1. SIMPLY CLEVER Ing. Martin Jahn Member of the board of management ŠKODA AUTO a.s. KNOWLEDGE ECONOMY FORUM V Innovation and Technology Absorption for Growth Prague, March 28-30, 2006

2. SIMPLY CLEVER innovation and technology absorption for growth 2 with sales of CZK 177,8 bln Škoda Auto is the biggest Czech industrial company 3% of Czech work force is directly or indirectly employed by Škoda Auto Škoda's exports = 8,2% of the total Czech export in 2005 Škoda Auto invested approx. 5% of its annual turnover The significance of Škoda Auto for the Czech Republic

3. SIMPLY CLEVER innovation and technology absorption for growth 3 Growth of Škoda Auto in 2005 record sales: 492.111 cars record production: 494.127 cars record revenue: EUR 6,46 bln record before-tax profit: EUR 348 mln record export: EUR 5,27 bln record employment: 26.000 employees expansion of assembly abroad (India, Ukraine, Bosnia and Herzegovina, Kazakhstan)

4. SIMPLY CLEVER innovation and technology absorption for growth 4 labour costs energy and material costs competitors (Japan, Korea, China) stronger CZK prices of products Competitive Environment

5. SIMPLY CLEVER innovation and technology absorption for growth 5 Investments – R&D 203 mln EUR Investments – Education 7,8 mln EUR Škoda Auto University 420 students in bachelor study Škoda Auto Mechanical 960 apprentices engineering vocational school Škoda Auto - R&D center 1420 employees Škoda Auto and Knowledge economy

6. SIMPLY CLEVER innovation and technology absorption for growth 6 Trainee- programme management talents programme management programme iLead competencies development GJEP GEF qualification standards target group JUST- pool MBA Škoda Auto University training scholarship vocational school students talents management juniors management Top- management Top-management juniors graduates apprentices specialists supervisors on the job off the job permanent learning know-how transfer supervisor school production system Škoda intercultural training activities Qualification and Top competencies as the competitive advantage of Škoda Auto

7. SIMPLY CLEVER innovation and technology absorption for growth 7 Knowledge management internet center/café, media library, study room, expert discussion forums, workshops Event Management catering, after-work party, concerts, exhibitions, festivals Škoda Auto University school for economic thinking - business and marketing professionals Coaching coaching, flow- teams, innovative processes Center of technical universities start of close co-operation between research lectures and students with company specialists and their involvement in the solution of new tasks Campus Na Karmeli – the public-private partnership Building up the level of education and innovations by combining knowledge management and practice

8. SIMPLY CLEVER innovation and technology absorption for growth 8 2009 Area of the new center:38.000 sq.m. Floor area of the labs and offices:11.000 sq.m. Investment:EUR 38 mln New jobs:370 employees The extension of Technological Center Building up the level of education and innovations by combining research and practice

9. SIMPLY CLEVER innovation and technology absorption for growth 9 Innovation Management R&D linked with Production Škoda Auto University – Masters Degree Cooperation with educational institutions – IQ Auto Škoda Auto - Knowledge economy in the future

10. SIMPLY CLEVER innovation and technology absorption for growth 10 Emphasis on knowledge economy Support of R&D demand, Innovation Support of R&D infrastructure, building capacity on supply side Mobility of R&D workers SME Support – consortium of SMEs as a final beneficiary Efficiency in respect of administration expenditure: Relatively small grants provided Administration/project expenditure for SME in line with HR capacity of SME The cost of providers Results of SME projects Support clusters of SMEs linked to big companies SMEs involved in robust R&D project led by big company Activity from FP focused on SMEs put into programmes on national/regional level Czech Republic – Financial perspective 2007-2013

11. SIMPLY CLEVER innovation and technology absorption for growth 11 Knowledge economy is the only answer to globalisation Knowledge economy = deindustrialization Quality over Quantity Public-private partnership Permanent learning and change = stable security Conclusions

12. SIMPLY CLEVER THANK YOU.