**4. A national digital agenda framework**

The subchapter is subdivided from the general definition of requirements for the creation and the national digital agenda framework, where the main areas are presented: enable digital and technology innovation; stimulate entrepreneurship; improve access to capital; regulate for the future, and build the skills and talent of tomorrow [8]. Then the *Czech Digital Agenda* is introduced in primary areas of focus, and then we employed the policy practices for practical reflection on what could be with what exists.

According to Ref. [8], enabling digital and technology innovation is based on the support of the development of innovation clusters with digital infrastructure, connecting start-ups to leading national companies and universities and attracting leading technology multinational corporations to establish national operations through tax subsidies.

In all introduced areas are stated the strategic priorities. In enabling digital and technology, innovation plays a role [8]:


Many of these topics could be implemented on a cross-national basis, either as agreed upon best practices or with one nation taking inspiration from another. This recommended overview for the creation of national digital agenda framework is then added by a realistic reflection that already exists in the Czech Republic.

### **4.1. Czech digital agenda**

The Czech Republic performs in line with the EU member states average in three (*integration of digital technology*, *changes in ICT start-up environment*, and *investments and access to finance*) out of seven dimensions (the remaining four ranks are *entrepreneurial culture*, *supply and demand of digital skills*, *e-leadership*, and *digital infrastructure*). Despite high marks in *e-leadership* at the national level, in comparison to the EU partners, the country is still slightly below the EU average. In the dimension entrepreneurial culture, the country scores significantly below the average of EU member states, to be precise 36% lower. Similarly, there is a shortfall regarding supply and demand of digital skills, the country's performance is around 18% below the EU average. The Czech Republic scores slightly above the average of the EU member states regarding investment and access to finance. Overall, the country performs broadly in line with the EU average. However, there is room for improvement in entrepreneurial culture and

The subchapter is subdivided from the general definition of requirements for the creation and the national digital agenda framework, where the main areas are presented: enable digital and technology innovation; stimulate entrepreneurship; improve access to capital; regulate for the future, and build the skills and talent of tomorrow [8]. Then the *Czech Digital Agenda* is introduced in primary areas of focus, and then we employed the policy practices for practical

According to Ref. [8], enabling digital and technology innovation is based on the support of the development of innovation clusters with digital infrastructure, connecting start-ups to leading national companies and universities and attracting leading technology multinational

In all introduced areas are stated the strategic priorities. In enabling digital and technology,

• *Enable digital and technology innovation*—fully digitize government processes; invest in IT, telecommunication, and digital infrastructure; drive the SME transition to digital and mobile-first; support digital and technology clusters; attract leading technology MNCs; invest

• *Stimulate entrepreneurship*—tax stock options as capital gains, steer public tenders and procurement toward SMEs and start-ups, link up tertiary education and start-up communities, introduce digitization and technology vouchers for SMEs, recognize and promote signifi-

• *Improve access to capital*—attract world-leading and regional venture funds, introduce tax breaks on angel investments, simplify public funding structures, use public funds for matching venture capital investments, shift a significant part of pension funds' investment

supply and demand of digital skills.

30 Digital Transformation in Smart Manufacturing

**4. A national digital agenda framework**

reflection on what could be with what exists.

cant entrepreneurial activity at national level.

mix to established venture capital funds.

innovation plays a role [8]:

corporations to establish national operations through tax subsidies.

in IoT and big data; harmonize ICT standards for new technologies.

The updated *Action Plan on the Development of Digital Market* [16] includes the initiative "*Society 4.0*," which is an umbrella for the various sectoral strategies, e.g., in education, labor, and industry. The emergence of the so-called FIR will increasingly lead to significant changes not only in manufacturing but also in an intertwined way in the labor market, education, and other areas. These changes are associated with the development of the Internet of things, the use of digitization, and the Internet in all areas of economic and social life.

Therefore, innovation in each of the above sectors must be carried out simultaneously and in a coordinated manner, and it is necessary to examine the issue in its social dimension, as "*Society 4.0*." On 15 February 2017, the Government approved the establishment of the Alliance Society 4.0, whose primary task will be to ensure coordination of agendas related to FIR. The *Alliance* will act as a coordination mechanism allowing the involvement of economic and social partners and representatives of the academic and scientific communities. At the end of June 2017, the *Alliance Society 4.0* will submit to the government an *Action Plan for Society 4.0*, which will include actions in specific areas of industry, education, and the labor market. Regarding priority areas, the *Digital Agenda* identified six headings under which individual measures are identified and developed, namely the following six areas. The first is so-called cross-cutting priorities, including, for example, legislation on legislation and assessment of its impact on the *Digital Agenda* for the *Company's activities 4.0*. Other priorities are e-skills, e-commerce, e-government, and e-security. The last round is e-challenges that include open data or shared economy measures.

