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Prague is the hub, but where is the countryside? | Innovation and startups in the CEE region II.

The highest proportion of men among IT professionals in the EU, chaotic public information systems, and rigid attitude of companies towards startups. Is this really the Czech Republic? Fortunately, the country is much better than that. It has the most companies using artificial intelligence in the EU and leads the way in digital skills and e-commerce. Analysis from Hype&Hyper – Part II.


The first part of the series is available here.

The highest proportion of men among IT professionals in the EU, chaotic public information systems, and rigid attitude of companies towards startups. Is this really the Czech Republic? Fortunately, the country is much better than that. It has the most companies using artificial intelligence in the EU and leads the way in digital skills and e-commerce.

Where are the women?

The government continues to support the higher participation of women in the tech industry. Czechitas, a non-profit organization, helps girls and women to acquire digital skills and encourages them to go for IT careers. Nonetheless, roughly 90% of IT specialists are still men, the highest proportion in the EU.

Unlike Poland, Czechia has an intense geographic concentration of digital expertise. More than 200 000 people work as IT specialists, and nearly a third of them live in Prague. So, every 20th person living in Prague is an IT specialist. Look at that!

It is an excellent thing but a barrier to digital transformation outside the capital, especially in remote areas. Residents of smaller towns have no sufficient opportunities to refocus their careers. Nonetheless, it is not a unique problem in the region that people living in rural areas cannot retrain as digital experts.

However, most Czechs have at least basic digital skills, and about one-quarter of them gained advanced digital skills. Many enterprises provide IT training to their employees, making Czechia a regional leader in this field. The country ranked above the European average in 2021, though unfortunately, one position lower than in 2020.

During the autumn of the first year of the pandemic, the Czech Republic adopted a new education strategy, including measures to develop students’ and teachers’ digital skills and introduce digital technologies in schools. The revision of the curriculum has already been a milestone. It might sound like a small first step, but it is more than what other countries in the region have achieved. To help mitigate the effects of the pandemic and promote basic education in advanced technological disciplines, such as cybersecurity or robotics, the National Institute of Education has provided guidance and support materials for schools, teachers, and parents through a new website (koronavirus.edu.cz.).

Prague and Czechia are doing great in digital skills and human resources concerning innovation and digitalization, but the cold truth is that it is still not enough. The permanent shortage of digital professionals slows down the pace of digitalization in the Czech Republic. Although the figures are improving, businesses still struggle to find skilled workers. The government is trying to help by supporting new university programs and issuing updated school curricula, but it will take several years to achieve actual results.

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The Czech enterprises’ digital transformation is slow. Still, the country remains among the European leaders in e-commerce. Almost one-third of Czech SMEs sell online, and 15% sell across borders. Moreover, according to the latest Digital Economy and Society Index (DESI), Czechia is ranked above average in integrating digital technology.

However, the system for implementing digitization in the Czech Republic is chaotic. Public information systems and online tools are not interconnected, and the system is inconvenient for businesses and citizens in terms of time or cost savings. The current government has approved the new Digital Czech Republic strategy to enhance progress with coordination on the digital agenda.

The Moravian-Silesian Innovation Centre in Ostrava improves its laboratories, offers new programs for SMEs, and plans to invest nearly EUR 15 million in a new supercomputer with the performance of 15,2 petaflops. What a one petaflop computer system can do in one second would take 31,688,765 years for a person if they do one calculation every second. If you multiply that by 15,2, you get the performance of the new Czech supercomputer. Is not it unbelievable? The Czechs also contribute to the EuroHPC, developed by the European Union, which would be 375 petaflops.

Furthermore, the Czech Republic has the highest proportion of businesses using AI in the EU. The Czech authorities support creating a center of excellence in AI in Prague, which will focus on social security. Due to the pandemic, significantly more businesses and organizations are interested in digital technologies. Still, one of the main problems is that small and medium-sized companies are slower than large enterprises to adopt digital technologies. So, the Czech Republic excels in many smaller areas, but unfortunately, in general, it still lags behind the EU average.

Startups are not really favored by the academia or SMEs

The Czech Republic has a weaker investment climate to encourage the creation and financing of new projects. Still, startup projects are supported by CzechInvest to some extent, in the form of incubation and accelerator programs.

What are incubators and accelerators?

Incubators help ambitious entrepreneurs to start and develop their business ideas, while accelerators boost the growth of businesses with a minimum viable product (MVP) already on the market.

A consistent national approach to help start, develop, and finance startups in Czechia is still lacking. Universities hardly support the creation of startups because they are generally perceived as risky in an academic environment. Czech larger companies and SMEs are not motivated to use academic results or cooperate with startups. This is a huge issue since more than half of the Czech startups operate in B2B. Thus, young Czech innovative companies have fewer opportunities to expand to the global markets.

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