Labour shortages push manufacturers toward automation

One of the main reasons Czech SMEs are increasingly turning to automation is the long-term labour crisis many manufacturers are facing. With 264,000 job vacancies nationwide and specific skilled trades becoming increasingly scarce, companies face critical capacity constraints.

"We are missing welders," says Jan Šimoník, continuing: "We are missing people skilled for bending operations. These are our bottlenecks."

Czech Chamber of Commerce President Zdeněk Zajíček emphasizes the critical nature of this transformation:

"We are an industrial nation with a very strong machinery sector, and naturally in this area automation and robotization are advancing by leaps and bounds globally. If we want to keep pace and maintain our good position globally, we have no choice but automation and robotization."

He sees this urgency driven by both efficiency needs and the shortage of qualified labor affecting all of Europe, making automation not just an option but a necessity for maintaining competitiveness.

A recent survey by the Czech Chamber of Commerce on automation adoption reveals the depth of the challenge. Manufacturing employs 30.9% of the Czech workforce while accounting for 20% of GDP – a ratio that shows both the sector's importance and its productivity challenge. The survey found that while nearly two-thirds of Czech firms have experience with automation, micro and small firms lag significantly behind, with almost half having no automation experience.

The labour shortage hits SMEs particularly hard. Unlike large corporations with dedicated recruitment teams and training programmes, smaller manufacturers struggle to compete for the shrinking pool of skilled workers. Czech SMEs often lack automation expertise internally, making them dependent on external support for technology adoption.

CBG Automation, a Czech integrator with 100 employees and over 100 clients worldwide, has witnessed this transformation firsthand. CEO Miloš Skýpala observes a clear shift in demand: "We see 10% annual growth in interest from SMEs. They're looking for complete solutions because they don't have internal automation departments. They need someone to guide them through the entire process."

This guidance requirement creates an opportunity for Danish suppliers. Traditional automation often becomes expensive when integrators must spend significant time making solutions user-friendly and flexible for the end customer. Danish technology solutions, however, are built from the ground up with this accessibility in mind. This built-in user-friendliness means integrators don't face the same additional costs with each new deployment, and end users don't need to employ robotics experts to operate and adjust the solutions when, for example, new products are introduced to the production line.

Rising costs make automation increasingly viable

While Czech labour costs remain below the EU average, the economics of automation have fundamentally shifted. Over the past eight years (2016-24), Czech manufacturing labour costs have surged by 83%, nearly three times the EU average increase of 30%, according to Eurostat data. Though labour costs in Czech manufacturing still sit at €18.7 per hour – about 55% of the EU average – this rapid growth trajectory shows Czech labour costs converging toward Western European levels, eroding the traditional cost advantage that Czech manufacturers have relied on.

The timing for automation investments may be particularly favorable now. Czech Chamber of Commerce President Zdeněk Zajíček observes a shift in investment conditions:

"During the energy crisis, companies had to allocate resources for unpredictable energy prices and postponed investments, including automation. With the stabilization of gas and energy supplies and decreasing energy prices, this could start to change. It's the right time to pursue this with greater vigor."

For Danish technology suppliers who might have found the business case challenging a few years ago, it's time to reconsider. The combination of rising wages and persistent labour shortages creates compelling economics for automation adoption. Czech manufacturers increasingly cannot compete on labour costs alone – they need productivity gains that automation provides.

The Czech Chamber of Commerce survey found that financial constraints remain the primary barrier, cited by 56% of respondents. Yet those who have automated report overwhelmingly positive results – over 60% say automation has significantly benefited their operations. The paradox is clear: manufacturers need automation to remain competitive but struggle to finance the initial investment.

This is where the payback period becomes critical. Czech manufacturers consistently report expecting returns within two to three years – a demanding threshold that requires cost-efficient solutions. 

"If the automation doesn't bring benefits like scrap reduction, quality improvement, or productivity increases within two years, it can be difficult to justify for smaller firms," explains Miloš Skýpala.

Many Danish suppliers offer modular solutions that spread costs over time. Rather than requiring massive upfront investment in complete automation systems, Danish solutions allow incremental adoption. A manufacturer might start with a single welding cell, prove the ROI, then expand as savings accumulate.