For the coordinator's role, the following priorities were set [16]:

#### **1.** *Cross-border priorities*

• Analytical activity—cooperation in updating Study Czech Internet Economy; extending the membership of relevant working committees on law professionals and digital agenda processes; extension of the RIA membership base; creating a submethodology for drafting legislation and assessing the impact of regulation from a digital agenda point of view.

• Company 4.0—establishment of Alliance Company 4.0; introducing the Work Initiative Study 4.0; developing Education Initiative 4.0; research projects within Company 4.0; action plan for Company 4.0.

trends and outline measures that would not only boost the economy and industrial base but also help prepare the entire society to absorb this technological change. The document contains mapping and measures to promote investments, applied research, and standardization and deals with issues related to cybersecurity, logistics, and legislation. The measure serves as a regulatory framework providing information on the need for urgent changes related to the FIR for the government, ministries, and social partners to promptly apply specific measures. The initiative *Industry 4.0* simultaneously aims to mobilize the business community and the stakeholders to

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In January 2017, the government established the *Alliance Society 4.0* as a coordination platform working on the Action Plan (Society 4.0). The platform was established under the *Digital Coordinator of the Czech Digital Agenda*, established by the government office. The platform brings together economic and social partners, representatives from the academic and scientific communities, and experts from private and public sectors. The *Action Plan Society 4.0* is a practical implementation of several agendas related to P40 to coordinate activities of individual ministries and other relevant governmental bodies. Moreover, the *Alliance* is also developing a system of information and feedback in public administration to promote and disseminate the implication of the Fourth Industrial Revolution. Simultaneously, this is an opportunity to inform and educate the general public about the topic and related changes [9]. *Society 4.0* will include in particular new approaches in the field of new technologies, industry, manufacturing and services, energy, healthcare, SmartCities, regional development, e-government, broadband infrastructure, the Internet of Things, and Services. Implementation of new technologies in these areas and overall digitalization on all levels require particular attention on cybersecurity to be included in the *Action Plan*. Similarly, the strategy will address the necessary modifications linked to the labor market, education, R&D, and fiscal and monetary policy. The *Alliance* is struc-

Regarding barriers to the implementation of P40, two main aspects were identified. So far, a positive development of the Czech industry leads to a reluctance to change, even though it is only a short-term perspective. The Fourth Industrial Revolution cannot be stopped, and its implications are irreversible. Furthermore, the society is not entirely familiar with the concept of Industry 4.0, and the misleading, insufficient knowledge about the subject is reinforcing the reluctance to change [9]. There is a deficient coverage of the broadband connection in some of the regions in the Czech Republic. A high-speed broadband connection across the whole

Public funding is based on the financial tools already in place. The *operational programs* and subsidy programs of the ministries and the *Technical Agency* are available to support P40 related projects. The government is currently looking into making changes to investment law for the benefit of the initiative. The financial resources allocated in the program OP PIK (€4.5 billion) administrated by the MIT already offers several suitable programs to support P40 activities. Several programs focus on the promotion and funding of scientific activities and the building of partnerships between the business sphere and R&D organizations, e.g., *Potenciál*

become actively involved in the implementation process.

tured into strategic, managerial and working, and coordination level.

country is a necessary condition for the smooth implementation of P40.

**4.3. Public financing via existing operational programs**


We also involved the following sector priorities [16]:


By the areas mentioned above, it can be stated that the Czech Republic has set the assumptions in the theoretical level, but on the practical level, it is common that the partial steps are only in the "progress report" state but lack the achieved outputs that have been set. There is also a shift away from the desired (for example, the framework of digital agenda presented above) from reality.

### **4.2. Policy practices**

The long-term goal of the initiative *Industry 4.0* is to maintain and enhance the competitiveness of the Czech Republic at the onset of the Fourth Industrial Revolution. The measure was introduced by the *MIT* and approved by the *Czech government* in 2016. The initiative aims to indicate possible trends and outline measures that would not only boost the economy and industrial base but also help prepare the entire society to absorb this technological change. The document contains mapping and measures to promote investments, applied research, and standardization and deals with issues related to cybersecurity, logistics, and legislation. The measure serves as a regulatory framework providing information on the need for urgent changes related to the FIR for the government, ministries, and social partners to promptly apply specific measures. The initiative *Industry 4.0* simultaneously aims to mobilize the business community and the stakeholders to become actively involved in the implementation process.

