# Transcript: Signal in the noise: how to read the world of polycrisis without panicking

## Description

We will look at how economic shocks spill over into societal moods (anxiety, trust, polarization) and what this does to the willingness to invest, start businesses, and plan.But most importantly, we will learn which practical principles help maintain direction in uncertainty and where the Czech Republic and Europe have real opportunities to “pull forward” despite the storm.



Who is David Navrátil



David Navrátil is a native of the Ostrava region, the chief economist of Česká spořitelna since 2008, and leads the Economic and Strategic Analysis team. He focuses on macroeconomics, megatrends, future development scenarios, and the prosperity of Czech society. He is co-author of the Prosperity and Financial Health Index and Stronger Regions. You can follow his commentary on Twitter, LinkedIn, or the Substack "Money, percentages, and prosperity."

## Transcript

**[00:00:00]** Thank you very much for having me.

**[00:00:31]** Hello and good day. My name is Honza Mašek

**[00:00:34]** and today we are here at the next breakfast of Brain & Breakfast Classic.

**[00:00:39]** We have just finished the beginning,

**[00:00:41]** here we are all in a great discussion,

**[00:00:43]** so I welcome everyone who visited the Magenta Experience Center,

**[00:00:46]** I welcome everyone who is watching us live

**[00:00:49]** and you are already in the company, in the library, in school.

**[00:00:52]** We are very happy that the places are expanding

**[00:00:55]** and that you are watching more and more.

**[00:00:58]** Today it will be about classic breakfasts.

**[00:01:01]** I just want to clarify that two years ago

**[00:01:06]** we made a business clone, but maybe a little later about that.

**[00:01:09]** Anyway, breakfasts have been here for 13 years

**[00:01:12]** and nothing would happen without strong partners,

**[00:01:16]** so we thank the Magenta Experience Center for hosting us here.

**[00:01:21]** Many thanks to Fruity Sim for a great and healthy breakfast,

**[00:01:25]** which you, who are watching us live, will not taste,

**[00:01:29]** but it is a motivation for you to come here next time

**[00:01:32]** so that we can meet here.

**[00:01:34]** Also, of course, thanks to the slides of the Interactivity group.

**[00:01:38]** We will show the slides in a moment.

**[00:01:40]** You will need them, the breakfast will be interactive.

**[00:01:43]** So, slides.

**[00:01:45]** And behind this whole bag is a network called Red Button.

**[00:01:50]** The QR code you see there will take you to the newsletter,

**[00:01:54]** so that you have information about what individual members

**[00:01:59]** and members of about a hundred of them do,

**[00:02:02]** and that they are worthy things and very beautiful.

**[00:02:05]** So, if you are interested, you just need to take this code

**[00:02:08]** and it will take you to the newsletter.

**[00:02:11]** So, as I promised, now it is time to take out your mobile phones.

**[00:02:18]** So, take them in your hands, enter www.slidu.com,

**[00:02:24]** enter the hashtag Brain,

**[00:02:26]** you can take this QR code again,

**[00:02:29]** or if you are watching us live on the Red Button.edu platform,

**[00:02:33]** under the window where you can see me now is the live window of the slide.

**[00:02:38]** And I have already prepared the first question for you.

**[00:02:42]** And the question is, and it is a tradition,

**[00:02:45]** if you are watching us for the first time,

**[00:02:48]** or if you have ever been to a breakfast.

**[00:02:51]** So, it is a kind of a signal test.

**[00:02:54]** So, today it is like this,

**[00:02:57]** that those who have been to a breakfast have already come,

**[00:03:01]** which always bothers me a bit.

**[00:03:03]** I like it when it is the other way around,

**[00:03:05]** because it expands our bubble.

**[00:03:08]** Nevertheless, we have tried it.

**[00:03:12]** So, I would like to welcome our guest today, David Navrátil.

**[00:03:16]** David, please come up to the stage.

**[00:03:20]** Welcome.

**[00:03:22]** What can I say about David?

**[00:03:24]** Just like me, he is from Ostrava.

**[00:03:28]** At the beginning, we said that he is one of the few people

**[00:03:31]** whose podcast I use to slow him down from 2.4 to 2.1,

**[00:03:36]** because it is always a bit faster.

**[00:03:39]** A lot of data, a lot of facts, very interesting.

**[00:03:42]** He is a celebrity on LinkedIn.

**[00:03:44]** His newsletter is really very, very interesting.

**[00:03:47]** I recommend it, and you will see it anyway.

**[00:03:49]** So, David, I give you the floor,

**[00:03:51]** and thank you very much for the introduction.

**[00:03:53]** Thank you very much.

**[00:03:54]** I will quickly turn off my phone so that it does not disturb you.

**[00:03:56]** Thank you very much.

**[00:03:57]** I wish you a good morning.

**[00:03:59]** If you are having breakfast, enjoy it.

**[00:04:02]** And at the same time, I would like to apologize to you,

**[00:04:05]** because, as far as I know, this is the slowest speech you will hear today.

**[00:04:09]** I will only speed up the presentation.

**[00:04:12]** Should I sit down?

**[00:04:13]** Great.

**[00:04:14]** I will sit down, because I am from Orlov,

**[00:04:17]** which is the worst place to live in the Czech Republic,

**[00:04:20]** according to some statistics,

**[00:04:22]** but at the same time, we in Ostrava and primarily in Orlov

**[00:04:25]** are talking about a fast aging time.

**[00:04:27]** So, get ready for that.

**[00:04:29]** I will talk a lot about economic growth,

**[00:04:33]** megatrends and risks,

**[00:04:35]** but what I would like to start with

**[00:04:38]** is that we economists are sometimes

**[00:04:40]** marked by the fact that we are stuck in economic growth.

**[00:04:43]** We still say that the economy should grow,

**[00:04:45]** that we should make various reforms

**[00:04:47]** so that the economy grows faster,

**[00:04:49]** and sometimes we find that some people come and say,

**[00:04:52]** but the economy cannot grow forever.

**[00:04:54]** So why should we focus so much on economic growth?

**[00:04:57]** Let's focus on something else.

**[00:04:59]** We get everything else thanks to economic growth,

**[00:05:03]** and this simple picture here,

**[00:05:05]** where you have paragraphs,

**[00:05:07]** shows that almost everything that improves our economic life

**[00:05:10]** is related to the economic level.

**[00:05:12]** That means, whether it is healthcare,

**[00:05:14]** mortality, education, even happiness,

**[00:05:17]** it turns out that happiness is not just

**[00:05:20]** a momentary increase in the economic level.

**[00:05:24]** Happiness is logarithmic, in other words,

**[00:05:27]** when my income increases by 10%,

**[00:05:30]** my happiness also increases by 10%,

**[00:05:33]** regardless of my assets or income.

**[00:05:36]** So we are stuck in economic growth.

**[00:05:38]** Some people say,

**[00:05:40]** but we cannot eat six or ten steaks a day.

**[00:05:44]** I say, yes, we cannot,

**[00:05:45]** but that does not mean that we should not focus on economic growth,

**[00:05:47]** because economic growth brings us

**[00:05:49]** exactly those other things,

**[00:05:50]** such as education, a healthier life,

**[00:05:52]** a longer, healthier life,

**[00:05:54]** and at the same time some kind of prosperity.

**[00:05:56]** At the same time, if we look at the Lunar Year,

**[00:05:59]** two economists and one historian

**[00:06:02]** got a Nobel Prize for Economics,

**[00:06:04]** where they described very well

**[00:06:06]** what caused economic growth.

**[00:06:08]** And this is starting to be interesting for Czech economists,

**[00:06:10]** because if you look at what they call the main factors,

**[00:06:12]** the main reason why we saw in the past

**[00:06:16]** that economists started to grow,

**[00:06:17]** or accelerated economic growth,

**[00:06:19]** is that we started to combine

**[00:06:21]** knowing why and knowing how,

**[00:06:22]** in other words, science and engineering.

**[00:06:24]** And this is something where the Czech Republic

**[00:06:26]** has a fairly broad field of activity,

**[00:06:28]** because we are the nation of engineers,

**[00:06:30]** we have an engineering approach.

**[00:06:32]** If you look at various indicators,

**[00:06:35]** you can see the added value of improvisation,

**[00:06:39]** or how much improvisation and engineering

**[00:06:41]** we put into our products,

**[00:06:43]** the Czech Republic is among the top.

**[00:06:45]** The only thing we need is to combine it with science,

**[00:06:48]** that is, to know how,

**[00:06:49]** so that we can benefit significantly more

**[00:06:52]** from our engineering.

**[00:06:53]** At the same time, it is about morality,

**[00:06:55]** that is, I am willing to sacrifice a short-term effect

**[00:06:58]** for a long-term growth trend.

**[00:07:02]** In this, we Czechs are a bit weaker,

**[00:07:04]** because if you look at various indicators

**[00:07:06]** that look at how much the Czechs say

**[00:07:09]** that we have or perceive a common long-term vision,

**[00:07:12]** which is the long-term trend we are heading towards,

**[00:07:14]** we belong to various indicators

**[00:07:16]** more like somewhere in the second hundredth of the Earth,

**[00:07:20]** which makes no sense,

**[00:07:21]** because when it comes to various economic indicators,

**[00:07:23]** we belong to the first, second or third hundredth of the Earth,

**[00:07:27]** but in any case, it just shows

**[00:07:29]** that we don't have the long-term trend,

**[00:07:31]** we don't have the vision we are heading towards,

**[00:07:33]** but we are very good at improvising,

**[00:07:35]** that is, at solving the acute problems.

**[00:07:38]** Then there is the connection by purpose,

**[00:07:41]** which Europe is very good at.

**[00:07:43]** These are our various SROs,

**[00:07:44]** share companies, and so on.

**[00:07:45]** In other words, we are not a clan nation,

**[00:07:49]** depending on which family you come from,

**[00:07:51]** but we are able to connect by purpose,

**[00:07:54]** and this is one of the reasons

**[00:07:57]** that historians show was the reason

**[00:07:59]** why China, despite being much more developed,

**[00:08:02]** has not been the economic winner until now,

**[00:08:05]** because Europe has overcome this with these factors.

**[00:08:10]** Then there is the mechanism,

**[00:08:11]** because capitalism is not about capitalists,

**[00:08:14]** but about a system that allows us to prosper.

**[00:08:17]** This means that it is about competition

**[00:08:19]** and creative destruction,

**[00:08:20]** the ability to gain a market,

**[00:08:22]** and at the same time to fight against monopolies and oligopolies,

**[00:08:25]** which disrupt the competitive system.

**[00:08:27]** These are the factors of economic growth

**[00:08:29]** defined by these three Nobel Prize winners for economy.

**[00:08:34]** If we look at a practical example

**[00:08:37]** of what it looks like,

**[00:08:39]** the Czech Republic, or Czechoslovakia,

**[00:08:42]** has become an unwanted participant in the experiment

**[00:08:46]** that shows how changing institutions

**[00:08:49]** can change the trajectory of economic growth

**[00:08:52]** and prosperity of the country.

**[00:08:54]** In 1948, the economic level of the Czech Republic,

**[00:08:58]** Austria, or Italy was very similar.

**[00:09:01]** In 1948, institutions in the Czech Republic changed,

**[00:09:04]** and you can see that the legs started to break.

**[00:09:07]** The Czech Republic began to stay very strongly,

**[00:09:09]** but at the same time it was determined by the quality of life,

**[00:09:12]** that the Czech Republic, or Czechoslovakia,

**[00:09:14]** had a significantly higher expected life expectancy

**[00:09:17]** than developed economies or countries in Central Europe,

**[00:09:21]** but the economic stagnation was reflected in the end

**[00:09:24]** not only in the fact that we had smaller incomes,

**[00:09:26]** smaller assets, but also significantly less healthy

**[00:09:29]** and longer life.

**[00:09:31]** This is a demonstration of how changing institutions

**[00:09:33]** can affect not only economic growth,

**[00:09:35]** but also the quality of life.

**[00:09:38]** Interestingly, in the last 50 years,

**[00:09:40]** the Czech economy has grown by 2.5%,

**[00:09:44]** which is not little or a lot.

**[00:09:47]** If we were to grow by 0.5% slower

**[00:09:50]** in the last 50 years,

**[00:09:52]** thanks to the complex year-round cycle,

**[00:09:57]** we would currently be at the level of Russia.

**[00:10:00]** half a percent less growth over a long period of time.

**[00:10:02]** It changes the way you live, the quality of life you have,

**[00:10:06]** and it's not just about the economic benefits.

**[00:10:10]** If we look at the factors of economic growth,

**[00:10:12]** all the analyses show that the most important factor

**[00:10:18]** that determines the long-term economic growth is innovation.

**[00:10:23]** That means the ability to come up with new ideas

**[00:10:26]** and at the same time to start a business.

**[00:10:32]** That's a half of the long-term economic growth.

**[00:10:36]** A quarter is about human capital.

