SITUATION ANALYSIS OF THE CENTRAL BOHEMIA

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SITUATION ANALYSIS OF THE CENTRAL BOHEMIA

• Kladno, 2nd December 2005
• Martin Janu

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Czech Republic

GDP per capita (2004) CZK 269.450,- Inflation
(2004) 2,8 Unemployment rate (8/2005) 8,8
over 78 ths. sq.km, over 10,3 mil. inhabitants,
capital Prague,
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SWOT analysis of the CB

• STRENGTHS
• qualified labour force oriented on services
• flexible labour force used to commuting
• existence of strong companies particularly in the
  automobile and chemical industries
• lower costs (if compared to Prague) make the
  region more attractive to investors
• high density of road and railway networks and
  waterways
• good connection of majority of communities with
  the capital by means of both public and private
  transport
• international airport in Prague-Ruzyne
• attractive location from the migration viewpoint
  (Prague suburban ring)
• high density of cultural and historical monuments
  of both local and national importance

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SWOT analysis of the CB (2)

• WEAKNESSES
• limited offer of areas to be immediately used for
  the purpose of industrial zones
• insufficient support to small and medium
  enterprise
• disparity in the structure of offer and demand in
  respect of vacancies
• the educational system does not produce flexible
  labour force
• great economic disparities within the region
• existence of territories that are partly or
  completely not used, declining industrial centres
  and military districts
• missing transport bypasses of towns, incomplete
  Prague ring road including Prague radials

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SWOT analysis of the CB (3)

• OPPORTUNITIES
• vicinity of Prague (a market for products and
  services, restraining losses caused by
  restructuring, opportunity for co-operation of
  companies)
• opportunity to draw down funds for support of
  small and medium businesses
• existence of areas to be used for potential
  development of commercial and industrial zones
• development of suburbanizing processes
• existence of a high number of foreign investors
  (improving the labour force potential)
• trend of a growing share of tourism in the GDP, a
  higher number of tourists visiting Prague and the
  trend of our populations travelling around the
  country
• capacity increase of the Prague-Ruzyne public
  international airport and air transport in
  general
• development of the road network and waterways
• improved quality of passenger railway transport
  and utilization of freight transport capacities

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SWOT analysis of the CB (4)

• THREATS
• underestimated sustainability of development and
  overestimated short-term economic effects,
  non-resolved conflict of interests with respect
  to the environment protection, development
  intents and spontaneity of development activities
  
• changes in tax related legislation which do not
  allow for long-term planning of income and
  capital expenditures
• indebtedness of communities and the region
  including a vast internal debt
• transfer of a part of air transport out of the
  Czech Republic
• vicinity of Prague (is more attractive for
  investor and labour force than the Central
  Bohemia Region)
• achieving and exceeding the capacity of the
  Prague-Ruzyne airport

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SME sector in the CR

• In the CR is over 989 th. SME,
• Its 99,21 of all companies,
• The most number of SME is in the sector of
  services,
• In the process of internationalization of the
  markets and the development of the Single
  European Market, the specific problems and needs
  of SMEs are access to knowledge and
  information, access to liable funds and credits
  on appropriate conditions, and access to
  qualified staff.

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Indicators of SME
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SME in the Central Bohemia

• In this region are
• 43.250 corporations,
• 214.076 personal entities.
• Share companies on 1000 inhabitants of region
• 38 corporations on 1000 inhabitants,
• 188 personal entities on 1000 inhabitants.
• Structure of economical base in region average
  registered number of employees
• agriculture 6,5 (the Czech Rep.
  5,5 )
• industry 47,4 (the Czech Rep. 44,6
  )
• services 46,1 (the Czech Rep.
  51,2 ).

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SME in the Central Bohemia (2)

• Representation of economic entities in the
  Central Bohemia Region and the Czech Republic
  as per industries

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Problems of SME in region

• Problems of SMEs in this region are
• lower productivity base,
• absence of new innovative companies in region,
• competitiveness of Prague,
• absence of money to financing of new project in
  the field of new technologies,
• administrative barriers to small and medium
  enterprises,
• non-cooperation between SMEs,
• non-existing strategy for innovations from
  regional authority,
• legal problems, tax policy of the Czech Republic,
• problems in the field of agriculture,
• high costs,
• there arent financing founds for SMEs on
  regional level, where SMEs can get money for
  projects,
• wrong technical infrastructure,
• older equipment in companies,
• innocence of information technologie, innocence
  of work with internet,
• nonavailability of credits and loans, high bank
  charges,
• changes in the regional economy in last 10 years.

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Support of RD in the Czech Rep.
Cost for RD ( from GDP)
Cost for RD ( of financing from government) in
the Czech Rep.
Number of absolvents at universities in the field
of science ( of all absolvent)
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Intellectual rights
Number of registered patents by European Patent
Office (EPO) on million inhabitants
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Programs for SME

• Clusters programme (Klastry)
• Development programme (Rozvoj)
• Marketing programme (Marketing)
• Real estate programme (Reality)
• Training centres programme (Skolici strediska)
• Prosperity programme (Prosperita)
• Profession programme (Profese)
• OP Multifunctional Agriculture and Rural
  Development

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Programs for SME (2)

• Start programme (Start)
• Credit programme (Kredit)
• other programs of Bohemian-Moravian Guarantee and
  Development Bank,
• credits by commercial banks,
• cooperation wiht labour offices,
• taxis

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Programs for SME (3)

• SMEs can get and can be interesting about
• grants - grant to reduce the payment of interest
  on specific loans for housing improvement (the
  PANEL programme),
• guarantees - bank guarantees are available to
  secure investment loans, operation loans,
  leasing purchase of equipment, venture capital
  investment or bids in open tenders (the
  GUARANTEE programme),
• loans
• interest-free loans for start-ups the START an
  MARKET programmes,
• standard loans and small loans for SMEs in early
  stage of development - the CREDIT and MARKET
  programmes
• subordinated loans the CREDIT, MARKET and
  PROGRESS programmes,
• special-purpose loans - the INNOVATION programme,
• long-term loans for financing specific
  infrastructure projects.

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Venture capital

• In the Czech Republic is in the field of venture
  capital very important organisation Czech Venture
  Capital and Private Equity Association (CVCA)
  located in Prague. CVCA is an association
  representing companies that are acting in section
  of venture capital in the Czech Republic. Members
  of CVCA are companies investing venture capital
  (full members) and companies providing advisory
  services in section of venture capital
  (associated members).

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Business angels

• BA are private individuals who are prepared to
  invest their own funds in private companies in
  return for a minority equity stake. They are
  particularly interested in growth business with a
  clear exit strategy for their investment.
• In the Czech Republic are only four companies in
  this area
• BANET,
• Business Angel Czech,
• Angel Investor Association,
• CEAA.

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Awareness raising

• Project Technological profile of the Czech
  Republic
• Innovation of the year, Conference Innovation
• Workshops and meeting in the field of innovation
• Seminars
• Establisment of new innovative companies
• Working group of Innovative Entrepreneurship in
  the Central Bohemia
• Consultanty Days

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Conclusion

• Central Bohemia is different from other regions
  in the Czech Republic.
• Location around Prague brings many advantages for
  development of SMEs in this region.
• Innovation and RD are still problems.
• SMEs havent information about possibilities for
  financing of their projects.
• SMEs have problems to get loans from banks.
• In Central Bohemia doesnt exist regional funds
  for SME.
• Very important is cooperation between public and
  private sphere.

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Thank U for your attention.