• Company 4.0—establishment of Alliance Company 4.0; introducing the Work Initiative Study 4.0; developing Education Initiative 4.0; research projects within Company 4.0;

**2.** *E-skills*—creating a platform for discussion on digital education; mapping of digital educa-

**3.** *E-commerce*—organizing a conference on e-commerce; mapping market players active in the field of e-commerce to communicate with the state administration and to set up a functional communication channel; coordination of the activities and opinions of individual

**4.** *E-government*—developing an analysis of procedural legislation; setting up an internal methodology for using digital tools within ministries and other central government authorities; research of already functional and planned digital services; communication with economic and social partners, ministries, the European Commission, and the public; collaboration with self-government in e-government project development and implementation

**1.** *Infrastructure development*—Internet networking, revision of the EU regulatory framework for electronic communication networks and services, digitization of television broadcast-

**2.** *The development of digital competences*—initial education, improving digital literacy of citizens.

**3.** *Access to goods and services*—online data protection, copyright revision, reducing adminis-

**4.** *Development of electronic public administration*—electronic communication with authorities, electronic health service, electronization of social services, and electronization of justice.

By the areas mentioned above, it can be stated that the Czech Republic has set the assumptions in the theoretical level, but on the practical level, it is common that the partial steps are only in the "progress report" state but lack the achieved outputs that have been set. There is also a shift away from the desired (for example, the framework of digital agenda presented above) from reality.

The long-term goal of the initiative *Industry 4.0* is to maintain and enhance the competitiveness of the Czech Republic at the onset of the Fourth Industrial Revolution. The measure was introduced by the *MIT* and approved by the *Czech government* in 2016. The initiative aims to indicate possible

action plan for Company 4.0.

32 Digital Transformation in Smart Manufacturing

national gestors in the area of e-commerce

tion projects

• Measuring the evolution of the digital economy.

**5.** *E-safety*—privacy and privacy protection; cybersecurity

We also involved the following sector priorities [16]:

**5.** *New trends*—Company 4.0, Open Data, Smart Cities.

ing, ensuring cybersecurity.

trative burdens for businesses.

**4.2. Policy practices**

**6.** *E-challenges*—open data; shared economy and online platform; smart cities

In January 2017, the government established the *Alliance Society 4.0* as a coordination platform working on the Action Plan (Society 4.0). The platform was established under the *Digital Coordinator of the Czech Digital Agenda*, established by the government office. The platform brings together economic and social partners, representatives from the academic and scientific communities, and experts from private and public sectors. The *Action Plan Society 4.0* is a practical implementation of several agendas related to P40 to coordinate activities of individual ministries and other relevant governmental bodies. Moreover, the *Alliance* is also developing a system of information and feedback in public administration to promote and disseminate the implication of the Fourth Industrial Revolution. Simultaneously, this is an opportunity to inform and educate the general public about the topic and related changes [9].

*Society 4.0* will include in particular new approaches in the field of new technologies, industry, manufacturing and services, energy, healthcare, SmartCities, regional development, e-government, broadband infrastructure, the Internet of Things, and Services. Implementation of new technologies in these areas and overall digitalization on all levels require particular attention on cybersecurity to be included in the *Action Plan*. Similarly, the strategy will address the necessary modifications linked to the labor market, education, R&D, and fiscal and monetary policy. The *Alliance* is structured into strategic, managerial and working, and coordination level.

Regarding barriers to the implementation of P40, two main aspects were identified. So far, a positive development of the Czech industry leads to a reluctance to change, even though it is only a short-term perspective. The Fourth Industrial Revolution cannot be stopped, and its implications are irreversible. Furthermore, the society is not entirely familiar with the concept of Industry 4.0, and the misleading, insufficient knowledge about the subject is reinforcing the reluctance to change [9]. There is a deficient coverage of the broadband connection in some of the regions in the Czech Republic. A high-speed broadband connection across the whole country is a necessary condition for the smooth implementation of P40.

#### **4.3. Public financing via existing operational programs**

Public funding is based on the financial tools already in place. The *operational programs* and subsidy programs of the ministries and the *Technical Agency* are available to support P40 related projects. The government is currently looking into making changes to investment law for the benefit of the initiative. The financial resources allocated in the program OP PIK (€4.5 billion) administrated by the MIT already offers several suitable programs to support P40 activities. Several programs focus on the promotion and funding of scientific activities and the building of partnerships between the business sphere and R&D organizations, e.g., *Potenciál*

(Potential), *Aplikace* (Application), *Partnerství znalostního transfer* (Knowledge transfer partnership), and *Proof of Concept* for commercialization of the research results. *Služby infrastruktury* (Infrastructure Services) and *Spolupráce* (Cooperation) support development of the clusters, technology platforms, cooperation networks, innovation centers, and incubators [9].

reflected in other sectors. While it was primarily about replacing manual work, robotization is currently taking place in other segments, such as replacing work with accounting software solutions, automated logistics, maintenance, IoT, or customer approaches (chatbots, software solutions in banking, managed CRM approaches, etc.). A number of examples of companies were identified with a different level of industry introduction rate of 4.0 or their business is

