This chapter focuses on regional characteristics relevant to attract FDI investment decisions in the regions of Ústí nad Labem and South Moravian in Czechia. It examines regional factors that can enhance FDI-SME spillovers and impact development opportunities. Subsequently, it evaluates regional factors and policies aimed at increasing these spillovers and the absorptive capacity of SMEs. Insights are provided on the integration of regional development initiatives with efforts to attract FDI and policies designed to support SMEs.
Strengthening FDI and SME Linkages in Czechia
Abstract
A regional approach can help strengthening FDI and SME linkages in Czechia to capitalise and take into account the country's diverse economic and social landscapes. On the one hand, tailoring FDI attraction strategies to regional specificities can enhance the innovation and growth potential of local SMEs, primarily by creating environments that promote knowledge spillovers and technology transfer. On the other hand, strengthening the right regional conditions can also help leverage SME growth through FDI investments and support higher value-added activities, strengthening the regional eco-business and leading to internationalisation and new development opportunities.
Ústí nad Labem and South Moravian regions have distinct geographic, economic, demographic, features that are relevant to attract and leverage FDI-SMEs linkages. Ústí nad Labem is in the midst of an economic transition, aiming to diversify and modernise its traditionally industrial sectors, notably mining and manufacturing. In contrast South Moravia stands out for its vibrant innovation ecosystem, IT, and service sector performance and the presence of research advanced institutions and universities in Brno.
Both regions can benefit from better digital and transport infrastructure to help capitalise their geographical location to attract and diffuse FDI.
Improved internet fibre rollout is warranted given that the penetration rate of fiber optic in Czechia (7.6%) is almost half of the OECD average (13.2%) (OECD, 2023[1]). Expanding this infrastructure is vital to firms in accessing digital business tools needed to remain competitive in today's economy. Beyond improving infrastructure, improved digital literacy can support SMEs to transition to more innovative industries, and the public administration to simplify administrative procedures for international investments.
Greater investments in cross-border programs can better connect internal markets with large bordering European markets (Austria, Germany, Poland, Slovak Republic), offering trade opportunities and new connections for the local economy.
There is scope to improve cooperation across municipalities within regions to enhance public service delivery and coordinate development strategies to increase attractiveness for FDI and international workers. Czechia records the highest degree of municipal fragmentation across OECD (average area of a Czech municipality is 13 km², significantly smaller than the OECD average of 234 km). This municipal fragmentation has led to siloed investments in public services resulting in a lack of economies of scale and scope, for example in technical and administrative capacities. Furthermore, in Ústí nad Labem, the polycentric settlement patterns require additional efforts to promote cooperation across development plans and strategies of the different cities to attract and link FDI with local business.
There is also an untapped opportunity to better link local businesses with foreign companies, thereby promoting knowledge and technology spillovers. The productivity gap between foreign companies and local firms in these two regions is relatively higher than the rest of the country, yet it remains lower than in several OECD countries, such as Latvia, Lithuania, and the Slovak Republic (Figure 6.8). The ‘North’ region, which includes Ústí nad Labem, has a foreign firm productivity premium of about 0.6 —indicating a larger gap between the productivity of foreign versus domestic firms. In the ‘South’ region, containing South Moravia, the premium stands at 0.4. These figures imply that foreign firms are making a positive contribution to productivity in these areas and could represent an opportunity for local businesses to learn and adopt new technologies and practices. However, realising this potential requires a supportive policy environment that encourages collaboration and technology transfer between firms. Strategies such as establishing 'one-stop shops' could streamline administrative processes, providing easier access to regional, national, and European support programs, and extending comprehensive support to SMEs that goes beyond financing. Such measures would enhance their capacity to innovate, scale-up, and ultimately increase their productivity.
In Ustí nad Labem there is scope to better map and brand regional economic characteristics to align local strengths with the international companies’ needs. While the region is diversifying from its industrial legacy towards a higher value-added industry, it struggles to be perceived as an attractive destination for high skill workers due to its historic mining and migration legacy. Thus, a branding strategy around the opportunities can held leverage the competitive advantages of the region, including a lower cost of living, access to a large set of brownfields (around 4,000 only in Usti), potential to enter into the German market and presence of natural amenities amongst others. Furthermore, in Ústí nad Labem, the polycentric settlement patterns require additional efforts to promote cooperation across development plans and strategies of the different cities to attract and link FDI with local business. Therefore, a platform for city cooperation would benefit the region to improve attractiveness through better public service delivery and reach a common vision for development, including FDI attraction strategy and local SME ecosystem development (see Box 6.1).
In the case of South Moravia, the region could further mobilise its innovation-led business ecosystem to promote inclusive development beyond Brno. While South Moravia's focus on attracting FDI in high value-added activities is well-supported by its infrastructure and educational framework, greater collaboration is needed between academia, public and private to further diffuse foreign know-how and technology into the local economy. The collaboration on R&D projects, particularly in burgeoning fields such as advanced manufacturing or biotechnology, is vital for fostering innovation. In South Moravia, for instance, electron microscopy (Thermo Fisher Scientific, Tescan) or in security (GEN, AT&T), or aerospace (Honeywell) are examples of great performers in R&D collaborators. Engaging companies in educational initiatives, such as structured internships, joint research programmes, and innovation workshops, allows for the direct application of academic research to industry challenges. In Ústí nad Labem, the Unipetrol Centre for Research and Education (UniCRE) collaborates deeply with academic institutions, including the University of Jan Evangelista Purkyně in Ústí nad Labem. Their focus areas include research activities supporting the chemical industry, with goals like integrating into European research structures and promoting science and development (Unicre, 2022[2]).
Establishing a collaborative platform for regional development in Ústí nad Labem, fostering a joint vision to attract FDI and integrate it effectively with the local economy. This initiative could be spearheaded by the regional office and encourage synergistic policy and resource alignment, enhancing coordination among the region's three Functional Urban Areas to foster a larger, integrated economic and social ecosystem.
Improving regional branding to better promote the competitive advantage of the regions for international firms and workers. It involves investing in regional branding initiatives that accurately reflect the unique regional advantages (e.g., lower living cost compared to the capital city, environmental amenities among others) and promote available job and career opportunities to attract talent.
Enabling regional governments and municipalities to lead redevelopment initiatives for brownfields, transforming them into hubs of innovation and entrepreneurship. This is of special relevance for Ústi nad Labem due to its high stock of brownfields (over 4 thousand). For this, the national government and the regions should build on the National Brownfield Regeneration Strategy and assist coordination between municipalities and investors to facilitate new business developments.
Leveraging its strategic position of border regions in Czechia. It could be done by developing cross border programs with neighbouring countries (Germany, Austria and Slovak Republic) to i) benefit SMEs by facilitating easier access to cross-border supply chains, expanding customer bases, and fostering collaborative opportunities with foreign partners and to ii) develop programs for academic partnerships across educational institutions.
Facilitating business services beyond financing to provide comprehensive support for local SMEs and investors. It can be done through a regional 'one-stop shop' for business support to provide administrative guidance and information about innovation opportunities, connect firms and university projects or EU funds and regional programmes.
Better linking universities and research centers with business to strengthening the regional innovation ecosystem. This should involve setting up contact points or joint forums to align business needs with the research agendas of local academic institutions, such as the University of Jan Evangelista in Ústí nad Labem and the Brno Technological Park.
Promoting inter-municipal cooperation on public service delivery to enhance regional attractiveness for FDI. Such collaboration could lead to better healthcare, education, and infrastructure development, as well as streamlined administrative processes, creating a more welcoming environment for both local and international enterprises and talent.
The Czechia's advantageous position in Central Europe, bordered by Germany, Poland, Slovakia, and Austria, offers a unique vantage point for understanding the dynamics of Foreign Direct Investment (FDI) and the development of Small and Medium Enterprises (SMEs) within its borders. This analysis specifically turns its focus towards the Ústí and South Moravian regions, which, despite their distinctive characteristics, share more similarities with each other than with the Prague capital region. The Ústí region, with its extensive network of municipalities and strategic location on major European roadways, serves as a crucial conduit for trade between Germany and Eastern Europe. South Moravian, home to the economic and educational hub of Brno, acts as a bridge between Eastern and Western Europe, facilitating traffic from Austria and Hungary towards Central Europe. Both regions are endowed with diverse landscapes that support a range of economic activities from agriculture to recreational services, contributing to their internal market vitality.
6.2.1. Regional economic characteristics shape FDI growth across regions in Czechia, with Prague leading
The regions of South Moravia and Ústí nad Labem exhibit modest growth in foreign direct investment (FDI), highlighting the challenges they face in attracting investment in comparison to Prague (Figure 6.1). Within the Czech investment landscape, Prague emerges as the dominant force, securing 64% of the nation's total FDI, which amounted to 114,529 million euros in 2021. This significant concentration of investment in the capital can be attributed to its diversified economic base and robust infrastructure, positioning Prague as a highly competitive location for investment. It is essential to acknowledge, however, that the distribution of FDI statistics may be influenced by methodological factors, such as the tendency for company headquarters to aggregate in the capital, a trend not unique to Czechia but also noted in Slovakia.
Despite attracting a smaller proportion of the national FDI, South Moravia and Ústí nad Labem have shown commendable performance, accounting for 5.3% and 2.4% of the national FDI in 2021, respectively. This places them as the 2nd and 6th highest FDI-receiving regions in the country. From 2014 to 2021, FDI in Ústí nad Labem and South Moravia increased by 26.5% and 48%, respectively, although this growth was below the national average and significantly less than the 86.3% increase observed in Prague. This period also saw a slight relative decline in their share of national FDI attraction, with South Moravia's and Ústí nad Labem's contributions decreasing by 0.4 and 0.6 percentage points, respectively, in contrast to Prague’s share, which surged by almost 6 percentage points from 54.5% in 2014 to 64% in 2021.
