Czechia is a highly export-oriented economy. However, foreign-owned multinational enterprises account for the lion’s share of national exports. SME export volumes have also increased over the past decade, but the number of exporting firms has not grown, pointing to the need of enlarging the base of SME exporters. The high share of foreign value added in national exports also indicates that the position of Czech firms in global value chains is predominantly into downstream activities. The overarching objectives of government SME internationalisation policies include enhancing SME internationalisation, promoting higher value-added exports, and supporting more permanent operations abroad. Programme-wise, existing informational and capacity-building tools, such as the Single Digital Gateway, provide valuable information and advisory services for exporters, but their uptake could be increased. Sector-specific training, export alliances and export incubators help pool expertise and transfer export-relevant skills to SMEs. However, some of these measures could be expanded to engage under-represented groups in international trade such as women entrepreneurs. Finally, strengthening FDI-SME linkages in high-growth sectors through supplier development programmes and supply chain finance could accelerate the export competitiveness of Czech SMEs.
SME Policy in Czechia
Abstract
Czechia is an export-oriented economy, with exports accounting for 72% of GDP in 2023, ranking the country in the 12th position among EU member states. Exports are dominated by large foreign multinational enterprises (MNEs), which generated more than 70% of export volumes in 2022. The high share of foreign value added in exports indicates that domestic firms are predominantly integrated into downstream segments of global value chains (GVCs), reflecting Czechia’s specialisation in later production stages such as the assembly of intermediate inputs. This is especially true for high-value-added and global sectors, such as automotive and machinery.
The SME export performance has improved in volume terms in the last ten years, with total SME exports increasing by approximately 30% between 2012 and 2022. However, the number of exporting SMEs has remained constant. This suggests an increase in average export intensity among existing exporters and their ability to capitalise on favourable global market trends during the 2010s. At the same time, the limited entry of new SME exporters points to the need of strengthening export readiness across a broader segment of the SME population.
Czechia’s SME Support Strategy is well aligned with the objectives of the National Export Strategy, which emphasises strengthening SME export capabilities, increasing the share of high value-added exports, and fostering a more sustained presence in foreign markets. The coherence between the two strategies is reflected in the policy instruments employed, which aim to develop a supportive domestic and international environment for exporting and to provide SMEs with targeted services and financing solutions to facilitate international expansion.
Information-based support tools (e.g. the Single Digital Gateway, Points of Single Contact, SOLVIT, and the Product Contact Point) play an essential role in improving SMEs’ access to export-relevant information. However, utilisation remains limited, highlighting the need to expand outreach efforts. Implementing and enhancing the “No Wrong Door” principle, as suggested by the National Export Strategy, and disseminating SME export-support services through the networks of business associations could strengthen awareness and uptake.
Export incubators and sector-specific export training programmes contribute to building SME capacity for internationalisation, particularly for innovative firms. These initiatives could be extended to additional sectors and further complemented by outreach efforts towards underrepresented groups in trade, including women entrepreneurs, to promote more inclusive participation in international markets.
Czech SMEs also benefit from trade missions and economic diplomacy initiatives. In this respect, an expansion of the geographical coverage of the PROPEA (Projects for the Support of Economic Activities Abroad) programme, which is run by national embassies, would benefit SMEs seeking access to non-traditional or niche markets.
Strengthening business linkages between foreign investors and domestic SMEs remains a key priority for strengthening technology upgrading in local SMEs and increasing the share of Czech value added in national exports. This objective could be achieved by further developing tools such as the supplier database of the national investment agency (CzechInvest) and by re-introducing supplier development programmes, particularly in sectors with strong growth potential, such as electronics and semiconductors.
Stronger FDI-SME linkages can also be facilitated through a wider uptake of supply chain finance (SCF) solutions. This may require regulatory measures to incentivise shorter payment terms of large buyers towards SME clients, as well as technical support, such as SME training on e-invoicing and the development of standardised SCF digital platforms.