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First, we introduce the leaders in digitization, automation, and robotics (the most advanced technologies, in collaboration with technical research centers, they determine trends, they give direction), and companies are characterized by the implementation of Smart Manufacturing systems leading to Smart Factory. As an example in these high-tech issues is *ABB Czech Republic*—a leading supplier of industrial robots, modular manufacturing systems, and services. The company focus is on manufacturers to improve productivity, product quality, and worker safety. ABB has installed more than 250,000 robots worldwide, e.g., in Zetor Kovárna a.s., where hot materials are processed by a robot; at Composite Components a.s., where a fully automated workplace for milling fiberglass parts is installed; and the installation of the YuMi robot at the Low Voltage Plant in Jablonec nad Nisou. YuMi is the world's first robot enabled to work with people. The

company is a partner of the Czech Institute of Informatics, Robotics and Cybernetics.

As a leader in automotive is *ŠKODA AUTO, a.s.* which implemented approaches in a big data analysis (visualization of the processes across platforms, lean process management, security principles); strategy, methods, and standards for IIoT in production; sensitive robotics—robot KUKA iiwa; system integration; predictive maintenance, system integration, additive manufacturing, and augmented reality. The company's leading projects implemented are: *Smart Maintenance* upgrade in the PKT/4 Central Maintenance Department: this innovation relates to the maintenance of machinery and equipment; *Mobile solution* with installation of *Smart components* that track their own status and report an error or failure; *Transparent Factory*—an automatic data acquisition system (processing and evaluating large data requirements) from all workplaces; *Digital Factory*—using digital models, simulations, methods, and 3D visualizations to efficiently plan, implement, manage, and continuously improve all processes and resources within the plant; and the TECNOMATIX and Siemens digital solutions portfolio

Second, the following companies represent the high progress in software solutions, maintenance, and high technology development areas, for example, *SIMPLECELL NETWORKS a.s*. the first Czech public mobile operator of the SIGFOX technology network for the Internet of things; *SERVODATA a.s.*—focused on business and technology solutions, with the main domain of the portal solutions (e-shops, e-commerce, and portals), project and IT management, business process management, Intranet, Extranet, DMS, (CRM, E-contracts), and business intelligence. The leader in electrical power solutions is *ELCOM a.s.* with drivers, power inverters, industrial power systems, automated test systems, visual inspection, monitoring systems and electrical network analyzers, and activity in software development (instrument drivers and application

The *CERTICON a.*s. company is involved in the innovation and development of software and hardware solutions for the areas of healthcare, telecommunications, and the automotive and

directly related to Industry 4.0 and we give examples.

that enables simulation, testing, and studies.

development.

The program *Pro-Commercial Public Procurement* provides funds and subsidies for innovative solutions for the public sector. Business entities can benefit from the program *ICT a sdílené služby* (ICT and shared services) providing financial aid to support data center operation and development of software or *Inovační vouchery* (Innovation vouchers) for obtaining knowhows. The *Operational Program OP VVV* (Ministry of Education, Youth, and Sports) and the *Operational Program OP Z* (Ministry of Social Affairs) are planned to finance the activities related to the education and social system.

In the light of facts, we have identified the program *Technology* [17] targeting beneficiaries such as start-ups, microenterprises, and SMEs; the program focuses on the acquisition of new machinery and technological equipment. Regarding the territorial dimension, the program focuses on the economically troubled regions and areas with high unemployment rate and urban areas with presumed participation in the integrated territorial investments [17]. The main objective of the program is to provide support to increase the number of new business projects implemented by start-ups and microenterprises. The program falls under the SME support programs for the period of 2015–2020, implemented by MIT of the Czech Republic with a cooperation of *Czechinvest* (Investment and Business Development Agency). The total budget available for the program is 220,795,917 EUR. The subsidy for each project may vary from 3700 EUR (microenterprises) and 37,000 EUR (SMEs) up to 740,000 EUR. The maximum aid intensity is equal to 35% (medium enterprises) or 45% (small and microenterprises) of the eligible costs. *Technology* is a support program within the *OPEIC* (Operational Program Entrepreneurship and Innovations for Competitiveness) [17]. Further programs *Trio* (€140 million), *Gama*, and *Epsilon* administrated by the MIT are considered as other options of the funding for the realization of the P40 activities. These programs aim to improve knowledge transfer between the industry and R&D institutions. At this stage, no model for private financing is in place. The government is planning to explore different possibilities.

The next part introduces selected companies, best practices, and their related issues with Industry 4.0 in the Czech Republic. We have identified many examples of companies that are very active in the area of Industry 4.0 that we have made a categorization of selected companies with a level of penetrating technological development.
