Invented in Hungary 2021-2022 Sample by Business Publishing Services Kft.

INVENTED P r i c e : HUF 2.9 9 0 Ι E UR 9

IN HUNGARY

2021-2022

RE SE ARCH & DE VELOPMEN T • GOVERNMEN T SUPP OR T: HUNGARIAN IN VE S TMEN T PROMOTION AGENC Y, N AT ION A L INNOVAT ION OF F IC E • REGION A L C OMPA RI S ON S • R& D S U C C E S S S T ORIE S • C A S E S T UDIE S

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INVENTED IN HUNGARY

CONTENTS Introduction: The Reinvention of Hungary’s Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Marketing the Knowledge Pool of Hungarian Universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Cooperation and Diplomacy: Connecting Academia and Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Knowledge as a Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Tungsram Takes up Elon Musk’s USD 6 bln Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Change of Attitude Required to Build Effective Digital Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Accessing the Great Potential in the Engineering Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Putting the SME Sector on the AI Fast Track . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Magyar Suzuki’s 1st Patent Registered, EUR 38.1 mln in Investments Made in 2020 . . . . . . . . . . . . . . . . . . . . . . . 24 Hungarian Language Attempts to Jump on the AI Bandwagon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Trust-based and AI-driven Public Digital Services on the Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 From the Fields to the Stars: Design Terminal’s Mission to Help Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Hungary Spent 1.6% of GDP on R&D in 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Paving Hungary’s Path to the Future Through Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 ASUS: Helping Business and Creative Users Anytime, Anywhere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 GreenTech, ZalaZone Grow Hand-in-Hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 A Guide to Some of Hungary’s Leading Research Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

INVENTED IN HUNGARY 2021-2022 | A BUDAPEST BUSINESS JOURNAL PUBLICATION BBJ Editor-in-chief: Robin Marshall • Editorial: Balázs Barabás, Bence Gaál, Levente Hörömpöli-Tóth, Christian Keszthelyi, Zsófia Végh • Sales: Csilla Lengyel, Bernadette Oláh, Erika Törsök • Layout: Zsolt Pataki • Cover image: Login / Shutterstock.com • Publisher: Business Publishing Services Kft. • Media representation: AMS Services Kft. • Address: Madách Trade Center, 1075 Budapest, Madách Imre út 13-14. • Telephone: +36 (1) 398-0344 • Fax: +36 (1) 398-0345 • ISSN 2732-1568

INVENTED IN HUNGARY

INTRODUCTION THE REINVENTION OF HUNGARY’S ECONOMY The direction of travel in Hungary has been pretty clear in the past few years. The government came to power in 2010 with the stated aim of creating one million jobs in a decade, something it has more or less pulled off. But it soon read the runes about the impact of Industry 4.0, digitization, and automation, and realized it had to switch its priority path away from making things (which had been the response to the Great Recession of 2008) and more toward value-added future proof jobs. To use the slogan the government trots out with remarkable frequency, it required a shift in mentality from “Made in Hungary” to “Invented in Hungary.” It is important not to misunderstand this approach. Making things, as the Germans have long understood, will always be lucrative. But it will create fewer jobs going forward, and those it does provide will require higher skill levels. So, expect plenty of government

publicity (whoever is in power at the time) when BMW finally opens its delayed factory in Debrecen. The initial construction phase, including the central office and training center, will start in 2022 on a 400-hectare plot. The total investment is more than EUR 1 billion (the government has given HUF 12.3 bln in support) and from middecade will produce 150,000 electric vehicles a year, creating more than 1,000 new jobs. But the “Invented in Hungary” approach has been made manifest across government departments and beyond. The Hungarian Investment Promotion Agency, for example, can offer targeted subsidies to encourage the creation of research and development roles and attract R&D centers. Following the 2018 general election (which saw Fidesz return to power for the third consecutive term), a new department, the Ministry for Innovation and Technology, was

created. Its head, the fast-talking László Palkovics, is now one of the senior members of the cabinet. Whether you agree with Fidesz’ politics or not (and the way R&D responsibilities were taken away from the Hungarian Academy of Sciences, for example, was undoubtedly controversial, for all that Palkovics and his ministry argued it was the best way to ensure research meets the real-life demands of industry), it certainly has done much to raise the profile – and the funding – of research and development and innovation. The marked increase in the number of patents filed by universities clearly points to the fact that academia has got the message. For too long, what R&D&I there was in Hungary came from private business. It seems the public sector may now be able to make its own contributions, and not before time. The publication you now hold in your hands is our annual salute to R&D&I in Hungary; its very name is a tip of the hat at what the government has been attempting to do. We hope you find it a helpful guide to the local scene and welcome any feedback you might have. Robin Marshall Editor-in-chief Budapest Business Journal Photo by Gorodenkoff / Shutterstock.com

