Prague ranks high as a European center for ‘brain business jobs’

A new index ranks regions according to the number of jobs at knowledge-intensive firms in tech, IT, and creative professionals. Staff

Written by Staff Published on 20.03.2023 14:26:00 (updated on 20.03.2023) Reading time: 2 minutes

Prague has become one of Europe’s main centers for knowledge-intensive work, though Czechia as whole lags behind the average.

Countries and regions that have a high share of working-age people in knowledge-intensive enterprises have lower unemployment, according to research by the European Institute for Policy Reform and Entrepreneurship (ECEPR).

Prague has 19.9 percent of the workforce engaged in “brain business jobs,” referring to employment in knowledge-intensive firms in tech, information and communications technology, advanced services, and creative professions. The figures come from the ECEPR’s 2022 index “The Geography of Europe’s Brain Business Jobs.”

Tied for second in brain business jobs

Bratislava remains the European region with the highest concentration of brain business jobs, at 22 percent, while Budapest and Prague came second and third – both at 19.9 percent – from among 267 European regions monitored for ECEPR’s index.

The Czech capital also has another 19.2 percent in manufacturing and 18.9 percent in services, adding up to 58 percent of the workforce in these three high-value-creating job sectors. This is the second-highest rate in all of Europe after Bratislava. Paris was third.

The report found a strong link between the combined share of employment in those three high-value-creating sectors and regional unemployment. Czechia has long had one of the lowest unemployment rates in Europe, according to Eurostat figures.

European regions cooperate on innovation

For the purpose of the index, Prague was considered part of Eastern Europe. In total, four of the top 10 centers for knowledge-intensive work were in that area – Bratislava, Prague, Budapest, and Warsaw.

Those cities together with Bucharest have almost as many brain business jobs as London, Klas Tikkanen, the COO of Nordic Capital, said in the introduction to the index. Private equity firm Nordic Capital commissioned the report.

“Some of these capital regions even have a higher concentration of brain business jobs than London, although smaller total populations,” he added. London has 15.4 percent of its workforce in knowledge-intensive work.

Innovation companies in places such as Stockholm and London now often reduce costs by outsourcing part of their work to knowledge centers in eastern or southern Europe. This means European innovation occurs in cooperation between regions, Tikkanen added.

Rest of Czechia lags behind Prague in knowledge-based jobs

As a whole, Czechia was in the lower half of the 31 surveyed European countries for working-age people in brain business jobs, coming at 6.4 percent. Switzerland and Ireland led this list at 10.1 percent.

The country has shown improvement with the share of employment in knowledge-intensive jobs increasing from 5.3 percent in 2014. While this level of improvement was about average, three countries – Denmark, Iceland, and Greece – saw their shares fall.

“The challenge for Czechia is to keep its impressive growth trajectory and to continue to develop Prague as a brain business hub, later expanding the success to other parts of the country,” the index stated.

Compared to the rest of Europe, Czechia has strengths in design and other creative professions, advertising and market research, and high-tech manufacturing. Despite the presence of big film studios, though, the country lags in film/TV/music. It also ranked poorly in the head office and management category.

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