The pronounced centralization of FDI in Prague, capturing 86.3% of all FDI in the country, stands in stark contrast to trends observed in other EU nations. For instance, in the Slovak Republic, the Bratislava region accounts for about 70% of the total FDI stock, nearly five times the combined share of the next two highest-performing regions. Similarly, in Portugal, FDI inflows have been predominantly concentrated in the Lisbon Metropolitan Area and Norte, with Lisbon receiving almost 50% of all greenfield FDI projects. Key findings from the analysis highlight Prague as the powerhouse of Czech FDI, with a significant increase in investment and share since 2014. South Moravia maintains a steady position amidst rising competition, experiencing a slight decrease in its share while seeing growth in FDI value. Ústí nad Labem, with its industrial focus, ranks 6th in Czech FDI stock, indicating potential for growth despite a small dip in its share of the national FDI.
Source: CZSO (2020[3]) https://www.czso.cz/csu/czso/home
The sectorial distribution of Foreign Direct Investment (FDI) within the Czech regions reflects the unique industrial fabric of each area, showcasing both traditional strengths and emerging sectors conducive to economic diversification and development (Figure 6.2). In Ústí nad Labem, substantial FDI flows into the rubber and automotive components sectors signal the region's reliance on its longstanding industrial heritage. This investment trend points to Ústí's solid manufacturing base, yet it also underscores the region's challenge to evolve beyond these established industries and potentially hindering a broader diversification of its economy.
As for South Moravia, the data displays a varied pattern of FDI across real estate and industrial equipment sectors, hinting at a strategic push towards cultivating an innovative ecosystem. The investment in these areas suggests an effective leveraging of South Moravia's educational and labour market strengths, aiming to entice investments that align with the region's vision of a knowledge-based economy. Employment and capital expenditure data provide further insight into the economic repercussions of these investment flows. South Moravia's FDI has been linked to the creation of 32,922 jobs and capital expenditures (Capex) amounting to USD 5,682 million, reflecting the region's dynamic industrial composition and its success in attracting innovation-driven sectors.
Source: Source: CZSO (2020[3]) https://www.czso.cz/csu/czso/home
Building on the regional FDI insights, the employment and capital expenditure data further illuminate the economic impact of these investments (Figure 6.3). In South Moravia, the creation of 32,922 jobs and a Capex of USD 5,682 million are associated with the region's receipt of investment - 4th across Czech regions. The region also exhibits a diverse industrial base and innovation-driven sectors, which could be linked to its economic development. Similarly, Ústí nad Labem's creation of 36,838 jobs and a Capex of USD 6,762 million are also associated with the FDI it has received – ranking 2nd across Czech regions. Despite facing challenges in some sectors, the significant job creation in the region might be related to its investment strategies. Additionally, the data could suggest Ústí nad Labem's efforts to diversify its economy.
Note: Last corresponds to data to 2022.
Source: CZSO (2020[3]) https://www.czso.cz/csu/czso/home
FDI trends and SME ecosystem opportunities in a context of economic transition for South Moravia and Ústí nad Labem
The economic and labour markets of South Moravia and Ústí nad Labem are undergoing distinct transformations, reflecting broader shifts in Czechia's economic landscape. South Moravia, led by Brno's dynamic growth, is embracing the digital transition, whereas Ústí nad Labem is navigating a transition from its industrial roots.
South Moravian’s growth in IT sector (152.1% between 2010 and 2020), outpaces the national average of 81.1% and the capital city of Prague (80.6%) (Figure 6.4). This rise shows the region's shift from traditional industries to a digital and knowledge-based economy, with Brno as the central catalyst in this transition. South Moravian's economic strategy is one of diversification and innovation-led growth. The region's significant leap in IT GVA reflects the results of its investment in research and development, higher education, and its proactive innovation policies. Brno's evolution from a historical focus on textile and machinery to a centre for ICT, aerospace, cybersecurity, and medical research underscores its emerging role as a regional powerhouse within Central Europe's tech landscape. This transformation is supported by entities such as Masaryk University, the Brno University of Technology, and the University of Veterinary and Pharmaceutical Sciences. CEITEC stands out as an inter-institutional research entity central to this ecosystem. Additionally, JIC, a player in the innovation ecosystem, has been relevant in organising open innovation sessions that connect local multinational corporations with startups. Similarly, Intemac, a JIC subsidiary, plays a role in developing initiatives that strengthen the relationship between multinational companies and local SMEs, thereby enhancing the integration of foreign direct investment into the local ecosystem (MOORE Czech Republic, 2021[4]).
In contrast, Ústí nad Labem's development trajectory has been largely over specialised in its industrial and mining legacy. The region has a robust infrastructure that once supported its primary industries, and its workforce is experienced in these sectors. However, the transition to a post-industrial economy necessitates a shift in focus. While Ústí nad Labem's historical strengths have defined its past, the region now faces the challenge of leveraging its assets in a changing global economic landscape. Ústí nad Labem's industrial sector has experienced a decline, with a -6.4% change in GVA, underscoring the region's struggle with deindustrialisation. However, there is a silver lining as the IT sector has seen a positive change, albeit a modest 9.3%, indicating the beginnings of a technological transformation albeit at a slower pace compared to South Moravian and the national average.
Note: Calculated as the change between GVA 2010 in Millions USD, constant prices, constant PPP, base year 2015 and GVA 2020 in Millions USD, constant prices, constant PPP, base year 2015
Source: OECD (2023[5]) https://stats.oecd.org/Index.aspx
Entrepreneurship and SME creation is greater thanks to its fabric of businesses (Figure 6.5). South Moravia's sectoral composition showcases a notable tilt towards contemporary, high-skill industries with a robust presence of enterprises in professional and technical activities and a burgeoning information and communication sector. This modern industrial profile not only demonstrates the region's capability to foster growth in advanced sectors but also signals its potential to attract Foreign Direct Investment (FDI) that prioritises innovative and skilled labour markets. Concurrently, the dynamic SME landscape in South Moravia is likely to benefit from an environment rich in knowledge exchange and technological advancements, providing fertile ground for startups and established SMEs to expand and innovate yet has room for improvement as the recommendation later in this chapter will further explain ‘’Strengthening university-industry collaboration for enhancing regional innovation capacities’’.
In contrast, Ústí nad Labem presents an industrial sector steeped in tradition yet showing an incremental shift towards the services sector, particularly in arts, entertainment, and recreation. This transition suggests a region in the midst of redefining its economic identity, looking to attract FDI that can harness the strengths of its established industrial base while exploring new opportunities in the emerging service sectors. The growth in public administration and service-oriented businesses points towards a diversifying economy where SMEs could explore new niches and capitalise on a broader spectrum of local and international market demands.
Between 2017 and 2021, the business sectorial trends in both regions underline an evolving firm’s landscape (Figure 6.5). South Moravia has witnessed considerable development in real estate and other services, reflecting an environment conducive to attracting FDI that values diversified, resilient economic structures. This growth aligns with a regional strategy that leans heavily on innovation and high-value sectors, shaping a sophisticated ecosystem that is attractive to SMEs and foreign investors alike. Ústí nad Labem, despite a strong inclination towards industry, has experienced a rise in arts, entertainment, and public administration sectors, signalling a nascent diversification. This could represent a dual-edged sword; while it allows for an expansion of the economic base, it also presents the challenge of ensuring this diversification leads to sustainable growth and does not dilute the region’s industrial strengths.
These sectoral shifts and growth patterns across both regions highlight underlying trends that influence the type of FDI received and the health of the SME ecosystem. For South Moravia, the current trajectory enhances its prospects for attracting FDI that complements its innovative and high-skill industries, while Ústí nad Labem's diversification into services may broaden its appeal to a different spectrum of investors, nurturing an SME environment ripe for transformation and cross-sector collaboration.
Source: CZSO (2020[3]) https://www.czso.cz/csu/czso/home
The employment distribution depicts a similar picture of a more diversified and knowledge service-oriented economy in The South Moravian region. A higher share of the national employment in knowledge-intensive services is concentrated in this region (32.8% of the national employment in this sector), second only to Prague (Figure 6.6). This aligns with the innovation-led growth strategy of the region, where the capital Brno plays a pivotal role, fostering a conducive environment for startups and tech companies. For instance, innovation policy plays an important role in improvement of innovation capability of the region, and it is well-known for its pioneering implementation of various innovation tools (Klímová and Žítek, 2017[6]). Even in high value-added occupations in manufacturing, Ústí nad Labem represent a slower share of in high-tech manufacturing (0.8%) than the country average and South Moravian's is double (1.7%).
In terms of digital occupations, the percentage of employment in digital occupations in small firms or self-employed professionals in South Moravian is notably higher at 3.4%, suggesting a vibrant ecosystem for digital entrepreneurship, likely supported by regional innovation policies and the presence of tertiary educational institutions in Brno. Moreover, the share of employment in digital occupations in South Moravian is at 3%, reflecting the region's successful integration of digital skills into the broader workforce. This is crucial for the region's adaptability and competitiveness in an increasingly digital global economy. While Ústí nad Labem's figures are more modest in these areas, they point towards the beginnings of digital integration, which is essential for the region's economic evolution. The comparison across different Czech regions reveals the varied stages of economic development and sectoral emphasis, highlighting potential areas for policy intervention to enhance regional innovation capabilities and economic diversification.
Note: [E] = Employment. Digital occupations are classified as in (Calvino et al., 2018[3]). The sample selection for the Labour Force Survey is the same as detailed for Table 6.3. The sample selection for Burning Glass Technologies data corresponds to all vacancies with non-missing information on occupation, sector of economic activity and region. Market services include NACE sectors: B, D, E, F, G, H, I, J, K, M, N.
