The Czech Republic can increase its GDP by 360 billion crowns thanks to the digital economy

The Czech Republic could increase its GDP by €15 billion, or roughly CZK 360 billion, by 2030 thanks to the digital economy. Growth will continue to be driven by e-commerce and the burgeoning information technology sector. Across Central Europe, GDP could grow by €200 billion thanks to digital technologies. This is according to a study by consultancy firm McKinsey.

It said Central Europe’s digital economy would grow at a rate of 13 percent a year between 2019 and 2021, catching up with the Big Five of France, Germany, Italy, Spain, and the UK, which are growing at seven percent.

The Czech digital economy grew at a ten percent annual rate. According to the study, Czech e-commerce grew by 17 percent per year, maintaining the country’s top position in per capita sales among Central and Eastern European countries.

McKinsey said Internet commerce in the Czech Republic and other Central European countries would continue to grow despite the post-Cold War slowdown.

Indeed, e-commerce’s share of total trade, which stands at 18 percent in the Czech Republic and 16 percent across the region, is still lower than that of the Big Five countries (21 percent) or the world’s digital leaders, it added.

Further growth, she said, will be helped by the increasing convenience of online shopping, the expanding availability of products and services, better prices, easy payments, and reliable delivery of goods.

Furthermore, the development of online marketplaces and digital innovations maximize the customer experience in terms of payments, fast delivery of goods, and easy returns.

According to the McKinsey study, the region has a great chance to accelerate the growth of information technology. The opportunity is the expected most extensive reallocation of capital in history, driven by the need to decarbonize and the increasing focus of business leaders on building new businesses and innovation.

The firm said the new business building could focus on technologies where Central Europe has a strong position and can compete globally, such as clean technology, new materials, and potentially manufacturing automation, connectivity, or biotechnology.

The company added that Central Europe could accelerate its digital economy through a pro-export orientation.