The 2011 Czech ICT Seminar, June 20, New York

1. ICT Business and Investment Climate
in the Czech Republic
THE 2011 CZECH IT SEMINAR
Jan Fried
Director of East Coast Operation
USA – New York
jan.fried@czechinvest.org
LinkedIn: Jan Fried
Twitter: JanFried2
June 20th, 2011, New York, NY
© Copyright, CzechInvest 2011. All rights reserved

2. Agenda
╌ Czech Republic / CzechInvest
╌ Czech ICT Sector – Attractive Investment Climate
╌ Academic Institutions – R&D Potential
╌ Skilled Workforce – Advanced Domestic IT Market
╌ Favorable Labor Costs
╌ Financial Support
╌ Case Study – Deutsche Post DHL – Global IT Facility (Prague, 2004)
╌ Questions and Answers

3. Agenda

4. Czech Republic
Technology and Innovation Hub in the Heart of Europe
Source: Google, CzechInvest, 2011

5. Czech Republic
Technology and Innovation Hub in the Heart of Europe
Source: Google, CzechInvest, 2011

6. Czech Republic
Technology and Innovation Hub in the Heart of Europe
Selected FDI / ICT Sector
Source: CzechInvest, 2011

7. Testimonials
Positive Experience and Words of Mouth…
“Some Skype people actually went scouting through many Central European countries earlier this
year, looking for a new location based on a number of factors. We chose the Czech Republic
simply because it had the best mix (I asked if good beer was one of the factors, but didn't
receive direct comments).”
“The pool of engineering talent within the country’s open source community and the strengths
of its universities provide a firm foundation of technical excellence from which to grow our
business.”
“The language and cultural differences have not been barriers in the work environment. In fact,
due to the quality and professionalism of the Czech people, we have effectively had
success leveraging the time difference to increase productivity. Each day our confidence in
working with the Czech Republic continues to increase due to the ease of recruiting high
caliber technical candidates, low attrition rate and the support offered by companies like
CzechInvest.”
“South Moravia Expands as Information Hot Spot - One of Central Europe’s fastest-growing regions
is South Moravia, centered on the city of Brno, in the Czech Republic” (May 22, 2011)
Source: CzechInvest, 2011

8. Czech Republic
Attractive Investment Climate – Location in the Heart of Europe
╌ Access to Emerging Eastern and Established Western Market
╌ Less than Two Hours by Air to most European destinations
╌ Advanced Infrastructure – Densest Motorway Network in CEE, High-Speed Railways
Source: CzechInvest, 2011

9. Czech Republic
Attractive Investment Climate – Projects by Sector
╌ 1993 – H2 / 2010 Approved Projects (Total) : 1,565
╌ “The highest growth of FDI in 2010 was New Jobs Created: 215,763
registered in the Czech Republic, which was Total Investment Amount: 25,909 (USD mil.)
the only country where the 2010 inflow
surpassed the 2008 level“. Strategic Services Paper, Wood
Manufacture of Center Processing Electronics,
Motor Vehicles 5% 2% Electrotechnics
19% 12%
Plastics, Rubber
7%
Engineering
14% Chemistry,
Pharmacy
7%
Other Biotechnology, IT and Software
17% Medical Equipment Metal Products Development
╌ IT – 40% of Total in 2010
1% 3% 14%
Source: CzechInvest – Official Statistics, Vienna Institute for International Economic Studies, FDI in CE&SE 2011

10. Czech Republic
Academic Institutions – R&D Potential
╌ 1920s – 1930s Czechoslovakia Ranked among
10 Most Developed Countries in the World Technical Universities
Students: 80,245
╌ World Class Technical Universities Graduates: 17,109
PhD grad.: 1,029
╌ Strong Science and Engineering Disciplines
╌ Focused to Meet the Needs of a Competitive Economy
Source: CzechInvest, 2011

11. Czech Republic
Academic Institutions – R&D Potential
PRAGUE REGION LIBEREC REGION
Students: 12,353 Students: 799
Technical Universities
Graduates: 2,464 Graduates: 455 Students: 80,245
Graduates: 17,109
PhD grad.: 1,029
HRADEC KRALOVE
Students: 782
Graduates: 114
PARDUBICE REGION
Students: 1,073
Graduates: 112
MORAVIA-SILESIA
Students: 3,935
Graduates: 720
Source: Institute for
Information on Education
CzechInvest, 2010 ICT Faculties
PLZEN REGION SOUTH MORAVIA ZLIN REGION
*Note: according to the selected Students: 2,364 Students: 8,058 Students: 1,794 Students: 32,789
educational fields - source Graduates: 539 Graduates: 1,897 Graduates: 418
CzechInvest Graduates: 6,575

