are exported to: –(mostly) Germany –Other EU countries –US & Canada –and: China, Russia, India and South America

Railway industry (Includes tramways) Three large factories: Prague, Plzen and Koprivnice 30% turnover is exported worldwide

Current Czech manufacturing industries include: Automotive Aerospace Electrical engineering and electronics High-tech engineering Life sciences Medical devices

Life science and Medical devices Life science –Especially Biotech and pharmaceutical industries Medical devices, eg: –Hospital beds –Ventilators –X-ray equipment –Dental technology –Mobile hospitals –Technical gases

Modern “Service businesses” in the Czech Republic

A few statistics

56% of all employees are in the service sector 53% of those are women

The main service industries Tourism Retail Accommodation Boarding ie: Restaurants and catering Banking & Finance Post and Telecommunications Jachymov Radon Spa Karlovy vary spa Beer spa Czech chata

Other service industries Information services, guides, translators Cultural (Concerts; castles; programmes) Health (Private & public; insurance; prescriptions; “alternative” treatments) Transportation (city transport; taxis; car rentals; international logistics) Libraries (including e-government) Cleaning (Public and private; buildings and households) Education (includes specialised education) Consultants (entrepreneurial opportunities – eg: HR) Legal Real estate

Some service businesses in Prague Business process outsourcing –Accenture; Ariba; Infosys IT and Logistics –DHL; Fedex; IBM; Tesco Customer support centre –GE Bank; Icon; Lufthansa; Phillips; Team Trackers Shared services centre –Exxon Mobil; Johnson & Johnson; Siemens; Tesco High-tech repair centre –Symbol technologies

Links Czech Statistics Office: Czech Republic (Official website): About Czech service industries ( you can open this website with confidence – Richard ):

Thank you!