My colleague, Ivo Procházka, SAP Sales Manager, recently participated in an interview with oRobotica, where he discussed not only the digitalization and automation of manufacturing companies but also their broader implications.
Many of you may have heard the Czech Republic referred to as the “assembly plant of Europe.” Skilled manual labor, modern factories, and competitive hourly rates make it an attractive location for production. But could enterprise digitalization help the Czech Republic move beyond this role?
“I see digitalization more as a means of maintaining the status quo—the Czech Republic’s position as Europe’s assembly plant,” says Ivo Procházka. “It’s important to remember that the vast majority of production here—about 90 percent, in my opinion—is funded by foreign capital.”
Who’s Going to Pay for It?
In recent weeks, Jana Maláčová, the Czech Minister of Labour and Social Affairs, has publicly supported the idea of a four-day work week. She argues that with increasing digitalization and automation in Czech industry, society is changing, and the government must adapt. However, many experts believe this initiative is economically unfeasible.
“Digitalization is not free—it requires investment,” explains Procházka. “Companies finance digitalization from their profits, their margins. A business with a margin of EUR 10 per product obviously has less to invest compared to one with a margin of EUR 100. To fund digitalization, either you need higher margins, or you have to ask employees to accept lower wages. And let’s be honest—would employees agree to that? Probably not.”
Moving Beyond Routine Tasks
Automation is being adopted across industries and services. When smart software can’t replace tasks, robotics often steps in. These technologies primarily focus on eliminating routine activities, which are known to reduce productivity and increase error rates over time.
“Simple, routine tasks are increasingly being replaced by algorithms and machines,” says Procházka. “In administration, algorithms handle repetitive operations, while in manufacturing, we see robotic workplaces and cobots taking over. Many service centers in the country, which are often overlooked in discussions about digitalization, are now rapidly deploying algorithms to handle routine tasks. This trend will only continue. Similarly, the rise of robotic workplaces will expand.”
Listen to the Full Interview
For more insights from Ivo Procházka on digitalization, automation, and their impact on the Czech Republic’s economy, listen to the full interview here.