Innovation Europe > News > Innovation EU Vol2-1 > Innovation Czech Republic

The Czech Republic is undergoing a transition from an efficiency-driven economy to an innovation-driven one. It has a strong tradition in technical and mechanical engineering, reflected through a high contribution from the medium-high-tech sector.

The openness of the Czech economy stimulated domestic companies to increase production efficiency but also significantly contributed to a rapid spill-over of the recent economic crisis and the way out will therefore largely depend on economic recovery abroad.

The economic crisis may trigger a shift in business strategies from long-term competitiveness to short-term survival, which might cause less investment in innovation activities. On the other hand, the pressure on businesses during the economic crisis may force entrepreneurs to cut excessive costs and make an effort to increase the efficiency of business processes.

The Czech Republic belongs to the group of moderate innovators with innovation performance below the EU-27 average, although the speed of improvement of innovation performance is higher (European Innovation Scoreboard 2008).

Relative strengths, compared to the Czech Republic’s average performance, are in firm investments, innovators and economic effects. Relative weaknesses are in human resources, finance and support and throughputs.

Main innovation challenges

• Lack of co-operation between the research sector and the business sector.
• Lack of human resources for innovation.
• Inefficiency in use of public resources for R&D and innovation.

Conclusions

Most of the policy measures focus on providing direct innovation support for the manufacturing sector, which complies with the strong industrial basis of the Czech economy and its current need for transition to production with higher added value. Furthermore, many innovation policy measures aim to strengthen R&D cooperation as a response to the most evident challenge of the national innovation system.

Although there is only little evidence about the impact of public support on innovation activities (partly due to the short time since the launch of their operation and partly due to insufficient evaluation in the Czech Republic), recent improvement in the overall innovation performance provides proof that the orientation of the policy mix is fairly accurate.

Regarding innovation policy governance, assessment of the Czech system of RDI has revealed that it can be inadequate in terms of effectiveness, flexibility and appropriateness, which results in insufficient quality of R&D results and detachment of public research from industrial needs.

It is, however, positive that the shortcomings that exist in the RDI system have been addressed in the current in-depth reform of the Czech RDI system.