世界发展银行-Czech-Republic-_-Assessment-of-the-SME-Policy-Mix_138页_4mb

Summary of the Czech Republic SME Policy Mix Assessment

Core Content

This report presents an assessment of the SME policy mix in the Czech Republic, focusing on how current policies align with the country's productivity and innovation needs. It analyzes 93 SME-related policy instruments operational from 2013 to 2017, which disbursed a total of 108.5 billion CZK (4.71 billion USD). The assessment is based on an analytical framework that evaluates the policy mix against the identified national needs.

Main Findings from the Country Needs Assessment

• Productivity and Trade Performance:

  • Labor productivity in the Czech Republic has increased but remains at 75% of Germany's level.
  • Productivity growth is primarily driven by capital deepening rather than total factor productivity (TFP).
  • TFP in the Czech Republic is about 60% of Germany's level, and productivity gaps are significant across sectors and firm sizes.
  • The Czech Republic is highly integrated into global value chains (GVCs), especially in Germany-led manufacturing sectors, but further gains in productivity from GVC participation are limited.
  • Exports are dominated by high-tech products such as electronics and automotive, with about 75% of exports going to the EU, mainly Germany and Central and Eastern Europe.
  • Productivity dispersion is wide within sectors, with top 10th percentile firms being 2.5 times more productive than bottom 10th percentile firms.

• Innovation Performance:

  • The Czech Republic has a moderate level of innovation, with SMEs contributing significantly to innovation in product and process but less in marketing and organizational aspects.
  • R&D investment is relatively low compared to GDP, and there is a lack of focus on supporting R&D-driven startups.
  • Only about 4% of SMEs use 3D printing, while 17% of large firms do so.
  • Digital technology adoption is lower among SMEs than among large firms, with only 26% of SMEs using cloud computing compared to 45% of large firms.

• Market and Institutional Factors:

  • The Czech business environment is generally favorable, but regulatory barriers to entry and exit, as well as limited access to early-stage risk financing, hinder productivity growth.
  • There is a need to improve management capabilities and support the adoption of Industry 4.0 (I4.0) technologies such as automation and big data.
  • The policy mix may contribute to resource misallocation, especially in less productive regions and sectors.

Key Characteristics of the SME Policy Mix

• The Czech Republic has a wide range of SME support instruments, but they are spread across various agencies and focus areas, leading to potential overlaps and inefficiencies.
• Instruments are categorized based on objectives, types, and beneficiaries, with some focusing on R&D, others on business framework conditions, and some on firm capabilities.
• The policy mix lacks synergy across agencies and within agencies, suggesting a need for better coordination and prioritization.
• Support for digital technologies and knowledge-intensive startups is relatively limited, despite their importance for future productivity growth.

Recommended Policy Actions

1. Improve the Effectiveness and Coherence of the SME Policy Mix:

   • Consolidate and streamline the governance framework to reduce duplication and improve policy coherence.
   • Ensure that the policy mix is aligned with the stated objectives of the SME Support Strategy 2014–2020.
   • Address gaps in supporting management capabilities and the adoption of I4.0 technologies.

2. External-to-the-Firm Recommendations:

   • Focus on enhancing the competitiveness of SMEs through improved access to early-stage risk financing.
   • Reduce regulatory barriers to business entry and exit, and improve competition policy to support more productive firms.
   • Promote integration into GVCs by supporting SMEs in adopting advanced technologies and improving export capabilities.

3. Internal-to-the-Firm Recommendations:

   • Encourage R&D investment in SMEs, particularly in high-tech and knowledge-intensive sectors.
   • Support the development of R&D-driven startups to foster innovation and new market creation.
   • Promote the adoption of digital technologies across SMEs to enhance productivity and competitiveness.

Conclusion

The Czech Republic's SME policy mix is extensive but lacks coherence and prioritization. While the current framework supports some aspects of SME growth, there are significant gaps in addressing the needs of less productive firms, especially in terms of innovation, digital transformation, and management capabilities. The report recommends a more integrated and focused policy approach to improve the overall productivity and competitiveness of SMEs in the Czech Republic.