Czechia is an export-oriented economy, but multinational enterprises take the lion’s share of national exports
Czechia’s exports of goods and services accounted for 72% of national GDP in 2023, placing Czechia in the 12th position among EU countries in this specific indicator, ahead of Poland (58%), but behind Hungary (81%) and the Slovak Republic (91%) in the region of Central and Eastern Europe (CEE) (Figure 3.1)1. Despite a small drop in the share of GDP over the past decade (four percentage points), Czechia remains more reliant on foreign markets than many other EU economies. The most important export destinations of Czech goods and services are primarily within the EU, with Germany accounting for 9.7% and the Slovak Republic for 4.5% of total exports in 2022.2
Percentage of GDP
Source: World Bank national accounts data, and OECD national accounts data files, https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS
Large enterprises, particularly multinational enterprises (MNEs), dominate Czechia’s export landscape; in 2022, foreign-owned firms accounted for more than 70% of the country’s export volume. Foreign-owned firms also derive much larger shares of their sales from exports. The export intensity of foreign-owned firms is nearly double that of domestic firms in the manufacturing sector. This gap remains significant also across other industries such as transportation and storage, information and communication, and construction (OECD, 2024[1]).
A recent OECD analysis of FDI-SME linkages in Czechia shows that the country participates in global value chains predominantly through backward integration, measured by the share of foreign value added in exports, which stands at 39% (OECD, 2024[1]). In contrast, forward integration – measured by the share of Czech value added in other countries’ exports – stands at 20%, similar to the OECD average. Higher-than-OECD-average backward participation and relatively lower forward participation suggest that Czech firms occupy a downstream position in global value chains, mostly focusing on using imported intermediate inputs and assembling goods (OECD, 2024[1]).
SME export volumes have increased, but the number of SME exporters has remained stable
Between 2012 and 2022 the overall volume of SME exports increased by around 30% in Czechia, more than Germany (16%), but less than neighbouring economies such as the Slovak Republic (68%) and Poland (75%). Over the same period, the number of exporting SMEs remained quite stable, growing by only 1% (Figure 3.2, Panel B)3. As a result, existing SME exporters have expanded their export capacity, but few more companies have started to export.
More generally, SMEs still account for a small share of total exports in Czechia, with micro-enterprises (1-9 employees) contributing approximately 4% and small firms (10-49 employees) 9% of direct exports – both values falling short of the EU averages of roughly 11% for each of the two firm-size categories (Figure 3.2, Panel A). Going forward, it will be crucial to support especially small-sized enterprises to enter foreign markets, as micro-enterprises typically have fewer internationalisation opportunities due to lower average productivity as well as prevalence in non-tradable sectors (e.g., retail trade).
Another issue affecting SME internationalisation in Czechia is the fragmentation of its business sector, which lacks the same numbers of medium-sized enterprises (50-249 employees) as other EU economies (OECD, 2024[1]; OECD, 2021[2]), whereas these companies are the most likely in the SME population to export or to become suppliers of large multinational enterprises, thus adding national value in total exports.
Czech SME internationalisation policies should, therefore, not only target existing small enterprises, but also strive to expand the number of mid-sized companies through appropriate scale-up policies, tackling broader issues such as business-friendly taxation and regulations, access to finance and digitalisation that are discussed in more detail in other chapters of the report. Business scale-up and internationalisation, especially in relatively small open economies like Czechia’s, often go in parallel.
Note: Micro = 0-9 employees, Small =10-49 employees, Medium = 50-249 employees, Large = 250 or more employees
Source: Trade in goods by enterprise characteristics by economic activity and size class, OECD, OECD Data Explorer • Trade in goods by enterprise characteristics by economic activity and size class.
Czech SMEs struggle to enter highly competitive FDI-driven sectors
Most export activity by Czech SME is concentrated in manufacturing, which accounts for 57% of total SME export volumes. Key sub-sectors include the production of fabricated metal products (10% of total SME exports), including machinery and equipment (7% of total SME exports). On the other hand, while automotive is the main exporting industry of Czechia (28% of total exports in 2022), SMEs only contributed 5% of the industry’s total exports, pointing to the dominance of large companies in this sector (Figure 3.3, Panel A).