Source: % employment in digital occupations Data for 2018 Labour Force Survey % employment in digital occupations between 20 and 29 years old Data for 2018 Labour Force Survey % employment in digital occupations between 55 and 64 years old Data for 2018 Labour Force Survey % employment in digital occupations in SMEE Data for 2018 Labour Force Survey % vacancies in digital occupations (all economy) Data for 2019 Burning Glass Technologies % vacancies in digital occupations (manufacturing) Data for 2019 Burning Glass Technologies % vacancies in digital occupations (market services) Data for 2019 Burning Glass Technologies
High value-added activities specialisation in South Moravian drives GDP per capita perform better than Ústí nad Labem yet there’s still a gap to bridge with Prague
The two decades from 2000 to 2020 have seen both South Moravia and Ústí nad Labem grow economically, yet their progress has been outpaced by national and OECD averages (Figure 6.7). South Moravia’s economic performance, while closely aligned with the national average, exhibits a growth trend that is slightly below the OECD benchmark. The region’s GDP per capita has risen from $21,035 in 2000 to $35,275 in 2020, reflecting an upward trajectory that, however, has not fully capitalized on the growth rates experienced by OECD countries during the same period. South Moravia’s competitive regional economy is underpinned by a low unemployment rate and a moderate level of innovation activity, signaling a stable economic environment with the potential for further growth.
Conversely, Ústí nad Labem’s economic growth has been more modest, with GDP per capita increasing from $19,438 in 2000 to $25,443 in 2020. This growth is significantly lower than the national average, underscoring the region’s economic challenges. The unemployment rate in Ústí nad Labem, higher than that of South Moravia and the national average, coupled with a higher interregional migration ratio, indicates potential labor market fluidity that could be harnessed to stimulate economic advancement.
Note: Czechia average = 100
Source: Macroeconomic indicators for regions, CZSO (2020[3]) https://www.czso.cz/csu/czso/home
Table 6.1 shows an overview of key indicators for South Moravian, Ústí nad Labem, Czechia, and its neighbours, covering demographics, economy, migration, and competitiveness. This data supports our analysis on SMEs and FDI's role in regional development, showing how these regions compare nationally and internationally. It helps showcasing strengths and challenges in attracting FDI and suggests areas for policy focus to enhance regional growth and integration into global markets.
Note: Eastern Neighbouring countries refer to Germany and Austria. Western Neighbouring countries refer to Slovak Republic and Poland.
Source: Own elaboration with data from the OECD (2023[5]) https://stats.oecd.org/Index.aspx , European Commission (2023[7]) https://ec.europa.eu/regional_policy/assets/regional-competitiveness/index.html#/
Productivity premia of foreign firms are low across all Czech regions compared to other OECD countries
The productivity premium of foreign firms in Czech regions, while positive, is modest when compared with the productivity differentials in certain EU comparator countries (Figure 6.8). Specifically, the ‘North’ region, including Ústí, shows a productivity premium of approximately 0.6, while ‘South,’ encompassing South Moravia, has a premium of around 0.4. This data implies that foreign firms in these regions contribute positively to the overall productivity.
Foreign firms in Czechia’s ‘North’ and ‘South’ regions, including Ústí nad Labem and South Moravia respectively, are more productive than domestic firms, yet the premium is not as pronounced as in regions of Slovakia or countries like Portugal, Latvia, or Greece. By focusing on improving factors that contribute to firm productivity, such as innovation, workforce skills, and technological advancement, regions like Ústí and South Moravia can further capitalise on the presence of foreign firms. This could involve targeted policies to support foreign firm operations, such as streamlining administrative processes, providing incentives for research and development, and fostering collaborations between foreign and local businesses to facilitate knowledge transfer and innovation.
The existence of a productivity advantage for foreign firms in Czech regions indicates potential for productivity spillovers, a phenomenon where domestic firms may benefit from the presence and practices of more productive foreign firms. As suggested by OECD findings, such spillovers are more likely when foreign firms outperform their domestic counterparts. However, this also poses a challenge; if the productivity gap is too wide, it may be difficult for domestic SMEs to bridge the difference and fully benefit from the potential spillovers. Conversely, smaller productivity gaps, as seen in Czech regions, may indicate better absorptive capacities of domestic firms, suggesting that Czech SMEs could have a more favourable environment for learning and knowledge exchange with their foreign counterparts.
In metropolitan areas, such as Bratislava in Slovakia, productivity gaps tend to be smaller, which could imply that regions with a higher concentration of economic activity and a denser business environment may provide better conditions for knowledge spillovers.
Note: Our study utilises 'North' as a proxy for Usti nad Labem and 'South' for South Moravia due to data limitations, aligning with the territorial divisions in the World Bank's Enterprise Surveys. This approach mirrors the aggregations used in peer countries like Latvia, Lithuania, and Slovakia, allowing for a meaningful comparative analysis beyond absolute figures to assess relative performance
Source: World Bank (2022[8]) https://www.enterprisesurveys.org/en/enterprisesurveys
Prague and South Moravia lead in competitiveness in the country, while Ústí nad Labem shows growing potential to attract investment beyond the traditional industries
The regional socio-economic competitiveness is still lower for Czech regions. According to several multi-country comparative competitiveness analysis; i) World Economic Forum places Czechia with 70.8 points out of 100 on the 2019 Global Competitiveness Report ranking 32 in 2019 (World Economic Forum, 2019[9]), ii) a more recent report shows that the country has achieved its best result, as it ranks as 26th place out of 63 economies in 2023, ahead of countries such as Hungary (39th place), Slovakia (49th) and Poland (50th) (IMD, 2023[10]), and iii) at the European Level, the European Commission produces the EU Regional Competitiveness Index 2.0 (RCI) in which the granularity of the analysis descends to the regional level for which the analysis of this chapter is more relevant (European Commission, 2023[7]) (see Figure 6.9). All in all, a region's appeal is multifaceted, involving economic stability, infrastructure, healthcare, education, and innovation capacity. A conducive business environment, paired with a robust education system and efficient healthcare, can significantly enhance a region's competitiveness and draw both foreign and domestic investors. The results of the RCI showcases that:
Prague, as the capital, already exhibits strong regional competitiveness according to its score in the index EU Regional Competitiveness Index 2.0 (RCI), signalling a well-developed, diverse economy. Its advanced infrastructure and high scores in education and innovation suggest a solid foundation upon which to further build and attract knowledge-intensive industries and global talent.
Ústí nad Labem nad Labem's RCI score of 86.6 suggests areas for development, particularly in health (75.4) and basic education (78.0), which are essential for a skilled workforce and a healthy population. Despite these challenges, the region's strong performance in the technological readiness pillar (78.7) indicates a potential for growth in tech-based industries. However, the lower scores in the innovation pillar (48.6) highlight the need for targeted initiatives to foster creativity and new business development that might affect the economic diversification efforts in the region.
South Moravian's RCI score of 98.8 reflects a more competitive position. With high scores in higher education and lifelong learning (98.3) and labour market efficiency (106.4), the region has solid foundations to attract investment and talent. Nonetheless, there's room for improvement in the innovation sub-index (59.4), suggesting that although South Moravian has educational and labour strengths, enhancing its innovation capacity could further boost its attractiveness.
The regional socio-economic competitiveness of Czech regions, as highlighted by the EU Regional Competitiveness Index 2.0 (RCI), underscores the multifaceted nature of competitiveness, encompassing economic stability, infrastructure, healthcare, education, and innovation. This index serves as a crucial analytical tool, providing granular insights into each region's specific strengths and weaknesses, thereby guiding targeted policy interventions. For instance, in regions like Ústí nad Labem where the RCI identifies gaps in health and education, tailored investments could significantly enhance competitiveness. Similarly, in South Moravian, fostering innovation and supporting tech-sector growth could leverage existing educational and labour market strengths. Thus, regional policies, informed by the nuanced data of the RCI, are vital for addressing unique regional challenges and opportunities, enhancing the overall socio-economic competitiveness of the Czech’s regions.
Note: The current edition of the RCI, dubbed RCI 2.0, upholds the structure of its predecessors but introduces an updated methodological framework to enable a more seamless comparison over time. To underscore this methodological shift, past scores from 2016 and 2019 have been recalculated using the new framework, producing the RCI 2.0, 2016 edition, and RCI 2.0, 2019 edition. These recalculated scores are available for download on the designated website. Importantly, these recalculated rankings do not supersede the original RCI rankings from 2016 and 2019, which were generated using the previous methodology. Thus, the RCI 2.0 scores for 2019 and 2016 are provided without their accompanying rankings.
Sources: European Commission (2023[7]) https://ec.europa.eu/regional_policy/assets/regional-competitiveness/index.html#/
The entrepreurial characteristics of the regions outline the potential for linkages with FDI.
In Czech regions, the landscape of businesses is marked by a proportion of small firms, with micro-enterprises—those employing fewer than 10 people—making up 80% of the business sector in both Ústí nad Labem and South Moravia. This figure is slightly above the national average of 79%, which, when compared with other EU countries like Portugal (95.3%) and Slovakia (97%) (OECD, 2022[11]) (OECD, 2022[12]), highlights a comparatively lower share of micro firms in Czechia. This suggests a notable presence of small firms (employing 10 to 49 people) in the Czech business ecosystem, a factor potentially advantageous for FDI-SME spillovers due to these firms' greater access to finance and talent.
