Erawatch Country Reports 2011: Hungary

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 RD - 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. RD 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.