AFI survey: Companies are planning major investment expenditures on the development of new products in digitalisation and robotisation, but they are hindered by a critical shortage of skilled labour
This and other facts are apparent from the conclusions of a survey conducted among investors by the Association for Foreign Investment, which was presented at the AFI’s Annual Conference
Prague, 21 September – On Tuesday, 21 September, the Association for Foreign Investment held its Annual Conference under the title “Targeted Investments as a Vaccine for the Czech Economy” at the congress centre of the Czech National Bank. At the conference, the AFI presented a representative survey of investors who have invested in the area of industry and services in the Czech Republic in the past quarter-century. The survey’s conclusions contain suggestions for changes that will make life easier for companies, increase their economic activity and benefit the economy as a whole. A number of prominent figures of the Czech economy appeared at the conference, such as economists Miroslav Singer and Tomáš Sedláček, Petr Očko of the Ministry of Industry and Trade, Zbyněk Frolík of Linet, Zuzana Krejčiříková of ČEZ, Anna Pasková of the Ministry of the Environment, Radek Špicar of the Confederation of Industry, Michal Menšík of DoDo and Jaroslava Rezlerová of ManpowerGroup, among many others. The AFI also presented its prestigious Prize for Significant Contribution in the Field of Investment to two investors, namely the BMW Mobility Development Centre and Prusa Research. The AFI Prize for Long-Term Benefit to the Investment Environment of the Czech Republic was awarded to Karel Dobeš for his contribution to the development of the space industry.
“The survey confirmed the existence of some trends and problems that we were aware of, but it also revealed other impetuses for making changes in the Czech Republic’s business environment. The good news is that companies are planning major investment spending – mainly on people, digitalisation and robotisation. However, a problem for the future is that 60% of companies are confused and disoriented with respect to the Green Deal and the whole decarbonisation trend, and that is preventing them from seeking opportunities in that area and using it as a springboard for their future development. Another important conclusion is the critical shortage of labour, which was mentioned by 45% of the respondents,” says Kamil Blažek, chairman of the Association for Foreign Investment, commenting in the survey’s conclusions.
Klára Sobotková, deputy chairwoman of the AFI Supervisory Board, considers the conclusion concerning cooperation between investors and municipalities to be alarming: “Seventy-one percent of respondents perceive cooperation and mutual support between municipalities and companies as being practically at a standstill.” Jan Linhart, member of the AFI Steering Committee, adds: “Nearly 75% of companies see investment incentives as beneficial to the economy as a whole, which we see as confirmation of the importance of this tool for increasing investors’ motivation to place their projects here.”
The quality of the survey is underscored not only by the high response rate, with nearly two hundred companies responding, but also by the composition of respondents, who came from the ranks of top management, owners, CEOs, COOs and financial, personnel and operations managers. Thanks to the conclusions drawn from the survey, the AFI gained impetuses that it intends to actively address together with relevant institutions and the Czech government with the aim of improving the business and investment environment in the Czech Republic. More information on the results of the survey can be found below.
In addition to the survey, the AFI’s Annual Conference covered four discussion blocks on the upcoming elections and possible post-election scenarios, as well as discussions on reinvestment and on how to effectively exploit the “Fortress Europe” issue and related decarbonization and the greening of the economy. The conference concluded with a look into future trends in human resources and the online environment.
Lively discussions were held on a number of topics, but the major issue permeating the whole conference was decarbonisation policy, which is a megatrend both in the EU and at the global level, though it is not perceived as such by the Czech public or companies. However, ignoring it constitutes a major threat and its rapid and active utilisation is a tremendous opportunity for the economy and individual companies across segments. There was also agreement on the necessity of more closely aligning the interests of companies and the municipalities where they operate and motivating them to cooperate – and how better than by changing the budgetary allocation of taxes, i.e. ensuring that part of the income tax paid by companies goes directly into the budget of the given municipality.
Commenting on the Annual Conference, Kamil Blažek adds: “I’m glad that, even in the pre-election atmosphere, the discussion was substantive and I am hopeful that such substance and stability will carry over into the post-election order, whatever it may be.”
The AFI also presented AFI Prizes for Significant Contribution in the Field of Investment to two investors, one of which is the BMW Mobility Development Centre in Sokolov, which will be BMW’s first development centre in Eastern Europe and will transform the area into a centre for attractive and modern technologies. The other prize recipient is Prusa Research, a Czech company that is currently the second biggest manufacturer of 3D printers in the word. The company flexibly responded to the situation at the beginning of the pandemic and certified and subsequently distributed hundreds of thousands of printed protective face shields. The AFI Prize for Long-Term Benefit to the Investment Environment of the Czech Republic was awarded to Karel Dobeš, government commissioner for cooperation with the European GNSS Supervisory Authority and chairman of the board of directors of the Association of Small and Medium-Sized Enterprises and Crafts.