It is generally acknowledged that focusing only on direct exports underestimates the participation of SMEs in international trade, as these companies can also contribute indirectly by supplying MNEs in the context of global supply chains. In addition to avoiding trade-related costs, this indirect participation allows SMEs to benefit from access to cheaper inputs and foreign technologies (López González, 2017[3]). According to available data from 2014, Czech SMEs contributed 47% of the total value added of Czech exports, behind other CEE economies such as Poland (50%), Hungary (52%), and the Slovak Republic (56%) (OECD, 2024[1]).
A recent OECD analysis on FDI-SME linkages in Czechia adds some further nuances, arguing that a major challenge is the limited engagement of Czech SMEs in long global value chains (GVCs) (Figure 3.3, Panel B) (OECD, 2024[1]). Long GVCs integrate various stages of production – e.g., sourcing raw materials, manufacturing components and assembling final products – across wide geographical areas. Participation in long GVCs, therefore, reflects the economy’s exposure to highly internationalised sectors (OECD, 2024[1]). Prominent examples include the machinery and automotive sectors, where Czechia-based companies hold a sizeable share of direct exports. However, as described above, large MNE dominate these industries, pointing to an important role for public policies to help Czech SMEs integrate further these supply chains, especially in higher value-added activities such as precision manufacturing, automation integration and quality assurance4.
Note: SMEs include firms with 1-249 persons employed. Panel B: SME integration in long GVCs is calculated as the share of SMEs in all imports and exports of the top 10 longest value chains based on the OECD Inter-Country Input-Output (ICIO). These are manufacturing of: textiles (13), wearing appeal (14), leather and related products (15), rubber and plastics products (22), basic metals (24), computers, electronics, and optical equipment (26), electrical equipment (27), other machinery & equipment (28), motor vehicles, trailers and semi-trailers (29), and other transport equipment (30).
Source: Trade by Enterprise Characteristics (TEC) databases, and (OECD, 2024[1]), Strengthening FDI and SME Linkages in Czechia, OECD Publishing, Paris, https://doi.org/10.1787/4c97d104-en.
The objectives of the new National Export Strategy are closely aligned with those of the SME Support Strategy
The Czech government has recently published a new National Export Strategy (“Export Strategy of the Czech Republic, 2023–2033”), whose objectives appear to be closely in line with those of the National SME Support Strategy, notably those of the chapter on “access to markets”. The new Export Strategy shifts from a narrow focus on export promotion to a broader agenda of internationalisation, aiming to help businesses, especially SMEs, establish a lasting and diversified presence in foreign markets through the offer of high-quality final products, services, and integrated solutions. The new National Export Strategy, therefore, prioritises the quality over the quantity of exports and, in doing so, seeks to further the diversification of Czech exports away from an overreliance on EU markets. The Export Strategy also moves from a traditional sector-based approach to a technology-based approach, emphasising cross-cutting technology areas like advanced manufacturing (e.g., 3D printing), artificial intelligence (e.g., autonomous driving), the circular economy, and smart solutions (e.g., smart cities).
The National Export Strategy gathers its specific instruments under two main pillars: a) Developing a pro-export internal ecosystem and improving the external environment; b) Providing services and financing that support firms’ expansion abroad.
The first pillar focuses on tailored export support along the business internationalisation journey and applies the “No Wrong Door” principle to ensure that SMEs can access the services they need at different stages of their business lifecycle. This pillar also addresses the external environment by focusing on the improvement of bilateral trade relations. The second pillar covers export-relevant information tools, training, marketing, consulting services, and finance.
Building on these broad areas, the new National Export Strategy identifies specific measures targeting SMEs, many of which are also mentioned in the National SME Support Strategy, suggesting that the two are aligned also with regard to promotional activities and not just objectives. These activities include developing sourcing services for supplier companies, creating tools to support the internationalisation of innovative SMEs and startups, and institutionalising cooperation with the National Development Bank (Národní Rozvojová Banka, NRB) to enhance SME support.
The main instruments to support SME internationalisation in Czechia are discussed in greater detail in the rest of this section. The assessment is done against chapter 3 (Access to Markets) of the national SME Support Strategy, whose broad objectives and proposed activities are, as abovementioned, closely aligned with those of the new National Export Strategy of Czechia.
