Covid has negatively affected almost half of the start-ups in Prague. But there are also exceptions
The coronavirus pandemic had a negative impact on 46 percent of companies, out of a quarter of Prague start-ups reporting a positive impact, three companies reported a “very positive” impact of the pandemic. The remaining 31 percent of start-ups have a neutral effect of the pandemic on their business. “This result represents the considerable resilience of the Prague start-up scene and a very good ability to absorb adverse shocks. However, the threat to Prague start-ups is the global economic crisis, the high rate of inflation, rising wages and energy prices,” said Prague innovation manager Tomáš Lapáček.
The survey from last year does not include the effects of the war in Ukraine. “However, every crisis situation also brings with it opportunities. several young Prague companies offer artificial intelligence to optimize processes in large enterprises, which leads to solutions for energy, finance and, among other things, also to support sustainability,” noted Lapáček.
Select half of all answers provided by start-ups, the main product is software or cloud services using remote access via the Internet. The share of companies working with artificial intelligence was also significant. On the contrary, companies from the field of life sciences, medicine and biotechnologies were minimally picked up by the survey. The lack of technology-qualified workers and difficulties in recruiting new people are therefore troubling companies, especially in information technology and the field of artificial intelligence, and they also lack data analysts.
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Access to external financing is rated as difficult by up to three-fifths of the companies approached, most often using a combination of own and foreign capital. Public support from secondary sources was accepted by 36 percent of Prague start-ups, the survey found. “The Czech and Prague start-up scene is relatively self-contained, unlike the Western European ones. Most of the companies also come from the Czech Republic,” said Alexandr Kuchynka, an analyst at the Prague Innovation Institute.
Attracting more talent from abroad and preparing better conditions for investment in fast-growing innovative projects, according to the responses of start-ups, Prague should do more to support them. The city should also promote the interest of its companies in innovations in custom artificial intelligence or be more open to the city’s innovative companies, the companies said in the survey. “Start-ups welcomed the high-quality preparation of municipal subsidy vouchers, which they could apply for again this year after many years,” said Prague Innovation Institute analyst Peter Deďo.
The Prague Innovation Institute was founded as a registered institute in the capital in January 2020. It focuses mainly on supporting the development of education and business in the metropolis. Managed by the Business and Innovation Center of the Capital City of Prague.
What is a start-up?
The term start-up refers to a new company or a starting project whose creators are at the very beginning of the business.
It was first used before 2000, when many such companies were established overseas during the Internet boom. In recent years, start-ups are once again experiencing a renaissance.