What have the been
major changes in your activities during the past
two or three years?
I believe that we have significantly improved
the implementation the incentives system of the
government, which we were just starting three
years ago. The system has proved to be very successful
and a large number of companies, both international
and domestic companies, have benefited from this
system. Since then, the Czech Republic became
the top destination for investments in Central
Europe. We also introduced new incentives to cover
more areas, including strategic services and R&D.
More and more companies are interested in developing
R&D projects here: shared service centres,
call centres, software development centres and
R&D centres.
Another change is that we increasingly work with
companies, who have already invested in the Czech
Republic. We call this after care and want to
make sure that we look after companies after they
have invested so that they are satisfied with
their investment.
The most significant project during the past
three years is the new automotive plant by Toyota
and PSA, which is the largest greenfield nvestment
ever made in Central and Eastern Europe. This
also increases the importance of French investors
in the Czech Republic.
How do you view the current investment climate,
especially after the floods of this Summer?
The floods basically have no effect on the investment
environment. We surveyed companies, which have
recently invested in the Czech Republic and basically
none of them has suffered under damages as they
were not located in the flooded zone. All the
special zones for investors are also fine. The
floods were very bad for small sized businesses
located close to the river and for the inhabitants
of the villages close to the river, but medium
and large sized businesses were not affected and
we do not see any effect of the floods on what
we are doing.
I this report, you mentioned some foreign
companies, which helped after the floods. How
important was this help? And what is the symbolic
meaning of it?
I think that the importance of this was that
the Czech people could see that we are part of
a bigger family and that multinational companies
located in the Czech Republic do not view us only
as a base for manufacturing, but that they also
want to be responsible corporate citizens. This
was a very important signal. It also showed us
that the EU is looking at what is happening here
and is trying to help.
Speaking about incentives, which are the tools
you are using to attract foreign investors?
I believe that the major issue is still the Czech
Republic itself, its location and its skilled
workforce. I think that thirteen years after the
revolution, it is clear to everybody that we have
a very skilled labourforce and that the quality
of our technical education is of a very good level.
Furthermore, our infrastructure is better than
in the other countries of this region. I therefore
think that the main attractions are these three
points: location, labourforce and infrastructure.
The incentives that we have introduced are very
appealing to foreign investors because they are
easy to administer and are compatible with EU
regulations which is a big advantage. For the
new investments for R&D and strategic services,
we have two types of subsidies: one for business
activity and another one for the training of people.
We consider the investments into people, meaning
training, as the most significant ones. These
incentives help companies to locate here, but
they are not coming because of this. They are
coming because of our people and our location.
Do you try to attract a specific type of activity?
We still focus on automotive, electronics and
engineering as these are the three major sectors,
but companies in biotechnology and pharmaceuticals
increasingly invest here. There was a recent investment
of Baxter, an American pharmaceutical company.
We will maybe see more in terms of pharmaceuticals
and biotechnology.
Which are the major countries that are now
investing here?
France definitely took big steps ahead during
the past three years, and it has become a very
important player. In addition to Germany and France,
United States and Asian countries, especially
Japan and Taiwan, are increasing their presence.
However, we have had investments from all the
European countries andare very happy about it
because we are not dependent on one country only.
Do you, however, have more activities in one
region or another?
We have more activities the further the location
is from the Czech Republic because Germans and
Austrians know us quite well already, the Franch
and Americans a little less. It is in Asia that
we have to make the most efforts to achieve the
same results.
Which countries do you see increasing their
investments the most?
Germany will maintain its current level and we
see growth opportunity for France and Asian countries.
Are you working specially with organizations
in these countries?
We have offices in France, Japan and Hong Kong
and cooperate with chambers of commerce, our embassies
and their embassies. We basically cooperate with
everybody, but our approach is very direct as
we directly go to the companies. After all these
years, we know the industry quite well and we
know who could locate here and who could be interested.
This is why most of our marketing activities are
directly focused at specific companies.
Where do you currently see the most opportunities
for investors?
Automotive components still remains the number
one sector as we are becoming the automotive center
of Central Europe. We also see a lot of opportunities
in services, shared service centers, call centers
and R&D.
Are there any specific regions or companies,
which are currently looking for foreign investors?
We mostly work with foreign companies, who want
to set up new operations here and do not actively
promote Czech companies. We do have some Czech
companies registered, which want to create joint-ventures,
but our main focus is to attract investors, who
have a specific project.
How do you see this helping to develop the
economy and thus the country?
We do not want to be too specific because we
need diversification. We need investments into
the software development sector as well as into
the goods processing industry because some traditional
industries are less cyclical. This is why we do
not really choose. If it is a quality project,
it can be of any industry and we will be very
happy to support it. Obviously, greenfield investments
have a bigger multiplication effect than acquisitions.