**[00:10:38]** It's not just about how our children and young people learn,

**[00:10:43]** but also about how we learn in adulthood.

**[00:10:45]** I'll show you how the Czech Republic is doing it.

**[00:10:49]** 15% is about allocations, in other words,

**[00:10:53]** how institutions work, how we have digital and physical infrastructure,

**[00:10:58]** how we have, for example, schools with a working system, and so on.

**[00:11:02]** That means how we allocate the limited resources we have in the economy,

**[00:11:06]** that is, work, capital, and time.

**[00:11:09]** If we were to sum up this part of the economic growth,

**[00:11:13]** when politicians try to increase prosperity anywhere in the world,

**[00:11:21]** the economy tells them clearly that no one has ever come up with a better policy

**[00:11:26]** that would double the standard of living for a single generation

**[00:11:29]** than economic growth.

**[00:11:30]** No one has ever come up with anything better.

**[00:11:32]** You can think about what you can do and so on,

**[00:11:34]** but economic growth is a necessary condition for prosperity to improve.

**[00:11:39]** That's why we, the economy, are the last economic boost.

**[00:11:41]** Not to show that the economy has grown by 2.4%,

**[00:11:45]** but that it really depends on the prosperity of a given nation

**[00:11:49]** or the people who live on that land.

**[00:11:52]** We're getting to the polycrisis.

**[00:11:54]** We're in a situation where, before we think about long-term economic growth,

**[00:12:00]** we feel like we're going to be extinguished by constant fires.

**[00:12:03]** This simple diagram shows a few selected problems

**[00:12:08]** of the economy, politics, geopolitics, society, technology,

**[00:12:13]** the environment and the environment.

**[00:12:16]** It also shows that these problems are interconnected.

**[00:12:19]** This is what we can call a polycrisis.

**[00:12:22]** I think there are many more crises.

**[00:12:25]** Just remember what happened in 2020.

**[00:12:28]** When we start counting, in 2020, we all locked ourselves at home

**[00:12:32]** with toilet paper, napkins and rice.

**[00:12:35]** We still use rice bags.

**[00:12:37]** We were afraid we were going to die.

**[00:12:39]** This lockdown meant that we started buying more grain

**[00:12:44]** and less services.

**[00:12:46]** Logically, because we could only buy grain at home.

**[00:12:49]** But at the same time, when China closed some of its ports

**[00:12:52]** because there were some sick workers there,

**[00:12:55]** suddenly the higher supply of grain was accompanied by a lower supply of grain.

**[00:13:00]** In fact, inflation was gradually rising,

**[00:13:02]** but at the same time it led to a crisis of supply chains.

**[00:13:05]** All of a sudden, the global economy was connected.

**[00:13:09]** At that time, companies were in a mode of just-in-time,

**[00:13:13]** meaning, let's have minimal supplies,

**[00:13:15]** because the supply at home is actually low,

**[00:13:17]** because it can't be optimized.

**[00:13:19]** So, of course, this started to happen.

**[00:13:21]** Here, for example, you can see a picture of that time.

**[00:13:24]** It was a piece of airport in Mladá Boleslav,

**[00:13:26]** where tens of thousands of cars were waiting in line.

**[00:13:29]** Here, you can see how the Czechs can improvise.

**[00:13:32]** German automobiles significantly limited the production of cars,

**[00:13:35]** because they waited for the chips to arrive,

**[00:13:37]** and then the cars would be produced.

**[00:13:39]** So, the Czechs started to improvise.

**[00:13:41]** We just produce the cars, put them on the site,

**[00:13:43]** our chips arrive, we just plug them in, and we're done.

**[00:13:46]** So, it's just a sign that we, the Czechs,

**[00:13:48]** were able to handle this better.

**[00:13:50]** Anyway, the lockdowns and the crisis of supply chains

**[00:13:53]** connected us all of a sudden.

**[00:13:55]** And already at that time, inflation began to change.

**[00:13:57]** That means, when we gradually overcome the inflation crisis,

**[00:14:00]** there was the energy crisis, the war in Ukraine,

**[00:14:02]** the inflation crisis, the Middle East,

**[00:14:04]** Trump 2.0, trade wars,

**[00:14:06]** and we could continue like this,

**[00:14:08]** because we have a lot of conflicts in Africa.

**[00:14:10]** So, for six years, or rather five years,

**[00:14:13]** we've had a relatively large number of crises,

**[00:14:15]** which tend to overwhelm us,

**[00:14:18]** react to us, influence us, or even affect us.

**[00:14:21]** And that's a polycrisis.

**[00:14:23]** So, you feel like you have a lot of crises,

**[00:14:25]** so you have a lot on your mind.

**[00:14:27]** And Aram Tuus describes very well

**[00:14:29]** what's going on in people's heads.

**[00:14:31]** Because when these problems,

**[00:14:33]** and our inability to solve them,

**[00:14:35]** begin to threaten our identity,

**[00:14:37]** meaning what I am in this world of the polycrisis,

**[00:14:40]** that's exactly what leads to various cultural wars in the end.

**[00:14:44]** Why are we starting to go back to the past?

**[00:14:47]** Why do we want to go back and take back control?

**[00:14:50]** This was actually the mood

**[00:14:52]** that Brexit described very well.

**[00:14:55]** Why do we want to go back and take back control?

**[00:14:57]** MAGA is more or less the same,

**[00:14:59]** but when we go to Europe,

**[00:15:01]** we hear the same thing in many areas.

**[00:15:03]** Let's go back and take back control.

**[00:15:05]** Let's go back to the past when we still had control.

**[00:15:07]** It's not possible to go back to the past,

**[00:15:09]** but people feel like there were fewer crises in the past.

**[00:15:11]** They're right.

**[00:15:13]** We've lived in relative peace for several decades.

**[00:15:16]** But the peace from a historical point of view is not completely normal.

**[00:15:19]** Anyway, they want to go back to the past,

**[00:15:21]** but the way to solve these problems

**[00:15:23]** is to go back to the past.

**[00:15:26]** Anyway, this identifies the first mega-trend

**[00:15:29]** that we've seen for a long time,

**[00:15:31]** which is the growing polarization and populism.

**[00:15:34]** If you look at the data,

**[00:15:36]** you can clearly see that the popularity of populists

**[00:15:40]** is continuously growing over time.

**[00:15:43]** In the 90s, the average support was around 10-15%,

**[00:15:48]** and we grew to 30% in the European countries.

**[00:15:52]** At the same time,

**[00:15:54]** economists give you a clear answer to what will happen.

**[00:15:58]** If you look at populist regimes

**[00:16:01]** in the countries of middle economy,

**[00:16:05]** and look at the economic results,

**[00:16:07]** despite the fact that populists say

**[00:16:09]** they will solve all economic problems,

**[00:16:11]** the opposite happens.

**[00:16:13]** Regardless of whether you have a left-wing populist or a right-wing populist,

**[00:16:17]** the economic results are negative.

**[00:16:19]** Minus 10-15% in the horizon of 10-15 years

**[00:16:23]** compared to a long-term economic growth.

**[00:16:25]** In other words, the economic level is decreasing

**[00:16:27]** compared to what would happen

**[00:16:29]** if the populists didn't rule,

**[00:16:31]** because the populists say they will solve the problem.

**[00:16:33]** It's interesting that populists

**[00:16:35]** generally rule for two election periods,

**[00:16:38]** but the negative results exceed the two election periods.

**[00:16:41]** This is due to the fact that populists

**[00:16:43]** often violate the basic allocation principles

**[00:16:49]** for economic growth.

**[00:16:51]** For example, trust in society,

**[00:16:53]** how the courts work,

**[00:16:55]** or how we trust the media.

**[00:16:59]** This is something that exceeds the negative impact,

**[00:17:03]** even though the populists don't rule anymore,

**[00:17:05]** a different political constellation rules,

**[00:17:07]** and the negative impacts continue.

**[00:17:11]** It's interesting that if you look at the programs of the parties

**[00:17:15]** in the developed economies of OECD countries,

**[00:17:17]** you can see one thing.

**[00:17:19]** I said that there is no better growth policy

**[00:17:22]** for increasing prosperity than economic growth.

**[00:17:25]** But if you look at the analysis of the programs of the political parties,

**[00:17:29]** you can see that the growth needs are more or less stagnating,

**[00:17:32]** or even declining for a long time,

**[00:17:34]** and then they grow against growth.

**[00:17:36]** In other words, the political programs

**[00:17:38]** of the political parties in OECD countries

**[00:17:40]** are against economic growth,

**[00:17:42]** against increasing prosperity,

**[00:17:44]** because they have a four-fold or three-fold higher number

**[00:17:48]** of anti-growth measures than for growth measures.

**[00:17:51]** What is the problem,

**[00:17:53]** and this is related to the polarization in society,

**[00:17:56]** is that the basic social contract begins to fall apart.

**[00:17:59]** The basic social contract is that we get up in the morning,

**[00:18:02]** we prepare breakfast,

**[00:18:04]** we take the children to school,

**[00:18:06]** we go to work, we study with the children,

**[00:18:08]** we invest in the Czech company,

**[00:18:10]** we pay taxes,

**[00:18:12]** we just live ordinary lives.

**[00:18:14]** And for this,

**[00:18:16]** and paying taxes is not something I would like to do,

**[00:18:19]** but for this I expect that I will get better,

**[00:18:22]** but especially my children, the next generation, will get better.

**[00:18:25]** And if you look at the report of Edelman,

**[00:18:27]** and now Varometer,

**[00:18:29]** and I recommend reading it for a long time,

**[00:18:31]** how the mood in global society changes,

**[00:18:33]** you can see that this basic social contract

**[00:18:36]** undergoes a significant erosion,

**[00:18:38]** especially in developed economies.

**[00:18:41]** Because about a third of people globally believe

**[00:18:44]** that the next generation will get better,

**[00:18:46]** and if you look at Germany or France,

**[00:18:48]** we are somewhere around 6-9%.

**[00:18:51]** 8-9% of people believe, for example in Germany,

**[00:18:54]** that the next generation will get better

**[00:18:56]** than the current generation.

**[00:18:58]** So if you don't believe that economic growth

**[00:19:01]** will lead to higher economic prosperity,

**[00:19:04]** that the next generation will get better,

**[00:19:06]** you start thinking in terms of the zero-sum.

**[00:19:10]** Because the only way,

**[00:19:12]** if economic growth doesn't work,

**[00:19:14]** you don't believe in it,

**[00:19:16]** the only way you can increase your wealth,

**[00:19:18]** your standard of living,

**[00:19:20]** is to take someone else.

**[00:19:22]** You start cutting the cake,

**[00:19:24]** and this explains why there are more and more fights

**[00:19:26]** between the left and right,

**[00:19:28]** conservative liberals,

**[00:19:30]** Orlov vs. Prague,

**[00:19:32]** to cut the cake in some way.

**[00:19:34]** And this distrust

**[00:19:36]** explains why politicians

**[00:19:38]** don't come up with progressive measures,

**[00:19:40]** but with anti-progressive measures,

**[00:19:42]** because we, voters,

**[00:19:44]** think much more

**[00:19:46]** in terms of the zero-sum.

**[00:19:48]** At the same time,

**[00:19:50]** this phenomenon shows an interesting factor,

**[00:19:52]** and that is that

**[00:19:56]** we prefer to achieve our goals,

**[00:19:58]** or even more...

**[00:20:00]** This is hostile activism.

**[00:20:02]** That's why I recommend reading Adelman in the long run,

**[00:20:06]** which he has been showing in recent years.

**[00:20:08]** Because this is where the paralysis of a lot of crises began.

**[00:20:12]** We're afraid of it.

**[00:20:14]** So I'm mainly worried.

**[00:20:17]** But in the Lonsky year,

**[00:20:19]** Adelman has already shown the growing feeling of vulnerability.

**[00:20:23]** And vulnerability is a positive emotion,

**[00:20:27]** which allows for an action.

**[00:20:29]** I mean, I want to do something.

**[00:20:32]** And that's hostile activism,

**[00:20:34]** where about 40% of people said

**[00:20:37]** they were willing to fight,

**[00:20:40]** or destroy, or blackmail people online,

**[00:20:44]** but also in the offline world,

**[00:20:46]** or somehow destroy, damage property,

**[00:20:49]** both digitally and offline.

**[00:20:51]** Among young people, it was even more.

**[00:20:53]** It was more than 50%.

**[00:20:55]** Another example of this is the German election.

**[00:20:59]** The last parliamentary election in Berlin,

**[00:21:01]** young people voted for the right-wing or left-wing.

**[00:21:04]** Because they no longer believe that the existing system

**[00:21:07]** can bring them prosperity.

**[00:21:09]** And the only thing they need to do is change the system.

**[00:21:12]** In the Czech Republic, we see a similar development.

**[00:21:15]** In the last parliamentary elections,

**[00:21:17]** if you look at what happened,

**[00:21:19]** it was very interesting.

**[00:21:21]** I don't want to say much about what politicians didn't do.

