The Impact of Startups on the Czech Economy

The startup scene in the Czech Republic is thriving, contributing over five percent to the nation’s Gross Domestic Product (GDP). Martin Kešner, founder of the Vodafone Idea of the Year competition, estimates that more than 400 new startups, particularly those focusing on advanced technologies, are launched annually. Over 3700 startups are currently operating in the country, significantly contributing to the Czech economy.

According to Petr Sklenář, the chief economist at J&T Bank, these companies play a substantial role in the country’s economic landscape. In the previous year, the country’s economic performance reached 6.8 trillion Czech korunas, with startups contributing approximately 340 billion. Sklenář further estimates that startups account for up to nine percent of the total income tax collected from individuals.

Filip Mikschik, the founder of StartupJobs, a company that connects employees with startups and tech companies, says that over 150 thousand individuals were employed in Czech startups in 2022. This figure represents about four percent of all employees in the country, double the number of individuals working in agriculture.

The number of startups in the country increased by one-third between 2018 and 2022, with a corresponding growth in the number of employees. The average wage in startups reached 65 thousand korunas in the previous year, significantly higher than the country’s average wage of 43 thousand korunas. Mikschik explains that startups often require highly skilled workers, particularly in information technology, hence the higher salaries.

Investment in the startup sector peaked in 2022, with approximately 37 billion korunas flowing into it. Although there was a dip in 2021, similar to trends worldwide, the investment volume was still higher than in pre-Covid 2019. The situation is improving, with a significant revival in the first two months of this year. Kešner expects a year-on-year investment growth of tens of percent for 2022.