The mathematics are increasingly compelling. With Czech wages rising at nearly three times the EU rate while remaining below Western European levels, the payback periods for automation investments continue to improve. A robot installation that might have taken four years to pay back in 2016 could now achieve payback in under two years – meeting even conservative Czech investment criteria.

Demand for automation solutions that lower adoption barriers

Three fundamental barriers have historically prevented Czech manufacturers from embracing automation: limited in-house technical expertise, financing constraints, and the challenge of high-mix, low-volume production. Understanding these barriers is crucial for Danish suppliers seeking to enter the market effectively.

Limited in-house technical expertise with automation and robotics presents the biggest long-term challenge. The Chamber of Commerce survey found that the lack of qualified personnel for automation implementation affects half of manufacturers, with smaller firms feeling this challenge the most.

“Most companies don't have such people internally, which means they need to rely on external consultants,”says Zdeněk Zajíček.

This is where Danish automation solutions can make a significant difference – for both end-users and local integrators.

"The key advantage of many Danish solutions is that they're easily accessible for local integrators to deliver and configure," notes Mikkel Viager, Principal Advisor at HowToRobot, adding:

"Integrators can deploy these solutions faster and more cost-effectively because they come as ready-made packages rather than requiring extensive programming. This can make projects more profitable for integrators and more affordable for end customers."

This approach works because Danish solutions are pre-configured for common applications. After installation, end customers can adapt to production changes – like introducing new products – without programming knowledge, reducing their dependence on external support. Danish suppliers can also provide remote assistance when needed, creating a complete support ecosystem for manufacturers without internal automation expertise.

Financing constraints demand different approaches. The Chamber survey identified limited financial resources as the top barrier, affecting 56% of firms considering automation. These challenges can be met with robot-as-a-service arrangements, leasing partnerships, and most critically, modular solutions that allow staged investment aligned with available capital.

High-mix, low-volume production – the reality for most Czech manufacturers – has traditionally been automation's Achilles heel. Jan Šimoník describes the challenge: "Our customers aren't set for high-series production. We have hundreds per year, up to thousands at most. That's why we need systems that can be programmed offline and reset quickly for different products."

Many Danish suppliers have made this flexibility a core design principle, for example, with robot solutions that can be quickly reprogrammed for different tasks. Vision systems adapt automatically to product variations. Modular end-effectors can be swapped in minutes to handle other components. Robot paths can be adjusted through a simple user interface or by manually grabbing and moving the robot arm and end effector. This flexibility transforms automation from a constraint into an enabler of variety.

Danish robot solutions well-suited for SME segment 

Danish automation suppliers bring specific capabilities that address Czech manufacturing needs. While Universal Robots' pioneering role in collaborative robotics is well known, the ecosystem extends far beyond single companies to encompass specialised solutions across all priority applications.

Through HowToRobot's platform data covering buyers and suppliers globally, an initial assessment identified 28 relevant Danish suppliers with the potential to partner with the 146+ Czech integrators operating across the ten priority applications from the study.

Spin Robotics exemplifies Danish innovation in targeted applications. Their collaborative screwdriving system claims to be the world's safest, with maximum pressure below five kilograms, even if workers accidentally contact the mechanism. 

"We're developing systems that are safe, easy to use, and accessible to users without robot knowledge," explains Teit Silberling, CEO and Co-founder. 

Spin Robotics distinguishes between simple installations - where their "robot in a box" solutions can be unpacked and operated directly by end customers - and integrations that require partner involvement when systems become part of production lines. This dual approach reflects a broader strategy used by Danish companies. While integrators typically handle initial setup and complex implementations, many solutions are designed so customers can independently handle day-to-day operations and simple adjustments as production needs change.

In welding applications, Danish suppliers have developed welding cells that address the critical welder shortage. These systems combine user-friendly programming with sophisticated arc control, allowing manufacturers to achieve consistent, high-quality results with fewer welders and fewer programming skills required for robotics. The technology particularly suits small-batch production where frequent changeovers are required.

Danish palletising solutions demonstrate similar innovation. Companies provide modular systems that start with basic functionality but can be expanded with vision systems, multiple product handling, and sophisticated packing patterns as needs evolve. Their software automatically generates robot programmes from simple inputs, eliminating the need for complex programming.

Machine tending represents another Danish strength. Solutions that automatically load and unload CNC machines allow Czech manufacturers to run unattended shifts without complex integration. Quick-change gripper systems handle multiple part types, maintaining flexibility for job shops with varied production.