12. Czech Republic
World Class Technical Universities – R&D Potential
╌ Case: CTU – Department of Cybernetics – EU Centre of Excelence Since 2000
╌ Research Cooperation: ╌ Industrial Contracts and Grants: ╌ Successful Start-Ups
╌ Vienna University of Technology, ╌ Rockwell Automation, ╌ Certicon,
╌ Cambridge University, ╌ BAE Systems, ╌ ProTyS,
╌ Delft University of Technology, ╌ Boeing, ╌ NeoVision,
╌ ETH Zurich, ╌ Google, ╌ Eydea,
╌ University of Pennsylvania, ╌ Medtronic, ╌ Cognitive Security,
╌ University of Minnesota, ╌ Texas Instruments, ╌ AgentFly Technologies,
╌ Milwaukee School of Engineering, ╌ CADENCE Design Systems,
╌ Tokyo University of Agriculture and ╌ US Air Force Research Lab,
Technology,… ╌ U.S.Navy Research, U.S. Army,
╌ NASA,
╌ Dedicated and Focused Support of Entrepreneurship:
Source: CzechInvest, 2011

13. Czech Republic
R&D Conductive Environment
╌ Total Expenditure on Research and Development (% GDP)
1.46%
Source: CzechInvest, 2011

14. Czech Republic
Advanced Domestic ICT Market
╌ Promotes Czech ICT Companies Abroad
╌ Foreign Customers/Partners, Outsourcing
╌ www.czechict.cz
╌ Defines and Represents Interests of ICT Companies in CR
╌ Development of Information Society
╌ www.ictu.cz
╌ Provides Czech Tech SMEs (StartUps) Support in Foreign Countries
╌ Business Development, VC/Angel Funding
╌ www.czechaccelerator.org
Source: CzechInves; Czech ICT Alliance; ICT Unie; 2011

15. Czech Republic
Favorable Labour Costs
╌ Skills Are the Critical Factor for Success in ICT Sector
╌ Creative, Innovative, Skilled and Experienced Professionals
╌ At “Fraction of the Cost” of Those in Western Economies
Position CR USA
IT Top Management 6,500 10,000
MIS Management 4,800 7,400
Systems Analysis 13.19
1,600 3,300
Professionals
Programming
1,300 2,700
Professionals
Source: CzechInvest, 2011; The Economist Intelligence Unit, 2010;
Watson Wyatt Data Services / USD = 16.908 CZK (www.cnb.cz 6-19-2011)

16. Czech Republic
Financial Support – EU Structural Funds Until 2013
╌ Programme: ICT and Business Support Services
╌ Supported Activities:
╌ Development and Creation of IS/ICT Solutions and Applications
╌ Business Support Services
╌ Shared Services Centers with Substantial International Focus
╌ High-tech Repair Centers for Products and Technologies
╌ Data Centers – Planned Call IV (August/September 2011)
╌ Allocation: 1 bil CZK / Approx. 60 mil USD
╌ Individual Support: 40 – 60 % of Eligible Costs / Regions
╌ Max. 150 mil CZK / Approx. 8.8 mil USD
Source: CzechInvest, 2011

17. Czech Republic
Financial Support – EU Structural Funds Until 2013
╌ Eligible Costs:
╌ Option One: Personal Costs
╌ Gross Wages of employees on Newly Created Positions
╌ Mandatory Social and Health Insurance Payments
╌ Option Two: Investment in Assets
╌ Land, Building, Hardware, Networks, ICT Components, etc.
╌ Software, Licenses, Know-How
╌ Binding Conditions (Small – Large Enterprise)
╌ Minimum Amount of Investment in Long Term Assets
╌ 0.5 – 3 mil CZK / 30k – 180k USD
╌ Creation of Minimum Amount of New Jobs within Project
╌ 3 – 40 jobs / Activities
Source: CzechInvest, 2011

18. ICT Business and Investment Climate
in the Czech Republic
Summary
╌ EU Funds Until 2013 – ICT&BSS
╌ Creative, Innovative, Skilled Professionals at Fraction of the Costs
╌ Advanced Domestic Market
╌ World Class Technical Universities
╌ Attractive Investment Climate
╌ CzechInvest – Gateway to the Czech Republic
╌ Services Are Free of Charge
Source: CzechInvest, 2011

19. Case Study
Deutche Post DHL – Global IT Facility (2004)
Source: CzechInvest, 2011

20. THANK YOU FOR YOUR ATTENTION
Questions?
www.czechinvest.org
Best Website among All Investment Promotion Agencies,
(2009, World Bank)
Jan Fried
Director of East Coast Operation
USA – New York
jan.fried@czechinvest.org
LinkedIn: Jan Fried
Twitter: JanFried2
June 20th, 2011, New York, NY
CzechInvest, the Investment and Business Development Agency, is an agency
of the Ministry of Industry & Trade of the Czech Republic
© Copyright, CzechInvest 2011. All rights reserved