The economic benefits of business and IT services are increasing thanks to accelerated technology adoption

Published On: 13. 12. 2023

The business and IT services sector grew again this year by 10,000 employees. With expansion plans for 59% of centres, the industry association ABSL expects the industry to reach 200,000 employees by 2025. The fastest growing areas of business and IT services this year were cyber and information security services, IT support and data analytics. This is according to ABSL’s latest survey, which the association presented at its 10th annual conference in Brno in early November.

“Despite the aridity of the labour market, crises, inflation and geopolitical shocks, our industry continues to grow. We consider this a great success, as no other sector of the Czech economy has shown such resilience and consistent growth as ours over the past ten years,”

explains Jonathan Appleton, Director of the industry association ABSL, adding:

“Over the next two years, we expect another 25,000 jobs to be created in the industry, across the Czech Republic, particularly in dynamic locations such as Brno, Liberec, Hradec Králové and České Budějovice. These will be innovative, digital and global positions with high added value, which represent a significant contribution to the country’s vision as a digital and innovative leader in global business.”

According to the ABSL survey, 59% of Czech business and IT service centres plan to expand and grow in the coming period. In order to continue to expand their reach and provide their parent companies with the breadth and quality of innovative services and support that is required of them, companies have had to step up their adoption of technologies that allow them to automate and simplify a range of activities due to human resource shortages caused, among other things, by inflexible economic migration strategies. On average, then, these technologies do as much work in each centre as 53 full-time human workers.

“It is technologies such as robotic process automation, artificial intelligence, OCR or data visualisation tools that enable further growth in the reach of centres, as well as their productivity and economic performance. According to our estimates, we contribute over $20 billion annually to the country’s economy,”

adds Jonathan Appleton. The growing contribution to the Czech economy is also due to the increasingly skilled work being done by local centres. According to a recent ABSL survey, the fastest growing areas of the industry are cyber and information security services, IT support and data analytics

In addition to the arid labour market, Czech centres must also face rising costs that could threaten the Czech Republic’s competitiveness as a destination for establishing and operating business and IT service centres in the future. According to the OECD, labour taxation in the Czech Republic stands at 39.82%, while in competitor Poland it is only 33.62% and in Ireland, another country that has also long been on the radar of investors, 34.72%. This is the percentage of the cost that each employee pays to the state in taxes, including social security and health insurance, to the total wage bill paid by the employer.

“To avert the risk of potential relocation to cheaper locations, local business and IT service centres must strive for maximum cost efficiency. And technology can contribute to a large extent to this as well. Current trends and case studies are discussed extensively at our conference this year, which starts today,”

concludes Jonathan Appleton, adding:

“I believe that the rich programme we have worked on with hundreds of presenters has outlined how to continue to keep this highly skilled industry growing and contributing from our country to the innovation of global business.”