SyllabusSyllabus

Basic Economical FrameworkBasic Economical Framework Towards the Information SocietyTowards the Information Society Educated and skilled populationEducated and skilled population Achievements of the Knowledge EconomyAchievements of the Knowledge Economy Challenges of the Knowledge EconomyChallenges of the Knowledge Economy

Czech Republic - Some FactsCzech Republic - Some Facts

Stable political situationStable political situation All major political parties united behind the All major political parties united behind the

priority of EU accessionpriority of EU accession After three years of recession the Czech After three years of recession the Czech

economy has clearly recoveredeconomy has clearly recovered GDP rose by 3.1% in 2001 and is expected to GDP rose by 3.1% in 2001 and is expected to

rise at the same pace in 2002rise at the same pace in 2002 Growth has been fuelled by rebounding foreign Growth has been fuelled by rebounding foreign

direct investment, with USD 6.3 billion invested direct investment, with USD 6.3 billion invested in 1999 and 4.6 billion in 2000in 1999 and 4.6 billion in 2000

Basic Economical FrameworkBasic Economical Framework

Consistent and predictable economic policyConsistent and predictable economic policy Extraordinary degree of Extraordinary degree of currency stability currency stability maintained by a strong and maintained by a strong and

independent central bank (Czech National Bank) since 1991independent central bank (Czech National Bank) since 1991 The Czech Republic received the The Czech Republic received the most favourable specific currency risk most favourable specific currency risk rating rating

from the Economist Intelligence Unit in the third quarter of 2000.from the Economist Intelligence Unit in the third quarter of 2000. First CEE country in the OECDFirst CEE country in the OECD Member of NATO, fully integrated into other international organisations: Member of NATO, fully integrated into other international organisations:

WTO, IMF, UNO, EBRD.WTO, IMF, UNO, EBRD.

NON-DISCRIMINATIONNON-DISCRIMINATION INVESTMENT PROTECTIONINVESTMENT PROTECTION INTELLECTUAL PROPERTY RIGHTS PROTECTIONINTELLECTUAL PROPERTY RIGHTS PROTECTION

– signatory to the Bern, Paris, and Universal Copyright Conventionssignatory to the Bern, Paris, and Universal Copyright Conventions

REPATRIATION OF PROFITSREPATRIATION OF PROFITS

Basic Economical FrameworkBasic Economical Framework

Investment Incentives

An investment incentives package originally approved by Czech government in An investment incentives package originally approved by Czech government in April 1998April 1998

Act on Investment IncentivesAct on Investment Incentives - in effect since May 1, 2000 - in effect since May 1, 2000– codifies, simplifies and extends the original national incentive schemecodifies, simplifies and extends the original national incentive scheme

INVESTMENT INCENTIVES – COMPATIBILITY WITH INVESTMENT INCENTIVES – COMPATIBILITY WITH THE EU DIRECTIVESTHE EU DIRECTIVES

INVESTMENT INCENTIVES FOR STRATEGIC INVESTMENT INCENTIVES FOR STRATEGIC SERVICESSERVICES

NON-DISCRIMINATION

100% FOREIGN OWNERSHIP POSSIBLE

FREE ENTRY AND EXIT

SUPPORT AND PROTECTION OF INVESTMENTS

DOUBLE TAXATION PREVENTION TREATIES

FULL CONVERTIBILITY OF CZECH CURRENCY

POSSIBILITY TO ACQUIRE REAL ESTATE *

INVESTMENT INCENTIVES

YES!

YES!

YES!

YES!

YES!

YES!

YES!

YES!

Legal Environment for Investments

* THROUGH A LOCAL SUBSIDIARY

Towards the Information SocietyTowards the Information Society

1998-2000: 1998-2000: First Steps towards Coordination of First Steps towards Coordination of Information and Communication PolicyInformation and Communication Policy– October 98 - Government Council for State October 98 - Government Council for State

Information PolicyInformation Policy– April 99 - National Telecommunications Policy April 99 - National Telecommunications Policy

(NTP)(NTP)– May 99 - State Information Policy (SIP)May 99 - State Information Policy (SIP)– May 2000 - SIP Action Plan (AP SIP)May 2000 - SIP Action Plan (AP SIP)– June 2001 - eEurope+ adopted by governmentJune 2001 - eEurope+ adopted by government

SIP - SIP - Eight Priority AreasEight Priority Areas

I. Information/Digital LiteracyI. Information/Digital Literacy

II. IT-based DemocracyII. IT-based Democracy

III. Development of Public Administration InformationIII. Development of Public Administration Information SystemsSystems