**[00:21:25]** Because in the last parliamentary elections,

**[00:21:28]** the number of people who didn't go to the elections

**[00:21:31]** increased significantly.

**[00:21:34]** They were so-called out of the system.

**[00:21:37]** They have people in executions.

**[00:21:39]** They have huge problems.

**[00:21:41]** And they didn't think that going to the elections

**[00:21:43]** would have any value.

**[00:21:45]** But it turned out that in the most endangered regions,

**[00:21:48]** where the socio-economic status is low,

**[00:21:51]** the number of people who went to the elections

**[00:21:53]** increased by 4-8% the most.

**[00:21:56]** People who didn't go to the elections

**[00:21:59]** came to the elections.

**[00:22:01]** And this shows that politicians

**[00:22:05]** who can work well with emotions

**[00:22:09]** can also activate people who have been passive for a long time.

**[00:22:13]** And many parties didn't agree at all

**[00:22:16]** to talk to these people.

**[00:22:18]** And this caused the elections.

**[00:22:21]** The Czech Republic has one specific export article,

**[00:22:25]** which we can see in the global situation,

**[00:22:29]** and that is compassion.

**[00:22:31]** Because compassion, as Milan Kundera defined it,

**[00:22:34]** is a fear that is created out of a sudden consideration

**[00:22:37]** for one's own well-being.

**[00:22:39]** It has no equivalent in any other language.

**[00:22:44]** This is how compassion is understood.

**[00:22:46]** It has no equivalent in any other language.

**[00:22:48]** So, just as Danova defines Hygge,

**[00:22:50]** we will also define compassion.

**[00:22:52]** Which is not exactly nice,

**[00:22:56]** but it is what it is.

**[00:22:58]** And the lower definition is more of an economic one.

**[00:23:02]** It is equal to the numbers.

**[00:23:04]** Compassion is simply sadness

**[00:23:06]** combined with self-love, a sense of innocence,

**[00:23:08]** and at the same time,

**[00:23:10]** a suppressed desire for repayment.

**[00:23:12]** So, in the context of compassion,

**[00:23:14]** in the global world,

**[00:23:16]** it is starting to grow.

**[00:23:18]** People, because they are scared of the poli-crisis,

**[00:23:21]** are starting to look for an action

**[00:23:23]** that can change their current situation.

**[00:23:25]** What about that?

**[00:23:27]** We can look at which institutions

**[00:23:29]** are able to positively motivate people,

**[00:23:33]** or how people perceive individual institutions.

**[00:23:36]** People usually perceive the government as incompetent

**[00:23:40]** and depending on whether you are a person with higher or lower degrees,

**[00:23:44]** you perceive it as unethical.

**[00:23:46]** The media is very similar to that.

**[00:23:48]** In recent years, business has moved from a quadrant

**[00:23:52]** where it is perceived as competent but unethical

**[00:23:56]** to a quadrant where it is perceived as the only institution

**[00:23:59]** that is at the same time competent and ethical.

**[00:24:01]** In other words, there is a huge responsibility

**[00:24:05]** on people's shoulders

**[00:24:07]** that business is behaving responsibly and ethically

**[00:24:11]** and that it is starting to change the world

**[00:24:14]** in order to overcome the negative tendencies,

**[00:24:18]** the fears, the negative emotions that people perceive.

**[00:24:21]** That is why there are various groups,

**[00:24:24]** such as the Second Economic Transformation

**[00:24:26]** or the Ministry of Health.

**[00:24:28]** There are groups of businesses

**[00:24:30]** that are trying to change the system

**[00:24:33]** so that the economy can prosper significantly more.

**[00:24:37]** That is the first mega-trend.

**[00:24:39]** The second mega-trend is geopolitical fragmentation

**[00:24:42]** and strategic autonomy.

**[00:24:43]** We have a feeling that the world is changing significantly.

**[00:24:46]** We, as economists, love graphs

**[00:24:49]** and that is why we do not support Trump.

**[00:24:51]** He can destroy any graph.

**[00:24:53]** If you look at the index

**[00:24:55]** of the current economic policies,

**[00:24:57]** what has happened to the growth

**[00:24:59]** has completely erased the decades of history

**[00:25:02]** because you do not see anything on the graph

**[00:25:04]** that happened in the past.

**[00:25:05]** At the same time, it shows how dramatic

**[00:25:07]** Trump's fall into global business policy was.

**[00:25:11]** It really started to change the map significantly.

**[00:25:14]** That is how we function.

**[00:25:16]** At the same time, it turned out

**[00:25:18]** that after the huge growth, there is a calming down

**[00:25:20]** because Trump realizes that these measures

**[00:25:23]** ultimately lead to negative effects on the American economy.

**[00:25:26]** Various types of analysis show

**[00:25:29]** that 95% of higher interest rates

**[00:25:32]** are paid by American companies or American citizens

**[00:25:35]** and only 5% was transferred to the companies

**[00:25:38]** that produce the product and import it to the United States.

**[00:25:41]** Because the American economy is relatively closed,

**[00:25:45]** there was an increase in inflation

**[00:25:48]** thanks to 1% interest rates.

**[00:25:50]** It looks like relatively little

**[00:25:52]** compared to the boom that started around that.

**[00:25:56]** At the same time, the 1% point

**[00:25:58]** in the situation where Americans are very sensitive to inflation

**[00:26:01]** is due to the fact that Trump's popularity is falling significantly.

**[00:26:04]** Because he says that he has reduced food prices by 10%,

**[00:26:07]** that is not true.

**[00:26:08]** Americans feel it and therefore their preferences are falling.

**[00:26:11]** At the same time, in the global world,

**[00:26:13]** the business industry is very sensitive

**[00:26:15]** to the reduction of investment activity

**[00:26:17]** because you are suddenly worried about where to invest

**[00:26:20]** because you do not know how the numbers will change

**[00:26:23]** over the course of a single week in various directions.

**[00:26:26]** So it is uncertainty.

**[00:26:28]** For a long time, uncertainty has been a source of confidence

**[00:26:33]** and, of course, opportunities to invest.

**[00:26:36]** Because in order to be able to invest,

**[00:26:38]** you need an elementary level of confidence.

**[00:26:40]** At the same time, a huge topic is de-globalization.

**[00:26:43]** And you can see in this picture

**[00:26:45]** that de-globalization has not been happening

**[00:26:48]** in the last few years,

**[00:26:50]** but the pace of globalization has stopped since the financial crisis,

**[00:26:53]** but at the same time it is stagnating.

**[00:26:55]** In other words, until 2007,

**[00:26:58]** the Czech economy, which is export-oriented,

**[00:27:01]** but at the same time it is a transport economy,

**[00:27:03]** we benefited a lot from what was happening in the global economy,

**[00:27:06]** that is, the increase in the share of exports in the world GDP,

**[00:27:09]** but at the same time it is stagnating.

**[00:27:11]** De-globalization does not happen in the sense

**[00:27:13]** that the business exchange would suddenly decrease,

**[00:27:15]** but it is changing.

**[00:27:16]** And the changes are already substantial

**[00:27:18]** and we need to establish a new business partnership,

**[00:27:21]** which Europe is able to do.

**[00:27:23]** For example, in recent years,

**[00:27:25]** we have been able to reach business agreements with Latin America.

**[00:27:28]** We will see if this is feasible,

**[00:27:30]** because some states, such as France,

**[00:27:32]** are trying to break this in some way,

**[00:27:34]** because the import of one steak,

**[00:27:36]** and there are already limits on the quantity,

**[00:27:38]** the import of one steak from Latin America

**[00:27:40]** is a bit hard for French farmers.

**[00:27:42]** But at the same time,

**[00:27:44]** for example, the trade agreement with India

**[00:27:46]** was successfully reached by the EU,

**[00:27:48]** and this shows that we are able to reach

**[00:27:50]** a bilateral agreement,

**[00:27:52]** not at the level of the World Trade Organization,

**[00:27:55]** but at the level of bilateral agreements.

**[00:27:57]** The EU is someone else's version

**[00:27:59]** of the trade agreements,

**[00:28:01]** which do not lead to the decline of the global exchange,

**[00:28:04]** but it changes from the multilateral to the bilateral level.

**[00:28:09]** At the same time, we have China here.

**[00:28:12]** I am talking about the first and now the second Chinese shock,

**[00:28:16]** which is interesting,

**[00:28:18]** because when it turns out that China is a global factory,

**[00:28:21]** and it is unprecedented,

**[00:28:23]** I say it is not so unprecedented,

**[00:28:25]** because before the Second World War,

**[00:28:27]** for example, the level of production in the United States,

**[00:28:30]** their share of world production

**[00:28:32]** was very similar to that of China now.

**[00:28:35]** And of course, as the United States became richer,

**[00:28:37]** and the share of services in the economy grew,

**[00:28:39]** the share gradually decreased.

**[00:28:41]** We can expect something similar in China.

**[00:28:43]** Anyway, this is just a sign

**[00:28:45]** that the share is not unprecedented,

**[00:28:47]** but of course it has negative consequences

**[00:28:49]** for anyone else,

**[00:28:51]** because China is doing its global expansion

**[00:28:53]** in an unfavorable way for us,

**[00:28:56]** in the sense that China is trying

**[00:28:58]** to keep its domestic demand very low,

**[00:29:01]** and at the same time,

**[00:29:03]** because of these industrial policies,

**[00:29:05]** various subsidies,

**[00:29:07]** such as granting land,

**[00:29:09]** reducing labor costs, and so on,

**[00:29:11]** China is trying to support domestic production.

**[00:29:15]** In other words,

**[00:29:17]** we have an imbalance between supply and demand,

**[00:29:19]** and this can be seen in the automotive sector,

**[00:29:21]** because whether it is Chinese or European automobiles

**[00:29:23]** that were invested there,

**[00:29:25]** American, Japanese, Korean, and so on,

**[00:29:27]** they assumed that China would not buy more cars,

**[00:29:29]** but they do not buy more cars,

**[00:29:31]** and the demand for cars stagnates.

**[00:29:33]** At the same time,

**[00:29:35]** there is an imbalance

**[00:29:37]** between supply and demand in China,

**[00:29:39]** and when you have this imbalance

**[00:29:41]** between supply and demand in China,

**[00:29:43]** what do you do?

**[00:29:45]** You start to export these cars.

**[00:29:47]** And the Chinese authorities support this,

**[00:29:49]** because of course they achieve

**[00:29:51]** that their share in global production is growing,

**[00:29:53]** and at the same time,

**[00:29:55]** they are destroying competition,

**[00:29:57]** destroying production in other economies in the world.

**[00:29:59]** This is the second Chinese shock,

**[00:30:01]** which destroyed several million jobs

**[00:30:00]** This led to, for example, the destruction of labor force in the housing sector,

**[00:30:06]** which is concentrated on a relatively small territory.

**[00:30:09]** This led to people in some states, in the United States,

**[00:30:14]** starting to think that globalization is not for them,

**[00:30:16]** that it only brings negative consequences.

**[00:30:18]** At the same time, they started to vote for someone else who promised to change Donald Trump's system.

**[00:30:22]** At the same time, what China is doing very well is focusing on a huge concentration of key materials.

**[00:30:29]** These are rare lands, where their share of refining is about 90%.

**[00:30:37]** In other words, all you need to do is limit the export of not large segments,

**[00:30:42]** but actually something small, for example, special magnets,

**[00:30:45]** which you need for everything, for the production of electric cars, weapons, rockets, and so on,

**[00:30:50]** so that you have a huge demand to expand to other countries,

**[00:30:55]** so that they can come to you and convince you that you want to dominate the global world.

**[00:31:00]** China is undergoing a huge transformation of some kind of hegemon.

**[00:31:06]** If I were to frame this into a long-term cycle,

**[00:31:12]** Modelsky came up with the idea of identifying the history of a 100-year cycle,

**[00:31:18]** so that there is always one hegemon, for example, Portugal, the Netherlands, Britain, the United States.

**[00:31:26]** They show that there are always some hegemons in some areas that can control the whole world.

**[00:31:33]** For example, ships can control the oceans, the United States has a satellite network that can control the whole world,

**[00:31:44]** and at the same time be a world police.

**[00:31:46]** What Modelsky shows is that hegemony gradually has a tendency to exhaust itself,

**[00:31:52]** because you pay a relatively large sum to be a world police officer,

**[00:31:56]** and suddenly, when a person from the OHIO, the middle class, sees that the world police does not bring him any benefits,

**[00:32:03]** he starts to vote to change it.

**[00:32:05]** He no longer wants to be a world police officer, he does not want to invest in the protection of the whole world.

