The indicators in the table below present a synthesis of research, innovation and competitiveness in the Czech Republic. They relate knowledge investment and input to performance or economic output throughout the innovation cycle. They show thematic strengths in key technologies and also the hightech and medium-tech contribution to the trade balance. The table includes a new index on excellence in science and technology which takes into consideration the quality of scientific production as well as technological development. The indicator on knowledge-intensity of the economy is an index on structural change that focuses on the sectoral composition and specialisation of the economy and shows the evolution of the weight of knowledge-intensive sectors and products and services.
ublic funding of R&D and the available pool of S&E graduates are in line with the level of development of the Czech economy although the level of excellence in S&T is markedly lower than the EU average (with the exception of S&T in other transport and energy) and is catching up only very slowly, which impacts negatively on the ability of the Czech innovation base to expand to its full potential. As a result, business investment in R&D is relatively low in relation to the structure of the economy (size of the manufacturing sector in general and of HT and MT sectors in particular) and the innovation performance of the country is sub-optimal. The situation is, however, improving as evidenced by the structural change towards a more knowledge-intensive economy and the fast-rising contribution of HT and MT sectors to the trade balance.
The latter has increased much faster than the EU average in spite of a sharp improvement in the total trade balance over the same period. Despite progress, the main challenge for the Czech research and innovation system remains therefore the insufficient quality of the scientific and technological output of the science base, which is notably linked to an inadequate system for evaluating research and allocating public R&D funding. Despite a public R&D intensity of 0.72%, similar to the EU average, the level of S&T excellence and the amount of intellectual property assets produced remain, in relative terms, well below the EU average. Another persistent weakness of the Czech research and innovation system is the low extent of cooperation between the science base and the business sector originating from a combination of poor absorptive capacity of domestic firms, a lack of incentives to support collaboration between universities and firms and the shortage of scientific and engineering skills.
This is evidenced notably by the extremely low shares of the R&D carried out by universities and by the government sector that are funded by business - 1% and 3.4%, respectively. According to innovation surveys, neither universities nor public research organisations are considered by firms as key partners for their innovation activities. These challenges are linked to the overdue reform of the higher education system and to the persistent weaknesses of the current system for evaluating research performance and allocating public R&D funding to higher education and research institutions. The Czech Republic International Competitiveness strategy for 2012-2020 plans to address several of these issues, as described in the following parts of the present country profile.