In order to reach this goal, the National Office for Research and Technology (NKTH) intends to start a Technology Incubation Program. A number of countries, similar in size to Hungary (e.g.: Finland, Ireland, Israel), have achieved significant success in creating high-tech start-up companies in the past 10-15 years. The technology incubator model operating in Israel has been receiving significant international attention in the recent years. For this reason, NKTH has studied the successful Israeli incubation system before setting up their own program, and incorporated the experiences gained.

The Israeli technological incubator model

The key factor of the Israeli R&D&I system is the network of the technological incubators, which is one of the main releaser of successful start-up companies.

The bottom line of the Israeli model is the optimal harmonisation of state and private stakeholders. R&D projects are too risky for private investors, most of the first investments are provided by the State in the form of final grant payments, and at the same time the mostly privately owned technological incubator, for the share received in the incubated company and, in a smaller proportion, for the capital invested, not only supervises the activity of the winner start-up but it also makes efforts for the success of the enterprise.

The technological incubator reduces state risk and the burden of state offices with the pre-selection performed before awarding of grant payments and with the in-progress monitoring.

The incubator, in case of a successful project, ensures further capital investment, since the lack of further capital would lead to a loss of value for the company set-up till that time.

Technological Incubator Program

NKTH has prepared the draft of its Technological Incubator Program, which was then approved by the Research and Technology Innovation Council. NKTH has earmarked 1,600 million HUF for the launch of the Program from the Research and Technology Innovation Fund.

The comprehensive goal of the program is to create market-oriented technological incubator enterprises, which are capable to coach and business incubate start-ups, in order to disseminate methods of technological incubation and its business model in the Hungarian R&D sector.

The program intends to motivate R&D and business activities of young innovative enterprises aiming to create marketable products, by supporting and incubating their product and business development activities with the involvement of business interests via technological incubator enterprises.

Further goals include

• strengthening the business exploitation of R&D results,
• increasing the number of successful innovative enterprises capable of growing
• creating new workplaces
• effective use of grants supporting R&D
• increasing risk capital investments, increasing the involvement and investment activity of foreign risk capital funds in Hungary
• enhancing company innovation, creating new, innovative, marketable products, technological applications and services

The intention of NKTH through the program is to enhance the setting up of at least five technological incubator companies, and to contribute to the development of 20 to 30 technology-intensive start-ups in Hungary.

Budapest, 12th October 2009

NKTH Communication Dept.