Labour market trends
The economy of the CR has experienced a period of robust and stable economic growth. Year-to-year increases in GDP in 2005-2007 exceeded 6%. Job creation was very dynamic as well, both in services and, most importantly, in industry. The most important factors that facilitated a significant growth in employment included the following:
- a system of investment incentives introduced in 2000. It considerably increased the level of the CR ’s attractiveness for investments in production and assembly within the manufacturing industry, and gradually also for investments in strategic and technology service centres ;
- the quality of technical education in the CR and availability of the workforce with these qualifications. This was the consequence of the transformation of the Czech economy and the loss of tens of thousands jobs in industry during the 1990s;
- and cost advantage of the
Czech Republic (e.g. wages, property and energy prices) in comparison with developed countries in Western Europe.
Except for the quality of technical education these success factors may be seen as of a short-term nature. However, thanks to them the economic growth in the CR was virtually unaffected by oscillations in the global economy. This advantage will no longer exist in years to come, and the increasingly open Czech economy will be fully exposed to the workings of global trends and changes.
The following trends will affect the labour market in the future:
- shortage of skilled workforce in the labour market will force enterprises and the state to “manage” human resources more efficiently, making use of what is available;
- demographic development – thanks to the weaker cohorts entering the labour market and due to changes in students’ preferences the supply of the workforce in certain fields will continue to decline;
- a slowdown in economic growth will limit the creation of new jobs – there may be a gradual increase in unemployment in future years;
- “Y generations” – new generations that are entering the labour market have different values, preferences and expectations from work. This threatens particularly the traditional occupations in industry and, also, technical education in general that is often seen as too difficult and “socially less attractive”;
- Development in global markets – the Czech economy will be increasingly sensitive to global changes – the labour market may be affected by unexpected twists and turns that will originate outside the
Czech Republic ; - Changes in investment policies of trans-national companies – due to the loss of cost advantage the CR may be afflicted by a loss of thousands of jobs in assembly plants of foreign investors;
- Sectoral threats – a global crisis, e.g. in some sectors of industry, could have tough implications for the CR. The question is whether such a situation can occur and when;
- Cost factors – due to growing wages and energy prices, and also due to exchange rate changes, the CR will gradually lose one of the advantages that fuelled economic development in the previous years. It will be necessary to boost competitiveness by means of human resources development. Skilled workforce is one of the most important factors for retaining foreign investors and developing the knowledge economy.