A number of tools provides SMEs with relevant export information, but their outreach could be improved
A range of tools and resources has been developed to help SMEs operate effectively within the EU market and access information on exporting opportunities. Significant progress has been made, for example, on the completion of the Single Digital Gateway. This pan-European electronic signpost gives Czech businesses and citizens access to essential information, administrative procedures, and assistance services needed to operate in other EU countries. For example, SMEs can use the search function on the “Your Europe” portal to obtain tailored information by selecting their target country and topic, such as product requirements, certification, and other rules related to goods. The Single Digital Gateway plays a pivotal role in equipping SMEs with the information necessary to enter EU markets, serving as a critical first step toward successful exporting. SMEs also benefit from the European Commission’s “Access2Markets” portal, which offers comprehensive and up-to-date information on trade conditions with non-EU countries, including tariffs, quotas, rules of origin, and import procedures.
Beyond these two portals, the national government has introduced three support services meant to facilitate the operations of local SMEs in the EU market.
First, the Point of Single Contact (PSC) offers free support to SMEs and individuals by providing key information on service-provider requirements, authorisations, and formalities needed to start and operate a business in the EU. The PSC also gives access to contacts for relevant authorities, guidance on EU-wide service rules, dispute-resolution and consumer-protection information, as well as links to practical assistance such as the European Consumer Centres Network. Accessible online or in person at 15 regional trade licensing offices, the PSC handled around 1 900 inquiries in 2021 and nearly 2 200 in 2022, reflecting growing demand.
Second, SOLVIT is a free, primarily online service run by national authorities across the EU to help individuals and businesses resolve problems caused by public authorities in another member state. It aims to close cases within 10 weeks when they involve a breach of EU rights and have not yet gone to court. SOLVIT handled 183 cases in 2021 and 109 in 2022. While total cases fell due to the pandemic, business-related cases increased.
Third, the Product Contact Point (ProCoP) offers free information on technical requirements for placing products on the EU market, including guidance on the principle of “mutual recognition” and contacts for competent authorities. It supports both foreign firms exporting to Czechia and Czech firms exporting abroad. Although requests were relatively low during the pandemic (194 in 2021 and 114 in 2022), ProCoP remains an important resource for SMEs navigating product regulations and restrictions affecting the free movement of goods and workers.
Overall, these information tools and portals play an important role in making local SMEs aware of rules and regulations involved in entering foreign markets, but there is room for improving their visibility and outreach as the overall number of users remains low compared to the much larger base of potential exporters. This could be achieved by strengthening the “no wrong door” principle which aims to enable SMEs to access all relevant services seamlessly at multiple entry points, as suggested in the National Export Strategy. Furthermore, a comprehensive document could be developed to consolidate SME support tools. This resource would offer clear, detailed information on available tools, training programmes, and export financing options. It could be widely circulated by well-connected partners, including business associations and Chambers of Commerce, to ensure broader outreach and accessibility for SMEs.
Export training by CzechTrade supports the internationalisation efforts of SMEs, increasingly also outside the EU market
CzechTrade is the government trade promotion agency of Czechia and, as a result, plays a central role in supporting the internationalisation of local SMEs. CzechTrade has traditionally focused on the promotion of direct exports, but in recent years its portfolio has expanded to include assistance for establishing a more permanent presence in foreign markets, not only traditional EU markets but also emerging markets.
A key instrument in this expanded support model is the network of export incubators. Since 2021, CzechTrade has progressively opened incubators in strategically selected markets, initially in India, followed by the United States, the United Arab Emirates and Mexico. These incubators offer practical services such as marketing, communications, and operational guidance to help companies enter and adapt to local markets. Typically, each incubator supports 5-10 companies per year, although utilisation levels vary: some, like the one in Chicago, face overcapacity, while others, like Bangalore, experience lower demand.
The selection of the locations of incubators aligns with the new National Export Strategy, which encourages firms to explore a broader range of export destinations beyond traditional markets like the EU. This shift is intended to give SMEs greater flexibility in choosing markets that match their capabilities, including specific strengths in niche technologies, while supporting Czechia’s broader objective of export diversification.