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With acquisitions, the
companies are restructured and there can be some
people laid off, but with greenfield investments
there is always new employment created. From this
point of view, greenfield investment may seem to
be better for us, but then again many Czech companies
need to be restructured. This is why we need both.
Do you try to attract investments in specific
regions where investments are perhaps more needed
than in Prague?
I think that this flow is to some extent natural,
but there are some regions that suffer from a
high unemployment: Northern Moravia, the region
around Ostrava and North Western Bohemia.
Are you developing specific actions to attract
investments in these regions?
Our incentives include a regional focus as you
can receive slightly bigger incentives in these
regions. We also focus on developing new industrial
zones, especially in these regions. However, investors
will then choose where they want to be located.
We are not pushing investors to some regions because
we need to solve our problems. Investors have
to understand that a region is good for them.
Speaking about industrial zones, are the incentives
to invest in these zones higher?
No. The benefit of an industrial zone is the
possibility to come and start construction rapidly,
which is a big incentive because speed is always
a big concern. You have a site, which is fully
prepared, for a symbolic price and I think that
this is a big incentive.
To attract R&D centres and technology
companies, a very highly qualified labourforce
is required. Do you cooperate with universities
to develop this?
The government is developing a strategy to make
universities more focused on cooperating with
private companies. However, I believe that we
already have a solid base as the quality of technical
universities has always been very high. They now
need to improve their understanding of the needs
of businesses, but I think we are on the right
way.
Do you see it as important for companies to
help universities develop this?
Companies never help universities just for the
sake of it, but help them to fill their own needs.
We already have examples of cooperation between
universities and foreign companies and the governmental
project is focused on fostering these cooperations.
Can you give us examples of foreign companies
doing this?
Rockwell, for example, has had an R&D centre
attached to a Czech university for a long time.
Other companies carrying out R&D in cooperation
with Czech universities include Phillips, Honeywell
and Volkswagen.
The level of attraction of FDI has been very
high in the country for the past three or four
years. How do you expect this to develop during
the next few years?
We expect to maintain the current annual level
of USD 4 to 6 billion during the next two years.
After this, it will probably decrease because
we will have completed the privatization process.
The level, which would allow us to maintain our
position in the global economy is probably around
USD 3 billion per year.
How will the accession of the Czech Republic
into the EU affect this?
I believe that it will improve the situation for
small and medium sized businesses because it will
reduce the risk and we will not be viewed as an
emergent country anymore. For large corporations,
I do not see many changes as all the investors
that are coming now are coming with the assumption
that we will be a member of the EU. This is why
most of the large investments will take place
before we become a EU member. I have to stress
that everybody takes this as a fact: it is not
about if we will join, but when we will join.
When the Czech Republic will be a member,
do you expect the inflow of investments to increase?
Or maybe the origin of investments to change?
I do not expect any major changes because investors
are not waiting for us to join. They make their
decisions in the meantime.
There are EU companies investing now because
they know that we will be a part of their common
market in the near future. There are also American
investors coming to the EU through the Czech Republic.
They are building here their base for the EU.
They are coming already as it is easier for them
to come before we access and become a formal member.
Our readers are also interested in knowing
how a manager arrived at his position. Can you
briefly summarize us your careerpath?
When I finished university, I replied to a recruitment
ad and was accepted in 1994 in CzechInvest. I
have been here ever since and as they did not
know what to do with me, they decided to make
m the CEO.
During these years at CzechInvest, what would
you remember as your biggest achievement?
I had a chance to work in several departments:
I have been the marketing director and the director
of the projects department, I also have been running
our US operations. The best experience for me
was to run our operations in the US.
Business is like playing chess and you always
need to predict your next move. So what is your
next move?
I think you should never reveal your next move
to your competitors and we can expect our competitors
to read this.
I believe that our next move will be to focus
on new incentives for R&D centres. Another
next move will also be to improve our aftercare
service to ensure that our current investors are
satisfied. A third move will be to focus more
on the Czech suppliers, meaning to help Czech
companies to become the suppliers of multinational
companies. This is not only good for Czech companies,
but it is also good for investors because it can
help them to further reduce the cost here in the
Czech Republic.
This report will be read by many French and
Francophone investors. What would be your final
message to them?
My final message would be to tell them that I
believe that our culture is very close to the
francophone culture and we also like good food.
Furthermore, I believe that the Czech Republic
provides many opportunities for both professional
and private life for francophone people. The francophone
community in the Czech Republic is growing. You
have to make sure that your readers know that
they are always welcome in the Czech Republic.
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