Main conclusions of the survey on the issue of “Improving the Business Environment in the Czech Republic”
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Conclusions of the Association for Foreign Investment |
Survey findings |
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1. CLEAR CONFIRMATION: “A significant majority of companies see investment incentives as beneficial. Incentives are a form of motivation for market drivers and are not ‘free money’ as in the case of subsidies.” |
Nearly 75% of companies responded that investment incentives contribute to the overall development of the Czech economy. |
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2. MAJOR PROBLEM OF THE FUTURE: “A significant majority of companies are confused and disoriented with respect to the Green Deal and the overall decarbonisation trend, and they are thus unable to seek opportunities within it and use it as a springboard to future development. That is a fundamental problem and it is necessary to change it.” |
In the matter of the Green Deal, companies’ opinions are divided. Twelve percent see the Green Deal as a clear opportunity and 13% as a clear risk. Twenty-eight percent see it as a possible opportunity and 27% as a possible risk, and 20% of respondents do not know. Furthermore, only 29% of companies responded that they have formulated a strategy for reducing their carbon footprint and 43% do not currently intend to prepare one. |
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3. MAJOR PROBLEM OF THE PRESENT: “The critical shortage of workers together with gaps in their qualifications hinder development and necessary changes in the Czech economy. A) it is necessary to proactively and thoughtfully allow foreign workers into the Czech Republic, especially from countries that offer a greater probability of their problem-free integration. B) it is necessary to work on retraining and change the educational structure of the Czech workforce and students.” |
The vast majority of companies (77.9%) agreed that their employees will need new skills, particularly training in the areas of IT, digitalisation, automation and robotisation. Nearly 45% stated that if the AFI could resolve one issue in the area of human resources, it would be the presence of a sufficient number of high-quality, skilled workers and educated employees, and promotion of the attractiveness of vocational training facilities, cooperation with companies and updating of fields of education. There were frequent comments in favour of opening up the market and making it easier to employ foreigners. |
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4. COMPANIES ARE PLANNING MAJOR INVESTMENT EXPENDITURES: “Companies see potential for their own progress in the development of new products and processes, as well as in digitalisation and robotisation, and most of the companies surveyed use their own property for this purpose. All of this brings about major investment needs in technology, facilities and human resources.” |
Sixty-five percent of companies expect development in IT and technical skills, individually in the areas of new product or process development (27%), digitalisation and robotisation (24%) and Industry 4.0 (14%). Nearly 70% of companies operate entirely or predominantly in properties that they own. |
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5. COOPERATION AND MUTUAL SUPPORT BETWEEN MUNICIPALITIES AND COMPANIES IS AT A STANDSTILL: “Most companies mainly see disinterest among local authorities with respect to their problems. However, mutual cooperation would help both parties. The problem is a lack of mutual motivation to cooperate, and the solution is, among other things, a change in the budgetary allocation of taxes and a better institutional framework. |
Nearly 71% of respondents stated that local authorities are not interested in their companies’ activities and possible support. |
Contact: Ivona Novotna, PR Manager, ivona.novotna@afi.cz, +420 731 889 963
About the Association for Foreign Investment
Association for Foreign Investment (AFI) is an organisation whose purpose is to provide comprehensive support for investments and investors in the Czech Republic. The AFI was established in 1996 at the instigation of the Czech government (Ministry of Industry and Trade and CzechInvest) as a platform for cooperation between the public and private sectors with the objective of continuously improving the Czech investment environment, the conditions for investors, legislation, communication and exchange of information. The AFI is currently composed of nearly forty companies that support premium investments and have a long history in the area of assisting all types of investors newly entering the Czech market.
Domestic investors, from the largest global brands to medium-sized Czech companies with Czech owners, are constantly appearing on the radar - from joining the EU through the economic crisis of 2008 to the COVID pandemic. AFI has facilitated a number of key foreign investments, including Honeywell, Toyota, Johnson Controls, NEXEN Tire, Denso, Yankee Candle, Canpack and A123.
Business Guidebook – a unique guide for foreign investors
One of our most important roles is to be the first point of contact and to provide assistance with navigation and decision-making processes for every kind of incoming foreign business. For this purpose AFI issue an unique publication Business Guidebook. The Guidebook presents the Czech Republic comprehensively in all macroeconomic perspectives and provides newcomers and current investors with information on investing in the Czech Republic.