Besides the incubator programme, CzechTrade continues to offer a wide range of export-readiness training for SMEs, some of which are sector-specific, such as the Design Centre for companies in the creative industries (Box 3.1), while others cover new thematic areas such as compliance with ESG requirements (see also chapter 7 on the green transition).
The Design Centre of CzechTrade facilitates connections between the creative industry and other business sectors by linking companies with professional designers and offering advisory services and guidance. The Centre collaborates closely with the Ministry of Industry and Trade and is a member of the Bureau of European Design Associations (BEDA), which provides Czech companies with access to the latest insights on design theory and practice. The centre specifically supports the competitiveness and internationalisation of firms through national exhibitions, participation in international design fairs, and educational and research activities (e.g., seminars, symposia, and conferences). Event and trainings are offered free-of-charge.
Source: Website of the Design Centre CzechTrade: https://www.czechtrade.cz/sluzby/design-centrum-czechtrade .
Some social groups, like women entrepreneurship, could be the target of specific support
CzechTrade’s initiatives to support SME internationalisation could be further strengthened by undertaking targeted actions to support underrepresented groups in trade, particularly women entrepreneurs. Recent OECD work shows that women entrepreneurs in the EU are about 19% less likely than men to have customers in another country (OECD/European Commission, 2023[4]). This points out that trade liberalisation has differentiated impacts due to unequal access to resources and established gender roles in society (European Parliament, 2024[5]). Gender disparities are also evident in other statistics. In 2022, Czechia’s national self-employment rate was 15%, but only 11% for women. Furthermore, only 13% of self-employed women had employees, a figure below both the national average (16%) and the much higher EU average (32%) (OECD/European Commission, 2023[4]). These gaps suggest that there is scope for targeted programmes to reduce gender disparities in business ownership and export activity.
The EU has made gender equality an explicit priority across different policy domains, including trade. Recent free trade agreements, for example, contain dedicated articles and chapters on trade and gender, signalling a shift towards a more systematic integration of gender considerations in EU trade policy (European Parliament, 2024[5]). On its side, the Czech national government has also adopted national gender strategies which include specific references to women entrepreneurship. For example, the “Gender Equality Strategy 2021-2030” highlights the importance of getting more women into entrepreneurship (Office of the Government of the Czech Republic, 2021[6]), while the specific scheme “Strengthening the Competencies of Women Disadvantaged in the Labour Market and in Business” (under the Operational Programme “Employment Plus”) supports women over 50 through comprehensive educational programmes aiming to reduce the risk of poverty in retirement5.
Building on these policy foundations, there is an opportunity for CzechTrade to further strengthen support for women entrepreneurs and women-led businesses in export activities. CzechTrade already organises a wide range of events tailored to different stages of export readiness and to region-specific market opportunities. Under Measure 11 of the National SME Support Strategy (i.e., Professional training for exporters), CzechTrade could expand its offer by introducing a targeted series of export training and networking activities specifically designed for women entrepreneurs.
Export alliances provide valuable expertise to many SMEs, but the sector coverage could be strengthened
CzechTrade is also active in the support of export alliances, which are sector-based collaborations aiming to enhance the international competitiveness of domestic firms by pooling expertise and resources. They offer services such as market intelligence, intellectual property guidance, and support for entering foreign markets. In Czechia, several export alliances were established in 2021 and 2022, including Elements for Smart Cities, the Czech Water Alliance, the PROVEG Czech Export Alliance, and the Czech Beer Alliance.
Broadening export alliances to new sectors and strengthening the role of the promoters of these alliances would enhance the visibility of this policy and would encourage wider SME engagement. Furthermore, consolidating selected alliances into formal export consortia could reinforce medium- and long-term strategic collaborations, without requiring participating firms to relinquish ownership (see Box 3.2).
The Italian government has a long tradition in supporting export consortia. These are voluntary alliances of SMEs, which come together to improve their export performance through the development of common activities. Each consortium needs to have at least eight SMEs (five in southern Italy). A consortium grant is worth on average EUR 2-3 million per year and funds are primarily used to finance visits abroad, workshops and advertising. Grants are disbursed annually, based on the expenses incurred in the previous year. A maximum of 40% of promotional expenses (60% for consortia based in Southern Italy) can be funded through the grants.
