Economic geography and spatial patterns of development

Economy of Czech Republic

In the past two decades, the Czech Republic has transformed its economy from a Communist command economy to a free-market economy integrated into the global market. Formerly a member of the Communist Soviet Union, the Czech Republic is now part of a supranational political entity composed of Western-style democracies called the European Union. (CIA World Factbook) Because of its location and its legacy of heavy industrialization, the Czech Republic has been able to achieve impressive economic development during its transformation into a Western-style Democracy. (IMF) However, the country's focus on labor-intensive industrial manufacturing makes it vulnerable to cheaper foreign labor. Thus, Czechoslovakia must prepare for economic shifts by developing its capabilities in knowledge-based service industries.

The Strengths of the Czech Republic Economy

The Czech Republic is a traditional industrial power because it was a central part of the prosperous Austro-Hungarian Empire before World War I. (CIA) the Economy of the Czech Republic is largely built on heavy industrial manufacturing, primarily steel, machinery, transportation equipment, and chemicals. (CIA) it is also engaged in light industrial manufacturing, primarily textiles, glass, beer, ceramics, and pharmaceuticals. (CIA)

Because of its late integration into the global economy, Czechoslovakia has been able to achieve leapfrog development of its infrastructure. Countries which lack certain types of infrastructure, and which have to adopt new infrastructure, end up receiving the most recent and advanced technology because of their late development. For the Czech Republic, this phenomenon has occurred in its telecommunications infrastructure, with the Czech Republic boasting some of the highest rates of wi-fi access in Europe. (http://www.budde.com.au)

Weaknesses

Czechoslovakia as a relatively small population with a rising level of wages and standard of living. With a population of 10.5 million people and a labor force of 5.37 million, Czechoslovakian industry may not always be able to compete against industrial powers with larger labor forces such as Germany or cheaper labor forces such as China or even its own Eastern European neighbors. (UN Dept of Social and Economic Affairs) This is especially true if the European Union and the World Trade Organization continue to relax restrictions labor and trade restrictions, which typically protect domestic workers from foreign competition.

Basics of Economic Development Plan

Considering Czechoslovakia has a well-educated population and great wi-fi infrastructure, it has an opportunity to develop its knowledge-based service sector. With its well-educated population and various cultural exchanges with Western Europe, Czechoslovakia has a chance to develop its competence and activity in traditional knowledge-based fields such as financial and legal services. Also, Czechoslovakia's impressive wi-fi infrastructure will make it possible for the country to be a leader in high-tech services.

Consequences of Economic Development Plan