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The number of innovative SMEs on the rise
23 November 2018
Modified: 23 November 2018
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Based on the most recent data of the Hungarian Central Statistical Office, in Hungary the proportion of companies which employ at least 10 people and pursue innovation activities has increased from 25.6% to 29%. It is important to note that the growth can be primarily attributed to SMEs being of outstanding importance from an economic policy perspective.

In the fierce domestic and international competition innovative solutions provide enterprises with a competitive advantage and help them increase their productivity. This is why the sate is fundamentally interested in providing targeted incentives to promote innovation more than ever before. For a broad range of enterprises a change of mind-set is necessary: enterprises need to be aware of the fact that non-technological (organisational, marketing) innovation, as well as adaptive innovation are also instrumental to improve productivity.

In 2017 R&D expenditure in Hungary reached 1.35% of the GDP, which is an increase of HUF 90 billion compared to 2016 (1.2%). A further increase of R&D expenditure is a high priority, since this is the key to the improving competitiveness of the country and the expansion of the national economy. This purpose is served by the restructuring of public funding provided for R&D and innovation, and the separation of RDI grants provided to enterprises on the one hand and to research organisations on the other.

32% of expenditure spent on R&D in 2017 (HUF 165 billion) came either from domestic sources or from operational programmes funded by EU structural funds, whereas 53% (HUF 272 billion) was provided by enterprises. Thus the private sector is seen as a major engine of research and development with an ever-increasing role in RDI financing. In the future, further growth of domestic R&D expenditure may be fuelled by a further increasing proportion of corporate sources as expected, as well as the fact that the use of the major part of project funding awarded from public funds has just started.

At present, a relatively small part of R&D funding provided by enterprises penetrates to universities and research institutes, which implies significant potential yet to be exploited in the cooperation of industry and researchers. Therefore, in the revised RDI policy of the Ministry for Innovation and Technology pays special attention to supporting such partnerships, aimed at knowledge and technology transfer, the promotion of joint R&D projects fine-tuned to the needs of industries and the regulatory environment to foster these all.

In addition to increasing R&D expenditure, the headcount of researchers also grew considerably: compared to 2016 the number of researchers-developers increased by 11%, now totalling 42,729. To ensure a knowledge-based, social and economic growth producing high added value, the supply of a new generation of researchers is of outstanding importance, together with the further increase of the number of researchers.

Balanced growth is also served by mitigating regional disparities. Whereas in 2016 64% of R&D expenditure was used in Budapest, in 2017 this proportion dropped to 61%. Major reserves are available in research and innovation outside Budapest, maximising the efficiency of utilising these resources is one of the domestic policy objectives.

Updated: 23 November 2018
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