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INVENTED IN HUNGARY

Zoltán Birkner

MARKETING THE KNOWLEDGE POOL OF HUNGARIAN UNIVERSITIES Managing the resources within an economy is one of the main challenges for any government. Connecting the dots can lead to significant developments, but creating a system that properly catalyzes them takes time and thorough preparation. The National Research, Development, and Innovation Office (NKFIH) has already undertaken such necessary initiatives in Hungary. The Budapest Business Journal talked to NKFIH president Zoltán Birkner about the results and further plans.

By Balázs Barabás BBJ: What was the strategy behind starting the innovation development program in Hungary? Zoltán Birkner: We started the university innovation ecosystem two years ago, aiming at giving universities a crucial role in an innovation system that is transforming and becoming ever more complex. We had two factors in mind, with the first being that universities need to serve the public good as well as teaching and researching. Through teaching, they ensure the supply of human resources for society and the economy alike. The second significant factor is that universities have an enormous knowledge pool, which shapes the future of new industries and opportunities; we want to support universities to use this pool efficiently. Therefore, their task is not only to help social and economic development but also to

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COOPERATION AND DIPLOMACY: CONNECTING ACADEMIA AND COMMERCE Hungarian universities have accumulated significant knowledge, and knowledge is critical for progress in the 21st century. But this asset must be translated into profit, and companies are best able to do that. The Budapest Business Journal talked with Deputy State Secretary Tibor Gulyás of the Ministry for Innovation and Technology (ITM) about connecting these two sectors. By Balázs Barabás BBJ: Universities and companies have different tasks and goals, while both contribute to growing the GDP of Hungary. How does ITM bring them together? Tibor Gulyás: We have extremely ambitious plans to develop the innovation ecosystem in Hungary after identifying where we should direct our resources and efforts. This was fundamental in making higher education institutions the key players in this construction process. We believe that we can contribute to significant advancements in regional and economic development by developing these institutions. We must also acknowledge that higher education institutions accumulated immense knowledge; however, these institutions do not have the instruments to capitalize on it. So, our task is, on the one

hand, to help them to turn the knowledge potential into profit, and on the other hand, to build an institutional system that makes knowledge accessible and places it into circulation for companies and all stakeholders; therefore, we are creating an institutional system to this end. This has different stages since some institutions have already implemented measures to enable the paradigm shift, and these measures have already yielded results. Such an example was the university innovation ecosystem program, which we see as extraordinarily successful, given that with less than HUF 2 billion, which means HUF 40 million-150 mln per institution, we achieved excellent results. Companies and universities signed more than 1,300 cooperation agreements; we increased funding for patents and industrial rights protection, while

the number of startups is reaching a level that dramatically improves our international negotiation positions. We started the Hungarian Startup University Program, an online training scheme that allows all those who wish to participate and have an innovative idea, to join a team and market this idea. More specifically, students can acquire entrepreneurial experience and receive feedback within the group, enabling them to strengthen their abilities. The feedback we receive from students shows that they are motivated and eager to participate. This year, more than 5,000 students applied for this program. BBJ: What are the steps to make Hungary a more significant player in the global innovation market? TG: We launched new financing instruments, which promote the change of perception and funding

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KNOWLEDGE AS A PLATFORM By Balázs Barabás Small- and medium-sized businesses are the engine of the Hungarian economy; it is vital both for them and for the economy to grow through innovation. Katalin Sebők, vice president of the National Research, Development, and Innovation Office (NKFI), shared some of the programs that support this goal with the Budapest Business Journal. “NKFI set up the system of territorial innovation platforms (TIP) in 2019,

having recognized that there is a lot of knowledge and opportunity to offer to innovation actors and SMEs in particular, by looking for solutions to specific problems among the actors within the ecosystem,” she explains. “TIPs are available in Hungary at 13 locations, relying on the knowledge base of 24 universities. These platforms already have 470 active members, most of them SMEs, professional organizations, clusters, chambers, and national institutions. We have seen excellent

examples of connecting players to provide solutions, through cooperation to a specific problem or development opportunity,” Sebők says. “Financial sources are also available; our innovation office has launched funding programs for many years now. This year’s total funding amounts to HUF 182 billion, which provides excellent opportunities to SMEs, as well as to researchers and research institutes. To summarize, all SMEs should join the TIP system,” she insists. “The membership is free of charge, requiring only a joining statement, after which SMEs can access all the benefits of the TIP system. All the necessary information is available on our website.”

