Research and development surpasses manufacturing investments in the first half of 2008

With CzechInvest’s assistance the Czech Republic attracted 124 new investments worth nearly CZK 20 billion in the first half of this year. More than 65% of these investments involve research and development or services.

“This is the first time that investments in research and development or services have comprised the majority of new projects. This is clear evidence of our country’s shift toward a knowledge-based economy,” says Alexandra Rudyšarová, acting CEO of CzechInvest. The new investors plan to create 9,669 new jobs, 34% of which will be intended for university-educated specialists.

Software development dominates

The largest number of new investments were prepared by firms engaged in software development. With CzechInvest’s contribution, 16 programming centres worth CZK 233.35 million will be established, eventually employing 2,561 specialists. Carmakers and automotive-component manufacturers account for another thirteen investments, and yet another 13 companies will focus on research and development in the area of mechanical engineering.

“Whereas in the past the greatest number of investment projects were in the automotive industry, today IT companies have achieved comparable significance,” Rudyšarová adds. “The most successful region in terms of attracting IT investments is South Moravia, which thank to its large concentration of technical schools and talented students attracted the largest number of software developers, specifically six firms, in the first half of last year.” 

Half-year comparison: less manual labour, more technology

In the first half of last year, CzechInvest mediated 83 investments in the value of CZK 49 billion, in which 17,780 new jobs will be created. Whereas last year 98% of all projects involved investments in manufacturing, this year the proportion of such projects fell to only 35%. The remaining two-thirds involve research and development or services.

“Comparison with the same period last years thus indicates that we have managed to attract a larger number of projects that are less dependent on manual labour,”says Rudyšarová. “The core of new investments today comprises rather smaller, sophisticated projects that do not require extensive investments, but rely primarily on the abilities and knowledge of their employees.”

Growing interest in EU funds

According to Rudyšarová, the small proportion of investments in research, development and services in the first half of last year was due mainly to individual companies’ delaying introduction of their projects until the reopening of the Framework Programme to Support Technology Centres and Centres of Business Support Services. Conversely, this year investors could draw support from both this framework programme and European Union funding, specifically from the Operational Programme Enterprise and Innovation and its Potential Programme announced by the Ministry of Industry and Trade.

“Investors’ interest in aid from European funds has grown remarkably,” Rudyšarová confirms. “Thanks to the EU’s Operational Programmes, we can support a broader spectrum of enterprises while conserving funding from the state budget.”

Czechs are the most active

“In the first half of this year alone, Czech companies prepared 78 new investment projects worth nearly CZK 5.5 billion. These projects require a substantial number of university graduates; fully 46% of 4,000 new jobs in Czech projects will go to such highly qualified employees,” Rudyšarová calculates. German companies are the second most numerous investors with 12 projects, followed by firms from the Benelux countries with eight investments.

“Projects prepared by domestic firms thus comprise the majority of investments as well as the greatest financial volume and largest number of newly created jobs,” says Rudyšarová.

South moravia leads

South Moravia attracted the largest number of new investment projects, precisely 21, while the Moravia-Silesia region recorded the largest financial volume and the greatest number of new jobs. The region attracted 19 investments in the total value of CZK 5.3 billion. These investments will result in the creation of 2,398 new jobs. Central Bohemia, with 12 projects, and South Moravia, with ten new technology centres, are the Czech Republic’s most attractive regions for investments in research and development.

Orders from multinational companies

 In addition to newly acquired investors, in the first half of the year CzechInvest helped six Czech firms obtain orders from multinational companies in the value of CZK 923 million. Sixty-five new jobs will be created as a result.

CzechInvest was established in 1992. Since then, it has assisted with 1,092 investments in the total value of CZK 637 billion. Projects mediated by CzechInvest will eventually create 197,453 jobs. Thousands more jobs will be created in related investments.

H1 2008

The statistics include all projects of domestic and foreign companies that decided to invest in the Czech Republic with CzechInvest’s mediation during the period 1 January 2008 to 30 June 2008.

H1 2007

*Investors delayed their projects until the reopening of the Framework Programme to Support Technology Centres and Centres of Business Support Services; the OPEI Potential Programme accepted only preliminary registration applications.

Total mediated investments: 1993 – h1 2008

Country of origin

of projects mediated by CzechInvest in H1 2008

Regional distribution

of projects mediated by CzechInvest in H1 2008

*Projects of companies that invested in more than one region concurrently are counted as only one project in the total number.

Sector distribution

of projects mediated by CzechInvest in H1 2008