**[00:32:08]** And we see this in the adoption of transfer,

**[00:32:11]** where America says, we will not be a world police officer,

**[00:32:13]** we will only look after our own America, our interests,

**[00:32:17]** and we will control China as much as possible,

**[00:32:19]** and the rest does not really care about us.

**[00:32:21]** So, from this perspective, it fits into the theory of the 100-year cycle.

**[00:32:26]** Maybe some of you feel that the presentation is negative.

**[00:32:31]** It is not negative, it is still relatively optimistic.

**[00:32:34]** Modelsky always said that the end was mostly a war.

**[00:32:40]** Conflicts, which seems to us to be very negative, but we are already in a conflict.

**[00:32:44]** We have a war in Europe, we have hybrid wars,

**[00:32:48]** Russia is teaching Western Europe,

**[00:32:50]** so we are already in a war,

**[00:32:52]** and only in some way will it change the system.

**[00:32:55]** Who will be the new hegemon?

**[00:32:57]** How will the conditions be divided?

**[00:32:59]** It depends a lot on some strategic concerns.

**[00:33:02]** And I would like to emphasize that in the EU,

**[00:33:04]** given that we have a lot of victories,

**[00:33:06]** various trade agreements, strategic agreements,

**[00:33:10]** actually increase the probability that the war conflict

**[00:33:14]** does not have to develop into a bigger world.

**[00:33:16]** Anyway, Modelsky, I recommend you read it,

**[00:33:18]** because it explains a lot,

**[00:33:20]** that it is not just about individualists like Donald Trump,

**[00:33:23]** but really about long-term changes,

**[00:33:25]** because whether they are Republicans or Democrats,

**[00:33:27]** they more or less wanted to assert their roles,

**[00:33:31]** because they are not capable of militarily financing the defense of Europe.

**[00:33:35]** Another mega-trend is brains and demography.

**[00:33:39]** When we look at demography,

**[00:33:41]** what is interesting is that companies complain

**[00:33:43]** that there are no people,

**[00:33:45]** and demographers say that there won't even be any.

**[00:33:47]** Keep in mind that such a workforce

**[00:33:49]** that recruits from the age group of 15 to 65 will always be low.

**[00:33:53]** In the Czech Republic, we are used to

**[00:33:55]** taking this workforce with us,

**[00:33:57]** culturally close countries like Slovakia,

**[00:33:59]** Bulgaria, Ukraine.

**[00:34:01]** However, the demographic gap there is even bigger.

**[00:34:03]** Some countries are even twice as big as we are.

**[00:34:07]** So this is not something we can completely win

**[00:34:11]** by just relying on immigration.

**[00:34:13]** At the same time,

**[00:34:15]** if we look at the European Union,

**[00:34:17]** by 2035,

**[00:34:19]** a quarter of the population

**[00:34:21]** older than 65 will be in Europe.

**[00:34:23]** It looks like a huge problem,

**[00:34:25]** and it is a problem, of course.

**[00:34:28]** But it is also an opportunity,

**[00:34:30]** because if you look at this generation

**[00:34:32]** and say that it is a spiritual generation,

**[00:34:34]** it doesn't sound like an opportunity at all.

**[00:34:36]** But if you say Silver Age Economy,

**[00:34:38]** you can already hear the words Silver and Economy,

**[00:34:40]** so all of a sudden it looks stressful.

**[00:34:42]** And if you really look at it,

**[00:34:44]** there are a lot of opportunities

**[00:34:46]** for government in the Czech Republic,

**[00:34:48]** Medtech, senior houses,

**[00:34:50]** if we are able to build them,

**[00:34:52]** and of course everything

**[00:34:54]** that is connected to longevity.

**[00:34:57]** So all of a sudden,

**[00:34:59]** when we get old

**[00:35:01]** and we feel some kind of technological change,

**[00:35:03]** more and more people are looking at longevity.

**[00:35:05]** Every medium in the Czech Republic

**[00:35:07]** has at least one thing about longevity.

**[00:35:09]** Every morning,

**[00:35:11]** at least 10 different preparations

**[00:35:13]** are thrown into each other

**[00:35:15]** and they believe it will save their lives.

**[00:35:17]** If they don't sleep,

**[00:35:19]** don't abstain and don't eat healthy,

**[00:35:21]** at least this will solve their problem.

**[00:35:23]** Creatine, holy grail now.

**[00:35:25]** This is exactly what is happening

**[00:35:27]** in the Czech Republic in the future.

**[00:35:29]** We currently have an extremely good

**[00:35:31]** healthcare system,

**[00:35:33]** an extremely good healthcare system

**[00:35:35]** due to the fact that we have

**[00:35:37]** a significant overcapacity

**[00:35:39]** of the healthcare system.

**[00:35:41]** But what we don't have is a healthy life.

**[00:35:43]** If you look at the statistics,

**[00:35:45]** the expected life expectancy

**[00:35:47]** in health is 62 years,

**[00:35:49]** and in Sweden it is about 10 years more.

**[00:35:51]** In other words,

**[00:35:54]** if we could live longer

**[00:35:56]** and healthier,

**[00:35:58]** it would be a structural reform

**[00:36:00]** that would have one of the greatest benefits.

**[00:36:02]** It would be 12% more

**[00:36:04]** at the economic level

**[00:36:06]** if the Czechs lived longer and healthier.

**[00:36:08]** At the same time,

**[00:36:10]** it would solve our demography a bit.

**[00:36:12]** Because, of course,

**[00:36:14]** if the workforce is recruited

**[00:36:16]** from the age group of 15 to 65 years,

**[00:36:18]** it could not be from 70 to 80 years.

**[00:36:20]** If you say, I will not work for 80 years,

**[00:36:22]** let's look at Japan.

**[00:36:24]** In Japan, the demographic change

**[00:36:26]** to the aging of the population

**[00:36:28]** has been going on for a relatively long time.

**[00:36:30]** So it's a kind of a leap

**[00:36:32]** of the things that Europe will go through.

**[00:36:34]** And a quarter of the people

**[00:36:36]** over 65 years old work there.

**[00:36:38]** A quarter of the people.

**[00:36:40]** In America, which does not have

**[00:36:42]** such huge demographic problems,

**[00:36:44]** but has a different social system,

**[00:36:46]** a fifth of the people over 65 years old

**[00:36:48]** work there.

**[00:36:51]** And a quarter of them expect

**[00:36:53]** to work until they die.

**[00:36:55]** I think this is an appropriate approach

**[00:36:57]** that we should also apply

**[00:36:59]** so that we can really adapt

**[00:37:01]** to what the demography will look like

**[00:37:03]** and how the spiritual and social

**[00:37:05]** health system in the Czech Republic

**[00:37:07]** is at the same time irresistible.

**[00:37:09]** The positive news for you is

**[00:37:11]** that many people feel

**[00:37:13]** that our cognitive abilities are declining with age.

**[00:37:15]** Studies show that this is not the case

**[00:37:17]** if you train your cognitive abilities.

**[00:37:20]** We all go to the gym and exercise

**[00:37:22]** and do strength training

**[00:37:24]** because we know that these muscles

**[00:37:26]** are important for aging.

**[00:37:28]** At the same time, we go to the gym

**[00:37:30]** which improves our cognitive abilities

**[00:37:32]** because it keeps us in the economic

**[00:37:34]** and productive age

**[00:37:36]** and at the same time improves

**[00:37:38]** the quality of life.

**[00:37:40]** In other words, if some politicians

**[00:37:42]** really want to make a huge change,

**[00:37:44]** it is to increase the expected life expectancy

**[00:37:46]** in health.

**[00:37:48]** In other words,

**[00:37:50]** how we are doing well

**[00:37:52]** and how we are educated

**[00:37:54]** affects how long we live in health.

**[00:37:56]** In health, this affects

**[00:37:58]** only 10% of the two factors.

**[00:38:00]** At the same time,

**[00:38:02]** when we look at demography,

**[00:38:04]** a lot of people and politicians

**[00:38:06]** deal with the issue of progeny.

**[00:38:08]** When we look at the United States,

**[00:38:10]** we can clearly see

**[00:38:12]** that the issue of progeny

**[00:38:14]** in the past was due to the fact

**[00:38:17]** that we want to have fewer children

**[00:38:19]** and we don't even want to have a relationship

**[00:38:21]** in which children are born.

**[00:38:23]** So here you can see

**[00:38:25]** that a large part of the progeny

**[00:38:27]** in the last few years

**[00:38:29]** is due to the fact

**[00:38:31]** that we go out less,

**[00:38:33]** we go out less,

**[00:38:35]** we build less relationships

**[00:38:37]** and it is not only in the United States,

**[00:38:39]** but in all countries,

**[00:38:41]** you can see a similar trend.

**[00:38:43]** The progeny decline correlates

**[00:38:46]** to an increase in the probability

**[00:38:48]** that we will have various tax cuts

**[00:38:50]** for the first, second, third, fourth, fifteenth child.

**[00:38:52]** This cannot work,

**[00:38:54]** because people do not even get to this

**[00:38:56]** from time to time,

**[00:38:58]** because they do not even have a relationship.

**[00:39:00]** That is why, for example,

**[00:39:02]** the progeny policies cannot work,

**[00:39:04]** because we are somehow starting to separate ourselves.

**[00:39:06]** An interesting trend that we see

**[00:39:08]** between men and women

**[00:39:10]** is that we understand each other less,

**[00:39:12]** because when you look at women,

**[00:39:14]** men are more conservative.

**[00:39:16]** In other words,

**[00:39:18]** this is just one of the reasons

**[00:39:20]** why the so-called coupling rate

**[00:39:22]** and how we create relationships

**[00:39:24]** decline, because we stop

**[00:39:26]** understanding each other.

**[00:39:28]** When I said demographics,

**[00:39:30]** I meant not only people,

**[00:39:32]** but also brains,

**[00:39:34]** because if there are fewer of us

**[00:39:36]** in a less working society,

**[00:39:38]** we will be able to replace

**[00:39:40]** the brains with some kind of workforce.

**[00:39:43]** In the past,

**[00:39:45]** we have often heard

**[00:39:47]** that we have too many high school students

**[00:39:49]** and that we should have more children

**[00:39:51]** sent to us as students,

**[00:39:53]** because the economy needs it.

**[00:39:55]** Here it turns out

**[00:39:57]** that we do not have many high school students

**[00:39:59]** in the younger generation

**[00:40:01]** until the age of 35.

**[00:40:00]** of high school students in Europe.

**[00:40:02]** And if you look at Poland,

**[00:40:04]** because in some areas Poland is running away from us,

**[00:40:06]** it's not about the highway.

**[00:40:08]** Poland has reached the highway, which we already had.

**[00:40:10]** But Poland is running away from us

**[00:40:12]** because of education, for example.

**[00:40:14]** Poland has 46%

**[00:40:16]** of the young generation

**[00:40:18]** of high school students,

**[00:40:20]** and this is due to the fact that Poles are able

**[00:40:22]** to build cities very quickly.

**[00:40:24]** 10 of the fastest-growing cities in Europe

**[00:40:26]** are in Poland.

**[00:40:28]** When you move to a city,

**[00:40:30]** you have to pay more attention

**[00:40:32]** to general education,

**[00:40:34]** to high school and high school,

**[00:40:36]** and then you go to high school.

**[00:40:38]** That's why Poland doesn't have a third of high school students

**[00:40:40]** like us, the young generation,

**[00:40:42]** but almost half of them.

**[00:40:44]** And this is a huge difference,

**[00:40:46]** which will help them in a cumulative way

**[00:40:48]** in higher education,

**[00:40:50]** because we are still discussing

**[00:40:52]** the quality of high school,

**[00:40:54]** whether it's low or high.

**[00:40:56]** We are still discussing the quality

**[00:40:58]** of Czech high school,

**[00:41:00]** and the fact that having a high school degree

**[00:41:02]** is a step forward for a much higher income,

**[00:41:04]** for a much better life.

**[00:41:06]** So this is high school.

**[00:41:08]** At the same time,

**[00:41:10]** if you look at the Czech problem,

**[00:41:12]** it starts with primary schools,

**[00:41:14]** because in my native Orlov,

**[00:41:16]** where there is no time,

**[00:41:18]** 6% of children don't finish primary school.

**[00:41:20]** 6% of children don't finish primary school.

**[00:41:22]** When I say this in Prague,

**[00:41:24]** where it's under 1%,

**[00:41:26]** people say,

**[00:41:28]** we have a 9-year compulsory school leave.

**[00:41:30]** And I say, yes, they go there for 9 years

**[00:41:32]** and they don't finish primary school.

**[00:41:34]** This is the reality in Orlov.

**[00:41:36]** It's not the worst ODP,

**[00:41:38]** it has an overall increased effect

**[00:41:40]** in the Czech Republic.

**[00:41:42]** In Krasnice, it's even around 14%.

**[00:41:44]** So you can see

**[00:41:46]** that we have huge regional differences,

**[00:41:48]** because something we don't understand in Prague

**[00:41:50]** is that for many regions,

**[00:41:52]** this is the reality.

**[00:41:54]** And when you ask yourself,

**[00:41:56]** why Orlov, which used to be

**[00:41:58]** a city of the Horde,

**[00:42:00]** and that's more or less 30 years ago,

**[00:42:02]** in the 90s, when they went to conquer the Doles,

**[00:42:04]** there was a high unemployment rate,

**[00:42:06]** why can't Orlov be built

**[00:42:08]** in the next 10 years?

**[00:42:10]** Because the education there is inherited.

**[00:42:12]** The Czech education system is set up

**[00:42:14]** to strongly support the inheritance of education.

**[00:42:16]** If you are from a bad or worse family,

**[00:42:18]** from a poorer family,

**[00:42:20]** with a worse socioeconomic status,

**[00:42:22]** then probably your children

**[00:42:24]** will also have a lower education

**[00:42:26]** than you do.

**[00:42:28]** Again, if I compare it

**[00:42:30]** to the Czech and Polish education system,

**[00:42:32]** the education system

**[00:42:34]** should somehow equalize

**[00:42:36]** these unequal conditions.

**[00:42:38]** Going to school,

**[00:42:40]** learning similar curricula,

**[00:42:42]** should help to overcome

**[00:42:44]** this wall, which I have above me,

**[00:42:46]** to a higher standard of living.

**[00:42:48]** But that doesn't work in the Czech Republic.

**[00:42:50]** While it works in Poland,

**[00:42:52]** in the Czech Republic,

**[00:42:54]** the way the regular education system

**[00:42:56]** is set up is wrong.

**[00:42:58]** In other words, the Czech education system

**[00:43:00]** increases the probability

**[00:43:02]** that I will not exceed

**[00:43:04]** the level of my parents' education,

**[00:43:06]** which is low in the poorer families.

**[00:43:08]** That's the problem with the Czech education system.

**[00:43:10]** We have a relatively high share

**[00:43:12]** of educational failure in the poor regions,

**[00:43:14]** and this will only copy

**[00:43:16]** the unhappiness in the poor regions.

**[00:43:18]** It's not that they won't get rich,

**[00:43:20]** the relative distance from Prague

**[00:43:22]** is still relatively large.

**[00:43:24]** That's a big problem,

**[00:43:26]** because many children,

**[00:43:28]** due to the way the education system is set up,

**[00:43:30]** and their parents,

**[00:43:32]** will not succeed.

**[00:43:34]** I dare say that a large part of children

**[00:43:36]** who have this educational failure

**[00:43:38]** will eventually become a burden for the state,

**[00:43:40]** because the educational failure

**[00:43:42]** is correlated with, for example,

**[00:43:44]** the fact that we are not able

**[00:43:46]** to use the talents we have,

**[00:43:48]** because we are not able to teach children

**[00:43:50]** the basic skills and competencies

**[00:43:52]** to be able to take care of themselves.

**[00:43:54]** This is a real problem for primary schools.