There are over 300 export consortia currently operating in Italy, covering a variety of sectors and regions. These consortia collectively include around 7 000 Italian companies The Italian Federation of Export Consortia (Feder-export) – the private federation historically associated with export consortia – represents about 110 consortia. It provides tax and legal advice, organises conferences and market surveys, arranges trade delegations, and negotiates credit lines with banks to finance the export activities of the consortia. Not all export consortia receive public funding, but they can apply to a competitive selection process (see above).
Source: OECD (2014[7]), Italy: Key Issues and Policies, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/9789264213951-en.
Many SMEs already benefit from participation in trade missions and economic diplomacy initiatives
CzechTrade also plays a central role in facilitating export support services for SMEs, including market research, matchmaking, and organising participation in trade missions. In 2022 alone, slightly more than 1 000 companies across various sectors benefited from its services. CzechTrade also implements several EU-co-financed economic diplomacy programmes.
For example, NOVUMM (i.e., New Marketing Models for Trade Fair Participation) is an export support initiative implemented by CzechTrade to help SMEs enter and strengthen their presence into foreign markets. The programme provides subsidised services that make it easier and more affordable for SMEs to participate in foreign trade fairs, exhibitions, and international events. Rather than receiving direct grants, participating companies benefit from reduced-price export promotion services which are coordinated by CzechTrade. Under the original NOVUMM projects, nearly 1 400 SMEs were supported to participate in 167 trade fairs in 23 different countries. In the current programming period, through the Operational Programme “Technology and Applications for Competitiveness” (OP TAC), these efforts continue through the follow-up projects NOVUMM 2 and NOVUMM2KET. The former focuses on facilitating SME participation into selected international trade shows, while the latter targets specialised events in key technology sectors.
Alongside CzechTrade, the Czech Chamber of Commerce also plays a role in the field of trade missions and economic diplomacy, offering services similar to those of CzechTrade (e.g., information on market conditions, facilitating connections with international partners, and enabling participation in global events).
The export destinations of the PROPEA programme could be expanded to foster export diversification
The PROPEA programme is an important tool of economic diplomacy. It was successfully developed in 2022, with the participation of 16 embassies. As part of the project, participating embassies support Czech companies in entering the target foreign market through the services of accredited local experts, including support with the development of business plans, regulatory analysis and marketing of the company in the market destination, all of this based on a commercial contractual relationship between the Czech company and the foreign representative.
While the current portfolio of PROPEA services appears to be comprehensive, future support could be developed and extended to include more destinations. This approach would align with the goal of the National Export Strategy, which aims to diversify national exports beyond traditional markets and to assist SMEs in selecting new export destinations.
Stronger FDI-SME linkages could be supported through an expansion of information tools and new supplier development programmes
Czechia mainly supports FDI-SME linkages through the provision of financial incentives and technical assistance (OECD, 2024[1]). Current technical support tools to strengthen FDI-SME linkages are managed by the national Investment Promotion Agency CzechInvest and include a Czech supplier database featuring over 3 600 companies, many of which are SMEs. Active since 1998, the database categorises suppliers into ten key sectors with further subcategories, under which SMEs can register for free. The database is widely used by MNEs across Europe and beyond, particularly in sectors such as electrical engineering, automotive, ICT, metal subcontracting, and general engineering. The supplier database is a well-functioning and accessible tool that could be further expanded. Above all, the government could consider integrating CzechInvest’s supplier database with other similar initiatives, like the Exporter’s Directory of CzechTrade, into one single database, in order to build stronger visibility for foreign companies and buyers (OECD, 2024[1]).
In this area, there is also an opportunity to enhance the capabilities of local suppliers. This is particularly relevant for FDI-driven sectors with high growth potential, such as electronics and semiconductors. The Czech government had operated a supplier development programme (SDP) between 2000 and 2008, with a focus on fostering linkages between inward FDI and local SMEs particularly in the electronics and automotive sectors. The programme was demand-driven and focused on enhancing the competitiveness of Czech SMEs to meet the standards needed to integrate the GVCs as suppliers of the multinational companies (World Bank/WEF, n.d.[8]). Overall, the programme was highly effective, with approximately 150 participating companies, primarily SMEs, securing contracts with MNEs worth over CZK 7 billion until 2008.
