Overview
Czechia is a significant player in the digital economy, leveraging its strong technological foundation and skilled workforce. Local companies are active in software development, cybersecurity, and artificial intelligence. Czechia has also attracted U.S. and global technology giants, as well as smaller, more specialized firms, to establish operations in the country.
Czechia has actively worked to develop, influence, and implement digital legislation and strategies to support its digital economy. European Union (EU) legislation has been one of the key drivers in this space. Czechia is part of the “Digital 9+” group of 12 EU countries which supports pro-innovative, anti-protectionist approaches for an open digital economy, including a strengthened digital single market, and pushing Europe to meet its ambitious goals for the Digital Decade. The Czech government has also introduced initiatives to support the growth of the digital economy, including investments in digital infrastructure, education, and research and development. The Czechs have supported U.S.-led digital initiatives including the Declaration on the Future of the Internet and the Freedom Online Coalition.
Challenges
Czechia complies with EU digital legislation, which creates a highly regulated operating environment for businesses, especially related to cross-border data flows. Please see the Digital Economy Chapter of the European Union Country Commercial Guide for more information on greater EU issues.
Czechia´s greatest challenges include a shortage of ICT experts particularly in cybersecurity, low budgets for IT and cybersecurity, and often-outdated IT equipment in the public sector. However, in response to a steady increase in cyber incidents, most of which are attributed to third country actors, coupled with greater cybersecurity awareness, budgets are generally increasing.
Opportunities
Czechia has successfully taken advantage of EU funding, including the Cohesion Policy Funds, the Digital Europe program, and Horizon Europe to support its digital development. As the EU has made digital transformation a key priority, further funding opportunities in this segment are expected.
In response to the EU NIS2 security directive requirements, the Czech National Office for Cyber and Information Security (NUKIB) has prepared a draft Cybersecurity Act, which aims to strengthen the country’s cybersecurity framework and is expected to take effect early 2025. The Cybersecurity Act is expected to expand the number of regulated entities from 400 to more than 6,000 and includes a supply chain security mechanism for ICT and other critical infrastructure. The law will likely prompt newly regulated entities to increase investment in cybersecurity, creating opportunities for cybersecurity suppliers and service providers, particularly in the energy, banking, defense, and healthcare sectors.
There is a growing demand for advanced ICT infrastructure, including fiber optic networks, data centers, and cloud services. Further investments are expected with the expansion of 5G and 6G networks. Private sector investments are often led by large, multinational companies, but also those active in banking, energy, or critical infrastructure. U.S. technology is highly regarded, and strong opportunities exist for U.S. companies offering innovative and sophisticated products, as well as data and value-added services.
Czechia has made significant advancements in smart city initiatives, leveraging technology to improve urban living and enhance sustainability. Projects in smart infrastructure (grids, transportation, buildings), smart services (parking), and smart environment (air quality monitoring) are ongoing.
The government continues to digitalize its services, and E-government projects present opportunities for U.S. firms specializing in software development, cybersecurity, and digital transformation services.
The tendering rules for central government contracting are designed to ensure transparent competition and promote the equal and non-discriminatory treatment of bidders. The offered price is often one of the key factors in decision making process for public tenders, although quality and security have been of increasing importance, particularly in critical infrastructure.
Czechia also aims to be at the forefront of the development and application of emerging technologies, especially artificial intelligence (AI), quantum information sciences, and semiconductors, and is exploring how to balance the advancements and opportunities these technologies bring with the challenge of protecting citizens and their privacy from any additional threats these technologies could also create. The Czech government is drafting national strategies to address the human capital and infrastructure investment demands of each of these priority technologies. In July 2024, the government approved the National Artificial Intelligence Strategy of the Czech Republic 2030 (NAIS), and the national quantum and semiconductor strategies should be released in late 2024 or early 2025.
Resources
The information on public tenders passing certain financial thresholds (differing by product or service) can be found in Tenders Electronic Daily (TED, https://ted.europa.eu/en) platform, on the web pages of The Office for the Protection of Competition (https://uohs.gov.cz/) and a portal for public tenders (https://isvz.nipez.cz).
National Cyber and Information Security Agency (NUKIB) - https://www.nukib.cz/en
Trade Events
Although there are many digital economy-focused conferences organized in Czechia, many Czechs also travel to important related events abroad.
Future Forces 2024 – FORUM (future-forces.org)
MSV International Engineering Fair | BVV EN
U.S. Commercial Service Contact:
Veronika Novakova, Commercial Specialist, Veronika.Novakova@trade.gov