**[00:43:56]** At the same time,

**[00:43:58]** if you look at 15-year-old students

**[00:44:00]** who are writing tests,

**[00:44:02]** and you ask them,

**[00:44:04]** if they think that if they try,

**[00:44:06]** their effort will lead to improvement,

**[00:44:08]** that they will start investing in themselves,

**[00:44:10]** and when they invest in themselves,

**[00:44:12]** half of them will say,

**[00:44:14]** no, I don't believe that.

**[00:44:16]** This is the worst outcome of OECD.

**[00:44:18]** We simply don't have the growth mindset,

**[00:44:20]** so when we talk about becoming more business-minded,

**[00:44:22]** and so on,

**[00:44:24]** we have not seen this

**[00:44:26]** in the majority of young people

**[00:44:28]** for the last 15 years.

**[00:44:30]** I say, if people who have been working

**[00:44:32]** in a corporation for 20 years would say this,

**[00:44:34]** it would be sad,

**[00:44:36]** but what can you do?

**[00:44:38]** But these are young people.

**[00:44:40]** They don't have the will to try.

**[00:44:42]** The effort will not pay off.

**[00:44:44]** This is bad.

**[00:44:46]** And the last example of how our primary schools

**[00:44:48]** work,

**[00:44:50]** in 12 years,

**[00:44:52]** 9 out of 10 children

**[00:44:54]** say that they don't like being in school,

**[00:44:56]** that they don't like it.

**[00:44:58]** And the relationship with the teacher,

**[00:45:00]** in the Czech Republic,

**[00:45:02]** when you compare it to OECD countries,

**[00:45:04]** is the lowest.

**[00:45:06]** The relationship with the teacher,

**[00:45:08]** which is supposed to shape them in some way,

**[00:45:10]** here is the lowest.

**[00:45:12]** And not only is it the lowest,

**[00:45:14]** they are even hostile.

**[00:45:16]** The Czech Republic is the only country

**[00:45:18]** where the relationship with the teacher is hostile.

**[00:45:20]** So this shows how much of a problem

**[00:45:22]** we have with education,

**[00:45:24]** and why, when we talk about changing

**[00:45:26]** the way the Czech education system works,

**[00:45:28]** it's not primarily about

**[00:45:30]** not having to learn how to name

**[00:45:32]** ten Láčkovs,

**[00:45:34]** and I don't know what else,

**[00:45:36]** but having to teach young people

**[00:45:38]** to experience success at a young age,

**[00:45:40]** to see that they are willing to work hard,

**[00:45:42]** to have what we call a growing mind,

**[00:45:44]** to believe that they can achieve something

**[00:45:46]** when they try, of course,

**[00:45:48]** at their own level.

**[00:45:50]** So these are young people,

**[00:45:52]** but thanks to our experience

**[00:45:54]** at a young age,

**[00:45:56]** we can say that education is not for us.

**[00:45:58]** When we go to a secondary school

**[00:46:00]** or a high school, we feel like we're done.

**[00:46:02]** And the last graph below

**[00:46:04]** shows how much time we spend

**[00:46:06]** in different age groups

**[00:46:08]** in something we can call

**[00:46:10]** lifelong education.

**[00:46:12]** The Czech Republic is one of the countries

**[00:46:14]** where this is the lowest level.

**[00:46:16]** We don't really educate ourselves

**[00:46:18]** after adulthood.

**[00:46:20]** When you go to Poland,

**[00:46:22]** you see that Poles invest twice

**[00:46:24]** or three times more time

**[00:46:26]** than the Czechs do,

**[00:46:28]** in every age category.

**[00:46:30]** So Poland is not about the distance.

**[00:46:32]** It's primarily about education.

**[00:46:34]** Poles have made education reforms,

**[00:46:36]** and at the same time,

**[00:46:38]** the economic growth

**[00:46:40]** really makes it possible

**[00:46:42]** to empower the talents they have.

**[00:46:44]** We often talk about tax security,

**[00:46:46]** where many politicians

**[00:46:48]** see tax security as something

**[00:46:50]** that can get rid of employees

**[00:46:52]** very quickly.

**[00:46:54]** But tax security is primarily

**[00:46:56]** about the active policy of employment,

**[00:46:58]** where taxes add up to 5% of gross domestic product.

**[00:47:00]** The active policy of employment

**[00:47:02]** means nothing more than

**[00:47:04]** when you come to the employment office,

**[00:47:06]** they actively work with you.

**[00:47:08]** They try to find the best job for you,

**[00:47:10]** the best qualifications

**[00:47:12]** so that you can achieve the best

**[00:47:14]** potential and use the talent you have.

**[00:47:16]** That's why in the age of 65,

**[00:47:18]** tax authorities start investing

**[00:47:20]** much more in their education.

**[00:47:22]** On the contrary, there's an increase.

**[00:47:24]** We're looking forward to income.

**[00:47:26]** We're already reaching a meter.

**[00:47:28]** We're investing much more in our education

**[00:47:30]** so that people can continue working.

**[00:47:32]** That's a change.

**[00:47:34]** At the same time, our non-growth mindset

**[00:47:36]** is that about 40% of people

**[00:47:38]** in employment are dissatisfied and unmotivated.

**[00:47:40]** Dissatisfied and unmotivated.

**[00:47:42]** That's something that pulls productivity

**[00:47:44]** down.

**[00:47:46]** And at the same time,

**[00:47:48]** these people don't go to change jobs

**[00:47:50]** because they're afraid.

**[00:47:52]** In our country, being unemployed

**[00:47:54]** means lying.

**[00:47:56]** We don't change jobs at all.

**[00:47:58]** We don't have our non-growth mindset.

**[00:48:00]** Recently,

**[00:48:02]** the head of the employment office,

**[00:48:04]** Dan Kryštof, showed statistics

**[00:48:06]** of what happens to a person

**[00:48:08]** who comes to the employment office,

**[00:48:10]** registers, goes through the system,

**[00:48:12]** doesn't improve his qualifications,

**[00:48:14]** just goes through the system,

**[00:48:16]** finds a job.

**[00:48:18]** I'm talking about how we can

**[00:48:20]** raise the income level.

**[00:48:22]** I say, raise 40%

**[00:48:24]** to find a new job.

**[00:48:26]** It's very important to raise

**[00:48:28]** your income level.

**[00:48:30]** If you go through a re-qualification,

**[00:48:32]** it will be more than 10%.

**[00:48:34]** That's the non-growth mindset

**[00:48:36]** that makes it difficult for us,

**[00:48:38]** not only in start-ups and entrepreneurship,

**[00:48:40]** but also in the world of cooperation,

**[00:48:42]** where we have relatively low income.

**[00:48:44]** Artificial intelligence.

**[00:48:46]** We know, or we suspect,

**[00:48:48]** how it will change.

**[00:48:50]** I'll just say a few words.

**[00:48:52]** What we can measure very well

**[00:48:54]** is that the general technology,

**[00:48:56]** whether it's railways, steam engines,

**[00:48:58]** electric motors, the Internet,

**[00:49:00]** personal computers,

**[00:49:02]** up to artificial intelligence,

**[00:49:04]** is constantly shortened by adaptation.

**[00:49:06]** When the railways came,

**[00:49:08]** it took us 70 years

**[00:49:10]** before we saw any economic benefits

**[00:49:12]** from the invention,

**[00:49:14]** because we had to build the rails

**[00:49:16]** for it to start working.

**[00:49:18]** At the same time, we know

**[00:49:20]** that the benefits of the railways

**[00:49:22]** and the rest of the economy

**[00:49:24]** are not based on the invention.

**[00:49:26]** The economic studies show

**[00:49:28]** that 90-95% of the benefits

**[00:49:30]** we get from the technologies

**[00:49:32]** in everyday use

**[00:49:34]** are not based on the invention,

**[00:49:36]** but rather on the whole economy,

**[00:49:38]** because they improve productivity,

**[00:49:40]** quality of life, efficiency,

**[00:49:42]** and so on.

**[00:49:44]** We see an acceleration.

**[00:49:46]** It may seem that artificial intelligence

**[00:49:48]** and the economic studies

**[00:49:50]** say that having a technology

**[00:49:52]** in your hands doesn't mean

**[00:49:54]** that you start using it.

**[00:49:56]** In other words, there is a measurement

**[00:49:58]** of what is called intensity.

**[00:50:00]** which means how quickly we can adapt technology globally and how intensively we can use it.

**[00:50:09]** And this intensity represents 70-80% of inequality between countries.

**[00:50:16]** And what does it mean if I, as an individual, can use this technology from a given country?

**[00:50:23]** It's always capital, in other words, education.

**[00:50:25]** It's some kind of historical memory.

**[00:50:27]** We have some kind of historical memory of people who are able to do these things,

**[00:50:33]** such as creativity, improvisation.

**[00:50:35]** It plays a role for us.

**[00:50:37]** Institutions, that is, if institutions allow, for example, creative destruction,

**[00:50:40]** they change the economy very quickly.

**[00:50:42]** Or if the institutions, on the contrary, have a tendency to support the status quo,

**[00:50:45]** that is, let's train companies to survive rather than innovate.

**[00:50:49]** It's a lobby, because, of course, various interest groups

**[00:50:53]** against creative destruction say,

**[00:50:55]** we can't change because it's a threat.

**[00:50:57]** Let's protect our rights.

**[00:50:59]** I can imagine that if an intelligence agency is able to hire IT people,

**[00:51:04]** lawyers, journalists, and so on,

**[00:51:07]** these professions will start to organize themselves professionally

**[00:51:12]** and start to lobby for it.

**[00:51:14]** Let's limit it because it's bad.

**[00:51:16]** Of course, I would add economics and analytics to this group,

**[00:51:19]** so we will also organize ourselves professionally.

**[00:51:21]** It's a kind of geography.

**[00:51:23]** It's a kind of proximity to technologies,

**[00:51:25]** but geography plays a smaller role.

**[00:51:27]** Anyway, 70 to 80% of the direct differences,

**[00:51:31]** economic inequality,

**[00:51:33]** are due to how you are able to intensively adapt

**[00:51:35]** technologies that give you the potential for economic growth.

**[00:51:38]** It's an opportunity to realize

**[00:51:40]** that we really need to implement AI very quickly

**[00:51:42]** and go through some kind of creative destruction.

**[00:51:45]** At the same time, AI is interested in the fact

**[00:51:47]** that in the past, its adaptation was much faster in a corporation,

**[00:51:51]** but now it's much faster in households, in people.

**[00:51:55]** In the pre-Lunar year,

**[00:51:57]** the number of such inquiries

**[00:51:59]** was about half in the working and non-working base.

**[00:52:02]** A year later, in the Lunar year,

**[00:52:06]** the number of inquiries tripled,

**[00:52:08]** but suddenly a quarter of all inquiries were opened,

**[00:52:10]** because 75% were non-working inquiries.

**[00:52:12]** We started using AI

**[00:52:14]** more for organizing personal life.

**[00:52:16]** It's a kind of therapist, a mentor,

**[00:52:18]** a way of life, and so on.

**[00:52:20]** In other words, it creates a partnership

**[00:52:22]** and learning,

**[00:52:24]** which is much faster in adaptation,

**[00:52:26]** and thanks to that,

**[00:52:28]** it's much faster than in a corporation,

**[00:52:30]** where you have various compliance processes,

**[00:52:32]** you deal with security much more,

**[00:52:34]** and so on.

**[00:52:36]** Anyway, it will have business models,

**[00:52:38]** because AI is starting to solve almost everything.

**[00:52:40]** For example, health.

**[00:52:42]** At the beginning of the Lunar year,

**[00:52:44]** health was included in the top ten,

**[00:52:46]** which is something very personal.

**[00:52:48]** Anyway, it's something

**[00:52:50]** where we considered the relationship

**[00:52:52]** between the carrier and AI.

**[00:52:54]** The relationship and the AI,

**[00:52:56]** you can ask the carrier

**[00:52:58]** if it improves your image.

**[00:53:00]** Anyway, we deal with it almost everything,

**[00:53:02]** and the business model is based on

**[00:53:04]** the fact that when I look for a product or service,

**[00:53:06]** I go to the website of the product or service

**[00:53:08]** on a visa, so it changes,

**[00:53:10]** because I won't go anywhere.

**[00:53:12]** I will deal with AI,

**[00:53:14]** so it's a question of business models,

**[00:53:16]** because I don't have to deal

**[00:53:18]** with my product or service

**[00:53:20]** anymore.

**[00:53:24]** At the same time,

**[00:53:26]** what's interesting,

**[00:53:28]** for the speed and intensity of adaptation,

**[00:53:30]** some experiments show

**[00:53:32]** that there is an increase in productivity in call centers,

**[00:53:34]** because call centers are

**[00:53:36]** mostly repetitive activities,

**[00:53:38]** where AI solves things very quickly.

**[00:53:40]** But if you get much more

**[00:53:42]** cognitively challenging tasks,

**[00:53:44]** the impact on productivity

**[00:53:46]** is less,

**[00:53:48]** less measurable.

**[00:53:50]** There is even an experiment

**[00:53:52]** with programmers who don't do repetitive things,

**[00:53:54]** but do really complex projects.

**[00:53:56]** It turned out that

**[00:53:58]** before using AI,

**[00:54:00]** the programmers who do

**[00:54:02]** complex things expected

**[00:54:04]** an increase in productivity.

**[00:54:06]** After using AI,

**[00:54:08]** they said that the productivity increased,

**[00:54:10]** but the productivity decreased.

**[00:54:12]** Because they saw the potential,

**[00:54:14]** but they hadn't used it yet.

**[00:54:16]** That's the measure of adaptation,

**[00:54:18]** which sometimes brings us different results.

**[00:54:20]** We see the potential,

**[00:54:22]** but we're not able to use it properly,

**[00:54:24]** so we know it will take some time.

**[00:54:26]** At the same time,

**[00:54:28]** what turns out to be

**[00:54:30]** a binary switch,

**[00:54:32]** if I'm able to use AI

**[00:54:34]** very effectively,

**[00:54:36]** is metacognition.

**[00:54:38]** If I'm able to think about my thinking,

**[00:54:40]** if I'm able to divide my work

**[00:54:42]** into tasks,

**[00:54:44]** if I'm able to strategically think about how I think,

**[00:54:46]** and change the model of how I work.

**[00:54:48]** A lot of people,

**[00:54:50]** and it shows very clearly

**[00:54:52]** in the digitalization of data recognition,

**[00:54:54]** a lot of digitalization happens

**[00:54:56]** by taking a form and translating it into digital forms.

**[00:54:58]** I don't change how the system looks at all.

**[00:55:00]** Of course, we're going to do

**[00:55:02]** something similar in our work with artificial intelligence.

**[00:55:04]** If they're going to digitize

**[00:55:06]** what I'm doing right now,

**[00:55:08]** and I start to think about how I can change my thinking,

**[00:55:10]** the positive impact will be significantly limited.

**[00:55:12]** In other words, people with metacognition

**[00:55:14]** will benefit from artificial intelligence

**[00:55:16]** significantly more.

**[00:55:18]** So I recommend finding metacognition,

**[00:55:20]** how to improve metacognition,

**[00:55:22]** so that you can actually invest in how you will benefit

**[00:55:24]** from artificial intelligence,

**[00:55:26]** rather than in all of our work,

**[00:55:28]** because the work is already starting to be taken up

**[00:55:30]** by younger people,

**[00:55:32]** where we see a decline in recruitment,

**[00:55:34]** where we see a decline in recruitment of junior people.

**[00:55:36]** I see it in our team,

**[00:55:38]** I have a hierarchy of people,

**[00:55:40]** a class of juniors,

**[00:55:42]** but there is no one in the junior position anymore.

**[00:55:44]** And I believe that there will never be anyone

**[00:55:46]** in the junior position as a human being,

**[00:55:48]** because artificial intelligence

**[00:55:50]** is already managing the junior work very well.

