The Czech Republic is looking for a way to start economic growth. “We need to invest in innovation and educate specialists,” says the economist

The Czech Republic is looking for a way to start economic growth. “We need to invest in innovation and educate specialists,” says the economist
The Czech Republic is looking for a way to start economic growth. “We need to invest in innovation and educate specialists,” says the economist
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This week, the Ministry of Industry issued a zoning decision to Czech Energy Plants that they can build up to two new nuclear power plant units in the Dukovan location. At the same time, the deadline for submitting price offers for the new nuclear block, which should be completed by 2036, has ended.

The final offer was submitted by the North American company Westinghouse, the Korean KHNP and the French EDF. At the same time, negotiations intensified about whether the German Volkswagen concern will build a new giant gigafactory for batteries for electric cars near Pilsen, which the Czech government is very interested in.

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According to Vladimír Rybecký from autoweek.cz, getting an investment will not be easy – we have strong competition. At the same time, he is not sure whether the gigafactory is an ideal opportunity for us. “The Czech Republic needs investments in projects other than a simple assembly factory.”

Petr Knap from Ernst & Young considers obtaining investment to be essential for the Czech Republic. “Other investments that are looking for their place in the future are looking to see if the country is on the map of future electromobility, which is why I think that other activities in this supply chain would have a better chance of developing faster in the Czech Republic. It is an automated chemical plant.”

Investment as a boost?

David Navrátil, chief economist of Česká spořitelna, claims that the domestic economy has not been able to catch up with more advanced economies since the financial crisis of 2008. “At the same time, we are the only economy from the European Union that has not yet reached the pre-covid level.

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“The reasons are inflation, a drop in household consumption and investments, which are below the level of the end of 2019. We are slightly better than the Eurozone average, where it is four percent. The government’s rhetoric that we will invest is a nice thing, but unfortunately we don’t see the results,” he adds.

“The Czech economy is incredibly energy intensive, our energy consumption per unit of GDP is twice that of Denmark and 50% higher than in Germany. Sufficient cheap and accessible energy is absolutely key for the Czech economy. We need to invest significantly not only in the economy of the Czech economy, but also in energy sources,” he says.

“Let’s not expect that just building a few blocks of a nuclear power plant will shoot us up, but it is a necessary condition – we will not be able to grow without it. We need a strategy, we need to invest in innovation and at the same time educate specialists so that we are able to export our knowledge and skills in building nuclear energy and at the same time execute this plan, which we are not able to do.”

Domestic vs. foreign investors

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Navrátil points to the pressures from the 1990s to attract foreign investment. “We’re now in a situation where almost half of the firms are owner-controlled, which drains six to eight percent of the gross domestic product in dividends every year, which is a huge amount,” he says.

“Compared to EU countries, we are in 21st place in terms of suitable business environments. We have only 150 start-ups per million inhabitants, Austria has twice as many and Estonia 1,100. Local business lacks the conditions for companies to be established easily and not to be afraid of investment, as well as the right mindset – the way we think.

We don’t believe too much that we are capable of growing up. We are taught not to make mistakes, without which there is no business, as well as without bringing new ideas,” he concludes.

You can hear more details about European investment, wage rises, monetary policy and rate cuts in the recording of the full interview.

The article is in Czech

Tags: Czech Republic start economic growth invest innovation educate specialists economist

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