One of the problems preconditioning the slow pace of IT technologies rise is the existing legislation. By the current laws, the Czech state can conduct business through its participation in a joint-stock company or via a state enterprise (Ondrich & Sebestova, 2017). In such a way, state-owned enterprises (SOE) acquire increased topicality every year because of multiple resources available to them (Ondrich & Sebestova, 2017). At the same time, the legal framework is not sufficient and effective enough to establish transparent management of SOEs and guarantee their appropriate functioning and desirable outcomes (Lane, 2015). For this reason, the old companies apply for state contracts as it helps the state to generate additional revenues by its participation in their functioning. However, it also means that the absence of transparency might precondition their decreased effectiveness compared to other, new, and less famous ones.
Another possible reason is the lack of appropriate infrastructure needed to support the implementation of technologies in all spheres of human activities and improve the quality of people’s lives (Hudeček et al., 2019). The efficiency of digitalization suffers if it is not supported by the changes in the way central institutions or agencies function (TMF Group, n.d.). In such a way, small companies designing innovative devices or solutions face the barrier preconditioned by the overall low level of preparedness for using such technology, while old and acknowledged firms might work following the course of the state and its current orders (Lichnovsky et al., 2020).
In such a way, the effectiveness of digitalization might suffer if the state does not have strong laws regulating the work of companies belonging to the IT sector and establishing fair competition between them to foster positive change.
References
Hudeček, T., Hnilička, P., Dlouhý, M., Leňo Cutáková, L., & Leňo, M. (2019). Urban structures, population density and municipal expenditures: An empirical study in the Czech Republic. Urban Studies, 56(16), 3450–3465. Web.
Lane, A. (2015). Challenges of company start up in Czech Republic. Healy Consultants.
Lichnovsky, J., Skubal, J., Maskova, M., Matejka, M., Bruger, J., Loebl, Z., Rosenzweigova, I., Sviatkin,I., Antonov, I., Vlasak, T., & Kiszkova, T. (2020). Doing business in the Czech Republic: Overview. Thomson Reuters. Web.
Ondrich, J., & Sebestova, J. (2017). Corporate governance in Czech state-owned companies. State Capture. Web.
TMF Group. (n.d.). Top 10 challenges of doing business in Czech Republic. TMF Group.