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Sophisticated investments find their way to the Czech Republic

The Czech Republic has experienced year-on-year growth in the number of foreign investors’ technology centres. This year 11 foreign companies have decided to establish research-and-development centres in the country and are planning to hire 420 employees. In the whole of 2005 only eight international companies established such centres in the Czech Republic.

04.12.2006

Foreign direct investments have contributed to the transformation of Czech industry, while at the same time stimulating the creation of the knowledge economy. “In most cases, companies are still investing in production, but after having good experience in the Czech Republic they often establish technology centres. A positive sign is that in recent years companies that do not have any production operations here, such as Ricardo and Roper Industries, have begun to set up technology centres," says Tomas Hruda, CEO of CzechInvest.

“Foreign investments in research and development indicate that companies are considering staying in the Czech Republic for a long time, as such investments are of a more enduring character. In the past five years, we have recorded a remarkable inflow of projects into the IT and business support services sectors," adds Rene Samek, director of CzechInvest’s Investment and Applied Research Division.

The Czech Republic is in a very good position among countries receiving intensive interest from global IT companies. This is demonstrated by the example ofSun Microsystems, which opened an advanced development centre in Prague this spring. This represents an investment of roughly USD 19 million in new jobs for top-notch software-development specialists, and USD 10.6 million in technological equipment. In addition to information technologies, design is another area in which investors are engaged. In the Moravia-Silesia region Bang & Olufsen has established a centre for the development of new products which should employ 70 developers.

In the latest rankings by significant consulting firms, the Czech Republic appeared as the most attractive location for shared services centres. At its customer service centre in Ostrava, GE Money has hired over 300 workers since the centre opened in April this year. According to A.T. Kearney, the Czech Republic ranked seventh in the world in 2005 as an ideal location for provision of global services, whereas a study by the Economist Intelligence Unit ranks the country in third place immediately behind India and China. The Czech Republic is establishing itself as a favourite location thanks to its cultural proximity, skilled workforce and developed infrastructure.

The Czech Republic is also starting to be a popular location for international companies’ regional headquarters. This is confirmed by the July opening of Hewlett Packard’s headquarters for Central and Eastern Europe, the Middle East and Africa (EMEA) in Prague, which is also the site ofHoneywell’s recently opened Global Aviation Center for Europe, the Middle East and Africa. Another American company, Ingersoll Rand, is planning to build its pan-European training centre for its Bobcat brand in Dobris, approximately 35 km south of Prague.


MORE ABOUT TECHNOLOGY CENTRES IN THE CZECH REPUBLIC

With CzechInvest’s assistance, 65 technology centres have been established in the Czech Republic since 2000, of which 22 were built by domestic companies. These 65 technology centres have created, or in coming years will create, more than 4,000 jobs in industrial research and development and product design.