Minister Helena Langšádlová: The goal is for revenues to be reinvested in science and research in the Czech Republic

According to Helena Langšádlová, the Minister of Science, Research and Innovation, investments into this area will contribute to the transformation of the economy and are one of the main factors for the Czech Republic to continue to be a prosperous country with a positive GDP. We have summarised the main pitfalls and necessary steps in support for science, research and innovation in the Czech Republic.

Minister Helena Langšádlová participated in the meeting at Deloitte, which revolved around the support for research and development for Czech businesses. She began by explaining the main objectives of her office. The new Ministry of Science, Research and Innovation will seek, among other things, to eliminate the fragmentation of the whole system. For example, the resources for science, research and innovation (SRI) currently span 15 budget chapters, 11 of which fall under other departments. In addition, this field must, more than others, react flexibly to the changing societal challenges ranging from issues related to AI and ethical questions to intellectual property protection and cybersecurity to the application and interpretation of tax conditions. Investments in science and research contribute to the transformation of the economy. They are one of the main factors for the Czech Republic to continue to be a prosperous and competitive country with a positive GDP.

Luděk Hanáček, Partner at Deloitte responsible for services in research and development, adds that the change will lie in underpinning the entire ecosystem of public aid schemes: education, human resources, business environment, tax and legal environment – all of those need to be made more attractive.

Critical human capital and its limits

In the meeting at Deloitte about the support for SRI, which was in addition to Minister Helena Langšádlová attended by Bohuslav Čížek, Economic Affairs Director of the Confederation of Industry of the Czech Republic, the topic of human resources was frequently mentioned; companies need to have enough high-quality people who will engage in research and development (R&D).

“The Czech Republic is not a country with a large deposit of mineral resources. We have to build on people and use their potential properly. People in R&D are the national elite. We have to do everything to create the conditions to connect academic and business spheres so that it moves us forward,” said Helena Langšádlová. The first step is to spark an interest in elementary school pupils and to follow that up through the subsequent stages of the education system. All of that is, of course, connected to the way the whole structure is underpinned. It is vital, for example, to define which people are missing in the field and what the government can do to change the situation.

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University laboratories for businesses

It is also essential to connect academic workplaces with business. Luděk Hanáček uses a practical example: “It is the same as with housing – most people believe owning a property is better than renting one. Similarly, I think that most businesses assume that conducting research independently is cheaper and more effective and does not come with potential legal issues or other risks. The way forward is to exemplify and support cases where it makes sense, be it centres of excellence or built capacities. After all, businesses do not need to develop costly laboratories and purchase expensive equipment when they can use university laboratories. That is the natural way for cooperation and therefore the seed for the creation of future joint projects.”

Minister Helena Langšádlová mentioned another issue: insufficient legislative support. “University representatives manage public funds. That exposes them to a certain risk. We must create a more secure and motivating environment – a safer, more clearly defined space in terms of legislation as to how far they can go and under what conditions.

7 priorities in research, development and innovation

1. Stabilisation and clarification of the system to remove fragmentation

2. Predictability of the steps leading to stabilisation and stimulation of the environment

3. Sufficient motivation for start-ups, small, medium and large companies to participate in R&D&I

4. Unification of control mechanisms, clear and comprehensive rules for controls

5. Simplification of the whole process, including submitting applications for better orientation of applicants

6. Utilisation of university laboratories for academic research and the needs of businesses

7. Making this area more attractive to employees, academics and the business environment

Simplification is the name of the game

According to Bohuslav Čížek, it is now crucial to stabilise the whole system. “Predictability is critical – there needs to be a schedule of public tenders that will be followed. This is related to the need to stabilise spending in this domain. Support should be accessible and should support companies in creating their development projects, that would otherwise be done at a smaller scale or not at all due to higher uncertainty,” says the Economic Affairs Director of the Confederation of Industry of the Czech Republic.

The motivation of companies is, of course, important as well, so that they focus on R&D&I and so that the revenue can then be reinvested in the Czech Republic. “What is essential too is the long-term awareness-raising that we want to support innovative companies, whether it is a start-up, small or large company,” adds Bohuslav Čížek. This requires favourable conditions with clearly defined simple rules and better orientation for applicants looking for the most appropriate forms of support.

Excessive control mechanism

Controls are a chapter in and of itself. “The provider of resources has an immense responsibility – he distributes public funds. On the other hand, we believe that the present system of controls is excessive. In an attempt to control everything, the state forces recipients to prove that every single penny is accounted for,” says Luděk Hanáček. “Increased administrative efforts in reporting and proving things is connected to distrust during controls themselves – with a little exaggeration, everyone who receives public money is now automatically viewed as if he were a fraud who does not have pure intentions.”

The solution? According to Minister Helena Langšádlová we need to create one control institution and set the rules so that control activities are carried out in a set period during a given process and, if possible, all at once. “So that we avoid the situation when one control ends and another one begins. For small companies with insufficient administrative support, this can be overly demanding. They often do not know who may come and what they may require. What we need is predictability, so that it is clear what the state may demand and from whom and to burden him with administrative tasks as little as possible ­– regarding frequency, length…,” adds Helena Langšádlová.

As pointed out by Martin Schulz, Senior Manager in the Tax Department of Deloitte, who focuses on grants and deductions, this additional administrative load may sometimes exceed the monetary amount that the company was given as aid.

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