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The Electrical and Electronic Industry in the Czech Republic

The modern history of the Czech electrical and electronic industry is very rich due to the basic restructuring of the majority of manufacturing foundations during the course of the last twenty years, the improvement of not only work productivity, but also the quality of products. The innovation level of Czech products makes it possible to find still new challenging markets. In the globalized environment of world trade, our products are competitive, and the trade exchange is growing in parallel to the ever-increasing size of production.

The electrical industry is marked by:
  • the complementary character of its production in creating prerequisites for the competitiveness of other branches of the manufacturing industry and power industry,
  • a high proportion of imported materials, components and parts for production and assembly,
  • a wide range of technological processes,
  • a high proportion of supranational capital in new investment projects and the use of progressive technologies,
  • the use of logistic networks of supranational companies,
  • a high proportion of science and research used in the production of computer and digital communications technology and the need for highly-qualified employees in research, development and production.



The share of the electrical industry on the revenue from sales of own products and services of the manufacturing industry in the Czech Republic as a whole reaches ca. 15.5 %. Thanks to this share ratio, to the creation of added value as well as of employment, the electrical industry is virtually placed 2nd to 3rd among the most important industrial sub-sectors in the Czech Republic. Even though the area of electrical industry has been adversely influenced by the effects of the economic depression and it has grown weaker, it still provides employment for ca. 180 thousand employees, while the effects of the current crisis are not only negative, but it also contributes to the efforts for restructuring of manufacturing operations, to stronger specialization and to orientation towards new innovated products with higher added value.


Czech electrical industry and its structure

According to the standard classification of production, manufacturing in the electrical industry is divided in the following manner:
30–Office Machines and Computers (Computer Technology);
30.01–Office machinery and parts;
30.02–Computers and other information processing equipment, their parts, installation and assembly

31–Electrical Machines and Equipment (Heavy-Current Electrical Technology);
31.1–Electric motors, generators and transformers;
31.2–Electric distribution systems, switching and control systems;
31.3–Insulated cables and conductors;
31.4–Accumulators, primary cells and batteries;
31.5–Electrical sources of light and lighting apparatus;
31.6–Electrical equipment not otherwise mentioned;

32–Radio, Television, Telecommunications Equipment and Apparatus (AV Engineering, Electronic Components)
32.1–Tubes and other electronic parts;
32.2–Radio and television transmitters; apparatus for telephones;
32.3–Radio and television receivers, audio or video recording and reproduction apparatus;

33–Medical, precision-measuring, optical and time-measuring devices, industrial services and work (Instruments and Automation Equipment)
33.1–Medical devices and equipment, surgical and orthopaedic resources;
33.2–Measuring, inspection, testing, navigation and other devices and equipments;
33.3–Equipment for controlling industrial processes;
33.4–Optical and photographic devices and equipment;
33.5–Time-measuring devices.

Heavy-Current Electrical Technology
Electrical machines and equipment have a stable position in the structure of the Czech electrical industry. Its main products are electric motors, generators and transformers, electricity distribution and switching equipment, cables and insulated conductors. In the recent several years, especially on the basis of foreign investments, the range of electrical industry products has been extended to include electrical equipment for the automotive industry. The technical level of products and services attains global standards. These products are mostly sold to countries within the European Union. Enterprises engaged in heavy-current electrical engineering employ 58 % of the people working within the electrical industry in the Czech Republic. The trade balance related to this commodity has been traditionally favourable. Foreign owners of large production organisations have carried out the needed modernisation of technologies, improved the organisation of production, and - most importantly - arranged new business connections. Heavy-current electrical engineering accounted for approximately 50 % of production in the Czech electrical industry in the past, but resulting from the influence of greater production increase in other branches of electronics, its share fell, however, from the point of view of its production volume and its added value, the heavy-current electrical engineering still belongs among structure-creating fields of industry.

Computer technology
Most of the manufacturing plants within this branch were “Greenfield” projects, while to a limited extent, buildings of former enterprises were also used. These companies are strongly influenced by globalization or by the participation of foreign investment capital. The majority of produced computers is exported on global markets. Through supranational companies, Czech Republic has joined other territories with developed production of competitive computer technology. There are also successful software-designing companies in the Czech Republic, their operation being not only in relation to the localization of worldwide software products or to the delivery of these services to Czech enterprises or to state agencies.


AV Engineering, Electronic Components
Significant changes occurred in the production of electronic components and telecommunications. New production units came into being and the product range changed. Facilities for the production of equipment for higher-level telecommunication systems, radio and television transmitters and transmission systems were modernised; new production centres of supranational companies were built.


Instruments and Automation Equipment
In contrast to other electro-technological branches, there was not such a strong increase of foreign capital participation in this group. However, Czech domestic market hosts most of the important international companies that are dealing with production and distribution of measuring, regulation, automation and medical equipment. They do not only deliver their products, but also carry out project designing and servicing. Automation technology products show a high level of innovation, and thanks to the innovation cycle growing longer, these are becoming the priority of the electro-technology branch in the Czech Republic. Therefore, the Electrical and Electronic Association of the Czech Republic in cooperation with the company Veletrhy Brno a.s. prepared trade-fair-targeted products focused on automation technology visions and on the ever-developing tools allowing to proceed towards a "digital factory".


The Electrical and Electronic Association of the Czech Republic operates as the only association of employers within the area of the electrical and electronic industries. The dynamics of growth of the electro-technology branch in the Czech Republic is likely best reflected by the development of the number of its employees. As Czech Republic was founded in 1993, there were about 65 thousand employees in the Czech electrical and electronic industry. The highest annual increases were recorded in 1997, just before Czech Republic joined EU. The number of employees had its peak prior to the outbreak of the economic depression, i.e. between 2007 and 2008, with its figure reaching 188 thousand people.


Nevertheless, the individual branches are better characterized by attained productivity of work than by the employment figures. If we evaluate computer technology only in relation to the area of technical equipment, the productivity attained here is not as high as in the case of other branches that are considered traditional in the Czech Republic and where the highest potential for innovations can be found. These are mainly branches of heavy-current electrical technology and branches associated with automation, regulation and measuring technologies.


Economic data related to Czech electrical and electronic industry, or to manufacturing industry, respectively, are published by the Czech Statistical Office on www.czso.cz and by the Ministry of Industry and Trade of the Czech Republic on www.mpo.cz (file Panorama of the Czech Manufacturing Industry).

The year 2010 is important for the Czech electro-industry from the two points of view. Twenty years ago the process of restructuring of production branches began; it was related to the transition from centrally planned economy to market economy. By no coincidence it was twenty years ago when the entrepreneur democracy was also re-established, and associations started their activities, which led to establishment of electrical and electronic association.

Now, after 20 years, due to global world crisis, there is another restructuring. Advantage is taken by industries with longer innovation cycle and higher added value. The interest in those industries which we can be considered as traditional in the Czech Republic is growing again. Namely we talk about heavy-current technologies, measuring, automation and control technology. These industries are not so much impacted by the present economic development; there are opportunities for highly qualified workers. This way the crisis becomes an opportunity for strengthening prospective industries.

31.7.2010

František Hýbner
Director of the Association