The Czech Republic at a Glance
Working in the Czech Republic
Ever since the fall of the Iron Curtain, the Czech Republic has continued to attract expats. This may be partly due to the charms of its capital Prague, but it’s of course also owing to astute economic management which has overseen the privatization of the economy and its opening up to foreign investment since the early 1990s. With EU accession in 2004, finding a job in the Czech Republic has become a realistic option for many more expats.
The Czech Market — At the Center of Everything
Working in the Czech Republic is rendered attractive to foreign employees and international companies due to the country’s central location within Europe. The Czech Republic has excellent transportation and infrastructure links to both the West and the East, thus providing an excellent base for doing business with Germany and Russia, for example. It’s only natural then that with the best infrastructure in Central Europe, the Czech Republic attracts the biggest share of direct foreign investment in the region.
Other advantages of working in the Czech Republic include a skilled workforce and an open economy. While the Czech language probably poses one of the biggest obstacles to foreign workers, the good news is that English is widely spoken throughout the business world.
The Driving Force behind the Czech Economy
The Czech Republic can proudly look back on a long and powerful manufacturing tradition. During the 19th century, the regions of Bohemia and Moravia were the industrial powerhouse of the Austro-Hungarian Empire. In the inter-war years, Czechoslovakia (as it was then called) established itself as one of the leading manufacturing economies in the world. Today, roughly 37% of the total labor force works in the industrial sector, but the secondary sector is by far the largest employing approximately 60% of the labor force. Similarly, the secondary sector comprises almost 60% of the country’s GDP.
The Czech Republic’s major industries are motor vehicles, machinery and equipment, metallurgy and metalworking, glass, china, ceramics, brewing, armaments, electronics, footwear, wood, paper products, chemicals, and pharmaceuticals. The automotive industry accounts for around 21% of the Czech industrial output and is thus the country’s largest single industry. Besides the automobile industry, beer production is also a significant industry in the country. In 2011 the Czech Republic accounted for almost two percent of the European beer market.
The Up-and-Coming, Stagnating, and Declining Sectors
A country with strong manufacturing industry is usually heavily dependent on export. This is also the case for companies and people working in the Czech Republic. As a result, the economic downturn starting in late 2008 affected industries and workers in the Czech Republic to no lesser degree than its main trading partners, i.e. Germany and the rest of Western Europe, Slovakia, Poland, Russia, China, and the US. Employing less than 3% of the people working in the Czech Republic, the agricultural sector is in decline.
The financial sector, on the other hand, remained relatively healthy as people working in the Czech Republic’s banks profited from the sector’s relatively conservative orientation. As a result of privatization, most banks in the Czech Republic are now foreign owned.
The tertiary sector in general is on the rise in the Czech Republic, as it is in most other modern economies. Although the size of the service sector in relation to its contribution to the national GDP has stagnated over the past couple of years at roughly 60%, it is predicted to grow as the country moves towards a more high-tech, service-based economy.
The tourism industry in particular is on the rise, providing a substantial source of income to people working in the Czech Republic. While Prague continues to attract record numbers of tourists every year, the country’s many famous spa towns (such as Karlovy Vary or Mariánske Lázně) as well as its castles are becoming increasingly popular tourist destinations.
Obstacles at Work: Language and Corruption
The main challenges for foreigners working in the Czech Republic are bureaucracy and corruption, both very typical for post-Communist societies. As awareness of corruption, especially in public procurement, is rising among domestic and foreign businesses in the Czech Republic, Czech officials will surely take adequate steps to counteract this development.
Another major hurdle foreigners have to tackle when working in the Czech Republic is the Czech language, which is not one of the easier languages to learn. In fact, the US state department reckons Czech is a level four difficulty which means it takes English speakers on average 44 weeks to become proficient in the language. While English is indeed widely spoken and many international companies conduct their business in English, expats will find it very hard to start working for a domestic company in the Czech Republic without at least a basic knowledge of Czech.
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