The State of Electrical Engineering in the Czech Republic: Where We Are Now and What Comes Next
The State of Electrical Engineering in the Czech Republic: Where We Are Now and What Comes Next
The electrical engineering industry is not "somewhere in the background" – it is one of the pillars of the Czech manufacturing industry and the heart of hundreds of thousands of products. In 2024, it accounted for 14.4% of manufacturing industry sales, with industry sales reaching CZK 689 billion. A new study by the Electrical Engineering Association of the Czech Republic in cooperation with BDO shows that the sector has weathered the turbulent global environment in recent years, but faces fundamental strategic challenges: it is under pressure from labor shortages, more expensive energy, geopolitics, and regulation. At the same time, it is being driven forward by digitalization, automation, and pressure for higher added value. The following text offers a quick overview of selected findings from the study.
WHAT DOES THE MARKET DATA SAY?
The numbers speak for themselves: sales in the electrical engineering sector rose from CZK 607 billion to CZK 689 billion, and in 2024 the sector will account for approximately 14.4% of sales in the entire manufacturing industry. However, there are interesting shifts taking place within the sector: electronics and optics (NACE 26) faced a gradual decline, with its share of the manufacturing industry falling from 7.8% (2020) to 5.9% (2023). However, 2024 brought a recovery, and the sector returned to a share of around 6.7% with revenues of over CZK 320 billion. On the other hand, the manufacture of electrical equipment (NACE 27) increased its turnover every year, climbing from CZK 300 billion in 2020 to more than CZK 410 billion in 2023, and although 2024 brought a slight decline, the sector's growth remains significant and maintains a stable share of 7.7% within the manufacturing industry.
The foreign trade balance for the electrical engineering industry is negative, and we import more products than we export, yet NACE 27 managed to achieve a positive balance in 2024 after five years. In NACE 26, stronger import pressures on selected items (e.g., telephones, chips) are among the factors preventing a positive balance, worsening the balance. Exports in NACE 27 are concentrated in a small group of markets—ten countries account for approximately three-quarters of exports. The main markets remain Germany, Slovakia, Poland, and other EU countries.
HOW IS THE SECTOR STRUCTURED?
The Czech electrical engineering industry is based on a broad base of small and medium-sized companies, which make up the vast majority of companies on the market. The MERK database lists almost 4,900 companies with their main activity in NACE 26 and 27; approximately 1,600 of them have an annual turnover of more than CZK 500,000. However, there are only about 90 large players with a turnover of over CZK 1 billion – yet they account for a key part of turnover and employment. Geographically, companies are mainly concentrated in Prague and the Central Bohemian Region, reflecting the concentration of capacity, logistics, and services in this region.
The study also provides a ranking of the TOP 30 companies by turnover operating in CZ-NACE 26 and 27. The companies in the ranking generate a total of more than CZK 450 billion. From an ownership perspective, foreign capital dominates, often from outside Europe (Taiwan, USA, South Korea, Japan). European headquarters are often located elsewhere than in Czechia (e.g., in Hungary, the Netherlands, or Germany). This has adverse effects on the Czech Republic: strategic decisions on investments, development, or closure of operations are made outside the Czech Republic, part of the profits flows out, and the motivation to localize R&D tends to be weaker if innovation management is not domestic.
Within the industry, two different worlds can be seen. NACE 26 is highly concentrated and is based mainly on the Foxconn group, whose Czech plants account for approximately 39% of the entire section; this is one of the reasons why "only" seven companies from NACE 26 are needed in the TOP 30 to generate 48% of the ranking's turnover.
In contrast, NACE 27 (electrical equipment) is more fragmented, with individual companies accounting for shares in the single digits. Looking at product classes, 27.1—motors, generators, transformers, and distribution equipment—carries the most weight. In 2024, it accounted for 48% of the total sales of NACE 27 and employed approximately 49,000 people. The growth of this class is supported by the modernization of energy, rail technology, and pressure for more efficient drives. Class 27.2 – Batteries and accumulators also grew dynamically, by approximately +58% (2020–2024), driven by demand for Li-ion cells for electromobility and backup power sources.
There are no purely Czech-owned companies in the TOP 30 ranking – and although this openness brings know-how and orders, it also weakens domestic decision-making leverage over where cutting-edge technologies will take root in Czechia and how much of the profits will be reinvested.
WHAT DID THE SURVEY AMONG COMPANIES REVEAL?
Companies in the industry are operating at high speeds. Three-quarters of them used more than 80% of their capacity in 2024, and manufacturers of measuring and testing equipment, for example, reported that six out of ten companies had a capacity utilization rate of over 90%. At the same time, it has been confirmed that NACE 27 is export-oriented by definition, with most companies sending more than half of their production abroad. NACE 26, which includes the manufacture of computers, electronic and optical instruments and equipment, is more diverse, with many companies having mainly domestic customers.