**[00:55:52]** And we're just talking about how quickly

**[00:55:54]** it's going to move up to the higher levels

**[00:55:56]** of analytical skills and expertise.

**[00:56:00]** So this work is going to change.

**[00:56:02]** It doesn't look like it's going to change yet,

**[00:56:04]** but believe me,

**[00:56:06]** the change will be significant.

**[00:56:08]** And I think that one of the things

**[00:56:10]** that politicians should start to deal with

**[00:56:12]** is when this comes,

**[00:56:14]** what will be our recipe

**[00:56:16]** for being able to maintain

**[00:56:18]** a social dimension

**[00:56:20]** so that the population doesn't grow any further.

**[00:56:22]** But what is changing,

**[00:56:24]** and what can be a bottleneck,

**[00:56:26]** what is changing,

**[00:56:28]** or what can be a bottleneck,

**[00:56:30]** is of course the calculation of capacity

**[00:56:32]** and data center.

**[00:56:34]** It's about whether it's a bubble or not.

**[00:56:36]** I'm omitting the word bubble,

**[00:56:38]** but anyway, what can be a bottleneck

**[00:56:40]** is energy.

**[00:56:42]** We are a civilization based on energy.

**[00:56:44]** Václav Smil, a Canadian scientist

**[00:56:46]** from the Czech Republic,

**[00:56:48]** the greatest energy expert,

**[00:56:50]** says very well that modern civilization

**[00:56:52]** is built on ammonia,

**[00:56:54]** plastic, cement, and steel.

**[00:56:56]** And I would add

**[00:56:58]** artificial fertilizers.

**[00:57:00]** All of these technologies are very

**[00:57:02]** energetically dependent.

**[00:57:04]** In other words, we need a lot of energy.

**[00:57:06]** So when the Czech Republic is discussing

**[00:57:08]** whether to build nuclear, wind, solar,

**[00:57:10]** or gas power plants,

**[00:57:12]** or coal power plants,

**[00:57:14]** we need all of them.

**[00:57:16]** And here in the United States,

**[00:57:18]** you can see that in states

**[00:57:20]** that have significantly more data centers,

**[00:57:22]** which are energetically dependent,

**[00:57:24]** electricity prices increase significantly faster.

**[00:57:26]** So of course, the United States will deal with this.

**[00:57:28]** In the end, they will deal with the fact

**[00:57:30]** that people and households will start to argue

**[00:57:32]** that they don't want such high prices for electricity.

**[00:57:34]** Just don't build it for us.

**[00:57:36]** So the limitation of capacity

**[00:57:38]** will increase the polarization in society

**[00:57:40]** because I don't want to pay

**[00:57:42]** high prices for electricity.

**[00:57:44]** And if I know that the data centers are doing this,

**[00:57:46]** I will start to beat them up.

**[00:57:48]** I will regulate the price of electricity

**[00:57:50]** and so on.

**[00:57:52]** So these are the basic megatrends

**[00:57:54]** that I have chosen.

**[00:57:56]** Of course, there are many more.

**[00:57:58]** Anyway, I have experience

**[00:58:00]** that when I say this,

**[00:58:02]** people say,

**[00:58:04]** well, that's very pessimistic.

**[00:58:06]** I say, it's not pessimistic

**[00:58:08]** because this global trend is well-described

**[00:58:10]** by the awareness it brings

**[00:58:12]** and of course the opportunities

**[00:58:14]** to identify this chaos.

**[00:58:16]** The first opportunity we should make

**[00:58:18]** is how we perceive the world.

**[00:58:20]** Because in the last year or two,

**[00:58:22]** many people perceive the European Union

**[00:58:24]** or Germany as a burning economy.

**[00:58:26]** It's completely unprofitable, unproductive.

**[00:58:28]** Let's wrap it up

**[00:58:30]** and talk about something completely new.

**[00:58:32]** The United States is the Holy Grail.

**[00:58:34]** If you look, for example,

**[00:58:36]** at the gross domestic product

**[00:58:38]** and in Germany, at the working hours,

**[00:58:40]** that is, when an average German works,

**[00:58:42]** that is, people in Volkswagen

**[00:58:44]** and so on,

**[00:58:46]** that is, non-competitive companies,

**[00:58:48]** and when an average American works,

**[00:58:50]** in math, alphabet and so on,

**[00:58:52]** let's say,

**[00:58:54]** to show the computer

**[00:58:56]** and discuss the average worker,

**[00:58:58]** the productivity is comparable.

**[00:59:00]** At the working hours,

**[00:59:02]** the German factory has only 3% lower productivity

**[00:59:04]** than the American factory.

**[00:59:06]** I'm not just talking about the factory,

**[00:59:08]** I'm also talking about the white and blue lines.

**[00:59:10]** The average productivity is more or less comparable.

**[00:59:12]** In France, it's 11% lower

**[00:59:14]** than we would expect,

**[00:59:16]** but there are economies like Denmark,

**[00:59:18]** where the productivity is higher

**[00:59:20]** than in the United States.

**[00:59:22]** In other words, the big economies

**[00:59:24]** are not burned economies

**[00:59:26]** because they have their own structural problems.

**[00:59:28]** But the economic level is lower.

**[00:59:30]** If we look at Germany,

**[00:59:32]** the GDP per capita is 16%

**[00:59:34]** below the United States.

**[00:59:36]** In France, it's about 30% below the United States.

**[00:59:38]** What's the reason?

**[00:59:40]** We work less.

**[00:59:42]** The number of hours produced per capita

**[00:59:44]** is 13% lower in Germany

**[00:59:46]** and 5% lower in France.

**[00:59:48]** This is our work-life balance,

**[00:59:50]** which we prefer.

**[00:59:52]** We call it a happy life.

**[00:59:54]** But when we work,

**[00:59:56]** the productivity is not as good as it used to be.

**[00:59:58]** In other words,

**[01:00:00]** As an economist, I was delighted when I found out about it.

**[01:00:03]** I thought it was great, because we don't have to destroy the whole economy

**[01:00:06]** and build a new structure.

**[01:00:08]** We just need to motivate people to work, if we want to reach the economic level.

**[01:00:12]** Sociologists say, let's destroy the economy and build a new one,

**[01:00:15]** because it motivates people to work more.

**[01:00:19]** Think about the elderly, the people over 65.

**[01:00:22]** A fifth of people in the United States work,

**[01:00:24]** while in the Czech Republic it's about 9-10%, or half.

**[01:00:27]** It doesn't show the difference in the working population.

**[01:00:30]** Anyway, we chose a work-life balance.

**[01:00:34]** We have a lower economic level,

**[01:00:36]** but it's not about having a dramatically lower productivity.

**[01:00:39]** That's the first thing.

**[01:00:41]** That's our narrative of how Europe is doing.

**[01:00:44]** We've decided that it's going to do a little less,

**[01:00:47]** because we want a happier, healthier life.

**[01:00:50]** The second thing is that we're dealing with Trump.

**[01:00:54]** We say, Trump led us astray, and so on.

**[01:00:57]** We're dealing with Trump.

**[01:00:59]** What about Trump?

**[01:01:00]** We should deal primarily with ourselves,

**[01:01:02]** because we have a single market.

**[01:01:04]** A single market in the EU is interesting,

**[01:01:06]** because everything is single, but not everything.

**[01:01:09]** Because the strength of the economic bloc

**[01:01:12]** is that we have a single market,

**[01:01:15]** a huge market where we can, under the same conditions,

**[01:01:18]** start a business, produce goods, provide services,

**[01:01:22]** and offer it to hundreds of millions of people

**[01:01:24]** who live in the EU.

**[01:01:26]** But that's not happening, because at the level of the economy,

**[01:01:29]** the IMF has calculated that we have non-tariff barriers.

**[01:01:32]** They're not social barriers.

**[01:01:34]** They're non-tariff barriers, such as certifications,

**[01:01:37]** various legal regulations, and so on,

**[01:01:39]** which you have to hire people to solve.

**[01:01:42]** And this is allowed by rather large companies,

**[01:01:46]** so at the level of the economy, it's a 45% non-tariff barrier.

**[01:01:50]** At the level of the services, it's more than 100%.

**[01:01:53]** In other words, we really need to solve our single market.

**[01:01:56]** And if we increase the mutual trade within the EU by only 2%,

**[01:02:02]** we'll be able to nullify the negative impact of Trump's goals.

**[01:02:10]** Mutual trade by 2%.

**[01:02:12]** Let's stop dealing with Trump.

**[01:02:14]** Let's deal with what we can change in the EU.

**[01:02:16]** Let's deal with this single market setting.

**[01:02:19]** And it's not just about services, services, energy, or the capital market.

**[01:02:22]** The 28th Regime can help us use the capital we have in the EU.

**[01:02:26]** Because we're investors.

**[01:02:28]** We invest a lot.

**[01:02:30]** In the Czech Republic, we invest 17-18%.

**[01:02:32]** But we need the money.

**[01:02:34]** It's strange that you call yourself an investor.

**[01:02:36]** You want to invest the investment.

**[01:02:39]** This will bring benefits, because we'll start building capitalism.

**[01:02:42]** We'll be able to use the capital we have in the EU

**[01:02:45]** and use it for long-term investments.

**[01:02:47]** Not just for the companies, but for me as an investor.

**[01:02:51]** The second thing I'd like to show you is the fragmentation of Europe.

**[01:02:54]** There are defense systems.

**[01:02:56]** We're talking about joint defense.

**[01:02:58]** And one of the things that's really good

**[01:03:00]** are joint purchases of defense systems.

**[01:03:03]** Tanks, guns, ammunition, rifles, guns, and so on.

**[01:03:08]** Anything, helicopters, ships.

**[01:03:10]** But if you look at the EU,

**[01:03:12]** in some areas, in some defense systems,

**[01:03:15]** tanks, and so on, we have dozens,

**[01:03:17]** maybe 20 different types of those systems.

**[01:03:22]** The coordination, or even the joint purchases,

**[01:03:24]** are very limited.

**[01:03:27]** And when we were able to change this,

**[01:03:29]** we were able to have a significant advantage in terms of reach,

**[01:03:31]** and at the same time, because we buy the same products,

**[01:03:33]** we were able to, thanks to the joint purchase,

**[01:03:37]** sell them at a significantly lower price.

**[01:03:41]** But above all, the biggest advantage is coordination.

**[01:03:44]** Maintaining those systems.

**[01:03:46]** We're able to supply the Ukrainians with different types,

**[01:03:49]** but the Ukrainians are afraid, because it's a logistical hell.

**[01:03:52]** Different defense systems, different types,

**[01:03:54]** and so on.

**[01:03:56]** It's a logistical hell,

**[01:03:58]** which, of course, in the event of a problem,

**[01:04:00]** reduces our defense capabilities.

**[01:04:02]** Another positive thing is that

**[01:04:05]** defense spending increases by about 80% over the next few years.

**[01:04:09]** Many people say,

**[01:04:11]** defense is not a productive war,

**[01:04:13]** and so on.

**[01:04:14]** I don't like that very much,

**[01:04:16]** but at least the EU is in a hybrid war,

**[01:04:19]** and at the same time, it's no longer a hybrid war,

**[01:04:21]** because we see that some actions in the Czech Republic

**[01:04:24]** are really a war action.

**[01:04:28]** Anyway, defense spending is nothing more than

**[01:04:32]** a weapon, a chemical industry, and innovation.

**[01:04:35]** This is something the Czech Republic is very strong in,

**[01:04:38]** and it's no coincidence that it's so successful in the Czech Republic,

**[01:04:41]** because the Czech Republic really has a huge potential

**[01:04:44]** to produce almost anything.

**[01:04:47]** At the same time, neighboring Germany has economic problems.

**[01:04:51]** It's been said for a long time that if Germany gets a loan,

**[01:04:53]** we'll get a loan.

**[01:04:55]** Just realize that in recent years, Germany has a loan,

**[01:04:58]** and we're doing much better.

**[01:05:00]** The Czech industry is much more resilient than the German industry,

**[01:05:04]** which is a very good news.

**[01:05:06]** The share of exports to Germany is decreasing,

**[01:05:08]** we export to other countries,

**[01:05:10]** we are able to quickly advertise or change suppliers,

**[01:05:14]** subscribers, and so on.

**[01:05:16]** So the Czech industry is much more resilient than the German industry,

**[01:05:19]** and at the same time, the German economy, Merz,

**[01:05:21]** has lost its fiscal package, which is bigger than Marshall Plan

**[01:05:23]** after the Second World War,

**[01:05:25]** in terms of share in the economy.

**[01:05:27]** If they invest in it, or at least eat it,

**[01:05:29]** it will help us.

**[01:05:31]** Because it's a neighboring economy,

**[01:05:33]** a third of Czech exports go to Germany,

**[01:05:35]** so it's a potential that will help us.

**[01:05:37]** Another thing that will help us

**[01:05:39]** are high energy prices.

**[01:05:41]** We have high energy prices in Europe,

**[01:05:43]** but our competitiveness is significantly limited,

**[01:05:46]** which is bad.

**[01:05:48]** The Czech economy is also very energy-intensive,

**[01:05:51]** because the share of energy consumption per unit of GDP

**[01:05:54]** is perhaps half that of Germany.

**[01:05:56]** As a result, we need to increase energy efficiency

**[01:05:59]** or rely on lower energy prices.

**[01:06:01]** We don't rely on lower energy prices,

**[01:06:03]** because if we build new nuclear power plants,

**[01:06:05]** they won't lower our energy prices,

**[01:06:07]** they will only allow us to have the energy.

**[01:06:09]** So in the end, we have to increase efficiency,

**[01:06:11]** and we are able to increase efficiency

**[01:06:13]** by investing significantly in higher energy efficiency.

**[01:06:16]** Václav Smil, I've already mentioned him once,

**[01:06:19]** says, stop believing that small modular reactors

**[01:06:23]** or, for example, hydrogen will help you in the short term.

**[01:06:28]** What will help you in the short term

**[01:06:30]** are the boring investments in energy efficiency.

**[01:06:33]** At the level of a person like me,

**[01:06:35]** an individual, like a family living at home,

**[01:06:37]** it's heating, heat pumps,

**[01:06:39]** various things that really lower my bill.

**[01:06:43]** The Czech Republic is leading in the production of clean tech.

**[01:06:47]** If you need something to increase energy efficiency,

**[01:06:50]** it's clean tech.

**[01:06:52]** The Czech Republic, for example, is the fourth best

**[01:06:55]** in the ability to produce such clean tech things

**[01:06:57]** that no one else can produce.

**[01:06:59]** Not that they can't produce them,

**[01:07:01]** but they can't produce them.

**[01:07:03]** Already now, 20% of Czechs export clean tech.

**[01:07:05]** So when some politicians say,

**[01:07:07]** let's stop talking about increasing energy efficiency

**[01:07:11]** and green deals,

**[01:07:13]** because they have a common purpose,

**[01:07:15]** they say, let's damage the Czech industry.

**[01:07:17]** Paradoxically, politicians say,

**[01:07:19]** let's help the Czech industry,

**[01:07:21]** because they say, let's not do these things.

**[01:07:24]** I understand why people agree on green deals,

**[01:07:27]** agreements, zero carbon emissions, etc.

**[01:07:31]** But anyway, when I break it down,

**[01:07:34]** for the Czech industry,

**[01:07:36]** and not only for the Czech industry,

**[01:07:38]** it's absolutely key to increase your energy efficiency

**[01:07:40]** to increase your competitiveness.

**[01:07:42]** And if you need something for that,

**[01:07:44]** the Czech economy is able to produce these clean tech things.

**[01:07:47]** Again, a huge advantage for the Czech economy.

**[01:07:49]** If you look at it globally,

**[01:07:51]** we have the 6th or 7th most diversified economy in the world.