Specifically, Ústí nad Labem and South Moravia exhibit divergent trends in entrepreneurial activity. South Moravia shows a vibrant entrepreneurial environment, with one new firm being established for every 96 people, outperforming the national average of one new firm per 102 people (Figure 6.10). In contrast, Ústí nad Labem demonstrates a lower rate of business creation, with one new firm for every 144 people, indicating a more challenging environment for new enterprise development compared to the national average. This difference underscores the need for targeted strategies to foster entrepreneurship and business growth, particularly in regions like Ústí nad Labem.
The analysis of business dynamics, including both the birth and closure of firms, further reflects the regions' economic health and potential for development (Table 6.2). With business birth rates improving from 2017 in both regions and closures decreasing, there's an indication of a strengthening business environment. However, the distinct difference in the rate of new business creation between Ústí nad Labem and South Moravia highlights the importance of understanding regional disparities to tailor effective development strategies. As such, the data points to a more nuanced view of the Czech entrepreneurial landscape, suggesting that while micro-enterprises dominate, the presence of slightly larger small firms may offer good ground for enhancing FDI-SME linkages.
Source: MOORE Czech Republic (2021[4]) https://lepsikraj.cz/download/srjmk21-aj-verze.pdf
6.2.2. Facilitating business services beyond financing at the regional level to support business creation
To foster local economic development, extending support services beyond just financing is essential, there exist a disparity of business activity across Czech regions). Establishing a 'one-stop shop' for financial and bureaucratic assistance greatly aids local business initiatives, offering comprehensive support and serving as an information hub about various programs. Funded through EU funds and regional banking programs, this initiative ensures a robust support system for businesses. One-stop shop recommendations can be found in literature developed by the OECD (OECD, 2020[13]), while France has advanced in a digital solution. In France, the transition to a single digital platform, formalities.companies.gouv.fr, marks a significant stride towards simplifying the administrative burden on businesses. Launching on January 1, 2023, this unified portal replaces the company formality centers (CFEs) and serves as a one-stop shop for all business-related formalities, including registration, changes, and cessation of activity. Designed to streamline the process of completing mandatory formalities for companies across a variety of sectors, the platform embodies the French government's commitment to enhancing the business environment (Republique Française, 2023[14]).
To further enhance this support, the regions should provide more tailored services to local SMEs and potential investors. This can be achieved by strengthening the presence and resources of Czech Invest, Business and Innovation Agencies (API), and institutions like the Innovation Centre of the Ústí Region. While Czech Invest's workshops and conferences are beneficial (Czech Invest, 2019[15]), there is a need for a wider and more granular implementation of these programs to benefit a diverse range of local economic initiatives. This approach aligns with research highlighting the importance of regional agencies in driving economic growth and innovation, exemplified by the South Moravian Innovation Centre (JIC) (JIC, 2023[16]). Over 20 years, JIC has supported over 1,500 companies, profoundly impacted the regional innovation ecosystem and demonstrating the effectiveness of such economic support. An example is ‘’Enterprise Ireland’’. A government agency that emphasizes the growth and international expansion of Irish businesses, with a significant focus on export capabilities. It demonstrates a compelling model for regional economic enhancement by concentrating on the growth and international outreach of businesses within Irish regions, with a particular emphasis on bolstering export capabilities. Functioning as a comprehensive support hub, it delivers an array of services including financial guidance, innovation assistance, and access to global markets specifically tailored to the needs of SMEs and startups at the regional level. This approach ensures that businesses within distinct regions are well-equipped for internationalization and broader business development. By facilitating easier access to funding and encouraging innovative practices through its programmes, 'Enterprise Ireland' exemplifies how targeted regional support can significantly contribute to the economic development and enhance the global competitiveness of regional enterprises (Enterprise Ireland, 2023[17]).
6.2.3. Regional settlement patterns define the capacity of internal markets to attract and diffuse FDI
In this broader discussion on strengthening FDI and bolstering the growth of SMEs, the concept of Functional Urban Areas (FUAs) becomes instrumental. FUAs, defined by their urban centers and commuting zones, provide a more nuanced understanding of the spatial economic activity extending beyond traditional administrative boundaries. These areas, identified through patterns of workforce commuting, reflect the intricate web of interactions between urban centers and their peripheries (Figure 6.11). FUAs refer to internal markets and commuting areas which refer to city level in most cases, yet the municipal level has an important influence in the business fabric of a region beyond the city. Due to the fragmentation of municipalities in Czechia there is an opportunity to elevate for improved governance to enhance inter-municipal cooperation generating several positive externalities as next recommendation will further elaborate on.
While Ústí's policentric configuration is an opportunity for synergies across markets, the region has yet to fully harness these economies of scale and harmonise economic activities across its three FUAs. Ústí's has three primary FUAs - Chomutov, Most, and the city of Ústí nad Labem, which suggests an opportunity to generate a more integrated and distributed economic and social ecosystem.
In the case of South Moravia, the region has benefited from the economies of scale of its singular and well performing FUA around Brno. Brno, serving as the economic and educational heart of South Moravia, acting as a catalyst for regional economic growth, significantly attracting FDI and fostering SME expansion. The concentration of resources, high-level educational institutions, and connectivity to international markets have enabled Brno to maximize economies of scale, exerting a substantial influence across the region.
Governance efforts for inter-municipal cooperation has the potential to maximise FDI and SME potential
The Czechia stands out for its notably fragmented administrative organization, featuring a considerable number of small municipalities both in terms of population and area (Figure 6.12). This fragmentation traces its roots to legislation from the early 1990s which permitted municipalities to separate, leading to an increase in their number. By 2020, the average size of a municipality in the Czechia was strikingly the smallest among the OECD countries.
The average area of a Czech municipality is 13 km², significantly smaller than the OECD average of 234 km².
A total of 6 258 municipalities, 14 regions (Kraj) and a population density of 136 inhabitants per km².
Fragmented administrative structure, with an average municipality size of only 1,710 inhabitants, the smallest in the OECD where the average is 10,250.
Note: Average calculations are based on population data as of 2019. Calculations do not comprise Indian Reserves and unorganised territories for Canada, Indian reservations areas for United States and French Guyana for France. For Türkiye, average and median municipal sizes exclude metropolitan municipalities in order to avoid double counting.
Source: OECD (2023[19]) https://doi.org/10.1787/41fd9e5c-en
The highly fragmented administrative structure in Czechia can lead to increased costs in public service provision. Particularly in smaller municipalities, especially those in remote areas, the challenges include higher costs for delivering public services, exacerbated by lower economies of scale, increased transportation costs, and additional financial requirements for service professionals. This issue is further intensified in regions with aging populations, which demand more specialised and potentially costly public services, a situation starkly highlighted during the COVID-19 pandemic. This lack of service delivery due to lack of scale of small municipalities also impact the business environment, and in particular SMEs.
Beyond cost concerns, the minute size of these municipalities introduces capacity challenges. The administrative strain on subnational governments is important, especially at the local level, where there’s not only a lack of adequate skills but also difficulties in attracting talent and offer SMEs a business environment conducive for developing economic activities. This lack of capacity hinders the efficient provision of public services, but more pertinently, poses significant obstacles in creating an environment conducive for FDI and for their linkages with local SMEs. Investors, both domestic and international, prefer administrative ease, clear policy communication, and efficient public services, as do SMEs – aspects that may be compromised in the face of extreme fragmentation.
Regions experiencing high municipal fragmentation, cannot fully benefit from economies of scale and scope and more coordinated efforts to attract Foreign Direct Investment (FDI) and improve public service provision through inter-municipal cooperation. The prevalent hyper-fragmentation in such areas leads to direct economic, administrative, and social consequences, particularly evident in smaller, remote municipalities. These municipalities often struggle with the increased costs of public service provision due to lower economies of scale, higher transportation costs, and additional financial incentives needed for service professionals. Moreover, these challenges are often compounded in areas with aging populations, where the demand for specialized and potentially expensive public services is heightened, as vividly demonstrated during crises like the COVID-19 pandemic.
Beyond cost concerns, smaller municipalities often face larger capacity challenges. The administrative strain on subnational governments is immense, especially at the local level, due to their lack of skills and human capital. The lower capacity hinders the efficient provision of services and poses significant obstacles in creating an environment conducive for FDI. Investors, both domestic and international, prefer administrative ease, clear policy communication, and efficient public services – aspects that may be compromised in the face of extreme fragmentation.
Municipal mergers and strengthened inter-municipal cooperation.
In addressing the challenges of municipal fragmentation, two distinct strategies emerge: municipal mergers and strengthened inter-municipal cooperation. While mergers represent a more integrated approach to regional planning and service provision, their implementation can be politically challenging and is often met with resistance from local stakeholders. Therefore, in many cases, the most feasible alternative is to enhance inter-municipal cooperation, which offers a more flexible and politically acceptable means to achieve similar objectives.
Mergers entail the consolidation of existing municipalities into larger entities, aiming to harness economies of scale and improve the efficiency of public service delivery. This approach can potentially streamline administrative processes and create a more attractive environment for FDI by offering a unified administrative structure and policy framework. However, the complexity of political landscapes and the desire for local autonomy frequently obstruct the merger process.
Strengthening inter-municipal cooperation, on the other hand, provides a practical pathway to coordinate efforts across fragmented municipalities without altering their formal independence. It allows for shared service delivery and joint strategic planning, which can reduce costs and improve investment appeal while maintaining the identity and autonomy of individual municipalities. This form of collaboration is particularly relevant where political, historical, or cultural factors make full mergers untenable.
