Transfer, configuration and development of multidisciplinary model for promoting entrepreneurship in VET and higher education


Newsletter Subscriptions

Log in

You are here

State of the Art of Implementation the 10 Key Principles Included in the Small Business Act in the Czech Republic

If we want to make an overall assessment of the implementation of measures given in the Small Business Act in the Czech Republic for the period of 2012 and the first trimester of 2013, unfortunately, we have to say that the practical support to entrepreneurship and small and medium-sized enterprises is not what it should be. On the part of the public administration it often consists only in measures with a proclamation character without significant positive impacts. Support to SMEs is mainly focused only onto education, innovation, investment and development, but on the other hand the support for exports is low, support for entrepreneurs (tradesmen) is almost none (they can’t practically draw subsidies, bear the greatest impact of administrative burdens, fundamental and frequent changes in legislation, especially taxes). The reason for the overall poor level of implementation is the fact that SBA is not a legislation act, so that various public bodies don't pay appropriate attention to the implementation of the content. To be more precise bellow we tried to briefly evaluate each of ten points included in the SBA separately.

  • Entrepreneurship: Progress in this SBA areas is quite LIMITED. Despite the fact of a widely proclaimed support to and an accent on the entrepreneurship, there are still many significant barriers in Czech reality (stricter labor-market conditions, restrictions on the employment of foreigners from third countries, the inflexible Labor Code - changes in taxation of agreements to complete a job, the ban on chaining of temporary contracts /exerting a negative impact on seasonal work/, the introduction of an unreliable payer /liability for VAT payments of business partners/, payments for medical examinations of employees transferred onto the  employer, etc. A positive aspect to be mentioned is that the concept of support for small and medium-sized enterprises for the period 2014-2020 has been approved.
  • Second chance: The progress can be considered a MODERATE one. In 2012 a fundamental amendment to Act No. 182/2006 Coll., The law on bankruptcy and its solution (the Insolvency Act), was approved, which brought a lot of positive aspects into the entrepreneurial environment.
  • Think Small First: SUBSTANTIAL progress has been made or is expected. For example, unified dates of effectiveness of the new legislation with an impact on the business environment have been introduced; new laws come into force always from January 1st respectively July 1st of each year (valid from 1. 1. 2013), the National Reform Programme - a strong proclamation of an introduction of measures for the more attractive business environment, consolidation of public finances and effective public administration, functioning labor market, growth based on innovation and research.
  • Responsive administration: Progress in this SBA area can be considered LIMITED. The administrative burden for SMEs is the biggest issue in this area. The Ministry of Industry and Trade as the body responsible for the implementation of SBA implements a long-term program to reduce the administrative burden indeed, but that seems to be generally ineffective; the Ministry of Industry and Trade isn't allowed to manage other ministries and make arrangements for reduction of business administration burden - although there is an officially indicated downtrend of the business administration burden in comparison with 2005 data, but the new legislation and the new load is completely ignored here. The new legislation is not consistently checked by the RIA (Regulatory Impact Assessment, i.e. an impact of new legislation on business).
  • Public procurement and state aid: Progress is MODERATE. The amendment to the Act on Public Procurement has been implemented - however the successful implementation suffers from four major problems:  the extensiveness of corruption in public procurement; the registry of contracts; the procedure of implementation of amendments to the Public Procurement Act, and the transparency of legal entities.
  • Access to finance: Progress in this sphere is considered MODERATE. Implemented are measures such as the "Seed Fund", "INOSTART", "PROGRES" with an intensive support through the ČMZRB, ČEB and EGAP, efforts of the Ministry of Finance to MINIMIZE tax evasions - see the introduction of the directive on an unreliable payer and liability for payment of VAT. The introduction of the European Directive to protect particular small and medium-sized businesses against enormous elongation of maturity of invoices has been recently discussed by the Czech government.
  • Single Market: Progress has been only MODERATE as not many significant measures have been introduced in this sphere so far.
  • Skills and Innovation: SUBSTANTIAL progress has been made in the given period with implementation of a lot of significant measures as already mentioned in the detailed list of SBA measures.
  • Environment: Progress has been LIMITED in the last period. This area is not at the center of enforcement.
  • Internationalisation: Progress has been MODERATE in this area. Several measures are used:  the Marketing Program, the New Export Strategy to Support SMEs - especially on distant markets, a new online web portal for international co-operation with the support of the Ministry of Foreign Affairs "" using contacts of Czech businessmen, expatriates abroad and foreign students who studied in the Czech Republic, support for SME participation in business missions accompanying governmental and state leaders on their official visits abroad and last but not least the emphasis on the work of economic diplomacy.
CEDIT IEPL IDEA Universidad de Sevilla BD Center AMSP ČR Università di Pisa Regione Toscana VŠFS