Although the programme was discontinued after 2008, the government is currently preparing a new SDP under the National Semiconductor Strategy, covering the 2024-2029 period. In this context, the Czech government could consider establishing a broader SDP that extends beyond semiconductors to additional strategic sectors, in order to strengthen supplier–buyer linkages across a wider part of the national economy. SDPs provide local SMEs with valuable opportunities to network with MNEs and enhance their competitiveness by diversifying their product offerings and client base. These programmes typically provide SMEs with technical expertise to improve their product quality standards and facilitate their transformation from serving only one main multinational company into more independent suppliers. Introducing SDPs other strategic sectors with high entry barriers would align well with the Czech National Export Strategy and would complement existing support measures, such as SME consulting services and participation in international trade fairs, which are designed to help Czech SMEs become exporters of high-value final products and services.
Supply chain finance could be encouraged to strengthen the liquidity of SMEs
In the context of GVCs, there is also scope for improving the financing ecosystem around buyer-supplier relationships through the development of supply chain finance (SCF). SCF refers to a set of financial solutions that optimise cash flow along a supply chain by enabling suppliers to receive early payment on their invoices (with a discount factor), while allowing buyers to extend their payment terms without impacting the liquidity of suppliers. Given that 61% of Czech companies experience late payments as against 43% at the EU level (OECD, 2024[1]), SCF can be an effective solution to address this issue by enabling SMEs to receive early payments through third-party providers.
In line with the EU Capital Markets Union Action Plan (see Chapter 2 on Access to Finance), as well as with the Recommendation of the OECD Council on SME Financing, Czechia could explore different options to enhance SME access to SFC, such as regulatory measures to incentivise buyers to adopt shorter payment terms for suppliers, simplification of SCF documentation, awareness raising and technical support measures such training on e-invoicing, and the development of e-platforms for SCF solutions.
Czechia has made progress in the implementation of a variety of measures to support trade facilitation in the EU Single Market. These include measures set out in the “Long-term Action Plan for the Better Implementation and Enforcement of Single-Market Rules”, as well as the implementation of the Single Digital Gateway. Other export support services building on European initiatives and used by Czech SMEs include the “Access2Markets” portal, the Point of Single Contact, SOLVIT, and the Product Contact Point, which have been discussed in the first part of this chapter, and which help SMEs effectively navigate the EU Single Market.
Additional services that help SMEs become export-ready are available in Czechia through the Enterprise Europe Network (EEN), which is also co-funded by the EU. Among other things, the network provides advisory services and innovation support to guide SMEs on their way to export products or services to new markets.
Finally, as highlighted in the annual implementation plans of the National SME Support Strategy, Czech SMEs benefit from the existing Free Trade Agreements (FTAs) between the EU and third-country partners, including Canada, Japan, Chile, and New Zealand. In this respect, there is an opportunity to build on the gender provisions of FTAs, such as those included in the recent EU-Chile agreement, to enhance support for women entrepreneurs in export activities through dedicated events. These measures would also align with Czechia’s Gender Equality Strategy for 2021–2030, which intends to promote greater gender equality in international trade.
The Czech economy is highly export-oriented, with exports accounting for 72% of GDP in 2023, the 12th highest value within the EU. While Czechia’s export landscape is dominated by large MNEs, SME export volumes grew by 30% between 2012 and 2022. However, the number of SME exporters has remained stable, highlighting the need to increase export readiness among a larger group of SMEs.
The objectives and proposed actions of the Czech SME Support Strategy are aligned with those of the National Export Strategy and focus on the export readiness of SMEs, high-value-added exports, and building a stabler presence in foreign markets. Current major initiatives include the export incubators, the export alliances, information platforms and training courses, and trade missions and economic diplomacy initiatives. Some of the current measures could benefit from broader sectoral and geographical outreach, as well as an improved inclusion of underrepresented groups in export activities like women entrepreneurs. Finally, further strengthening FDI-SME linkages and promoting supply-chain finance solutions can support the indirect participation of local SMEs in foreign markets through participation in global value chains. In doing so, these policies will increase the Czech value-added in national exports, which is currently relatively low.