Top-down approach. This approach involves initiatives and policies being driven by higher levels of government, such as national or regional authorities. In this framework, the central government takes the lead in identifying the challenges of municipal fragmentation and devises strategies or policies to encourage cooperation among municipalities. This could involve the creation of legislative frameworks, provision of financial incentives, or development of specific programs aimed at facilitating collaboration in public service provision and strategic development. Some examples are:
Slovenia introduced a financial incentive in 2005 to encourage inter-municipal co-operation by reimbursing 50% of staff costs of joint management bodies – leading to a notable rise in the number of such entities (OECD, 2018[20]). The result has been an increase in municipal participation in such entities from nine joint management bodies in 2005 to 42, exploding to 177 municipalities today. The most frequently performed tasks are inspection (waste management, roads, space, etc.), municipal warden service,) physical planning and internal audit.
The region of Galicia in Spain has many small municipalities with limited institutional capacity and spread out geographically, which increases the cost of providing public services. The regional government has taken steps to encourage economies of scale. First, it has improved the flexibility of and provided financial incentives for voluntary (“soft”) inter-municipal co-ordination arrangements. Investment projects that involve several municipalities get priority for regional funds. “Soft” intermunicipal agreements tend to be popular in the water sector. Local co-operation is also being encouraged in the urban mobility plan for public transport, involving the seven largest cities in the region. The regional government also imposed a “hard” co-ordination arrangement. Specifically, it created the Metropolitan Area of Vigo, an association of 14 municipalities. Although the metropolitan area was defined by the regional government, it was based on a history of “light co-operation” among 12 municipalities (out of 14) (OECD, 2019[21]).
France has more than 36 000 communes, the basic unit of local governance. Although many are too small to be efficient, France has long resisted mergers. Instead, the central government has encouraged municipal co-operation. There are about 2 145 inter-municipal structures with own-source tax revenues aimed at facilitating horizontal co-operation. 99.8% of communes are involved in them. Each grouping of communes constitutes a “public establishment for inter-municipal cooperation” (EPCI). The EPCIs assume limited, specialised, and exclusive powers transferred to them by member communes. They are governed by delegates of municipal councils and must be approved by the State to exist legally. To encourage municipalities to form an EPCI, the central government provides a basic grant plus an “intermunicipal grant” to preclude competition on tax rates among participating municipalities. EPCIs draw on budgetary contributions from member communes and/or their own tax revenues (OECD, 2019[21])..
Through financial incentives, Poland was recommended to encourage joint planning and the delivery of joint services, which is particularly relevant to face common local challenges, such as the ageing population) and attenuate increasing costs of services. Many OECD countries have recently passed regulations to encourage inter-municipal co-operation on a voluntary basis. For instance, France offers special grants and a special tax regime in some cases and other countries, like Estonia and Norway, provide additional funds for joint public investments (OECD, 2018[20]).
Inspired by these examples, Czechia can envisage assigning a share of existing funds for local development and investments exclusively to joint projects. Alternatively, Czechia can further develop the territorial contracts for projects between the national or regional self-governments and municipal unions or associations. The regional level can also play an active role in encouraging co-operation through financial incentives since the planning phase (OECD, 2018[20]).
Peer learning and the creation of capacities are also crucial processes to further encourage municipalities to co-ordinate planning, investments, and service delivery. Some OECD countries have opted to encourage collaboration by providing consulting and technical assistance, promoting information sharing or providing specific guidelines on how to manage such collaboration. Arrangements to solve capacity issues have been popular in particular among the Nordic countries (Denmark, Finland, Norway and Sweden) but they have also been practiced in Chile, France, Italy and Spain for example (OECD, 2017[22]), (OECD, 2019[23]).
Bottom-up approach. This approach focuses on initiatives and decision-making originating at the local or municipal level. In this framework, individual municipalities themselves identify the need for collaboration and take the lead in forming partnerships or associations for shared investments and service provision. This approach is often driven by Voluntary Associations of Municipalities (VAMs), where municipalities come together voluntarily to collaborate on various public services and strategic development projects. This trend towards cooperation is increasingly seen as a grassroots solution to counterbalance the challenges of municipal fragmentation.
The design of cooperative projects stems directly from the local entities themselves, reflecting their specific needs and contexts. While this approach can lead to more tailored and locally relevant solutions, it often faces challenges like over-reliance on temporary funding sources and the absence of overarching legislative guidance or support from higher levels of government. Despite these challenges, a bottom-up approach can foster a sense of ownership and empowerment among local entities, potentially leading to more sustainable and effective collaborative efforts.
In Chile, The Association of Municipalities objective is to represent all Chilean municipalities, defend their interests and promote bottom-up policies. Its mission is “To be a democratic institution, representative and leader of all Chilean municipalities fulfilling a role of promotion of innovation and excellence, through education, training as well as technical and political support with the aim to deepen the decentralisation of the state”. The association also acts as an expertise centre and think tank. It has already published a number of studies, surveys and publications that cover different topics such as municipal health, public education, citizen security, child protection, e-commerce, staff management, electoral participation, migration, transport and good municipal practices, among others. In 2017, the Association of municipalities of Chile comprises 61 municipality members (ACHM, 2023[24]).
In Germany, "Zweckverbände" (Purpose Associations) are formed by municipalities to manage specific tasks like public transport systems, waste management, or regional planning. There are 4 606 municipal associations (Gemeindeverband) in 2021, which have different forms and status (e.g., joint municipalities, association of communities and syndicates). Syndicates (Zweckverbände) are special-purpose associations created to deliver standard local services, such as waste management, water and wastewater or transport. They are widespread throughout Germany and are one of the most common and oldest forms of inter-municipal co-operation in the country (SNGWOFI, 2023[25]). These associations are a common tool for inter-municipal cooperation in various German states and one of the key aspects of the initiative is that it is formed through the collaboration and agreement of the participating municipalities, rather than being imposed by a higher level of government.
Poland is the sixth largest country in the European Union in land area (312,679 km2) and fifth largest by population (38.4 million). Poland’s population density (123 people/km2) is less than that of other large European countries such as Germany or Italy, with a relatively low geographic concentration across regions compared to other EU and OECD economies.
At the regional level it is composed of 16 voivodeships (regional self-government units in regions). At local level it consists of two types of local self-government units (LSGUs):
380 counties (LSGUs at the county level in all of the 16 voivodeships and, including 314 counties and 66 cities with county status);
477 municipalities (LSGUs at the municipal level in each of the 16 voivodeships).1 The lowest administrative level, the municipality, is divided into three categories: urban, rural and mixed (urban-rural). Since 2020, rural municipalities account for most of the municipalities (62%), above the number of mixed (26%) and urban (12%) municipalities. According to the official Polish categorisation, rural areas comprise rural municipalities and the rural parts of mixed municipalities, while urban areas comprise urban municipalities and the urban part of mixed municipalities.
Areas of improvement in Poland’s municipal classification as identified in the OECD Rural Policy Reviews: The TERYT classification of municipalities could improve certain aspects:
1. The typology relies on qualitative criteria. Urban status is conferred to municipalities through political (supported by residents/self-government) and administrative procedures, regardless of quantitative or objective characteristics of the municipalities. The process also involves historical reasons when assigning urban status (cities with county status or the traditional administrative regional centres).
2. There is no differentiation among different types of rural. Rural municipalities with significant linkages with an urban centre are not distinguished from rural municipalities that are remotely located.
3. The “mixed municipality” classification, i.e., urban-rural municipality, creates limitations and distortions for policy analysis and research. Rural parts of mixed municipalities are incorporated into the definition of rural areas. However, certain statistical variables, such as municipal revenue and expenditure as well as the allocation of EU funds, are often not available at this municipality level. Such situation can bias some analyses. For example, the average accessibility of rural dwellers to public services is overestimated because services are often located in the urban part of urban-rural municipalities.
Alternative OECD territorial classification for municipalities in Poland
The alternative classification follows a three-step process:
4. Identifying municipalities inside and outside FUAs. The methodology identifies municipalities inside and outside FUAs (city and commuting zone).
5. Measuring accessibility for municipalities outside FUAs. The methodology measures the level of accessibility to population settlements by following three steps:
Population within a 90-minute drive around each municipality: it calculates all the population that can be reached from the centroid of each municipality outside FUAs within a 90-minute drive by car in every direction.
Threshold of population reached: It then calculates the bottom 10th percentile of the distribution of the population that all Polish municipalities can reach within a 90-minute drive.
Classify low accessibility and high accessibility municipalities: A municipality is classified with low accessibility if the level of population reached within a 90-minute drive is below that 10th percentile. Above the threshold, the municipality is classified with high accessibility.
The previous two steps identify three types of municipalities:
6. Inside FUAs
7. Outside FUAS, with high accessibility to FUAs.
8. Outside FUAS, with low accessibility to FUAs.
To account for unique characteristics of municipalities, the methodology differentiates those municipalities inside FUAs and outside FUAs by size of population. The municipalities outside FUAs with low accessibility are not differentiated by size of population given their relatively homogenous distribution in size. Therefore, the final step to classify municipalities by size of population is as follows:
Dividing municipalities with high accessibility outside FUAs and municipalities inside FUAs by population size. The methodology identifies municipalities outside FUAs with high accessibility and municipalities inside FUAs that are relatively large and small in terms of population. To define the population threshold, the methodology follows Poland’s population distribution of all municipalities and Poland’s official threshold to differentiate among small and medium/large cities (20 000 inhabitants). Therefore, municipalities with a population of more than 20 000 inhabitants are classified as big and those with a population of fewer than 20 000 inhabitants as small. The previous three steps identify five subtypes of municipalities:
1. Big municipalities inside FUAs
2. Small municipalities inside FUAs
3. Big municipalities outside FUAS, with high accessibility to FUAs.
4. Small municipalities outside FUAS, with high accessibility to FUAs
5. Municipalities outside FUAS, with low accessibility to FUAs.
Source: OECD (2018[20]) https://doi.org/10.1787/9789264289925-en
Enhancing city cooperation in Ustí nad Labem to facilitate FDI-SMEs linkages and foster regional development
Ústí nad Labem, the region exhibits a multifaceted administrative structure characterised by several mid-sized cities. This multicentric configuration is made up of populations that are not below 45,000 but none exceeding 100,000 (CZSO, 2020[3]) (see Figure 6.13). This urban settlement distribution possess challenges in attaining economies of scale and in reaching a single vision for development and for FDI attraction. Currently the region lacks a common strategy for FDI attraction and diffusion that integrates the vision of local stakeholders and the supportive role of the different cities. Greater cooperation across cities can be promoted through single forums or policy incentives. The establishment of a forum would serve as a centralised platform to gather key stakeholders and foster a cohesive strategy that leverages the strengths of each city, facilitating collaborative initiatives and pooling resources across various policy areas.