**[01:07:55]** When Europe talks about re-industrialization,

**[01:07:58]** who else should benefit from it than the Czech economy?

**[01:08:01]** It's able to produce almost anything.

**[01:08:03]** You may have heard that the Czech Republic

**[01:08:05]** is one of the 9 countries in the world

**[01:08:07]** that are able to produce aircraft from start to finish.

**[01:08:10]** The Czech Republic.

**[01:08:12]** So it's able to produce almost everything.

**[01:08:15]** In the past, it was shown to produce everything.

**[01:08:18]** Today, it's able to focus on one product, one thing.

**[01:08:21]** It's shown to be our greatest strength.

**[01:08:23]** If we use it, we'll be able to use it.

**[01:08:25]** Here, we're being restricted.

**[01:08:27]** What we need to produce is to build production capacities.

**[01:08:30]** For example, the government came and said

**[01:08:32]** our strategic investment is gigafactories.

**[01:08:34]** I'm not saying that gigafactories were really what we needed,

**[01:08:37]** but the government said it was a strategic investment.

**[01:08:40]** And for many years, no gigafactories have been built,

**[01:08:42]** neither in Pilsen nor in Lutyn.

**[01:08:44]** In large part, this is due to the fact

**[01:08:46]** that our municipal system is very fragmented.

**[01:08:49]** In other words, half of the municipalities have less than 420 inhabitants.

**[01:08:54]** And of course, at this level,

**[01:08:57]** you're not able to have the capacity to manage the municipalities,

**[01:09:00]** the project managers, and the local authorities

**[01:09:02]** to be able to do the projects,

**[01:09:04]** whether it's building houses, flats,

**[01:09:06]** or negotiating with other partners on the investor's side,

**[01:09:10]** so that they have this capacity.

**[01:09:12]** And at the same time, you don't have the motivation.

**[01:09:14]** Because of the economic activity you attract to your territory,

**[01:09:17]** in the Czech Republic, you only get 1%.

**[01:09:19]** In the Polish state, you get 30% of the economic activity.

**[01:09:22]** In other words, the Czech state doesn't have the 1% motivation

**[01:09:27]** to attract new investors.

**[01:09:29]** Because if a new investor comes,

**[01:09:31]** the only thing you have is a lot of money,

**[01:09:33]** a big box is going to be built,

**[01:09:35]** new people are going to come,

**[01:09:37]** because a large part of the workplace

**[01:09:39]** has to be occupied by people who don't live there yet.

**[01:09:41]** So there's a lot of competition.

**[01:09:43]** Now there's less access to schools.

**[01:09:45]** Schools are closed, I don't know why.

**[01:09:47]** And you don't have enough money to compensate for that.

**[01:09:50]** You need better infrastructure,

**[01:09:52]** transport, education, and so on.

**[01:09:54]** In the 1970s, when nuclear power plants were being built in France,

**[01:10:00]** the state will be affected, because we understood that the financial motivation was much higher.

**[01:10:05]** So we need to set up something similar in the Czech Republic.

**[01:10:07]** If we can make full use of the opportunities that the chaotic world offers us,

**[01:10:12]** if not, it will be a wasted opportunity.

**[01:10:14]** And that's the black scenario.

**[01:10:17]** If we can't make full use of the opportunities we have,

**[01:10:22]** and we get the last point, which is resilience,

**[01:10:24]** we need to build something that we have invested heavily in,

**[01:10:27]** and that is resilience.

**[01:10:29]** Resilience in the sense that I am able to adapt very quickly.

**[01:10:33]** You constantly learn new things in a country where you don't like to learn.

**[01:10:37]** You constantly need to be agile.

**[01:10:41]** In fact, strategic thinking is something you need,

**[01:10:43]** because relying on one scenario,

**[01:10:45]** even if it's the darkest one you're afraid of,

**[01:10:47]** or the best one you hope for,

**[01:10:49]** is actually wrong.

**[01:10:50]** You need to have more scenarios that you can build on

**[01:10:52]** and evaluate yourself.

**[01:10:53]** And you know what will happen if you have plan B,

**[01:10:55]** if you have plan C, if you have plan D,

**[01:10:57]** if you have plan D,

**[01:10:59]** if you have plan C, if you have plan D,

**[01:11:00]** if you have plan C, if you have plan D,

**[01:11:01]** if you have plan C, if you have plan D,

**[01:11:02]** if you have plan C, if you have plan D,

**[01:11:03]** if you have plan C, if you have plan D,

**[01:11:04]** if you have plan C, if you have plan D,

**[01:11:05]** if you have plan C, if you have plan D,

**[01:11:06]** if you have plan C, if you have plan D,

**[01:11:07]** if you have plan C, if you have plan D,

**[01:11:08]** if you have plan C, if you have plan D,

**[01:11:09]** if you have plan C, if you have plan D,

**[01:11:10]** if you have plan C, if you have plan D,

**[01:11:11]** if you have plan C, if you have plan C, if you have plan D,

**[01:11:13]** I'll go back to Edelman, who I mentioned at the beginning.

**[01:11:15]** Edelman says that when people perceive brands,

**[01:11:19]** it changes from me to them.

**[01:11:21]** He doesn't want us to be interested in a huge community,

**[01:11:25]** nation, society, etc.

**[01:11:27]** He wants brands to help me more,

**[01:11:29]** to help me individually,

**[01:11:31]** so that I can improve my life conditions,

**[01:11:35]** learn something new, feel better.

**[01:11:38]** He gave me a bit of optimism,

**[01:11:40]** by saying that this change can be optimistic.

**[01:11:44]** This is something that people expect from the company,

**[01:11:47]** that it will help them.

**[01:11:49]** Thank you very much for your attention.

**[01:12:01]** Thank you very much.

**[01:12:03]** It's great that you finished where you started,

**[01:12:07]** because I have a feeling that this is the cornerstone of the problems

**[01:12:11]** and the step instead of enlarging the cake.

**[01:12:15]** Is there a place in the world where this still works,

**[01:12:20]** apart from the Nordic countries,

**[01:12:22]** which we are still pointing to?

**[01:12:24]** Well, it works in the Nordic countries,

**[01:12:26]** but I would say that it works in countries that grow very fast,

**[01:12:28]** because people there have a feeling that things are improving.

**[01:12:30]** So when I look at the economy,

**[01:12:32]** even the African economy,

**[01:12:34]** or the fact that the next few years will be better,

**[01:12:36]** the confidence there is much higher.

**[01:12:38]** But of course, we are in a situation where

**[01:12:40]** it's good to look at the European economies,

**[01:12:43]** which are similar to ours.

**[01:12:45]** For example, Denmark, where the confidence is much higher.

**[01:12:48]** Because they have the European Union,

**[01:12:50]** the GDPR, and so on,

**[01:12:52]** they are able to invest in society,

**[01:12:54]** but also in capital, much more.

**[01:12:56]** Because we always say that the United States has a strong capital market.

**[01:13:00]** Well, Denmark or Sweden has a similar strong capital market.

**[01:13:03]** Of course, the economy is smaller,

**[01:13:05]** but the capitalization is similar to the GDPR.

**[01:13:07]** And in the end, the capital is able to bring the risk-free capital,

**[01:13:10]** start-ups, new ideas, new ideas,

**[01:13:12]** and realize them.

**[01:13:14]** And at the same time, the active policy of employment

**[01:13:16]** is based on the fact that society is set on

**[01:13:18]** that it's not about the fact that if I don't have a job, I'm sorry.

**[01:13:21]** I'm sorry if I don't use my talent as much as I can,

**[01:13:23]** and if I don't develop it.

**[01:13:25]** The mindset is completely different.

**[01:13:27]** I just listened to an analysis

**[01:13:30]** about how young men rather want to invest in the NFTs,

**[01:13:37]** instead of really investing in themselves,

**[01:13:41]** and that it will increase their income for a long time,

**[01:13:44]** for example, by twice as much.

**[01:13:46]** And it's the work versus the easy...

**[01:13:49]** That's the other thing that always,

**[01:13:51]** when I listen to your lecture,

**[01:13:53]** it freezes me up.

**[01:13:55]** And it's the young people who don't see the future

**[01:13:58]** that they're striving for.

**[01:14:00]** And this is terrible.

**[01:14:02]** It's terrible, and then it results in...

**[01:14:05]** I don't want to throw away different types of investments,

**[01:14:09]** but it's a kind of sasquatch.

**[01:14:11]** It's the kind of sasquatch we had,

**[01:14:13]** Matez or someone else.

**[01:14:15]** I just put it in and hope to win.

**[01:14:17]** And yes, it can happen.

**[01:14:19]** A lot of people can win, but a lot of people lose in the end.

**[01:14:22]** So it's not a long-term story.

**[01:14:25]** But it's also interesting

**[01:14:27]** that when we look at the stock market,

**[01:14:30]** we're in a mode where the supply...

**[01:14:34]** Let's put it simply.

**[01:14:36]** We see it in general in the world.

**[01:14:38]** It's not just some local changes.

**[01:14:41]** And at the same time, when a change comes,

**[01:14:43]** in the sense of a crash on the stock market,

**[01:14:46]** most people don't see it as a correction

**[01:14:48]** that corrects some prices.

**[01:14:50]** They see it as buying something again.

**[01:14:52]** It's cheaper, so let's buy it quickly.

**[01:14:54]** In recent years, these corrections have a very short duration.

**[01:14:57]** For example, a week.

**[01:14:58]** After a week, the price of the stock goes back to the original level.

**[01:15:01]** And I think that's the kind of level

**[01:15:03]** that leads to the fact that the stock markets

**[01:15:05]** can't go down for a long time.

**[01:15:07]** But we know that they do.

**[01:15:09]** After the financial crisis, the stock markets didn't grow for 10 years.

**[01:15:12]** The S&P 500 index, for example.

**[01:15:14]** So it's a kind of mentality

**[01:15:16]** that doesn't allow for a crisis

**[01:15:20]** to reach the stock markets.

**[01:15:24]** I'm going to focus on your questions now.

**[01:15:27]** First of all, I apologize,

**[01:15:29]** because we won't be able to answer all of them.

**[01:15:31]** So I'll just say that we'll have a classic round-trip.

**[01:15:35]** So what is the reason for the negative relationship

**[01:15:37]** between students and teachers?

**[01:15:40]** Well, that's a very good question.

**[01:15:42]** I would say that it's very much due to the fact

**[01:15:46]** that I'm not a specialist in education.

**[01:15:48]** I recommend looking at, for example,

**[01:15:50]** the work of Dana Minich,

**[01:15:52]** who did a very good job at the Czech School Inspection.

**[01:15:54]** She has a lot of great analysts

**[01:15:56]** who describe what's going on in schools.

**[01:15:58]** So it's a kind of disclaimer.

**[01:16:00]** But at the same time,

**[01:16:02]** we're a society that believes

**[01:16:04]** that we shouldn't make mistakes.

**[01:16:06]** And for a long time,

**[01:16:08]** it was normal to label people in the lower classes.

**[01:16:11]** They said, you have a 1, you have a 2,

**[01:16:13]** you have a 3, 4, 5.

**[01:16:15]** Instead, we realized that the transition from school

**[01:16:17]** to the educational institution

**[01:16:19]** is a shocking thing.

**[01:16:21]** Because we see them as 1s, 2s, 3s, 4s, 5s.

**[01:16:25]** And instead of teaching the children

**[01:16:29]** to be successful,

**[01:16:32]** everyone can be successful.

**[01:16:34]** And this raises the motivation

**[01:16:36]** to say, I'm successful.

**[01:16:38]** So if I try, I'll be successful more often.

**[01:16:40]** So we don't have this.

**[01:16:42]** And of course, even my parents,

**[01:16:44]** we don't treat them as 1s.

**[01:16:46]** We treat them as normal.

**[01:16:48]** But we start to treat them as 3s, 4s,

**[01:16:50]** 5s, 6s, 7s, 8s, 9s, 10s, 11s, 12s,

**[01:16:53]** We say, focus on what you're good at

**[01:16:55]** and don't make mistakes.

**[01:16:57]** We don't focus on what you're good at,

**[01:16:59]** and that's where we reinforce it.

**[01:17:01]** And then, after 10, 20, 30 years,

**[01:17:04]** the so-called gallops in corporations

**[01:17:06]** and other measures of the strong side

**[01:17:08]** are done,

**[01:17:10]** so we can finally try to overshadow it

**[01:17:12]** and find out what you're good at in the end

**[01:17:14]** and start to reinforce it.

**[01:17:16]** Instead of doing it from an early age,

**[01:17:18]** we say, this is what you're good at,

**[01:17:20]** and that's where you start to experience success.

**[01:17:22]** Instead, we say, that's not math,

**[01:17:24]** you have 3s here,

**[01:17:26]** so now we're going to teach you

**[01:17:28]** what you're not good at.

**[01:17:30]** That's one thing,

**[01:17:32]** but the other thing is,

**[01:17:34]** we don't even work with talents.

**[01:17:36]** We say, our system is designed

**[01:17:38]** to define our talents.

**[01:17:40]** We have 8-year-old or 6-year-old kids

**[01:17:42]** in high school,

**[01:17:44]** so that the talented kids

**[01:17:46]** can progress much faster.

**[01:17:48]** But if you have a talented kid,

**[01:17:50]** who would be able to jump the whole year,

**[01:17:52]** we can't identify him,

**[01:17:54]** because at the level of talented kids,

**[01:17:56]** you have to go to the so-called expert,

**[01:17:58]** who gives you a stamp of your talent,

**[01:18:00]** a genius,

**[01:18:02]** so you can jump the whole year

**[01:18:04]** in that system,

**[01:18:06]** or objects and so on.

**[01:18:08]** But here, it's fractions of a percentage of kids.

**[01:18:10]** But if you look at the results of TIMSS,

**[01:18:12]** these are some tests of kids,

**[01:18:14]** there you can see that

**[01:18:16]** a very high percentage,

**[01:18:18]** for example in mathematics,

**[01:18:20]** has 10-12% of kids.

**[01:18:22]** But we also have fractions of a percentage.

**[01:18:24]** Often, these are kids

**[01:18:26]** with lower socioeconomic status,

**[01:18:28]** whose parents don't take them there.

**[01:18:30]** Often, these are men rather than women,

**[01:18:32]** so there's a view that

**[01:18:34]** women in mathematics

**[01:18:36]** don't have much to study.

**[01:18:38]** So there are a lot of advantages.

**[01:18:40]** Anyway, in our system,

**[01:18:42]** where you don't help the kid down,

**[01:18:44]** here's a question from Jirka Urbana.

**[01:18:46]** What exactly do they do differently in Poland

**[01:18:48]** in terms of skills?

**[01:18:50]** Do they have better results?

**[01:18:52]** They have a much larger offer

**[01:18:54]** of general education,

**[01:18:56]** high school and high school.

**[01:18:58]** In other words,

**[01:19:00]** the top 10 fastest-growing cities in Europe

**[01:19:02]** are in Poland,

**[01:19:04]** and in Poland, they don't just build houses,

**[01:19:06]** office buildings, but they also build schools,

**[01:19:08]** so they increase the availability

**[01:19:10]** of general education,

**[01:19:12]** so it's not as hell as it is in the Czech Republic,

**[01:19:14]** where the parents experience the greatest stress

**[01:19:16]** when their child finally goes to high school.

**[01:19:18]** Even families have experienced

**[01:19:20]** the same thing,

**[01:19:22]** when their children go to high school.

**[01:19:24]** So there's a lot of stress.

**[01:19:26]** So the offer of education

**[01:19:28]** is larger at these levels,

**[01:19:30]** because you don't limit

**[01:19:32]** the child's ability to go to high school.

**[01:19:34]** If anyone

**[01:19:36]** had the need

**[01:19:38]** to learn a little

**[01:19:40]** about this topic,

**[01:19:42]** we had a few meetings

**[01:19:44]** with Dan Prokop,

**[01:19:46]** who has a lot of interesting data

**[01:19:48]** from Denmark,

**[01:19:50]** and a lot of organizations

**[01:19:52]** are dedicated to this.

