Erawatch Country Reports 2011: Hungary

JRC Scientific and Policy Reports - Report EUR 25698 EN

46 Pages Posted: 4 Jul 2013

See all articles by Attila Havas

Attila Havas

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS)

Date Written: March 1, 2013

Abstract

This report identifies five main science, technology and innovation (STI) policy challenges in Hungary. The first two ones can be understood as symptoms, which are important enough to consider them on their own; the third is an ‘early warning’ signal; while the last two are not only important symptoms, but also major reasons to be considered when explaining poor innovation performance.

- Low level of innovation activities, especially that of the SMEs; - Low occurrence of co-operation in innovation activities among key actors; - Insufficient quantity of human resources for R&D and innovation is forecast by 2015; - Unfavorable framework conditions for innovation, especially unpredictable business environment, high administrative and tax burden, competition not conducive to innovation; - Shortcomings in STI policy: lack of political commitment; instability; shortfalls in implementation; and slow, insufficiently informed policy learning processes.

Two main reasons of the poor innovation performance have also been identified. One of these points outside the narrowly defined STI policy domain: the framework conditions for innovations influence firms’ behaviour with such a power that STI policy schemes cannot offer strong enough incentives to overrule those unfavourable effects. Thus, major policy efforts are needed to create favourable framework conditions, notably a stable macroeconomic environment; endurable administrative and tax burdens on firms; strong demand for new products; a sufficient supply of skilled people for RTDI projects; appropriate regulations and standards; effective IPR policies; etc. Further, policies affecting these conditions need to be aligned with STI policy efforts to make a difference.

The second set of factors can be grouped together as shortcomings in policy-making, including lack of political commitment. R&D and innovation needs to be perceived by politicians as a major contributor to socio-economic development, as opposed to the current – although implicit – understanding, when it is taken as a burden on the budget, and thus becoming the first ‘victim’ when budget problems must be solved. Frequent changes in the structure of the STI policy governance sub-system has lead to organisational instability, which, in turn, affects negatively policy formation and implementation as it hampers organisational learning and imposes unnecessary burdens on RTDI performers, too. Hence, this sub-system needs to be stabilised.

Combining these explanatory factors, there seems to be no ‘panacea’ or a simple ‘quick fix’ to improve RTDI performance. Conscious co-ordination of major economic and STI policies is needed, guided by an overarching socio-economic development strategy. Foresight processes would be useful to underpin these strategies. These dialogues can also highlight how RTDI processes – advanced by appropriate STI policies – can contribute to overall socio-economic development. Policies affecting RTDI processes and performance need also to be orchestrated. Up-to-date decision-preparatory methods – most notably thorough analyses of innovation performance, combining census, R&D and innovation data; evaluation of individual policy measures, as well as that of the policy mix as a whole; and technology assessment – should be relied upon when devising and implementing STI policy measures, also assisted by recurring consultations with the major actors of the national innovation system.

Keywords: STI policy, Hungary

JEL Classification: O38

Suggested Citation

Havas, Attila, Erawatch Country Reports 2011: Hungary (March 1, 2013). JRC Scientific and Policy Reports - Report EUR 25698 EN, Available at SSRN: https://ssrn.com/abstract=2288736 or http://dx.doi.org/10.2139/ssrn.2288736

Attila Havas (Contact Author)

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

Toth Kalman u. 4.
Budapest, H-1097
Hungary
+36-30-8164266 (Phone)

HOME PAGE: http://www.mtakti.hu/en/kutatok/attila-havas/8185/

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