The forum could support the regions in fostering effective communication and the sharing of best practices and innovative solutions. It could include including representatives from regional offices of CzechInvest, the Transformation Centre of the Ústí Region, the University of Jan Evangelista in Ústí nad Labem (UJEP), Regional Council Bodies, and municipalities with extended competence (Obec s rozšířenou působností - ORP). The regional office of Ústí (Krajský úřad Ústeckého kraje) is positioned to play a pivotal role in this initiative, providing a venue for meetings in the capital city of Ústí nad Labem.
This collaborative type of platform can help transform the regional landscape into a competitive and dynamic economic area that is attractive to broader investment and development opportunities. As an example, the Randstad Metropo approach can be of guidance for Ústí nad Labem. The Randstad Metropo a polycentric conurbation in the Netherlands, encompassing major cities such as Amsterdam, Rotterdam, The Hague, and Utrecht. These cities are part of the Randstad region and are connected by the "Randstad Authority," a collaborative platform for municipalities and provinces to discuss and align their strategies on transportation, economic development, housing, and environment. This joint effort aims to strengthen the region's global competitiveness while maintaining local autonomy and addressing regional challenges collectively (Lambregts, Janssen-Jansen and Haran, 2008[26]).
Source: Map extracted from TOP09 (2020[27]) https://www.top09.cz/regiony/ustecky-kraj/krajska-organizace/reseni-pro-kraj-dualni-vzdelavani-je-vyhra-pro-vsechny-27522.html and population from CZSO (2020[3]). https://www.czso.cz/csu/czso/home .
Improving the regional branding to help increase qualified labour supply and appeal towards investors
The regional branding has clear room for improvement. This is particularly true for Usti nad Labem, owing to its traditional industrial base and migration legacy, as observed during the OECD’s on-site visit in April 2023. For instance, enhancing the region’s branding could not only bolster interregional and international inward migration of qualified individuals and investors but also counteract and prevent brain drain. The strategy must, therefore, be implemented through a multifaceted approach and can also be developed by forum such as the proposed in the previous recommendation. Such approach should consider beyond the economic development to include efforts aimed at showcasing the region’s unique benefits. Enhancing the region’s appeal could involve marketing campaigns, showcasing success stories, and improving living standards and quality of life.
For instance, building an attractive ecosystem for investors extends beyond the availability of land; the presence of qualified professionals plays a significant role. These professionals seek environments that offer opportunities for development, competitive salaries, and high life satisfaction among other, often grounded in the assets a community can offer. Regions compete for this qualified labour, leveraging their strengths and mitigating weaknesses to enhance their appeal as destinations for talent. For increasing the supply of qualified professionals there are two side phenomena to take place: i) turn communities into appealing places worth moving to and ii) a labour mobility that is willing to relocate for better opportunities.
The regions could draw inspiration from Asturias, Spain, which, historically a mining region, successfully rebranded itself as a destination celebrated for its natural beauty and cultural richness, with campaigns such as "From Madrid to Heaven" By highlighting its stunning landscapes, rich cultural heritage, and the transformation of former mining sites into tourist attractions, Asturias has managed to shift its image from that of an industrial to a vibrant, green, and culturally appealing region. This strategic rebranding aims to boost tourism and attract new investments (FusionAsturias, 2024[28]).
Leveraging brownfields to create places of entrepreneurship
There is a large stock of brownfield locations that offer significant potential for further development in Czechia (Figure 6.14). Brownfields are remnants of industrial, agricultural, residential, military, or other activities so they typically cannot be used effectively and appropriately without undergoing a process of regeneration, which might require collaboration from public institutions. For instance, CzechInvest supports revitalising brownfield sites across the Czechia. It identifies suitable locations for development projects via the National Brownfield Database and supports their regeneration with state and EU funding (based on the National Brownfield Regeneration Strategy). Additionally, CzechInvest organises property tours, and hosts seminars and conferences on brownfield redevelopment (CzechInvest, 2024[29]).
While the role of CzechInvest is pivotal in the reutilisation of brownfields, there’s room for improvement in the capacity of local governments to lead and coordinate local economic initiatives with these land areas. This coordination should come in first instance from the Local and Municipal Government supported by the regional government and the National Agencies with regional representation. For instance, Usti nad Labem has over 4 000 brownfields which might benefit by facilitating the permitting of activity and land use to investors, together with fiscal incentives and decrease of red tape for its private exploitation.
These sites can be transformed into hubs of innovation and entrepreneurship, offering a canvas for new industries and businesses (e.g., the Tonaso and Severní Předlice Industrial Zones) (Usti, 2023[30]). Redeveloping these areas could attract private investment and serve as a way ahead to the region's commitment to environmental and economic regeneration. The country could be inspired by the EPA’s Brownfields Program of the United States. This program has provided grants and technical assistance to assess, clean up, and reutilize contaminated properties. Successful projects have led to job creation and have been instrumental in the economic redevelopment of distressed communities (EPA, 2023[31]).
6.2.4. Leveraging geographical proximity to Central Europe to attract investment
The advantageous positioning is pivotal for the South Moravian and Ústí regions to strengthen their roles as gateways for economic growth and innovation. Their proximity to affluent markets can attract foreign investments and enhance market accessibility for SMEs and FDI. Table 6.3 illustrates the strategic positions of these regions due to its proximity to European cities. For example, Brno is only 130 km from both Bratislava and Vienna, and Ústí nad Labem is just 70 km from Dresden, highlighting their proximity to major European capitals and enhancing their roles as crucial connectors in Central Europe.
South Moravian and Ústí regions are well-placed to leverage their geographic proximity to neighboring countries to build a strong, export-oriented economy that benefits not only large corporations but also the vibrant SMEs that form the backbone of their economic landscape. There are three corridors running through the Czech network (EC, 2023[33]):
Baltic-Adriatic, in the eastern part of the country between the Polish border and the Austrian border via Brno.
Orient/East-Med, from the German border to the Austrian and Slovakian borders, via Prague and Brno.
Rhine-Danube, between the German border and the Slovakian border in Ostava.
Source: Estimations from Klímová and Žítek (2017[6]) https://is.muni.cz/do/econ/soubory/katedry/kres/rinstin/CERS2017_KlimovaZitek.pdf and Google Maps (2023[34]) https://www.google.com/maps
This strategic geographic location that can be leveraged to strengthen their roles as gateways for economic growth and innovation. Their proximity to markets presents a unique opportunity to attract foreign investment and improve market accessibility for Small and Medium-sized Enterprises (SMEs). This geographical advantage positions both regions as ideal hubs for businesses seeking to tap into the larger European market.
By effectively showcasing their strategic locations, South Moravian and Ústí can attract businesses aiming to leverage the proximity to affluent European markets. This approach not only appeals to foreign investors but also benefits SMEs by facilitating easier access to cross-border supply chains, expanding customer bases, and fostering collaborative opportunities with foreign partners. The outcome is a potential increase in exports and business growth for local enterprises, capitalizing on the regions' unique positioning. A good example can be The Lombardy region in Italy effectively showcases its strategic location as a gateway to European markets. Positioned in the heart of Europe, Lombardy has attracted a multitude of foreign investors, especially in sectors like fashion, technology, and manufacturing, by emphasizing its connectivity to major European cities and markets (Regione Lombardia, 2020[35]).
Leveraging cross-border educational and vocational training programs to prepare the workforce with the skills required by international businesses, beyond just physical market access for goods and services. Collaborations with educational institutions in neighbouring countries will be instrumental in developing a workforce that is both multilingual and culturally adept. Such a skilled workforce will make the regions more attractive to multinational companies, further enhancing economic activity and addressing regional employment challenges. For cross border programs, a good example takes place in the Greater Region, encompassing parts of Belgium, France, Germany, and Luxembourg, utilizes cross-border educational programs to create a multilingual and skilled workforce. Initiatives like the University of the Greater Region consortium enable students and professionals to gain diverse skills and language proficiencies, making the region attractive to multinational companies (European Commission, 2023[36]).
6.2.5. Closing distances with greater digital infrastructure
Expanding high-speed internet access across Czechia is essential for levelling the playing field for all regions, not just for connectivity but for enhancing the productivity of domestic firms in Usti nad Labem and foreign firms in South Moravia on the business side, and public administrations on the public one. With the current fiber optic penetration at only 7.6%, significantly below the OECD average (13.2%), there is a clear need for improvement. Increasing internet coverage aims to bridge the geographical divide, enabling companies throughout Czechia to leverage digital tools essential for modern business operations and compete on a global scale. This initiative is not only crucial for boosting firm productivity but also for enhancing the efficiency of public administration. To complement this infrastructure expansion, implementing digital literacy programs is imperative. Such programs will ensure that citizens, especially SMEs, are well-equipped to engage in the digital economy through practices like e-commerce and the integration of digital tools into their business models.