**[01:19:54]** I think you can find

**[01:19:56]** these things

**[01:19:58]** in the Brain & Breakfast archive.

**[01:20:00]** to upskill themselves, to educate themselves, and so on.

**[01:20:04]** What is your opinion, Oral?

**[01:20:08]** I agree, because our narrative, as Czech users,

**[01:20:12]** supports education at a lower level.

**[01:20:14]** We support teachers, teachers' counsellors, and so on.

**[01:20:17]** Anyway, our new direction is lifelong education,

**[01:20:20]** because we say to ourselves, children, that's great,

**[01:20:23]** but let's go, because we see the problems that affect us,

**[01:20:26]** and will affect us, thanks to artificial intelligence,

**[01:20:28]** and we need to raise the level of education

**[01:20:30]** even among the elderly.

**[01:20:32]** And when we had a panel, or a table of experts,

**[01:20:36]** one of the things that came first was,

**[01:20:38]** let's change the name to lifelong education,

**[01:20:41]** because it sounds like a lifetime,

**[01:20:43]** it's a complete nonsense.

**[01:20:45]** And at the same time, education that we've had

**[01:20:47]** since we were kids, we don't like it,

**[01:20:49]** we're not looking forward to it.

**[01:20:51]** Even worse, as a brand, is the University of the Third Age.

**[01:20:55]** It sounds awful, of course.

**[01:20:57]** So it's funny.

**[01:20:59]** But it's often about changing the wording,

**[01:21:02]** and this society is divided,

**[01:21:04]** and sometimes you have to change the wording.

**[01:21:06]** So that's one thing.

**[01:21:07]** And the other thing is,

**[01:21:09]** not to lock people up in educational institutions

**[01:21:12]** where they can't go to high school,

**[01:21:14]** because they don't have a degree.

**[01:21:15]** Let's expand universal education.

**[01:21:17]** There are various proposals.

**[01:21:19]** They say, let's give two years of universal education

**[01:21:22]** to secondary schools as a duty.

**[01:21:24]** So, for example, a nine-year school leave

**[01:21:26]** for eight years plus two.

**[01:21:28]** There are many more approaches,

**[01:21:30]** but let's give universal education to people

**[01:21:32]** who decide to go to secondary schools,

**[01:21:35]** because this will help them not only

**[01:21:37]** to develop their skills and abilities

**[01:21:39]** in their adult life,

**[01:21:41]** because they have to decide, for example,

**[01:21:43]** why they're going to secondary school

**[01:21:45]** in the 20th century,

**[01:21:47]** so they'll understand some things,

**[01:21:48]** but at the same time, it won't lock them up

**[01:21:50]** in high school if they have a degree.

**[01:21:53]** Can I say one more thing?

**[01:21:55]** The degree is very interesting.

**[01:21:57]** I remember one sociological study

**[01:21:59]** that looked at what millenials are.

**[01:22:02]** So the sociologists looked at what millenials are,

**[01:22:06]** how they behave, what they buy, etc.

**[01:22:09]** And they looked at the whole society

**[01:22:11]** and what percentage of different age groups

**[01:22:13]** are represented by millenial behavior.

**[01:22:16]** And one thing that really increased the probability

**[01:22:19]** that people in their 50s and 60s

**[01:22:22]** would have a degree or not.

**[01:22:26]** So this changes the way people live,

**[01:22:29]** how they think, what they do,

**[01:22:31]** how they decide, what they read, etc.,

**[01:22:33]** when they have universal education

**[01:22:35]** that people who don't have this education have.

**[01:22:38]** I'm going to take a sip of water again.

**[01:22:40]** You mentioned it.

**[01:22:42]** Last year, in August,

**[01:22:44]** we had a breakfast with Dan Kristof

**[01:22:47]** from the Office of Labor.

**[01:22:49]** In the morning breakfast, he described

**[01:22:51]** a specific case of Liberty Island,

**[01:22:53]** where they told people,

**[01:22:55]** look, this is going to end here.

**[01:22:57]** If you re-qualify, you'll get nothing.

**[01:22:59]** And no one did it until it really ended.

**[01:23:02]** When people were fed up,

**[01:23:04]** the pigs started eating this.

**[01:23:06]** You know this for an active interest.

**[01:23:08]** Unfortunately, this is not the case

**[01:23:10]** in our population.

**[01:23:12]** I'm moving on to another area

**[01:23:14]** that you mentioned.

**[01:23:16]** When we meet with them,

**[01:23:18]** it starts bubbling up.

**[01:23:20]** These are the junior positions.

**[01:23:22]** They won't have a place to gain experience.

**[01:23:25]** They won't gain experience

**[01:23:27]** in a senior position.

**[01:23:29]** How do you see this?

**[01:23:31]** You've been showing this for a while

**[01:23:33]** and you can see it in the data.

**[01:23:35]** It will be a problem.

**[01:23:37]** We're not in a situation

**[01:23:39]** where these people are actively allowed in,

**[01:23:41]** but they are less likely to be hired.

**[01:23:43]** They won't get this position.

**[01:23:45]** A few years ago,

**[01:23:47]** they raised the lottery a bit.

**[01:23:49]** The problem is,

**[01:23:51]** I don't have a solution.

**[01:23:53]** The solution could be to increase

**[01:23:55]** the qualification somewhere else.

**[01:23:57]** It will be a much more expensive approach.

**[01:23:59]** We also have a problem

**[01:24:01]** with the Czech market.

**[01:24:03]** We have a very tight workflow.

**[01:24:05]** Not only because of the institutional conditions,

**[01:24:07]** but also mentally.

**[01:24:09]** We're afraid to change our position.

**[01:24:11]** It will be a huge problem for the young people.

**[01:24:13]** It will contribute to the polarization.

**[01:24:15]** In the vision of the world,

**[01:24:17]** the system that is becoming

**[01:24:19]** doesn't bring anything positive.

**[01:24:21]** I just want to change it.

**[01:24:23]** It will be a matter

**[01:24:25]** that will be deepened and sharpened.

**[01:24:27]** We just had an interesting

**[01:24:29]** intimate discussion

**[01:24:31]** with Dita Formanko from Chequitas.

**[01:24:33]** She makes sure

**[01:24:35]** that women are the new programmers.

**[01:24:37]** She just said

**[01:24:39]** that this affects her a lot

**[01:24:41]** and that the companies really don't hire her.

**[01:24:43]** It's something that changes a lot.

**[01:24:47]** Let's move on.

**[01:24:49]** What are the most important reasons

**[01:24:51]** why the productivity

**[01:24:53]** is so much worse than in the USA,

**[01:24:55]** Germany or Denmark?

**[01:24:57]** It's not because we work less.

**[01:24:59]** We even work more than the Americans.

**[01:25:01]** We go to the offices

**[01:25:03]** for the meetings,

**[01:25:05]** but you don't see the productivity.

**[01:25:07]** It's sad.

**[01:25:09]** One of the reasons is

**[01:25:11]** that we don't produce bad things.

**[01:25:13]** For example, the highest

**[01:25:15]** export production

**[01:25:17]** is in the EU.

**[01:25:19]** But we produce and export

**[01:25:21]** things that are not part of the final product.

**[01:25:23]** In other words,

**[01:25:25]** we have a lot to do with the economy.

**[01:25:27]** Let's take automotive for example.

**[01:25:29]** When we looked at the data

**[01:25:31]** three years before and after COVID,

**[01:25:33]** what is the role of capital

**[01:25:35]** in the automotive sector

**[01:25:37]** and in the final product?

**[01:25:39]** Before COVID, it was about 20%.

**[01:25:41]** After COVID, it's about 20%.

**[01:25:43]** It hasn't changed dramatically.

**[01:25:45]** It will change thanks to China.

**[01:25:47]** But when you produce in the automotive

**[01:25:49]** subcontractors,

**[01:25:51]** the role was about half.

**[01:25:53]** Before COVID, it was about 13%.

**[01:25:55]** After COVID, it's reduced to zero.

**[01:25:57]** It's largely due to the fact

**[01:25:59]** that the subcontractors

**[01:26:01]** in the Czech Republic

**[01:26:03]** are subsidiaries of a German company

**[01:26:05]** I see a question there.

**[01:26:07]** Please go ahead.

**[01:26:19]** Thank you very much.

**[01:26:21]** Next time, please let the people

**[01:26:23]** who are watching us hear it.

**[01:26:25]** I will comment on that.

**[01:26:27]** It's true that subsidiaries

**[01:26:29]** of a company

**[01:26:31]** are less motivated

**[01:26:33]** to invest here.

**[01:26:35]** But that's not true.

**[01:26:37]** In the end, our owner is a capitalist

**[01:26:39]** who wants to do as much as possible.

**[01:26:41]** If we create conditions for companies

**[01:26:43]** to reinvest the money

**[01:26:45]** so that they come here

**[01:26:47]** because they will be able

**[01:26:49]** to build something quickly,

**[01:26:51]** they will have a qualified workforce,

**[01:26:53]** they will be able to get

**[01:26:55]** some scientific basis.

**[01:26:57]** I have a collaboration

**[01:26:59]** with a university.

**[01:27:01]** The more you reinvest your profit,

**[01:27:03]** the lower the corporate tax rate.

**[01:27:05]** That's a motivation

**[01:27:07]** that can work for us.

**[01:27:09]** But at the same time,

**[01:27:11]** the conditions for rapid growth

**[01:27:13]** are absolutely insurmountable.

**[01:27:15]** If I say I will reinvest 100% of my profit

**[01:27:17]** but I can't build anything in two years,

**[01:27:19]** the money will run out.

**[01:27:21]** The other thing is,

**[01:27:23]** and we can learn more about it,

**[01:27:25]** that when the World Bank

**[01:27:27]** and the International Monetary Fund

**[01:27:29]** come together,

**[01:27:31]** it's the same thing.

**[01:27:33]** You are poor, so you have to export.

**[01:27:35]** What you are going to export

**[01:27:37]** is the industry.

**[01:27:39]** Because you are not very productive,

**[01:27:41]** you have to go to foreign investors

**[01:27:43]** who will teach you these things.

**[01:27:45]** We got there, as I said,

**[01:27:47]** to a private company.

**[01:27:49]** And the fourth point was

**[01:27:51]** to learn from them and build your own capital.

**[01:27:53]** Create your own brands

**[01:27:55]** that will be global.

**[01:27:57]** CSG is the last one,

**[01:27:59]** but we will find many more.

**[01:28:01]** For example, compared to Poland,

**[01:28:03]** Czech companies invest much more

**[01:28:05]** than Poles.

**[01:28:07]** So this is positive.

**[01:28:09]** And of course,

**[01:28:11]** if we had stronger capital,

**[01:28:13]** we could do it even better.

**[01:28:15]** So we are learning how to do it

**[01:28:17]** and we need to set up a system

**[01:28:19]** so that there is much more motivation

**[01:28:21]** to reinvest in the Czech economy.

**[01:28:23]** Because in the end,

**[01:28:25]** we want to make a profit.

**[01:28:27]** And at the same time,

**[01:28:29]** we want Czech companies

**[01:28:31]** to become a strong capital

**[01:28:33]** with global ambitions.

**[01:28:35]** It is a matter of mindset

**[01:28:37]** how to set up these things.

**[01:28:39]** That was very interesting.

**[01:28:41]** I think the Czech-Polish balance sheet

**[01:28:43]** compared to the Polish and Czech billionaires

**[01:28:45]** who got it in the 1990s.

**[01:28:47]** The Poles built it themselves.

**[01:28:49]** So the mindset of the growth

**[01:28:51]** is somewhere else.

**[01:28:53]** It is a clear indication

**[01:28:55]** of how important the capital market is.

**[01:28:57]** Because the Poles said

**[01:28:59]** we will build a capital market.

**[01:29:01]** And in the end,

**[01:29:03]** the share of companies

**[01:29:05]** owned by Czech owners

**[01:29:07]** is significantly lower

**[01:29:09]** compared to the Czech Republic.

**[01:29:11]** And they did it a bit more

**[01:29:13]** regularly.

**[01:29:15]** They said the pension funds

**[01:29:17]** had to invest at least some time

**[01:29:19]** in the domestic Polish capital market.

**[01:29:21]** So the Czech pension funds

**[01:29:23]** and the old ones

**[01:29:25]** were considerably more conservative

**[01:29:27]** compared to the Polish ones.

**[01:29:29]** The last question.

**[01:29:31]** What is your type of country

**[01:29:33]** that will follow the USA hegemony?

**[01:29:35]** The logical challenger

**[01:29:37]** is China, of course.

**[01:29:39]** There is no need

**[01:29:41]** to think too much about it.

**[01:29:43]** And I don't know.

**[01:29:45]** I really don't know.

**[01:29:47]** We need to be prepared

**[01:29:49]** for the scenario of Mr. Betser.

**[01:29:51]** And at the same time,

**[01:29:53]** at the strategic level,

**[01:29:55]** we need to be aware

**[01:29:57]** that in order for it not to happen

**[01:29:59]** as usual,

**[01:30:00]** and that is that we have to overcome the war conflict,

**[01:30:04]** which will become the new hegemon in the end.

**[01:30:08]** I've already started the slide.

**[01:30:12]** Thank you very much.

**[01:30:14]** Thank you.

**[01:30:15]** It was great.

**[01:30:17]** Thank you for being here.

**[01:30:19]** I've already started the slide with some stars.

**[01:30:23]** We'll be happy for feedback,

**[01:30:25]** we'll be happy for what comes to your mind

**[01:30:27]** when you've listened to the breakfast.

**[01:30:29]** Of course, it's good,

**[01:30:31]** because it's very, how to say,

**[01:30:33]** rich and rich,

**[01:30:35]** when you discuss this in some way,

**[01:30:38]** whether with a colleague or someone close to you.

**[01:30:41]** We'll do this for you.

**[01:30:43]** On the 25th of February,

**[01:30:45]** you'll be able to join David at Digestive.

**[01:30:49]** We'll definitely answer some of the questions

**[01:30:51]** that were asked a lot here.

**[01:30:53]** I already have other people

**[01:30:55]** who will have a lot to say about the discussion.

**[01:30:58]** They'll be the questioners.

**[01:31:00]** But you can join us and join the discussion.

**[01:31:03]** So, it'll be on the 25th of February.

**[01:31:05]** I think we've agreed on a lunch break

**[01:31:07]** so that it doesn't hurt anyone at work.

**[01:31:10]** So, in 12 hours.

**[01:31:12]** I'd like to invite you to another business breakfast.

**[01:31:15]** It'll be about customer experience with Jan Uriga.

**[01:31:18]** I'd like to remind you that on our educational Netflix

**[01:31:22]** you'll find new episodes of Eliška Ramešová

**[01:31:25]** on the balance between business and life.

**[01:31:28]** Also, Digital Essentials for Business,

**[01:31:31]** Michael Schreyer, Kuba Heikonward,

**[01:31:33]** and Dita Formankova will be the guides

**[01:31:36]** so that we can advance our skills in digitalization.

**[01:31:40]** Knižka měsíce na zývdobě AI,

**[01:31:43]** Kuba Heikonward just chose.

**[01:31:45]** So, that's another thing.

**[01:31:47]** Don't forget that there are a lot of interesting breakfasts

**[01:31:51]** in the archive, even in the context of what we talked about today.

**[01:31:55]** If you need anything, just press the red button.

**[01:31:58]** And I will continue this year.

**[01:32:02]** It's a thin red line.

**[01:32:04]** After Odolnosti and Petr Horáková-Krištofová,

**[01:32:07]** we've talked to David about all kinds of mega-trends.

**[01:32:11]** So, the third guest of the year will be

**[01:32:14]** Pepa Šlerka on the 19th of March.

**[01:32:17]** Josef and I will talk about where to send your child to study.

**[01:32:21]** And, of course, an expert on social media.

**[01:32:24]** It will be very interesting, very rich.

**[01:32:26]** So, if you have time,

**[01:32:29]** come to the Magenta Experience Center on the 19th of March.

**[01:32:32]** I will be looking forward to seeing you, or you can look at us.

**[01:32:34]** Thank you very much. Have a nice day.

**[01:32:36]** Bye and goodbye. Thank you very much.

**[01:33:17]** Thank you very much.