Czechs IT firms successful internationally
The Czech Republics unique mix of a cheap and highly skilled labor force has led to the development of a progressive and highly developed information technology industry. In many ways the Czech Republic is increasingly being considered the silicon valley of the East. In this weeks economics report we look at how these Czech IT firms are exporting their products to the highly competitive global market.
The IT sector has become a fundamental element of any progressive and diverse economy. So how do Czech IT companies fare in the international market? I spoke with Martin Tlapa who is managing director at Czech Trade - a government agency which promotes Czech exports - and I first asked him how Czech Trade aids domestic IT firms in the international market.
"We have several activities with the IT sector. We would like to promote Czech companies and build the brand name of IT in the Czech Republic as a strong name. This is the main reason why Czech Trade is involved in the promotion of these companies abroad."
What are some of the advantages that Czech IT firms have in the international market?
"These people in the Czech Republic have excellent experience and they have good technical school. They are oriented on solutions and they are very flexible compared to our competitors. So this is the main reason why Czech IT companies should be successful. Of course, the labour force in the Czech Republic is cheaper than in the EU."
What are some of the problems that Czech IT firms have faced in moving into the international market?
"I think that the main problem is the name of the Czech Republic abroad or the trade mark of the Czech Republic. Many countries in the EU still dont recognise the Czech Republic as a country where IT is a strong industry with experienced people and where people are enthusiastic about IT. Companies are mainly facing the bad brand name of the Czech Republic and we would like to improve that."
So the future of Czech IT firms looks bright?
"I think that IT is one of the sectors of the Czech economy which will be very bright and promising in our export activities. Our advantage is that we are cheaper then our competitors. Even if there is a slowdown in the demand for IT solutions abroad I think that this is a chance for Czech companies because we can offer a cheaper solution that is very high or excellent in quality. This is the main reason why I am optimistic that IT companies will be a strong part of our exports in the future."
One of the Czech success stories in the field of IT is the software company Unicorn. To date, this company has expanded into Slovakia, Croatia, and the United States. I asked Unicorn board chairman, Vladimir Kovar, why the company has been so successful and what makes them so unique in the international market place...
"Well Unicorn is a company which has developed from the bottom. We are now 500 employees and the average age is 23, I am the oldest man in the company. We are oriented to develop all of our people, we dont buy people on the market. We train them by our internal training, it is about 10% of their capacity per year. I think our company is first, very systematic. This means that we know the process how to develop and we are fully oriented to this process. Second, we make a delegation of competence. This means that all of our managers are created from our staff and they are fully responsible for all of our projects and they are still very young. It is normal, for example, a 25 year old man is responsible for a project for one million dollars. This is normal for our customers, he is fully responsible. And third we are oriented to our clients as well as our employees. This is very important because we need and prefer long-term cooperation."