Katalin Sebők

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CHANGE OF ATTITUDE REQUIRED TO BUILD EFFECTIVE DIGITAL SOCIETY

Veronika Antall-Horváth

The creators of some of the world’s most advanced digital societies shared their experiences at think.BDPST, the annual innovation conference held in Budapest this fall.

By BBJ Staff One of Hungary’s most significant future conferences, the event was held for the sixth time on October 14, 2021. With Estonia, a world leader in e-government and digitization, the “guest of honor” this year, the focus was the post-pandemic digital world, sustainability, the destructive effects of fake news, and the present and future of e-government.

of the Hungarian presidency of the Visegrád Four (V4) group of the Czech Republic, Hungary, Poland, and Slovakia. It was opened by Estonia’s Minister of Entrepreneurship and Information Technology, Andres Sutt, Kristi Karelsohn, the Estonian Ambassador to Hungary, and Veronika Antall-Horváth, deputy director of organizers the József Antall Knowledge Center.

This year’s think.BDPST conference formed part of the official program

The Estonian minister said that digital transformation is the key to human

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PUTTING THE SME SECTOR ON THE AI FAST TRACK Newly set-up accelerators aim to provide free mentorship, a test environment, and a large array of solutions to choose from for small- and medium-sized enterprises so they can become part of the global AI transformation. However, it still takes two to tango: business owners need to be open-minded. At the same time, the providers must be able to offer turnkey solutions to achieve the much-anticipated large-scale AI breakthrough. Image by Blue Planet Studio / Shutterstock.com

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MAGYAR SUZUKI’S 1ST PATENT REGISTERED, EUR 38.1 MLN IN INVESTMENTS MADE IN 2020 “It is a challenge to our company to offer our hybrid cars at consumer prices (and manufacture them at production costs) that will allow an increasing range of consumers to buy new cars. We are, therefore, constantly working on reducing our operating costs. Digitalization and the switch to smart production could prove to be a partial solution to this challenge,” says Zsuzsanna Bonnár-Csonka, head of corporate communications.

Having originally started as a weaving factory, Suzuki is now a global leader in automotive, marine engine, and motorcycle manufacturing, and a conscious, innovative company. Organized to guidelines set by the parent company, the research and development programs of the Esztergom factory of Magyar Suzuki have become increasingly important since 2009. Magyar Suzuki has a conscious approach to R&D, and the processes are embedded within the organization. The parent company determines the main direction, but Magyar Suzuki cooperates with suppliers, research institutes, and universities at the operative level. The development of products and the drivers of innovation are always framed by consumer needs, industry challenges, and the regulatory environment.

Compliance with environmental regulations is a critical goal in model and production technology development and feedback-based development projects. In December 2019, in line with the EU’s emission level regulations, the Esztergom factory began the mass production of hybrid variants of the Vitara and the SX4 S-CROSS models for European markets. In 2020, 65% of production already used hybrid technology.

In addition to the cost aspects, the introduction of hybrid auto manufacture was also a challenge in terms of production, as new technologies had to be introduced that had not previously been utilized at the Esztergom factory. The company forecasts that hybrid models will still be in demand for the next 10 years on the market, yet the future is electrification, and the Japanese parent company’s plans involve a larger selection of fully electric models in the product range from 2030 onwards. GREENER FUTURE Suzuki Group is dedicated to a greener future, and would like to achieve carbon neutrality by 2050 in all factory units, and for all products manufactured by the company globally. Magyar Suzuki’s development projects are primarily self-funded, but also use state and EU level subsidies whenever possible. A five-year R&D&I project led by Magyar Suzuki Corporation, implemented in a consortium including the Esztergom factory, Bay Zoltán Nonprofit Ltd. for Applied Research, PEMÜ Plc., and Pázmány Péter Catholic University, is nearing its end. It involves the

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HUNGARIAN LANGUAGE ATTEMPTS TO JUMP ON THE AI BANDWAGON Hungarian must be made more compatible with artificial intelligence so that AI-based services can proliferate. The local stakeholders are aware there’s not much time to catch up. By Levente Hörömpöli-Tóth

Fundamental is having trained datasets that recognize intent and layers of meaning. What is missing in the case of Hungarian is so-called NLUs, building blocks that make the whole thing work. (See dedicated box for more on NLUs.) These are responsible for detecting, for example, whether a customer wants to place or cancel an order or file a complaint.

