The Digital Economy in the Czech Republic
The Digital Economy in the Czech Republic
On 4 October 2022, Aspen Institute Central Europe in cooperation with Opero organized a closed debate on the theme The Digital Economy in the Czech Republic. The discussion was introduced and moderated by Milan Vašina, Executive Director of Aspen Institute CE.
Speakers from the e-commerce industry František Štrupl (Google), Soňa Fialková (Spokojenypes.cz), Tomáš Havryluk (former CEO of Alza.cz) and Petr Kasa (kasa.sk, pilulka.cz), shared their views on the digital economy situation in the Czech Republic.
At the beginning of the discussion, Milan Vašina asked all the speakers to share their experiences in this field and point out areas for further improvement.
František Štrupl mentioned a study that tracked the development of the digital economy over the past few years. “The traditional economy has been stagnant. The more digital maturity and resilience we had, the smaller the decline in GDP was during Covid.” František Štrupl also highlighted the digital economy’s 8% share in GDP, which is comparable to the automotive industry. “The digital economy is becoming extremely important for the human performance of the country, so it is worth addressing.“ He also pointed out that the countries that experienced the smallest decline in GDP during Covid were among the digital front-runners, “The digital economy plays a major role in the future certainty of our economy.”
Development and support for the digital economy in the Czech Republic
The discussion then focused on the development of the digital economy in the Czech Republic and opportunities where we could better exploit the potential of e-commerce. “Czechs are creative and inventive, and digital can be a way to export the potential of a small country across borders.” – Tomáš Havryluk.
There was also a discussion on how e-commerce can be supported and what it lacks. “From my point of view, we are lagging mainly in human productivity and education. I don’t mean the huge amount of information we should overwhelm our children with at schools, but mainly communication skills, social skills and the ability to work as a team. Young people are beginning to lack passion, enthusiasm, self-education, and in general hunger.” – Soňa Fialková
Petr Kasa also commented on this topic and agreed that people indeed lack motivation: “Children should be more interested in exploring the world. The state should invest more in young people and also in startups. The state could take inspiration from the Finnish system of education. Children are our future.”
Education is the key to the future of e-commerce
How has the government helped you and where do you feel there were unnecessary barriers?
“There have been no positive surprises. Authors’ fees, all the legislative issues, how to do business, how to export, how to deal with complex tax models – we had to deal with all of that ourselves. I appreciate, however, that the civil service didn’t place any obstacles in our way.” – said Tomáš Havryluk.
The participants in the debate also called for digitalization and simplification of the communication processes by the civil service administration. This would overall help reduce costs and allow for investment in further growth. There was no such agreement on whether the state should support the digital economy through investment.
“The prevailing view at the moment is: We’ll figure it out, the main priority is to focus on the customer. The state should put more effort into supporting companies. It’s time to change the perspective.” said František Štrupl.
“The civil service should, first of all, focus on what it is competent to do, i.e., education, only then should the civil service start thinking about additional investments.” – Tomáš Havryluk
Challenges from the state that hinder faster growth
The main issues are overwhelming administration, lack of labor force, and weak processes, often due to a lack of understanding of the state and the absence of laws for such a specific sector. The discussion also covered the importance of involving women in the IT industry, of which there is a shortage. “One of the ways is to give more visibility to women who are successful in these areas and also to support new non-profit organizations that provide education for women.” – Tomáš Havryluk mentioned.
Soňa Fialková also commented on this topic – “I think it all starts at school. That is the area where we should try to make digital fields more attractive. Another possibility would be to offer a higher salary. “
Final recommendations
František Štrupl (Google): It is clear that the will for improvement lies on both sides. Unfortunately, there is a lack of communication. The government needs to learn how to use digital technology to its advantage. The most critical step for higher growth is to make communication more effective and intensive. František Štrupl also highlighted the message that guided the entire discussion: “It all begins and ends with education.”
Soňa Fialková (Spokojenypes.cz) – The Czech government should think far ahead in the future. It is essential to consider what to do with professions that will be unnecessary or replaced by robots, for example, warehouse people. The next step is to make the study of IT more attractive.
Tomáš Havryluk (ex-CEO of Alza.cz) – The civil service should be more careful with regulations.
Petr Kasa (kasa.sk, pilulka.cz) – The civil service should simplify processes and try to legalize “grey areas“. These are areas that are on the edge of the law, not completely illegal, but also not forbidden. These zones are just waiting for legalization.