Against this backdrop, the following recommendations are put forward to enhance the internationalisation of Czech SMEs:
Increase visibility and simplify access to export information for SMEs (in line with the “no wrong door” principle), for example, by developing a comprehensive document that gives an overview of relevant tools, training programmes, and export financing options for SME exporters.
Establish a series of dedicated export training and networking events for entrepreneurs underrepresented in foreign markets, notably women, to boost their participation in international trade.
Further support the creation of export alliances and export consortia to enable SMEs with similar products or distribution channels to easily access foreign markets at lower cost.
Expand the network of export destinations within the PROPEA (Projects for the Support of Economic Activities Abroad) programme to maximise global coverage of available export services.
Re-establish and further develop supplier development programmes to strengthen the linkages between local SMEs and foreign MNEs, particularly in highly internationalised and high-growth sectors such as electronics and semiconductors.
Promote the use of supply-chain finance (SCF) solutions by SMEs and larger buyers, including through regulatory measures to incentivise large buyers to adopt shorter payment terms for small suppliers, simplification of SCF documentation, awareness raising and training, and the development of web platforms for SCF solutions.
References
[10] AMSP, CEB, EGAP, KP, IPSOS (2023), Export of Small and Medium Sized Companies, https://www.amsp.cz/media/amsp/3833/export-62023-final.pdf.
[9] EGAP (2024), Annual Report 2023, https://www.egap.cz/en/annual-reports.
[5] European Parliament (2024), Gender mainstreaming in EU trade agreements, https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2024)760388.
[3] López González, J. (2017), “Mapping the participation of ASEAN small- and medium- sized enterprises in global value chains”, OECD Trade Policy Papers, No. 203, OECD Publishing, Paris, https://doi.org/10.1787/2dc1751e-en.
[11] Ministry of Industry and Trade (MIT), Czechia (2023), Annual Implementation Report 2023 of the SME Support Strategy.
[1] OECD (2024), Strengthening FDI and SME Linkages in Czechia, OECD Publishing, Paris, https://doi.org/10.1787/4c97d104-en.
[2] OECD (2021), SME and Entrepreneurship Policy in the Slovak Republic, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/9097a251-en.
[7] OECD (2014), Italy: Key Issues and Policies, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/9789264213951-en.
[4] OECD/European Commission (2023), The Missing Entrepreneurs 2023: Policies for Inclusive Entrepreneurship and Self-Employment, OECD Publishing, Paris, https://doi.org/10.1787/230efc78-en.
[6] Office of the Government of the Czech Republic (2021), Gender Equality Strategy for 2021 – 2030, https://vlada.gov.cz/assets/ppov/gcfge/Gender-Equality-Strategy-2021-2030.pdf.
[8] World Bank/WEF (n.d.), Pilot Czech Supplier Development Programme in Eleectronics and Automotive, https://www3.weforum.org/docs/Manufacturing_Our_Future_2016/Case_Study_13.pdf.
← 1. It should be noted that “export as a percentage of GDP” is an indicator also influenced by the size of a country. The larger a country, the larger its domestic market and, as a result, the lower the share of exports in national GDP, all else being equal.
← 2. Based on information from the “Annual Implementation Report 2023” of the SME Support Strategy, provided by Czechia’s Ministry of Industry and Trade (MIT).
← 3. Source: OECD Data Explorer: Trade in goods by enterprise characteristics by economic activity and size class.
← 4. In automotive, for example, high value-added activities in precision manufacturing include the robotic welding of car bodies and assembling transmissions, while quality assurance includes vehicle testing (e.g. breaking, emissions, etc.) and traceability systems.
← 5. Further information on the Operational Programme “Employment Plus” is available here: https://eurydice.eacea.ec.europa.eu/national-education-systems/czechia/national-reforms-related-adult-education-and-training.