Expert Meeting on the Impact of FDI on Development

Robert HejzakDirector of MarketingCzechInvest

R&D investment promotion

Policy development

-- global trends vs. CEE experience

-- supply vs. demand factors

-- how to benefit how to attract how to sustain

-- macro policies vs. micro policies

Road to Success in R&D

-- Physical infrastucture (ICT)

-- Regulatory framework

-- Fiscal and financial measures

-- CzechInvest strategy and tools

Expenditure on R&D

Czech

Rep

ublic

Hungar

y

Eston

ia

Polan

d

Slova

kia

Source: IMD World Competitiveness Yearbook, 2003

The Czech Republic spends more resources on Research and Development than many of its competitor countries

USD per capita

% of GPD

0.675

0.7910.904

1.303

0.65472.4

4631.6 30.7 24.8

Investment incentives

╌ Subsidy for business activity

╌ provided for max. 10 years / up to 50% of investment costs

╌ Subsidy for training and retraining

╌ provided for max. 3 (5) years / up to 35% (60%) training costs

Types of supported projects╌ Development and innovation activities with

the close linkage to production of high-tech

products and technologies, including

development of specific software, in the

following fields:

╌ Aerospace

╌ Computers and machinery

╌ Electronics and microelectronics

╌ Telecommunications

╌ Pharmaceutics

╌ Motor vehicles

╌ Etc.

Eligibility Criteria

╌ Min. amount of investment

╌ CZK 15 mil. (app. 0,5 mil. EUR / 0,6 mil. USD) within 3 years

╌ Min. number of new jobs created

╌ Min. 15 new jobs within 3 years

╌ Min. equity share

╌ CZK 7,5 mil. (app. 0,25 mil. EUR / 0,3 mil. USD) of the investment will be financed with own sources

╌ Linkage with production

CzechInvest strategy

-- foreign AND indigenous investment

-- projects AND instructure development

-- 2 marketing models for FDI attraction –„evolution“ vs. „leap“

-- local sourcing nad university linkages

Advanced R&D environment

Source: Eurostat, European Innovation Scoreboard, 2002

Corporate Investment into R&D and New Technologies (% of GDP)

Poland

Hungary

Slovakia

Spain

Italy

Czech Republic

Ireland

E.U. Average 1.28

0.88

0.45

0.36

0.25

0.81

0.53

0.52

University links (ČVUT)

Source: Institute for Information in Education 2004, www.cvut.cz

1541, 356Architecture

22, 903

1, 808

1, 434

6,206

4,979

6,551

2,107TOTAL (included other departments)

159Transportation Sciences

135Nuclear Sciences and Physical

584Electrical Engineering

371Mechanical Engineering

624Civil Engineering

-- Prague’s CVUT: second largest Technical University in Europe (23,000 students)-- exchange programs with foreign universities in over twenty countries -- projects with Samsung, Texas Instruments, Bosch, AVX, Boeing, Ericsson, Honeywell

Students Graduated

Results

Source: CzechInvest, 2004

Wood-processing industry8% Automotive

industry29%

Chemical industry 14%

Electricalindustry 29%

1994

Construction industry 14%

R&D18%

Business Support Services11%

Manufacturing71%

2004

StatisticsTechnology Centres

-- 22 investors have received investment incentives

-- Investment: 55,5 mil. EUR

-- Training and re-training : 10,8 mil. EUR

-- Newly created jobs: 1 570 (75 % university graduates)

-- Applications from 18 firms are being processed

Source: CzechInvest, 15th January 2005

R&D Activities in the CR

CR in the Top 10 most attractive countries for R&D

05

1015202530354045

1. Chi

na2.

USA

3. In

dia

4. U

nite

d Kin

gdom

5. G

erm

any

6. B

razil

7. J

apan

8. F

ranc

e9.

Italy

10. C

zech

Rep

ublic

23. P

oland

24. S

lova

kia

35. H

ungary

Source: The Economist Intelligence Unit 2004

% respondents

In which of the following countries does your company plan to spend the most on R&D in the next three years? Please choose the top three countries.

CzechInvest, the Investment and Business Development Agency, is an agencyof the Ministry of Industry & Trade of the Czech Republic

Thank you

Contact us at:

robert.hejzak@czechinvest.og

www.czechinvest.org