Europe is its Own Biggest Obstacle
32 ǀ POSITIV 4/2024
BUSINESS
itself as a unified market, in practice, this
is far from reality. One of the reasons is
the complex and opaque bureaucracy,
along with excessive regulatory barriers
that hinder innovation. These obstacles
often arise at the national level. What
we need are innovations that transcend
individual countries.
If the EU wants to be competitive, it
must undergo a legislative detox and set
realistic goals. Businesses understand
the concept of the Green Deal, but
governments are imposing overly
complex regulations—such as ESG
requirements—where compliance
and reporting overshadow the actual
innovation potential that exists.
The Green Deal should not just be
a set of regulations; it should be a true
catalyst for innovation.
Today, companies are forced to create
entire departments dedicated to
reporting and administration. Innovation
is becoming more difficult, and only
companies that can separate their
innovative projects from standard
corporate structures are truly successful.
Another major obstacle is the high cost of
energy, which directly threatens industrial
enterprises. European manufacturing
companies pay up to 50% more for
electricity and about a third more for
gas than their competitors in the United
States. For energy-intensive industries,
such as steel production, this situation is
critical.
How to Support Innovation Potential?
We need to create an attractive
investment environment. During
an export mission to the United States
and Canada, specifically at an innovation
center in Toronto, I met with venture
capital experts. They explained how
they allocate their investments globally,
but at the same time, they pointed out
that they currently have no interest
in European countries. The reason is
not only regulatory barriers but also
the fact that the Czech Republic has
not yet adopted the euro, which further
discourages investors.
At the start of November and December
2024, you led a business delegation
to Australia, accompanying the first
presidential visit to the country in nearly
30 years. The delegation attended
an Australian-Czech business forum
and visited the University of Adelaide,
known for its innovation programs.
What were the key takeaways from
this mission?
We saw a highly effective tool for economic
support in practice – the Australian
government has shifted a significant part
of its defense research from the military
to innovation hubs, which are connected
to universities, research parks, and
companies. These ecosystems have now
grown into large-scale networks, capable
of multiplying state investments and
generating real added value.
In contrast, instead of supporting
domestic research and development, we
purchase ready-made technologies, and
Czech companies are often limited to
assembling components. This is a strategic
mistake that we must correct.
Furthermore, Europe spends 80% of its
defense budget outside the EU, rather
than investing in its own industry and
research. As a result, Europe loses
the entire multiplier effect—European
companies lack access to contracts, and
the economic value flows abroad.
What is Your Outlook on the Business
Environment in the Czech Republic?
Over the past two years, I have regularly
met with companies and know many great
businesses that successfully export their
products and do it very well. However,
we are in a transformational decade—not
only due to changes in Europe but also
because of a generational shift among
entrepreneurs.
The founders of companies who
built their businesses after the Velvet
Revolution are retiring and handing
them over to their children or new
successors. Companies that manage
this transition well have a chance for
long-term success. The key is to sustain
innovation and growth, rather than
remain in a state of comfort.
What’s ahead? We can expect the sale of
Czech businesses to foreign investors, but
also the emergence of new companies
and startups. The Czech startup scene is
growing, but one major problem is that
Czech companies are being sold too
early—before they achieve significant
value. We need to support our businesses
so they can develop and grow in
the domestic market.
We should take inspiration from Ireland
or Luxembourg. These countries
strategically selected key industries
and provided them with significant
advantages, which kickstarted their
economic growth.
The Czech government recently approved
a new Economic Strategy—a Vision
for the Development of the Czech
Economy—which, for example, mentions
semiconductors. However, shortly after,
the representative of this sector was
removed from the Council for Research,
Development, and Innovation. So, while
we have strategies on paper, in reality, we
are contradicting ourselves.
How do you see the Geopolitical
Tensions Between the U.S. and Europe?
America will always play to win. Trump will
only reinforce their aggressive approach.
And on the other side stands Europe,
which is its own biggest obstacle. Why?
Because we are too fixated on the welfare
state.
In the U.S., people know that if they
don’t work, they don’t have health
insurance, they don’t have social
benefits, they don’t have housing. This
creates a completely different approach
to work—in the U.S., people compete to
survive.
In Europe, people wake up and already
have all these benefits secured. That’s not
necessarily a bad thing, but it suppresses
competition. We need to return to natural
competition. The U.S. will only respect us
if we are strong competitors. If we only ask
for concessions and plead for cooperation,
they will not take us seriously.
Ironically, Trump may actually jumpstart
the global economy—his policies could
stimulate greater competitiveness and
eliminate stagnation. For Europe, this is
a challenge—either we learn to compete
again, or we will continue to decline. And
this applies not just to business but also to
the political arena.
The Trump administration has
implemented the announced tariffs
on Canada, Mexico, and China and is
“
Over the past two years,
I have regularly met with
companies and know many
great businesses that
successfully export their
products and do it very well.
”
“
We need to support our
businesses so they can develop
and grow in the domesc
market.
”