In terms of technology, electrical engineering companies are not lagging behind. Most companies plan to introduce new technologies over the next two years – from predictive maintenance and advanced data processing to artificial intelligence in production and logistics. Additive manufacturing (3D printing) has meanwhile changed from a "novelty" to a standard tool for prototyping and smaller series. On the other hand, companies are troubled by a shortage of skilled workers, excessive paperwork and frequent regulatory changes, the complexities surrounding ESG, uncertainty in the energy sector, and geopolitical risks.
TRENDS AND CHALLENGES THAT WILL DRIVE THE INDUSTRY FORWARD
1) Automation and digitization: from pilots to everyday operations
Digitization is no longer a "project" but a way of working. In practice, companies often start with data—they monitor machine utilization, quality, and energy consumption. Predictive maintenance is then added to this, which helps prevent breakdowns and saves time and money. The next step is usually the use of AI in production and logistics – for example, in shift planning, short-term forecasting, or flow optimization. Large players are further ahead in digitization and automation, but smaller companies are catching up quickly thanks to more accessible technologies and smart partnerships.
Almost seven out of ten companies plan to deploy new technology in the next two years – this is already a clear trend, not just isolated initiatives.
2) ESG and energy: from checking “papers” to a business advantage
European rules are here to stay. Those who have their energy and emissions data in order will find it easier to access financing and will be in a better position in tenders, especially with multinational customers. Banks are gradually incorporating ESG into their credit models, so it is not just a matter of reporting, but also of the cost of money. In addition, there are support programs for savings and the circular economy, which can kick-start the return on investment in technology and energy management. Some international companies are already starting to monitor ESG and the carbon footprint of their customers and suppliers and include them among the key criteria in their selection process.
A high-quality ESG report and realistic steps to reduce emissions often directly help companies win contracts today.
3) Supply chains: certainty over "just-in-time"
Global supply chains have undergone a fundamental restructuring in recent years due to geopolitical tensions (US–China) and extraordinary events such as pandemics and war. The EU has identified 137 products with increased import dependency, of which 52% of critical imports come from China; for selected rare earths, the dependency reaches up to 98%. In response, in 2023 the EU adopted the Critical Raw Materials Act, which aims to diversify sources, and the European Chips Act, which aims to capture 20% of global chip production by 2030, increase resilience, and support R&D. For Czech companies, this means the opportunity to participate in newly emerging value chains in the EU and, at the same time, the need to systematically diversify suppliers and contractually secure key items. This is in line with the findings of the study, where companies most often cite challenges in the limited number of suppliers and long delivery times for critical components.
China's role in imports to the Czech Republic is still very evident, accounting for about one-third of the value of electrical engineering product imports, while Czech exports are mainly directed to the EU.
4) People and skills: a tailwind
After years of pressure due to a shortage of skilled workers, the outlook is improving: the number of graduates in technical fields such as electrical engineering, energy, electronics, and automation is growing. But that alone is not enough. Those who really want to strengthen capacity must quickly get graduates up to speed in practice and systematically invest in the skills of existing teams—while automating routine tasks so that people can devote themselves to work with higher added value.
In 2024, the number of electrical engineering graduates will almost reach the record level of 2011.
WHAT DOES THIS MEAN FOR MANAGEMENT?
Today, companies are increasingly relying on data—regular monitoring of quality, energy consumption, and machine utilization paves the way for predictive maintenance and better planning. Gradually, the first wave of AI in manufacturing and logistics is being added to this, taking productivity to the next level.
ESG is increasingly emerging as a business issue. High-quality data and a clear strategy for reducing consumption and emissions help in tenders and open up access to support.
From a supply chain perspective, it is essential to diversify risks – especially for critical items such as batteries or specific components from third countries.
And in the future? Investments in people and automation complement each other – education advances the team's capabilities, while automation brings capacity and margins.
The Czech electrical industry has a strong position and a solid foundation. However, the next decade will determine whether we move towards greater self-sufficiency and higher added value, or get stuck in the "middle-of-the-road trap." The direction is clear: digitize smartly, rely on data, reduce energy consumption, diversify chains, and take full advantage of public and private investment in R&D. Those who add investment in people and automation will not just "assemble for others," but will create final solutions with higher margins. Data from the study show that companies are already changing course—they are planning innovations, increasing their export ambitions, and looking for opportunities in strategic technologies. Only one thing will matter: speed and quality of execution.
ABOUT THE STUDY:
The study was initiated by the Czech Electrical and Electronic Manufacturers' Association. It was prepared in cooperation with the BDO team.
The study aims to provide a data-driven, comprehensible, and professionally grounded view of the development and structure of the Czech electrical engineering sector in the period 2020–2024.
The purpose of this study was not only to describe the current position of the sector, but above all to help companies, institutions, and legislators better understand its dynamics and prepare for future developments.
The study therefore combines statistical data (Czech Statistical Office, Ministry of Industry and Trade, Czech National Bank, Eurostat), annual reports, and data from the MERK database with a qualitative survey of companies. The questionnaire survey was conducted in April–June 2025 and involved 50 respondents across CZ-NACE sections 26 and 27 and related fields. The data was evaluated anonymously.