Challenges for the Czech Republic's Competitive Performance in the Enlarged EU

The new EU-entrants face double challenge on the Lisbon road to knowledge-based competitiveness. On the one hand, higher expenditure is required to improve the quality of research and education input and infrastructure, on the other hand, the innovation system changes are necessary to increase efficiency of expenditures. The example of the Czech Republic within EU-25, as to the export performance, productivity and R&D intensity of the so-called hi-tech activities, presents a more detailed analysis of competitive advantage sources and challenges in the less developed EU members. The analysis emphasizes the criterion of (in)completeness of the multinational value chain, which continues to consist mainly of segments with lower quality intensity (assembly operations) in these countries. This aspect plays a crucial role in international comparison of competitiveness within EU-25, and in assessment of success and political support of transition to knowledge-based economy.