Czech Prime Minister Jan Fischer

“Presiding over the EU was an opportunity to promote the country’s location and inform international businesses that this country has a reliable economic environment, good legislation and knowledge of European markets,” says Czech Deputy Foreign Minister Helena Bambasov´a.

According to Japanese Ambassador Chikahito Harada, the agenda laid down by Prague during its EU presidency complemented his country’s long-term commitment to the Czech Republic and the rest of Central Europe, as affirmed during Prime Minister Taro Aso’s visit in May of that year.

Having found an ideal location in the Czech Republic, Japanese companies have raised their investments in many of the country’s main industries due to its developed infrastructure, accessible links to Western Europe and effective business environment.

“The workers are sophisticated and the business culture here is the same as the (rest of the) EU. There are no surprises here,” says Japan External Trade Organization Prague head Hiroshi Sano.

With a decade of success in the Czech Republic, leading Japanese companies Daikin, Denso and T.RAD have outlined plans to expand operations in the country.

“Traditionally, the most dynamic areas of industry are electronics, information technology and
automobiles. I think that we (the Czech Republic and Japan) should definitely continue cooperating in these respective areas. The Czech Republic of course tries to progress and there’s a keyword or a buzzword that has been used quite a lot recently by the Czech government and that word is ‘competitiveness,’ ” says Czech Prime Minister Jan Fischer.

Aside from its stable currency, the Czech banking system also boasted a strength that protected domestic businesses from volatile swings, particularly during the tumultuous years of 2008 and 2009.

As the Prague Stock Exchange unifies its trading and clearing platforms with the Central European Stock Exchange, Japanese investors will have an increased incentive to add geographic diversity to their portfolios with emerging indexes that are not as linked to Asian markets.

Japanese Ambassador Chikahito Harada

Looking to the future, the Czech government has launched a new strategy to invite new high-technology investments while helping the current manufacturing plants expand their local operations.

Those new investment incentives are focused on the information and communication technology (ICT), biotech, environmental and pharmaceutical sectors.

“We want to show that we have the high-skilled laborers to participate in R&D projects, engineers with good language skills and innovative engineers capable of creating new solutions,” says Alexandra Rudysarova, general director of CzechInvest, which helped 150 of the 237 Japanese companies in the country establish their local operations.

Those incentives will not only help new companies establish their headquarters in the Czech
Republic but also reward existing investments if they increase the amount of high-skilled labor and value-added services in their local operations.

“During a recession, a company can relocate their R&D centers elsewhere. But if they already have an existing manufacturing center, the operation is complete and they will be more likely to keep investing in their Czech operation,” says Seiji Nakagashi, executive director of the Japanese Chamber of Commerce and Industry.

Meanwhile, companies such as Panasonic have collaborated closely with local technical institutes and as a result benefited from homegrown technological innovations and an educated labor pool.

“We hope that more Japanese will follow the model of Panasonic, so that local production will have higher added value and companies will have a long-term future to stay in the region of the Czech Republic,” says Jan Prockš of the Czech and Moravian Electrical Electronic Association.

So, the full potential of Japanese-Czech collaboration has yet to be realized.

“We do not necessarily have to narrow down cooperation to ‘the economy.’ We have other areas for cooperation such as science, research and development, and education. There is also culture and music in particular. One should not only reduce the partnership and relationship to the economy,” Fischer says.

“We are very pleased to have seen a very dynamic growth in our relations. There’s a lot of Japanese investment. However, there is still a lot of untapped potential. Therefore, my appeal is that let’s use this untapped potential. The government stands ready to provide whatever support is necessary to really use up all that potential we have in all of those areas, not only the economy but also culture and education. So let’s do it!” he adds.