The technology readiness levels of Danish solutions provide confidence for risk-averse SME buyers. These aren't experimental technologies but proven systems with thousands of global installations across the analyzed applications. Danish suppliers can reference similar applications, share performance data, and often arrange visits to existing installations.

Integration ecosystems surrounding Danish technologies add further value. Compatible peripherals, standard interfaces, and extensive third-party support mean Czech integrators can build complete solutions rather than struggling with compatibility issues. This ecosystem approach reduces integration time and technical risk.

Working through local integrators is key to market success

The study highlights the critical importance of partnering with local integrators when entering the Czech market. These integrators understand Czech business culture, speak the language, provide ongoing support, and maintain the established relationships that drive purchasing decisions. The presence of 146+ automation integrators operating across the ten priority applications confirms ample opportunities for partnerships.

EC TECH's experience illustrates why this local connection matters. When asked about their automation supplier relationships, Šimoník emphasises proximity and responsiveness: "It's really good to have people close to us. When we need them, having Czech people on site advising our operators in Czech is important."

EC TECH's fifteen-year relationship with their integrator shows how trust develops over time – they value partners who 'know our products, know our scope, know our needs.' For Danish suppliers, this highlights an opportunity: while manufacturers value trusted relationships, they also seek innovative solutions to new challenges. Partnering with established Czech integrators allows Danish companies to combine fresh technology with existing local trust.

Many Czech manufacturers rely on integrators for complete solutions — from initial assessment through implementation and ongoing maintenance. They expect partners who understand their business context, regulatory requirements, and operational constraints. While Danish suppliers bring advanced technology, they often don't have the local presence and network to provide this comprehensive support directly.

CBG Automation exemplifies the type of partner Danish suppliers need. With 25 years' experience and a growing focus on SME clients, they bridge the gap between advanced technology and practical implementation. "We provide complete solutions," explains Miloš Skýpala. "From initial studies and technical proposals through design, manufacturing, programming, installation, and after-sales service."

The integrator model offers mutual benefits. Czech integrators gain access to advanced Danish technology that differentiates them from competitors. Danish suppliers gain local market access without establishing physical presence. End users receive complete solutions with local support. When executed correctly, everyone wins.

Yet building these partnerships requires investment. Danish suppliers must train Czech integrators on their technologies. They need to provide technical documentation in Czech, offer remote support during implementations, and sometimes assist with initial projects to build integrator confidence.

Teit Silberling from Spin Robotics learned this lesson through experience: "We spent considerable time educating our distribution network – over 100 partners worldwide. It's hard work because end customers have different questions, and if you're not from the area, it's difficult to provide the right answers."

The study found that successful Danish suppliers often adopt a hybrid approach. They might engage directly with large end customers on strategic projects while supporting integrators to expand market coverage. Some bring customers to integrators, as Spin Robotics does: "When I bring a customer and ask the partner if they'd be interested in integrating our system, they're more likely to investigate and proceed."

Integrators are open to collaboration – with conditions

Many Czech integrators are interested in and open to partnering with Danish suppliers, according to the study. But their interest comes with specific considerations that Danish companies must understand and address.

"We welcome suppliers when they want to visit us, see our facilities, and understand our capabilities beyond just presentations," states Miloš Skýpala. 

"Physical visits create real connections because then we can discuss specific projects and ambitions with engineers who speak the same language – even if it's English."

CBG Automation's requirements for international partnerships reflect common integrator needs. First, many expect comprehensive technical support, particularly during initial implementations. This could include detailed documentation, training programmes, and responsive technical assistance when challenges arise. Second, several integrators highlight that commercial terms should recognise their role in market development – protecting their customer relationships and ensuring reasonable margins for the value they provide.

Training emerges as a critical success factor. Czech integrators expect Danish suppliers to invest in building their capabilities. This includes not just initial product training but ongoing education as technologies evolve. Service support requirements extend beyond training – integrators need rapid access to spare parts, clear escalation procedures for technical issues, and, ideally, local inventory of critical components.

Several integrators expressed interest in co-development opportunities. As they gain experience with Danish technologies, they identify adaptations for local market needs. Progressive Danish suppliers who incorporate this feedback into product development create stronger partnerships and more relevant solutions.

