Industry and entrepreneurship

Business brief: The Czech Republic’s fourth Industrial Revolution


Innovation and creativity have long been hallmarks of the Czech Republic. After all, this is the country that invented the term “robot”, when Czech writer, Karel Čapek, coined the word back in 1921. Some 70 years later, one of the characters in the Oscar-nominated film, “The Elementary School”, by Jan and Zdeněk Svěrák, further defined Czech creativity: a handyman who manages a small electrical outlet, who is said to be able to make and repair “everything”.

This innate inventiveness is not just in stories, but has produced very real results. Soft contact lenses, for instance, were invented half a century ago by Otto Wichterle using a device based on a Meccano-like construction kit for children called Merkur.

Nowadays, it is often said that if you want to find out whether a new mobile phone application will work or is worth downloading, then you should test it in the Czech Republic.

Even in the 19th century the Czech Republic had been noted for its industrialised, technically skilled people, and their solid grounding in the natural sciences. At present, the country has one of the highest shares of industry in GDP in Europe and the OECD area. In short, the Czech Republic is an ideal environment for launching a new industrial revolution.

Since 1989 the country has developed as an open, export-oriented economy, attracting many multinational companies, some of which have also established high value research and development (R&D) functions.

The backbone of Czech industry is in producing electrical, electronic and optical devices, as well as cars, transport vehicles and machinery. These innovative sectors are characterised not only by their high share in exports, but also by their lion’s share of private R&D funding, and as a result creative industries are growing. Also, the number of university students –is now one of the fastest growing in Europe. Within the last seven years the number of R&D staff in companies and universities has grown by 50% and R&D funding has exceeded 2% of GDP, with a growing share of that going to small and medium-sized domestic firms.

An extensive infrastructure of excellent scientific centres has been built in the Czech Republic in recent years. Centres like ELI, CEITEC or IT4Innovations have managed to establish partnerships with foreign partners and have excellent equipment and top scientists at their disposal via their extensive networks. This has helped the Czech Republic to assert itself in fields such as information technology (IT), nanotechnology, biotechnology, nuclear and non-nuclear energy sectors, aerospace and the chemical industry. Moreover, a lot of innovative domestic companies have emerged, especially in the aviation industry and in IT, adding to the economy’s competitive potential.

Companies like AVAST, AVG, GoodData or Socialbakers, to name but a few, are internationally successful in the fields of cyber security, data protection, analyses and processing. A large number of research centres and companies dealing with IT, biomedicine and other branches, is located in Brno–the Czech “Silicon Valley”.

The Czech Institute of Informatics, Robotics and Cybernetics (CIIRC) of the Czech Technical University in Prague is working with Airbus Industries to develop ARUM–a flexible production planning and scheduling system for aircraft assembly tasks. The first pilot application will be for the ramp-up phase of manufacturing the A350, and the new system is expected to increase the productivity of aircraft assembly by 10-15%.

Important IT projects are focused on developing new technologies for automatic transcription of audio-visual recordings of lectures and court proceedings, and automated online monitoring of streamed news. The EyeDentity project for identifying facial features even under difficult conditions holds promise for the security sector. Helpful new technology is also being developed for speech processing to improve communication between humans and computers, and to help navigation for people with a disability.

Czech teams from Charles University, Prague, together with industrial partner Lingea Brno have developed state-of-the-art systems for automatic translation which are helping to crack the language barrier still present in the EU digital market.

Such breakthroughs show that the Czech Republic is not only continuing its long industrial tradition of leading innovation and harnessing the creativity of the Czech people, but is improving its competitiveness to better embrace the fourth industrial revolution for everyone’s benefit.

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OECD work on Innovation

OECD work on Science and technology

OECD work on the Czech Republic

OECD Forum 2015 Issues

OECD Observer website



Rut Bízková 
Technology Agency
of the Czech Republic

© OECD Yearbook 2015


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