The business environment in the Czech Republic Viktorie Klímová klimova@econ.muni.cz Content • Business environment in the CR • Assessment of business environment – WB • Small and medium-sized enterprises Factors influencing business environment • Finance • Government policy • Education, knowledge, skills • Technology transfer • Business partners, services, law • Market • Physical infrastructure • Entrepreneurial mentality • Programmes for support Strenghts in the CR • Tradition of industrial production • Tradition of research and development • Offer of new industrial zones and real estate for enterprises • Geographical location and proximity of major markets • Good transport infrastructure • Existence of network of institutions promoting enterprises and innovation Weaknesses in the CR § enforceability of law § regulation of bankruptcy § environmental legislation § tax system and tax rates § lack of capital § qualification of workforce § mobility of workforce Tax system Insurance Doing Business in 2006 • The World Bank • Objective measurement of business regulations and their enforcement • 175 economies • Regulatory costs of business • Ranking from 1 to 175 Doing Business - methodology • Doing Business • Starting a Business • Dealing with Licenses • Employing Workers • Registering Property • Getting Credit • Protecting Investors • Paying Taxes • Trading Across Borders • Enforcing Contracts • Closing a Business Doing Business – Czech Republic Ranking in 2006 Doing Business in 2006 • Singapore • New Zealand • United States • Canada • Hong Kong, China • United Kingdom • Denmark • Australia • Norway • Ireland Small and medium-sized enterprises Importance of SMEs • Business environment • Structural changes • Stabilizing element EU: backbone of European economy Economic and social contribution § structural changes § subcontractors § new technologies § marginal areas of the market § development of regions § new jobs § main factor of economic development Disadvantages of SMEs § low economic power § access to capital § education, information, consulting § unfair competition, dumping § public contracts § payment habits § administrative requirements Some statistics about SMEs Definition of SMEs Micro, small and medium enterprise: • Fewer than 250 employees • Assets 43 MEUR or net turnover 50 MEUR (or equivalent in Czech crowns) Definition of SMEs Small enterprise: • Fewer than 50 employees • Assets or net turnover 10 MEUR (or equivalent in Czech crowns) Definition of SMEs Micro firm: • Fewer than 10 employees • Assets or net turnover 2 MEUR (or equivalent in Czech crowns)