The commercial relationship must balance risk and reward. Integrators invest significantly in learning new technologies, developing local applications, and building customer confidence. They want assurance that these investments are protected — that suppliers won't bypass them to sell directly to customers they've cultivated. This isn't about exclusive territories but about respecting the value integrators bring and protecting the customer relationships they've built.

Cultural alignment matters too. Czech integrators appreciate the Danish business culture's emphasis on trust, long-term relationships, and technical excellence. These values resonate with Czech engineering traditions. However, they caution that Czech businesses often take longer to make decisions and prefer building relationships gradually before committing to partnerships.

Czech SMEs: Start small and build on success stories

When Czech manufacturers describe their ideal automation solutions, they unknowingly create a specification that Danish suppliers are uniquely positioned to meet. The requirements emerge consistently across industries and company sizes: simplicity, flexibility, rapid payback, and local support.

"We need systems that can be programmed offline and prepared while the robot is working," explains Jan Šimoník. "Resetting jigs and production happen frequently with our product mix. Flexibility is our biggest challenge."

This need for rapid changeover capabilities runs throughout Czech SME manufacturing, where average batch sizes range from hundreds to low thousands rather than mass production runs.

The demand for simplicity reflects the reality of the workforce. With limited automation expertise, Czech SMEs need solutions that production workers can operate after basic training. One pharmaceutical manufacturer reported that while their core processes were automated, all material handling remained manual because they couldn't justify complex automation requiring specialised technicians.

Financial pragmatism drives every decision. A food industry representative was explicit: "Two to three years maximum for payback. If it takes longer, we can't justify the investment to ownership." This shortened horizon reflects both capital constraints and uncertainty about future market conditions.

Czech manufacturers also emphasise incremental implementation. Rather than transforming entire production lines simultaneously, they prefer to start with proven applications and expand based on results. One metalworking company began with a single welding robot, gained experience, and then added a second system once the benefits were confirmed.

Quality considerations increasingly drive automation decisions. Czech manufacturers competing with Eastern European rivals can't match labour costs but can differentiate through consistent quality. Automation provides this consistency, particularly in processes like welding, where human variation can affect outcomes.

Danish solutions are developed from the ground up with a focus on user-friendliness, safety, and modularity – often meeting these requirements. This approach means deployment requires minimal infrastructure changes, existing staff can operate systems after brief training, and companies can expand incrementally. The built-in flexibility also supports high-mix production environments common in Czech manufacturing.

The Danish Embassy to support further market entry

The feasibility study establishes a clear opportunity, but converting potential into a partnership requires structured support. The Danish Embassy in Prague is developing concrete mechanisms to facilitate connections between Danish suppliers and Czech integrators.

"We want to bring Danish robot companies to present solutions to Czech integrators," states Lars Gade Holm. "Danish robot technologies aren't always complete solutions — they're components or specialised systems that need local integration. That's why connecting with Czech partners is essential."

The Embassy's approach emphasises quality over quantity. Rather than broad promotional campaigns, they're facilitating targeted introductions between Danish suppliers whose technologies match specific Czech needs and integrators with relevant expertise and customer access. This matchmaking function leverages the Embassy's local knowledge and credibility.

The Embassy is developing support packages for Danish robotics companies looking to export to the Czech Republic, aimed at helping them find relevant local integrator partners. 

Lars Gade Holm outlines specific initiatives: "We'd like to offer Danish companies market visits to set up meetings with integrators here. We'd also like to bring some of the integrators to Denmark to see the Danish robot cluster and understand the solutions we can offer."

The partnership between Danish automation technology and Czech manufacturing capability offers clear potential for both sides. The feasibility study provides the framework, and the Danish Embassy stands ready to facilitate these connections.

Odense Robotics and The Trade Council is hosting an online introduction to the Czech Republic and the feasibility study on 30 January 2026 - more details here.

This article was commissioned by the Danish Embassy in Prague, based on its feasibility study, "Export potential for Danish automation technology to the Czech Republic" (September 2025). The research was conducted by HowToRobot, a global platform connecting end-users with automation suppliers, bringing first-hand data and insights on buyer behaviour and supplier capabilities. The study included extensive interviews with Czech manufacturers, automation integrators, and Danish technology suppliers, supplemented by market analysis and industry data from official sources.