Digital Infrastructure
The initiative to broaden the deployment of fiber optic networks aims to universally provide high-speed internet access. Given the current fiber optic penetration of 7.6% in Czechia, lagging the OECD average of 13.16%, there's a marked potential for growth (OECD, 2023[1]). Expanding this infrastructure is vital for enabling firms to access digital business tools essential for competitiveness in today's economy. This strategic expansion, aimed at reaching and surpassing OECD levels, will facilitate access to e-commerce, cloud computing, and big data analytics, fostering productivity gains and competitive edges for Czech firms.
Fostering Digital Literacy
Parallel to infrastructure enhancements, comprehensive digital literacy programmes are crucial for ensuring that citizens and SMEs are well-equipped to navigate the digital landscape. These initiatives will prepare the workforce and businesses, particularly SMEs, to effectively utilise digital tools, thereby unlocking new opportunities in the digital transformation era. Highlighting the uniformity of internet utilisation across Czech regions, the strategy promotes inclusivity in digital participation, contrasting with the varied digital adoption landscapes of countries like Poland and Portugal (Figure 6.15).
Digitalising Public Administration
The modernisation of public services through digitalisation aims to simplify administrative procedures and foster inter-municipal cooperation, enhancing process efficiency for SMEs and attracting FDI. This approach is especially pertinent at the municipal level, where challenges posed by limited human capital and bureaucratic red tape can hinder FDI attraction. Drawing inspiration from Estonia’s e-Government initiatives, Czechia’s strategy involves a comprehensive digitalisation of government services to improve public sector efficiency. As an example, in Estonia, there has been putted in place e-Government initiatives for public sector efficiency, involving digitalization of government services and inter-agency cooperation. The range of activities cover several fields such as: e-identity, Cyber security, Interoperability services, e-Health, e-Governance, Ease of doing Business among others. (e-Estonia, 2023[37]).
Supporting SMEs in the Digital Transition
Access to advanced digital infrastructure and the adoption of digital tools are imperative for SMEs to streamline operations and expand market reach. Emphasising digital literacy and the integration of digital technologies, such as e-commerce, is crucial for maintaining SME agility in the fast-evolving business environment (OECD, 2023[38]). The example of Singapore’s "SMEs Go Digital programme" illustrates a successful national strategy to support SME digitalisation, providing a model for Czechia’s efforts in this direction. In Singapore there is a “SMEs Go Digital programme”, which is a comprehensive national strategy aiming to support small and medium-sized enterprises in embracing digital technologies. This campaign includes the provision of high-speed internet infrastructure even in rural areas, training programs for digital skills, and subsidies for SMEs to adopt digital tools for e-commerce (IMDA, 2023[39]).
Notes: Regions are defined at NUTS II level (see Box 6.1 for more information on current data limitations and the territorial classifications used in this report).
Source: Eurostat (2023[40]) https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Digital_society_statistics_at_regional_level; Regional statistics, Regional digital economy, and society (accessed 31 March 2023)
6.2.6. Higher levels of tertiary education and investments in R&D help increase the competitiveness of the regions in Czechia
The educational and R&D landscape of Czechia reveals varied regional differences and emerging challenges. Data reveals that the percentage of people with a university degree in different regions, such as Ústí nad Labem and South Moravia, exhibits significant variation, with figures in 2018 indicating less than 13.0% in Ústí and over 19% in South Moravia and Prague (Figure 6.16). This educational divide correlates with regional differences in research and development (R&D) investment and the share of population with tertiary education in 2022. For instance, the Southeast-South Moravia region demonstrates a notable 27.2% share of population with tertiary education, coupled with a substantial R&D investment of 24,512 million CZK.
In contrast, the Northwest-Ústí region has a lower 15.6% share and significantly lower R&D investment of 1,809 million CZK. (Figure 6.17). It underscores the improve tertiary education incentives, especially in a context of under-structural unemployment rates. Addressing these educational and economic disparities is crucial not only for fostering regional development but also for preventing the outflow of human capital in the short term. Short-term solutions could focus on quickly implementable programs aimed at skills development, tailored to the existing job market, and partnerships with local businesses to create immediate employment opportunities.
Source: Image from MOORE Czech Republic (2021[4]) https://lepsikraj.cz/download/srjmk21-aj-verze.pdf with data extracted from CZSO (2020[3]). https://www.czso.cz/csu/czso/home
Note: R&D in millions of CZK. Education corresponds to the share of population with tertiary education over the 15-64 total population of the region.
Source: Data for R&D extracted from CZSO (2020[3]). https://www.czso.cz/csu/czso/home and data for education extracted from OECD (2023[5]) https://stats.oecd.org/Index.aspx
6.2.7. Strengthening university-industry collaboration to enhancing regional innovation capacities for attraction and diffusion of FDI
Czech regions display a diverse spectrum of innovation and collaboration between the private and public sectors. Utilising patents as an indicator of innovation, the Central Bohemian region, which includes Prague, stands out with 23.9 patent applications per million population, signifying a robust ecosystem conducive to innovation. Conversely, the Northwest region, encompassing Ústí, shows a lower rate of 13.7%, pointing to possible untapped innovation potential within the area. The Southeast region, including South Moravia, with a patent application rate of 16.7%, demonstrates a moderate level of patent activity. This reflects its balanced mix of traditional and technology-driven industries, indicating a healthy, albeit moderate, innovation landscape (Figure 6.18).
The collaborative efforts in patent applications are noteworthy, especially the significant proportion of patents co-patented with foreign entities in both Ústí and South Moravia, at 70% and 73.3% respectively. This not only highlights active engagement in the international innovation arena but also underscores the opportunity to strengthen innovation collaborations regionally. In South Moravia, 6.4% of patent applications result from university-industry collaboration, a rate that equals that of Prague and signifies robust academia-industry links crucial for fostering innovation. Ústí, however, with a 4% rate, showcases the potential for enhancing university-private sector partnerships.
These observations reveal a clear directive for Czech regions to develop a more vigorous regional innovation system. There is a pressing need to encourage both local and international partnerships, which could significantly improve SMEs' ability to absorb new knowledge and technologies. The Central Bohemian region, presenting the highest rate of patent applications in Czechia, sets a benchmark for innovation. In contrast, Ústí nad Labem and South Moravia present ripe opportunities for growth in their innovation capabilities. A substantial portion of patents in the Czechia involve international collaboration, with South Moravia exhibiting an impressive level of engagement with foreign entities, suggesting a global orientation in its innovation efforts.
Enhance the regional innovation ecosystem by linking the academic excellence of local universities with the dynamic business environment. Universities and research institutions play an important role in both high-tech innovation and in local spill-over effects that involve knowledge transfer within territories and spin-offs firms (OECD, 2021). To catalyse the region's innovative capacity and address future labour market demands, the regions should fortify the nexus between educational institutions and the business sector.
Central to this initiative is South Moravian Innovation Centre (JIC). Situated in proximity to local universities, the park is ideally positioned to lead as a conduit for skills exchange and collaboration. Structured partnerships between companies and neighbouring universities could yield a robust talent pipeline, where academic curricula are fine-tuned to meet the evolving needs of industry. By facilitating joint ventures, offering internships, and fostering apprenticeship programs, these collaborations would provide students with real-world experience and foster a workforce adept at navigating the demands of a dynamic economic landscape. An example that could inspire Czechia to foster collaboration between public and private is the "Silicon Fen" in Cambridge, UK. The program displays a great set of academic-industry partnerships, where the University of Cambridge's cutting-edge research fuels a thriving ecosystem of tech enterprises and startups, significantly contributing to regional economic dynamism (University of Cambridge, 2023[41]). Also, the European Commision has developed the Digital Innovation Hubs which are are one-stop shops supporting companies and public sector organisations to respond to digital challenges and become more competitive improving business/production processes, products, or services using digital technologies. EDIHs combine the benefits of a regional presence with the opportunities available to a pan-European network. This regional presence leaves them well-placed to provide the services local companies need, through the local language and innovation ecosystem. The European coverage of the network facilitates the exchange of best practices across hubs in different countries as well as the provision of specialised services across regions when the required skills are not locally available (European Commission, 2023[42]).
Note: Regions include countries with data availability across Czechia and Slovak Republic.
Source: % joint applications co-patented with foreign regions Data for 2015 OECD Regional Innovation Database % joint applications co-patented within the country Data for 2015 OECD Regional Innovation Database % joint applications co-patented within the region Data for 2015 OECD Regional Innovation Database % university-industry applications Share of patent applications where at least one applicant belongs to the HEIs sector and one to the business sector. Data for 2015 PATSTAT # applicants Data for 2015 PATSTAT % SME collaborating in innovation Data for 2019 Regional Innovation Scoreboard % public-private copublications (per million population) Data for 2019 Regional Innovation Scoreboard
The ability for rural people and businesses to successfully adopt innovations depends on their connectivity to other regions. Of particular importance is proximity to access knowledge networks in, and knowledge spillovers from, urban areas. However, there is some variation in the role of linkages and networks within OECD countries. In the case of Europe, differences in territorial scale do not appear to play quite the same productivity-enhancing role that they do in the US. While size is important in both the context of innovation for both Europe and the United States, European cities tend to rely relatively more on what is often termed as ‘borrowed size’ (Garcilazo and Oliveira Martins, 2020[43]), in which urban-rural linkages play a crucial productivity-enhancing role. This does not appear to have a parallel in the US. Rather than focusing simply on urban scale, opportunities for enhancing rural and small-town innovation are more widespread when spatial networks are more developed than where growth is overwhelmingly urban dominated. For remote rural areas, dependence on digital networks and supply chain linkages (where possible through infrastructure), are increasingly important.