IV. Communications InfrastructureIV. Communications Infrastructure

V. Trustworthiness and Security of InformationV. Trustworthiness and Security of Information Systems and Personal Data ProtectionSystems and Personal Data Protection

VI. Electronic CommerceVI. Electronic Commerce

VII. Transparent Economic EnvironmentVII. Transparent Economic Environment

VIII. The Information Society: Stable and SafeVIII. The Information Society: Stable and Safe

SIP - Legal FrameworkSIP - Legal Framework

Personal Data Protection ActPersonal Data Protection Act Free Access to Information ActFree Access to Information Act Telecommunications ActTelecommunications Act Electronic Signature ActElectronic Signature Act Public Administration Information Systems ActPublic Administration Information Systems Act

“The Czech Republic has made good legislative progress in the field of the Information Society. Acts on Technical Products Requirements, Public Administration Information Systems and Electronic Signatures have been in force since 2000, with further alignment to be completed upon accession. Future efforts should concentrate on the effective implementation of the adopted laws and on the transposition of the electronic commerce directive. Certain elements of the electronic signatures law will have to be reviewed. The Office for Personal Data Protection will be in charge of the accreditation and supervision of certification authorities”.

EU Commission 2001 Report

Main processes:

Completion of full liberalization

Strengthening of regulation (Independent National Regulatory Authority)

Full implementation of ONP

Privatisation of government-held property shares of telecommunications operators

Universal service obligation

Situation in Telecomunications

Educated and skilled populationEducated and skilled population

Educated and skilled populationEducated and skilled population

The share of state budget expenditures for education system

GDP in common prices 1 381 100,0 1 572 300,0 1 668 800,0 1 798 300,0 1 836 300,0 1 910 600,0Consumer Price Index (1995 = 100) 100,0 108,8 118,0 130,7 133,4 138,6Public expenditures for education system in common prices 71 861,6 81 673,6 78 888,0 80 341,9 86 821,8 87 380,8

Ministry of Education 49 269,3 63 771,5 62 749,1 63 916,5 69 704,6 70 327,8 Municipalities 13 760,9 16 141,2 13 727,3 13 940,2 14 482,6 14 268,4 Ministry of Agriculture 1 515,5 1 761,0 1 593,0 1 516,0 1 523,8 1 676,5 Ministry of Health 881,0 x x x x x Ministry of Industry and Trade 6 434,9 x x x x x Ministry of Defence . . 818,6 969,2 1 110,7 1 108,2

Public expenditures for education system in % of GDP 5,2% 5,2% 4,7% 4,5% 4,7% 4,6% From total expenditures for welfare and health care 10 500,0 11 800,0 12 100,0 12 300,0 13 700,0 13 900,0

in % of the GDP 0,76% 0,75% 0,73% 0,68% 0,75% 0,73% State budget expenditures in common prices 432 738,0 484 379,0 524 670,0 566 700,0 597 000,0 622 650,0Public expenditures for education system in % of the state budget 13,4% 13,5% 12,4% 11,7% 12,1% 11,7%

1998 1999 2000

in th

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1995 1996 1997Status by day 31.12.2000

Educated and skilled populationEducated and skilled population

CZECH REPUBLIC:CZECH REPUBLIC: THE SKILLS HUB OF CENTRAL EUROPETHE SKILLS HUB OF CENTRAL EUROPE IT SKILLSIT SKILLS LANGUAGE SKILLSLANGUAGE SKILLS The Czech education system pays particular attention to language skills. The proportion

of secondary-level students studying English is as great in the vocational stream as in the academic stream, and high by European levels at 95-96%. Many school students also learn German.

The Czechs have a secondary level completion rate second only to the USA. In 1999 88% of the Czech labour forces aged 24-64 had completed higher secondary education, compared to an OECD average of 65%.

General education in the Czech Republic rivals the best in the world. The 13-year-old students attained the best test results in Europe in both mathematics and science in 1995, and in 1998 the proportion of the adult population that had completed secondary education was the highest in Europe.

