Investment 2010: Four out of five investments going into services or research

18 Mar. 2011 | CzechInvest, Ministry of Industry and Trade | Four out of five new investors in the Czech Republic focus on research and development or strategic services; only every fifth new investment is directed to manufacturing.

These figures are from the statistics of the CzechInvest agency for 2010. It has contributed towards the creation in the Czech Republic of a total of 209 new investment projects from both Czech and foreign companies worth CZK 16.248 billion.

Every second investment acquired by the CzechInvest agency last year was directed into services
Almost 40% of companies invested into IT and software development
Last year CzechInvest acquired a total of 209 investments worth CZK 16.25 billion
Almost 10,000 new jobs were created in total

"The results of the CzechInvest agency for last year reflect long—term changes in the structure of the Czech economy — in 2007 manufacturing projects still dominated in terms of new investment, but this year services and research are already in first place,” stated Minister of Industry and Trade Martin Kocourek.

A joint press conference held by the Ministry of Industry and Trade and the CzechInvest agency garnered significant interest from journalists. The CzechInvest agency has succeeded in implementing 23 more projects than in 2009, meaning a ten per cent better result. "The current trend shows that the world has got over the crisis and interest in the Czech Republic is growing once again,” explained CEO of the CzechInvest agency Miroslav Křížek.

The CzechInvest agency contributed last year towards a total of 105 companies deciding to invest in strategic commercial services such as outsourcing of accounting and personnel services or software development. In the area of research and development 65 projects were implemented and 39 in manufacturing.

The largest volume of investment went into manufacturing projects, which are also the most demanding in terms of the size of input capital. Czech and foreign companies invested CZK 13.8 billion into this in total. CZK 1.8 billion was directed into research and development and CZK 652 million into strategic services.

Up to 9,423 new jobs will be created thanks to investments made in 2010, which is a growth of almost 40% compared to 2009. The majority of the investors are from the Czech Republic; Czech investors prepared a total of 174 projects into which they invested CZK 6.7 billion. Among foreign investors last year the majority were from Germany (8 projects), the USA (4 projects) and from Great Britain and Ireland (4 projects). The highest amounts were invested by Austrians, with two projects worth almost CZK 1.9 billion.

"Thanks to the investments acquired by our CzechInvest agency around 10,000 people will find work. In particular I am pleased that the Czech Republic has been selected by a large number of investors in services and research and development, because for many such investors it is not important whether their business activities are carried out in the Czech Republic or, for example, in Singapore, and this means that we are facing genuinely global competition in these sectors. My goal is to continue to simplify doing business in the Czech Republic and to make it more attractive, for example through the systematic reduction in the administrative burden,” added Minister Kocourek.

Investments dominated by IT and software development sector

2010 once again confirmed that the Czech Republic is particularly attractive for IT companies, with most investment being focused precisely into this sector. The second—most—common area into which Czech and foreign companies invested last year was engineering. This also attracted one of the largest projects of last year, namely investment by the American company Caterpillar, which will repair gas turbines from all over Europe, Africa and the Middle East in the Triangle industrial zone.

"This investment is one of the greatest successes of CzechInvest in the past year. The investor made its selection from several European countries. The Czech Republic beat out the other candidates in particular thanks to its quality infrastructure, excellent geographical location, its numbers of experienced employees and its tradition of top—class engineering,” added Miroslav Křížek.

The third most common investment last year was in strategic services projects. The majority of the new jobs will be created in the electronics and electrical engineering sector, followed once again by engineering and then strategic services centres.

The trend of investments into research and development and into services is being helped in the Czech Republic by the fact that in this country these investors can get support from European Union funds. Last year 150 projects received subsidies from the Operational Programme Enterprise and Innovation; 73 within the framework of the Potential programme focusing on research and development, and 77 through the ICT and Strategic Services programme.

The majority of investors headed to the South Moravia region

Of the total number of 209 implemented investments in 2010, 52 went to the South Moravia region. In second place in the imaginary ladder was the Moravia—Silesia region with 29 projects and just behind this was Central Bohemia region with 26 projects. The Moravia—Silesia region, however, outdid all the other regions in terms of the total amount of investment, which reached CZK 3.488 billion. The second—highest volume of investment went to the South Moravia region (CZK 2.246 billion), and the third to the Ústí region (CZK 2.211 billion).

The structure of investments is changing

Statistics from the CzechInvest agency confirm a significant change in the structure of investments implemented in the Czech Republic. Instead of large investments requiring relatively much easier manual work, there tend to be smaller projects that are more demanding in terms of experience and technology. There has also been an increase in companies expanding their existing projects. "In 2011 this trend will probably continue. We are expecting an incoming tide of investment into technologically more demanding projects in IT and software development and the strategic services sector,” concluded Miroslav Křížek.