1. Knowledge Economy Forum V Prague 2006
Jiří Havel
Vice Prime Minister of the Czech Republic

2. Plan Introduction Czech Experience: Closing
Necessary conditions for development
Knowledge oriented measures
Achievements
Measures to Proceed (what we have learned)
Closing

3. The need for knowledge-based economy
Introduction
The need for knowledge-based economy
Innovative investment
Labour force with high qualification
Mobile
Adaptable
Language skills
From centrally planned to KE - transition
World Bank assistance – KEF

4. Several necessary measures - preconditions
Czech Experience
Several necessary measures - preconditions
Assuring stability
Improving the legal framework
Promote ICT
Developing HE infrastructure
Knowledge oriented measures
Attract knowledge when missing
Expanding and absorbing knowledge when attracted - Cluster, Platform
Create knowledge as needed

5. Czech Experience - Necessary Measures (1/2)
Assure stability of investment climate
Liberalisation
Better regulation
Stable prices
Fiscal discipline

6. Achievements: Still needed:
Czech Experience - Necessary Measures (2/2)
Achievements:
Improved legal framework and administration
Recodification of bankruptcy law
Single contact place for entrepreneurs
Increasing number of internet users
Decreasing prices of home internet access
Still needed:
Further decrease the burden on business
Regulation Impact Assessment
Business impact assessment
Extend the PC and internet availability for schools

7. Czech Experience - Attract Knowledge (1/_3)
Attracting knowledge
Investment incentives
Clustering
R&D expenditures with 100 % dep. rate
FDI inflow per capita, period (USD, source: CzechInvest)

8. Czech Experience - Attract Knowledge (2/3)
Appreciated currency
But positive Trade balance
Higher added value production
Continuous growth
Positive effect of the past investment

9. Still needed: Czech Experience - Attract Knowledge (3/3)
Investment incentives
Subsidies in line with the additionality principle - promote investment activities
Subsidies for job creation - problematic
European style labour market
Incentive for production with lower added value (labour intensive)
More labour - lower reward - slower innovation
Keep a slower track for Incumbents
support high-tech production/services enterprises in innovations, R&D expenditures with 100 % dep. rate
Support dynamic Startups
Venture Capital, Mini-grants, Matching Grants

10. Czech Experience - Expand and Absorb Knowledge
Expanding and Absorbing knowledge
Assure access to and the protection of IPR
Support the formation of Clusters
the service for Incumbents
the learning of potential Startups
Support the communication from consumer to researcher and vice versa
support technological Platforms
create a “knowledge market-place”
information exchange and feedback

11. Achievements: Czech Experience - Create Knowledge
Promoting Higher education
students increase in tertiary education since 2000
Reform of university financing
Increased funding by 50 % in the last 4 years (from 18 to 27 bln CZK)
The public expenditures for science increased by 46 % since 2002 (12,5 to 18,2 bln CZK)
R&D evaluation emphasises scientific excellence and practical results
BIC Plzen (18 companies, e.g. Panasonic SW, 77 employees, 1925 m²)
VUT Brno – Technological incubator (15 companies e.g. YSoft, 90 employees, 521 m²)

12. Still needed: Czech Experience - Create Knowledge
Promoting Higher education
Project oriented funding
Increase the number of the general secondary school students (35 % of all secondary level students in 2010)
More technical studies, keep the studies of arts
Mobility of students, researchers
Make the students mobile (study visit abroad programme)
Get the brains back (motivation for return from abroad)
Take care of them (support of projects after the return)
more young scientists
the programmes of Ministry of Education, Youth and Sport of the Czech Republic

13. Still needed: Czech Experience - Create Knowledge
Gradual increase of R&D expenditures to reach 3% of GDP in 2010 (1/3 from public sources) – when demand for knowledge is enough stimulated
More finance to collaborative research (subsidies, tax incentives)
Use EU structural funds (Business incubators, Transfer technology centers) – 12 bln CZK

14. This event was inspected by
Closing
This event was inspected by
R&D Council of the Czech government
Government Council for Human Resources Development
Follow-up conferences:
How to proceed in the R&D financing? Seminar in Michnov Palace, Prague on March 31st 2006, and
2nd International Conference: Knowledge-Based Economy, National Forum on Knowledge-Based Economy, organised by The Institute for Finance and Administration on May 23rd 2006 and is held under my auspices.

15. Thank you for your attention. Hope to see you soon in Prague again.
The end of presentation
Thank you for your attention. Hope to see you soon in Prague again.