It might be hard to believe, but it’s true: Hungarian became the sole official language of Hungary only in 1844. Before that, Latin had been used in public administration. To be fair, Hungarian simply was not ready to play such a role any earlier; it took the linguistic reform led by Ferenc Kazinczy to make it fit for purpose. Without his work, the language would have been stuck at a primitive level without providing the necessary vocabulary in science, law, or economics. The age of artificial intelligence marks similarly challenging times from the linguistic point of view. As Ádám Feldmann, head of applied data science and the Artificial Intelligence Group at the University of Pécs, says, we are in the middle of a paradigm shift. “Natural language processing (NLP) is developing at break-neck pace, robust computing systems provide unprecedented breakthroughs that trigger demand for new software and hardware,” he notes. Big Tech mainly develops NLP solutions, and it focuses primarily on English; less common languages are on their agenda only to a limited extent. This simplifies the equation,

Ádám Feldmann

pinpointing the nature of the homework for representatives of not-so-populous nations. Feldmann draws a stark comparison to underline the significance of what’s at stake here. As he points out, missing out on preparing the language for the digital age would have as catastrophic a set of consequences as if books had never been printed in Hungarian. OUT OF THE BOOM “We need to catch up because whatever languages the AI knows, services will be available on them. If yours is not on the list, your country will be left out of the AI business boom,” he warns.

NLUs are created by annotating thousands of sentences which helps identify critical information, most of all intent and entities. Once it is done, the system can classify information of any input text, and your data is ready to be engaged in a meaningful conversation. Vast amounts of annotated datasets already exist in English and serve as a basis for conversational AI services such as Azure’s Luis, IBM’s Watson, Google’s Dialogue Flow, or Amazon’s Lex. Some two-thirds of Facebook’s Snipes have been translated into Hungarian which contains real customer interactions in smart homes. Such databases are helpful because they cover real-life situations where it is often challenging to identify intent due to the unprecise way clients express their thoughts. Thanks to annotation, the mild nuances in meaning can be detected, which trains the system.

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TRUST-BASED AND AI-DRIVEN PUBLIC DIGITAL SERVICES ON THE WAY Hungarian citizens will have ever more encounters with artificial intelligence in their daily lives, not least because of a growing number of applications in digital public services. Biometric authentication, chatbots, state-of-the-art language tech, and AI-driven self-service kiosks are set to soothe customers’ nerves, and aid overwhelmed operators. By Levente Hörömpöli-Tóth The Hungarian government is very much open to using new technologies such as Artificial Intelligence. Indeed, there are a lot more such tools out there than you might think. However, technological advancements cannot be introduced into the public sector without the presence of trust. Hungary, after all, is well-known for public behavior that tends to be mistrustful of the authorities and delights in searching for legal loopholes. Accordingly, citizens and authorities haven’t really gotten along. Up till now, it had to be certified very thoroughly before using a public service that the person was who they claimed to be and was entitled to said service. Indeed, those facts are generally checked by officials, whatever the circumstances. It is the kind of approach that reminds you of stories of passengers who are asked so many questions regarding their journey and ticket before approaching the platform that they miss the train in the end. This practice is changing. Sticking with the previous example, the promise is that checking tickets and any rights to special rates would be done only after getting onto the bus or train. In other

words, good faith will be presumed, and only those who don’t abide by the rules will have a reason to fear.

against scanned facial images or thumbs is stored on government servers in a secure environment.

This whole new trust-based approach applies to data processing as well. European Union GDPR rules must be observed during all public admin procedures, but the primary guiding principle is to ensure a smooth customer experience, relying on an enhanced level of biometric authentication.

Biometric authentication takes the form of a so-called SZEÜSZ, the Hungarian initials for Regulated Electronic Administration Service. One of those services supports video communication. Based on opensource software, this governmentdeveloped system is hosted at the state’s data center so that the information won’t cross borders.

SELF-IDENTIFICATION Face recognition and fingerprint scanning are now both valid options for self-identification. All data matched

Remote video connection can be established with it not only between

ROOM FOR IMPROVEMENT Digital public services have been one of the most challenging areas in Hungary. The country ranks 24th out of 28 EU Member States in this category according to the Digital Economy and Society Index (DESI) 2020 of the European Commission (U.K. data was still included). It now ranks 20th for e-government users, pre-filled forms (measuring the re-use of information across administrations

to make life easier for individuals), and online service completion (measuring the sophistication of services). The scores for online service completion and business services are just below the EU average. According to Hungary’s AI Strategy, by 2030, up to 60% of all kinds of administration, including customer services, should be automated thanks to AI technology.

