ŠAVŠ/TAČR Digital Czechia in a Digital Europe

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renewal of corporate information technology, i.e. the purchase and installation of new hardware and software. The second most common digitalization project (52% of companies) was the modernization of the user interface (in most cases it was the modernization of websites) or systems for communication with suppliers. (NB: this category also includes online marketing and work with social networks.) The third type of the most common digitalization projects (38% of companies) was the development of IT expertise – usually it was the training of employees or company management. A digitalization project focusing on the overall reorganization of the course of work operations only comes in the fourth (29% of companies). 19 However, this type of project is a characteristic feature of a higher level of digitalization, which can fundamentally reform or modify the business model. In order to significantly strengthen the competitiveness of domestic SMEs, the Czech Republic should not only strive to create infrastructure and financial background for the development of digitalization but should also strive to set up the system to encourage SMEs to implement higher-level digital projects as much as possible. Website modernization, presence on social platforms, renewal of ICT systems or a better interface for communication with suppliers are undoubtedly favorable steps, but in the long run this lower type of digitalization may seem to be quite insufficient. Therefore, in an effort to digitalize faster than other countries, the Czech Republic should not only take into account how many Czech SMEs apply digitalization projects but should also seriously consider what types of digitalization projects are implemented. In so doing, a preference must undoubtedly be given to higher-level digitalization projects – i.e. such projects that are more complex and impact more deeply upon the functioning and overall structure of the company that implements them. When creating incentives for digitalization, the Czech Republic could apply, for example, the method of progressive favoritism based on the principle: the more complex digitalization project (or possibly multiple projects) the individual SME decides to implement, the greater the financial support (whether in the form of direct co-financing, grant or financial relief ) which he/she may receive. In this context, it is necessary to mention another important variable. There exists a very clear correlation between the size of the company (especially with regard to the number of employees) and the ability of said company to implement and successfully complete a digitalization project. According to a study by KfW Research Focus on Economics, in the case of SMEs with less than five employees, only 24% of the surveyed companies have successfully 19 Zimmermann Volker, Digitalization in German SMEs: state of implementation and investment, KfW, 17/03/2018, see https://www.kfw.de/PDF/Download-Center/Konzernthemen/Research/PDF- Dokumente-Fokus-Volkswirtschaft/Fokus-englische-Dateien/Fokus-2018-EN/Fokus-No.-202-March- 2018-Digitalization-in-German-SMEs.pdf.