Innovation adoption and diffusion through rural-urban linkages. The depth and reach of linkages between rural and urban areas is an important factor for facilitating the transfer of knowledge between places. These linkages can be facilitated through institutional partnerships. For example, national, regional and local government authorities can create opportunities to deepen networks and bring in new players through networking events within functional areas, facilitating access to national programs for sub-national stakeholders and entrepreneurs, or building networks of entrepreneurs to learn from challenges and opportunities from different regions. Other forms of deepening linkages include facilitating access to research partners such as universities, the private sector and civil society organisations.
Innovation adoption and diffusion occurs in networks, but not much is known about the role of rural-urban networks for innovation adoption and diffusion. Fast-growing economies tend to have a more rapid diffusion of relatively new innovations and technologies (Bassanini, 2002[44]). Yet little is understood about barriers to diffusion of innovation within countries in places that are growing at different speeds. In addition, entrepreneurs in rural areas (whether in federal or unitary governments) often face challenges in physical (and digital) access to services and resources, such as skilled labour, that facilitate innovation adoption and diffusion. This includes factors such as supply chain networks, (specialised) labour markets, international finance networks, and regional or international markets that are more difficult to access for rural entrepreneurs than urban entrepreneurs.
Source: Networks and rural-urban linkages for rural innovation Marshalian, Chan and Bournisien de Valmont (2023[45]) https://doi.org/ 10.1787/4928f26b-en
References
[24] ACHM (2023), Asociación Chilena de Municipalidades, https://www.achm.cl/ (accessed on 7 August 2023).
[44] Bassanini, A. (2002), “Growth, Technological Change, and ICT Diffusion: Recent Evidence from OECD Countries”, Oxford Review of Economic Policy, Vol. 18/3, pp. 324-344, https://doi.org/10.1093/oxrep/18.3.324.
[15] Czech Invest (2019), Workshop for foreigners living and working in the Pardubice Region, https://www.czechinvest.org/en/Homepage/Events/Workshop-for-foreigners-living-and-working-in-the-Pardubice-Region (accessed on 20 April 2023).
[29] CzechInvest (2024), , https://www.czechinvest.org/en/For-Investors/Real-estate-offer/Brownfields (accessed on 10 January 2024).
[46] CZSO (2023), Research and Development R&D, https://www.czso.cz/csu/czso/statistika_vyzkumu_a_vyvoje (accessed on 20 September 2023).
[3] CZSO (2020), Czech Statistical Office, https://www.czso.cz/csu/czso/home (accessed on 2023).
[33] EC (2023), Mobility and Transport, https://transport.ec.europa.eu/transport-modes/rail/ertms/who-involved-ertms-deployment/countries/czechia_en (accessed on 21 October 2023).
[37] e-Estonia (2023), e-Estonia, https://e-estonia.com/ (accessed on 17 July 2023).
[17] Enterprise Ireland (2023), Enterprise Ireland, https://www.enterprise-ireland.com/en/ (accessed on 20 August 2023).
[31] EPA (2023), Brownfields, https://www.epa.gov/brownfields (accessed on 30 September 2023).
[7] European Commission (2023), EU Regional Competitiveness Index 2.0 - 2022 edition, https://ec.europa.eu/regional_policy/assets/regional-competitiveness/index.html#/ (accessed on 25 July 2023).
[42] European Commission (2023), European Digital Innovation Hubs, https://digital-strategy.ec.europa.eu/en/activities/edihs.
[36] European Commission (2023), Interreg V-A - France-Belgium-Germany-Luxembourg (Grande Région/Großregion), https://ec.europa.eu/regional_policy/in-your-country/programmes/2014-2020/fr/2014tc16rfcb045_en (accessed on 3 July 2023).
[40] Eurostat (2023), Digital society statistics at regional level, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Digital_society_statistics_at_regional_level.
[28] FusionAsturias (2024), ¡Por fin! Asturias, más cerca. De Madrid al Paraíso, https://fusionasturias.com/otras-secciones/turismo/por-fin-asturias-mas-cerca-de-madrid-al-paraiso.htm (accessed on 4 January 2024).
[43] Garcilazo, J. and J. Oliveira Martins (2020), “New Trends in Regional Policy: Place-Based Component and Structural Policies”, in Handbook of Regional Science, Springer Berlin Heidelberg, Berlin, Heidelberg, https://doi.org/10.1007/978-3-642-36203-3_139-1.
[34] Google Maps (2023), Search Engine - Google maps, https://www.google.com/maps (accessed on 3 November 2023).
[10] IMD (2023), IMD World Competitiveness Ranking, https://worldcompetitiveness.imd.org/rankings/wcy (accessed on 10 July 2023).
[39] IMDA (2023), Makes going digital simple for SMEs, https://www.imda.gov.sg/how-we-can-help/smes-go-digital (accessed on 20 July 2023).
[16] JIC (2023), South Moravian Innovation Centre, https://www.jic.cz/en/about-us (accessed on 4 February 2023).
[32] Kunc, J. et al. (2018), “Industrial legacy towards brownfields: Historical and current specifics, territorial differences (Czech Republic)”, GEOGRAPHIA CASSOVIENSIS XII, https://www.researchgate.net/publication/326877683_Industrial_legacy_towards_brownfields_Historical_and_current_specifics_territorial_differences_Czech_Republic.
[26] Lambregts, B., L. Janssen-Jansen and N. Haran (2008), “Effective governance for competitive regions in Europe: the difficult case of the Randstad”, GeoJournal, Vol. 72/1-2, pp. 45-57, https://doi.org/10.1007/s10708-008-9164-6.
[45] Marshalian, M., P. Chan and M. Bournisien de Valmont (2023), “Networks and rural-urban linkages for rural innovation”, OECD Regional Development Papers, No. 53, OECD Publishing, Paris, https://doi.org/10.1787/4928f26b-en.
[6] Masaryk University, F. (ed.) (2017), Building of advanced innovation system: the story of the South Moravian Region, https://is.muni.cz/do/econ/soubory/katedry/kres/rinstin/CERS2017_KlimovaZitek.pdf (accessed on 31 October 2023).
[4] MOORE Czech Republic (2021), Development Strategy of the South Moravian Region 2021+, https://lepsikraj.cz/download/srjmk21-aj-verze.pdf (accessed on 5 November 2023).
[1] OECD (2023), OECD Broadband statistics, https://www.oecd.org/sti/broadband/broadband-statistics/ (accessed on 30 November 2023).
[19] OECD (2023), OECD Public Governance Reviews: Czech Republic: Towards a More Modern and Effective Public Administration, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/41fd9e5c-en.
[38] OECD (2023), OECD Recommendations on SME and Entrepreneurship Policy, https://www.oecd.org/cfe/smes/oecdrecommendationonsmeandentrepreneurshippolicy/.
[5] OECD (2023), Regional Statistics, https://stats.oecd.org/Index.aspx (accessed on 1 November 2023).
[18] OECD (2022), Functional urban areas, https://www.oecd.org/cfe/regionaldevelopment/Czech-Republic.pdf.
[12] OECD (2022), Strengthening FDI and SME Linkages in Portugal, OECD Publishing, Paris, https://doi.org/10.1787/d718823d-en.
[11] OECD (2022), Strengthening FDI and SME Linkages in the Slovak Republic, OECD Publishing, Paris, https://doi.org/10.1787/972046f5-en.
[13] OECD (2020), One-Stop Shops for Citizens and Business, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/b0b0924e-en.
[23] OECD (2019), Asymmetric decentralisation: Policy implications in Colombia, https://www.oecd.org/colombia/Asymmetric_decentralisation_Colombia.pdf (accessed on 20 August 2023).
[21] OECD (2019), Effective Multi-level Public Investment, https://www.oecd.org/effective-public-investment-toolkit/Full_report_Effective_Public_Investment.pdf (accessed on 2 October 2023).
[47] OECD (2019), Making Decentralisation Work: A Handbook for Policy-Makers, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/g2g9faa7-en.
[20] OECD (2018), OECD Rural Policy Reviews: Poland 2018, OECD Rural Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264289925-en.
[22] OECD (2017), Multi-level Governance Reforms: Overview of OECD Country Experiences, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264272866-en.
[35] Regione Lombardia (2020), Lombardy. In the north of Italy, in the heart of Europe, https://www.en.regione.lombardia.it/wps/portal/site/en-regione-lombardia/discover-lombardy#:~:text=Situated%20in%20the%20North%20of,linking%20eastern%20and%20western%20Europe. (accessed on 2 June 2023).
[14] Republique Française (2023), Company formalities: a one-stop shop on 1 January 2023, https://entreprendre.service-public.fr/actualites/A15691?lang=en (accessed on 10 January 2024).
[25] SNGWOFI (2023), Germany, https://www.sng-wofi.org/country-profiles/germany.html (accessed on 20 July 2023).
[27] TOP09 (2020), Řešení pro kraj: Duální vzdělávání je výhra pro všechny, https://www.top09.cz/regiony/ustecky-kraj/krajska-organizace/reseni-pro-kraj-dualni-vzdelavani-je-vyhra-pro-vsechny-27522.html (accessed on 3 March 2023).
[2] Unicre (2022), MIssion and Goals, https://www.orlenunicre.cz/en/.
[41] University of Cambridge (2023), From Silicon Fen to world-leading networks: the Cambridge eco-system, https://www.jbs.cam.ac.uk/2023/from-silicon-fen-to-world-leading-networks/ (accessed on 10 June `2023).
[30] Usti (2023), The Statutory City of Usti nad Labem: Real estate and brownfields, https://www.usti.cz/en/entrepreneur/real-estate-brownfields/ (accessed on 30 September 2023).
[8] World Bank (2022), Enterprise Surveys, https://www.enterprisesurveys.org/en/enterprisesurveys (accessed on 2 March 2023).
[9] World Economic Forum (2019), The Global Competitiveness Report, https://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf (accessed on 20 June 2023).