CountryCountry

Patents Patents granted to granted to residentsresidents

(per mil. people) 1998(per mil. people) 1998

Internet Internet hosts hosts

(per 1,000 people) (per 1,000 people) 20002000

Mean years of Mean years of schoolingschooling

(age 15 and above) (age 15 and above) 20002000

Mobile Mobile subscriberssubscribers(per 1,000 people)(per 1,000 people)

19991999

USAUSA 289289 179.1179.1 1212 312312

GermanyGermany 235235 41.241.2 10.210.2 286286

SpainSpain 4242 2121 7.37.3 312312

ItalyItaly 1313 30.430.4 7.27.2 528528

Czech Rep.Czech Rep. 2828 2525 9.59.5 189189

HungaryHungary 2626 21.221.2 9.19.1 162162

SlovakiaSlovakia 2424 10.210.2 9.39.3 171171

GreeceGreece (.)(.) 16.416.4 8.78.7 311311

PortugalPortugal 66 17.717.7 5.95.9 468468

PolandPoland 3030 11.411.4 9.89.8 102102

TECHNOLOGY ACHIEVEMENT

Source: UN Human Development Report 2001, 10 July 2001

The Czech Republic‘s attainmentsThe Czech Republic‘s attainments

The ECDLThe ECDL European Computer Driving LicenceEuropean Computer Driving Licence a as an internationallys an internationally recognized standard of competence recognized standard of competence

for serving in an office for serving in an office

Czech Technology ParksCzech Technology Parks Brno – providing support for machinery industry, equipped with modern business premises for Brno – providing support for machinery industry, equipped with modern business premises for

technology companies in a business park environment technology companies in a business park environment Ostrava – light industry backgroundOstrava – light industry background Prague – establishment under way; will provide institutional support for technology transfersPrague – establishment under way; will provide institutional support for technology transfers

Inflow of knowledge into the CRInflow of knowledge into the CR Participation on international programmesParticipation on international programmes Distance learning programmes Distance learning programmes Increasing interest in MBA studies, Master and Doctoral programmesIncreasing interest in MBA studies, Master and Doctoral programmes Short term attachments of our employees in abroadShort term attachments of our employees in abroad Consultancies and supra-national firms employing Czech expertsConsultancies and supra-national firms employing Czech experts

Other successesOther successes Distance learning project 150 PC‘sDistance learning project 150 PC‘s Technology Centre of the Czech Academy of Sciences - co-operation with SMEsTechnology Centre of the Czech Academy of Sciences - co-operation with SMEs Certificate authorities for e-signaturesCertificate authorities for e-signatures CESNETCESNET

Challenges of the Knowledge EconomyChallenges of the Knowledge Economy

Specific strengths of the CR on its way to becomingSpecific strengths of the CR on its way to becoming globally competitive in the knowledge economy: globally competitive in the knowledge economy:

high proportion of value-added production high proportion of value-added production high investments into ICT infrastructurehigh investments into ICT infrastructure good potential of skilled peoplegood potential of skilled people high volume of FDI high volume of FDI

The greatest weaknessesThe greatest weaknesses of the CR:of the CR: some islands of the KE are readysome islands of the KE are ready nation-wide knowledge strategy development missingnation-wide knowledge strategy development missing co-ordination of the KE support activities missingco-ordination of the KE support activities missing

Challenges of the Knowledge EconomyChallenges of the Knowledge Economy

The most difficult challenges the CR faces in theThe most difficult challenges the CR faces in thebuilding of the knowledge-based economy:building of the knowledge-based economy:

low perception of the value knowledge in all segmentslow perception of the value knowledge in all segments overestimation of the market positioning (by our firms)overestimation of the market positioning (by our firms) low participation on R&D by private companies (SME’s)low participation on R&D by private companies (SME’s) low co-operation between academic, entrepreneurial and low co-operation between academic, entrepreneurial and

government sectorsgovernment sectors

Towards the knowledge strategyTowards the knowledge strategy

in progress

in progress

in progress

YES

Restructure and downsize the academies and institutes, Restructure and downsize the academies and institutes, and bring in foreign partnersand bring in foreign partners

De-regulate bureaucratic licensing and taxation De-regulate bureaucratic licensing and taxation machinery to encourage foreign (and domestic) machinery to encourage foreign (and domestic) investmentinvestment

Improve legal and regulatory framework affecting Improve legal and regulatory framework affecting business relations, intellectual property rightsbusiness relations, intellectual property rights

Private state-owned enterprises operating in the Private state-owned enterprises operating in the knowledge and technology sectorknowledge and technology sector

De-monopolize communications sectorDe-monopolize communications sector Introduce computers and Internet connection to schools Introduce computers and Internet connection to schools

in rural areas (through the post office), develop rural and in rural areas (through the post office), develop rural and urban tele-centersurban tele-centers

Establish e-Establish e-ggovernment projectsovernment projects Reform the higher education sector; also through Reform the higher education sector; also through

distance learning.distance learning.

Thank you for your attention.Thank you for your attention.