OECD territorial review: Czech Republic

Abstract:

The paper states that the Czech Republic has registered relatively regular growth and has attracted a high level of foreign direct investment. At the dawn of EU accession, these results need to be consolidated. One of the major challenges facing the Czech Republic will be to preserve the role of the capital city region of Prague and its surroundings as growth engines for the national economy, while ensuring adequate development in other regions. Strengthening major urban hubs such as Brno, Ostrava and Plzen and also the 18 medium-sized cities is key to success in a country where close to 71% of the population live in small towns and urban areas. Rural areas, with their natural and cultural amenities, also need to continue being a focus point of national policies but with a greater emphasis on sustainable development and local initiatives. Persistence of high unemployment, particularly in structurally affected old industrial regions, requires both infrastructure priorities to facilitate access and also development of human capital, support to entrepreneurship and the adoption of new technologies and processes. Likewise, indirect obstacles to labour force mobility, such as the lack of a liberalised housing market, need to be removed in parallel with the adoption of proper measures to preserve and develop social housing.