Minister Lipavský: Czech economy must move from assembly to design

Jan Lipavský

Over 150 Czech economic diplomats based the world over met in Prague this week for consultations on how to further the country’s economic interests. Addressing the gathering, Foreign Minister Jan Lipavský stressed the need to transform the Czech economy from assembly to design, seek new markets outside the EU and build a solid Czech brand.

Illustrative photo: Gino Crescoli,  Pixabay,  Pixabay License

With its export-driven economy, competitiveness and export opportunities are key to Czechia’s future prosperity making economic diplomacy an important part of the foreign ministry’s agenda. Regular consultations take place at Czernín palace to further the country’s economic interests in a fast changing world. Addressing the gathering on Monday, Foreign Minister Jan Lipavskýy said it was essential for Czechia to respond to the changes taking place –be it the impact of the Green Deal on Czechia’s car industry or the need to cut the country’s dependence on Russian energy.

“Czechia’s growth and prosperity are based on foreign trade. We are among the world’s 27 biggest exporters and 28 biggest importers. The world is changing and the Czech economy must adapt to the changes taking place. Cars with combustion engines will soon end up in museums alongside steam engines and black and white television sets. In the next decade the Czech economy, now based on burning fossil fuels, must be transformed into a modern, green and competitive one.”

Jan Lipavský | Photo: Office of Czech Government

Minister Lipavský said now was the time to establish a respected Czech brand; a brand based on reliability, inventiveness and added value. For this, he said, it is essential for the Czech economy to move from assembly to design. Exports from Czechia have long been based on low value-added subcontracting. In order to increase the country’s competitiveness in the coming years it is necessary to support Czech companies exporting goods and services with high added value," Lipavský said.

He stressed that in order to secure this transition it is essential to focus on science, research and innovation.

"The success and prosperity of our country in the coming years will directly depend on our ability to join international scientific societies, to be part of modern applied research and to create products, services and software with high added value.”

Achieving this will require strengthening the position of Czech universities and boosting the potential of the workforce by improving work conditions. The foreign minister also emphasized the need to make full use of the potential of Ukrainian war refugees and to create a flexible labour migration system to attract qualified foreign workers from other states.

Illustrative photo: adam_gorka,  Pixabay,  Pixabay License

In addition to transforming the economy, Minister Lipavský stressed the need to cut the country’s dependence on Russian energy sources, strengthen Transatlantic ties and look for new export opportunities in India, Africa and the Far East.

“In September of 2022 our government approved a national strategy for economic cooperation with the Indo-Pacific region and Africa. Those regions afford excellent potential for business. India is the fifth biggest world economy and the predictions are that by 2030 it may be the 3rd biggest. It affords opportunities in science and research as well as tourism and sustainable development. In this light, we are now working on reopening our consulate in Mumbai. Africa symbolizes fast-paced growth and has a big interest in reforms and modern technology offering many business opportunities, as well as potential in the areas of natural resources and energy security, which are so important to us.”

Close to 90 percent of Czech exports now go to EU member states, just over 6 percent of exports go to Asian countries and over 3 percent of goods are shipped to North American. Neighboring Germany is the single biggest importer of Czech goods accounting for 32.7 percent of overall exports.

Czechia’s leading export articles are cars, automotive parts and accessories, phone devices including smartphones, computers including optical readers, electrical machinery, mineral fuels, plastics, articles of iron and steel and crystal glass.