From 25/9 to 27/9 2015 New York will be more connected to small and medium-sized Czech business than ever before. In the presence of heads of state and government institutions, the Association of Small and Medium-Sized Enterprises and Crafts of the Czech Republic (AMSP ČR) will be presenting successful Czech business projects in the world business metropolis. For the occasion, the association will present an Analysis of trade and investment activities between the Czech Republic and the USA. It indicates that the influence of mutual trade and investment is growing at an unprecedented pace. In terms of the added value of Czech exports, the USA is the second most important partner and currently the fifth largest investor in the Czech Republic.
The analysis shows that exports in CZK to the USA are growing at twice the rate (26.8%) of the overall growth of Czech exports (13.1%). In 2015 alone, total exports to the USA will in all likelihood approach a value of USD 5,000,000,000 and the USA will move up from 13th position into the TOP 10 export territories, with a 2.5% share of overall exports.
For the first time the AMSP ČR will also concurrently present a view of exports to the USA with OECD metrics, which monitor not only the total volume, but also economic added value. From this perspective, the United States of America are becoming a key destination for the Czech Republic and, with an almost 6% share of added value, remain in second position behind Germany (19%). This is also reflected in the composition of exported product ranges, as the Czech Republic is exporting more and more products with higher added value to the USA, whereas previously we exported more cheap products.
Karel Havlíček, chairman of the AMSP ČR, adds: „This is crucial news for small and medium-sized companies which, considering the risks, cannot chase market share and large volumes of exports, but mainly added value. Put simply, if we have an innovative or exceptional product, we can sell it in the United States at a higher price than anywhere else.“
A further point of interest is the composition of Czech imports in terms of products and services, where services, which generate higher profits, account for almost a third of the total volume of exports.
Whilst in the EU 24% of SMEs (companies with up to 250 employees and a turnover of up to EUR 50,000,000) export to the USA, in the Czech Republic that number is 16% of small and medium-sized exporters; however, in the near future 11% intend to expand their export activities to cover the USA.
Given the fact that imports from the USA to the Czech Republic are growing at the same intensity as exports to the USA, that is, by almost a third year-on-year, the USA is becoming the most dynamically growing market for the Czech Republic regarding mutual trade.
The USA is historically the fifth largest investor in the Czech Republic, where the amount of American investments in the Czech Republic is approximately a quarter compared to German investments. Since coming into existence, the investment and business development agency CzechInvest has attracted 197 American investments in the Czech Republic, creating 37,000 jobs. The most significant investors from the USA are companies from the automotive and transport industries, food processing, ICT and mechanical engineering. Although the number of Czech investors in the USA is estimated at only a few dozen (35), the number of those beginning to prepare production facilities in the USA is starting to grow. So far, these have mostly been commercial branches of domestic producers, assembly plants or services in the field of ICT.
„The dynamics of mutual trade between Czech and American enterprises in recent months has been gaining intensity. Czech companies have reached the conclusion that American partners are stable and are replacing insecure eastern markets with them. By the same token, American investors consider Czech companies to be particularly technically proficient and capable of producing quality products and offering first-class services. In addition to traditional industrial sectors such as engineering or the automotive industry, the Czech Republic is beginning to reach a leading world position in the field of nanotechnology, and Czech research is also achieving very promising results in biomedicine,“ says Karel Havlíček, specifying the reasons for the interest of American investors in Czech companies.
As part of the Czech Business Weekend in New York, on Friday 25/9/2015 chairman of the AMSP ČR, Karel Havlíček, in the presence of Czech Deputy Prime Minister for the Science, Research and Innovation, Pavel Bělobrádek, and General Manager of the Meopta Group, Gerald Rausnitz, will be opening the first comprehensive professional facility for small and medium-sized Czech enterprises in the USA – MeoHub. Preparation of the project, which is subsidised by the Rausnitz family of American investors in cooperation with the AMSP ČR, took over a year, and this Friday the first five Czech enterprises will officially commence business activities in the newly built office and manufacturing space on Long Island near Manhattan. On this occasion, a new internet portal (www.czechstartups.org) will also be presented. It was created by the investment and business development government agency CzechInvest in cooperation with the AMSP ČR, ICT IBM, ICT Alliance and Rockaway and is the very first independent source to map the infrastructure of the Czech start-up environment. The portal is intended for both aspiring entrepreneurs and international investors, who will have the opportunity not only to gain an overview of Czech start-up companies but, at the same time, to familiarise themselves with the entire investment ecosystem in the Czech Republic.
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