The main problem is long-term. “Productivity, i.e. performance per hour worked, in the European Union is about a fifth lower than in the USA,” the European Commission states in its analysis. According to the Commission, Europe invests less in research, introduces new technologies more slowly and has a harder time putting them into practice. This is gradually reflected in weaker growth and lower competitiveness.
The impacts are all the stronger in countries such as the Czech Republic. The domestic economy is one of the most open in Europe and is closely linked to the single market, especially to neighboring Germany, where a third of Czech exports go. As soon as European industry slows down, Czech companies will feel it very quickly.
According to the Commission, the single market itself still does not work as smoothly as it could. Companies encounter different rules between states, complex paperwork and the slow implementation of technical standards, which today take an average of four years to create. This inhibits innovation and increases costs.
“Companies have been encountering obstacles for a long time, especially in the areas of packaging and labeling of products, regulation of the posting of workers or licensing of services,” Ellen O’Connorová from the largest European business organization BusinessEurope confirmed to Novinkám. She added that EU states only make limited use of the principle of mutual recognition of products, which should make it easier for companies to enter markets throughout the EU.
The report draws attention to another problem, which is less visible, but all the more tangible – late payments. Smaller companies often wait weeks or months for money. According to a survey by Atradius Collection from 2025, up to 61 percent of invoice payments are delayed in the Czech Republic, which limits investments and complicates the operation of smaller businesses.
Even more significant differences are in the area of innovation. In the entire EU, there are roughly 152 patent applications per million inhabitants, while in the Czech Republic there are only about 23. “The Czech Republic also lags behind in spending on research and development. In the EU, they reach an average of 2.2 percent of GDP, in our country it is roughly 1.8 percent,” pointed out Deloitte’s chief economist David Marek, a former adviser to President Petr Pavl.
A possible solution was outlined by Pavlína Žáková, director of the Economic Policy Section of the Union of Industry and Transport of the Czech Republic. According to her, there is a need to support more investments and the connection of companies with research institutions. Greater orientation towards foreign cooperation is also important.
The report thus confirms the long-term picture of the Czech economy. The latter is strong in production and export, but weaker in the development of its own technologies. It is often a matter of production for foreign companies that keep the research at home, and the added value thus remains lower.
On the other hand, the Czech Republic also has strong points. Employment is one of the highest in the EU and is around 82 percent of people of working age, while the European average is just under 76 percent. The industry remains a stable basis of the economy, even if it is precisely on its performance that the country will cope with the European slowdown.
