Ing. Martin Jahn Member of the board of management Š KODA AUTO a.s.

1. Ing. Martin JahnMember of the board of management ŠKODA AUTO a.s. KNOWLEDGE ECONOMY FORUM VInnovation and Technology Absorption for GrowthPrague, March 28-30, 2006

2. The significance of Škoda Auto for the Czech Republic • with sales of CZK 177,8 bln Škoda Auto is the biggest Czech industrial company • 3% of Czech work force is directly or indirectly employed by Škoda Auto • Škoda's exports = 8,2% of the total Czech export • in 2005 Škoda Auto invested approx. 5% of its annual turnover

3. Growth of Škoda Auto in 2005 • record sales: 492.111 cars • record production: 494.127 cars • record revenue:EUR 6,46bln • record before-tax profit:EUR 348mln • record export: EUR 5,27bln • record employment: 26.000 employees • expansion of assembly abroad (India, Ukraine, Bosnia and Herzegovina, Kazakhstan)

4. Competitive Environment labour costsenergy and material costscompetitors (Japan, Korea, China)stronger CZKprices of products

5. Škoda Auto and Knowledge economy Investments – R&D 203 mln EURInvestments – Education 7,8 mln EURŠkoda Auto University 420 students in bachelor studyŠkoda Auto Mechanical960 apprenticesengineeringvocational schoolŠkoda Auto - R&D center 1420 employees

6. Top- management GEF Top-management juniors GJEP iLead management interculturaltraining qualification standards management juniors talents know-howtransfer Trainee- programme graduates supervisors specialists scholarship students JUST- pool apprentices Qualification and Top competencies as the competitive advantage of Škoda Auto target group activities MBA management programme management talents programme permanent learning on the job off the job production systemŠkoda supervisorschool competenciesdevelopment Škoda Auto University training vocationalschool

7. Building up the level of education and innovations by combining knowledge management and practice Campus „Na Karmeli“ – the public-private partnership Škoda AutoUniversityschool for economic thinking - business and marketing professionals Event Managementcatering, after-work party, concerts, exhibitions, festivals Coaching coaching, flow-teams, innovative processes Center of technical universities start of close co-operation between research lectures and students with company specialists and their involvement in the solution of new tasks Knowledge managementinternet center/café, media library, study room, expert discussion forums, workshops

8. Building up the level of education and innovations by combining research and practice The extension of Technological Center • 2009 • Area of the new center: 38.000 sq.m. • Floor area of the labs and offices: 11.000 sq.m. • Investment: EUR 38 mln • New jobs: 370 employees

9. Škoda Auto - Knowledge economy in the future Innovation ManagementR&D linked with ProductionŠkoda Auto University – Master‘s DegreeCooperation with educational institutions – IQ Auto

10. Emphasis on knowledge economy Support of R&D demand, Innovation Support of R&D infrastructure, building capacity on „supply side“ Mobility of R&D workers SME Support – consortium of SMEs as a final beneficiary Efficiency in respect of administration expenditure: Relatively small grants provided Administration/project expenditure for SME in line with HR capacity of SME The cost of providers Results of SME projects Support clusters of SMEs linked to big companies SMEs involved in robust R&D project led by big company Activity from FP focused on SMEs put into programmes on national/regional level Czech Republic – Financial perspective 2007-2013

11. Conclusions Knowledge economy is the only answer to globalisation Knowledge economy = deindustrialization Quality over Quantity Public-private partnership Permanent learning and change = stable security

12. THANK YOU.