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FROM THE FIELDS TO THE STARS: DESIGN TERMINAL’S MISSION TO HELP INDUSTRY The simplest business ideas can be suitable for disrupting whole industries. For some years, Design Terminal has been looking for bright ideas from young entrepreneurs. Together with the Hungarian Chamber of Agriculture (NAK), it created NAK TechLab to digitize the sector. After marvelous results in this area, the space industry is getting ready. Design Terminal is Central Europe’s leading innovation agency and builds “Innovation Champions” through corporate partnerships and talent acceleration. From the very beginning, the agency has been working to ensure its programs have a tangible impact on the economy of Hungary and the region. Its industry programs can help this goal in the most practical way since they ensure that innovation in different areas enters an industry immediately. Design Terminal’s two primary areas regarding this topic today are agriculture and space. Startup incubation programs connected to these industries have made a real difference and created strong examples for a few years now. Although these may seem like two very different sectors, the transition between them can be straightforward. An innovation with a satellite image, for example, can immediately be applied to agriculture. Here, we look at concrete examples of programs DT and its partners have managed to launch and the results they have reached so far. DIGITALIZATION OF AGRICULTURE NAK TechLab is the first Hungarian business development program to focus specifically on agricultural startups. One of the most effective responses

to the challenges of agriculture, such as extreme weather, which is increasingly affecting farming, or the issue of generational change, is to increase the level of digitalization in the sector. The program was launched in 2019 by NAK and DT to find the most innovative solutions in agriculture and the food industry, thus making them more competitive, sustainable, and greener. The main objective of this program is to optimize the competitiveness of domestic farmers in agriculture, enabling their long-term integration into the sector. In addition to startups, corporations, farmers, and investors are all eager to participate in this popular program. Young entrepreneurs and developers help big corporations, and through them the farmers, with innovative solutions, whereas big companies create opportunities for startups to enter the market easier. NAK TechLab supports agtech startups through several programs. One of them is the three-month-long incubation program, where startups can boost their developments via business training, intensive workshops, and working with mentors. The program was held for the third time since 2019. Almost 100 consultations took place in the first phase between

the participating startups and the prominent corporate players that joined. The program also supports teams with legal and technological advice, as well as venture capital investment meetings that can help develop their solution from both a professional and commercial perspective. The startups receive professional guidance from agricultural and product development experts, thus preparing them for business meetings with representatives of AXIÁL Kft., Corteva Agriscience, Bonafarm Group, KITE Zrt., or the technology partner of the program, Vodafone Hungary. Another NAK TechLab project invites young, innovative people into the sector from the universities. This was also organized for the third time since 2019. To give an idea of what type of solutions students came up with this year, one of the winners was Agrofly. They created an airship suitable for the observation of birds and other wild animals. Countless students who are not from an agricultural major also see potential in finding a solution to the challenges of agriculture with their innovative ideas. Last year, the main prize went to team CowBaj, whose solution measured the various conditions of cows precisely by a digitized method to find any lameness in the animals. ALUMNI SUCCESS STORIES FROM TECHLAB One of the stars of the NAK TechLab incubation program was the SMAPP Lab startup. Leading Hungarian agricultural company KITE saw immediate potential in the team, whose founder was an 18-year-old

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HUNGARY SPENT 1.6% OF GDP ON R&D IN 2020 R&D spending has increased significantly in the past decade, and not even coronavirus curbed money allocations significantly. However, for the country to generate more than moderate growth, both subsidies and education need to improve, according to the experts. By Zsófia Végh Research and development expenditures continued to increase in 2020, mainly due to foreign and business sources. The growth rate (9%) exceeded the 0.5% increase in GDP at current prices, with the result that the ratio of expenditure to GDP (1.6%) was the highest in 30 years, according to data by the Central Statistical Office (KSH). The number of research sites did decrease in the year, but the organization notes that the proportion of researchers in total employment continued to rise.

The amount of allocations may be improving, there is room to grow. In 2020, the total government budget allocations for R&D (GBARD) across the EU stood at €100 786 million, equivalent to 0.8% of GDP, according to Eurostat. Government budget allocations for R&D at an EU level stood at €225 per person in 2020, a 22%

As a comparison, in 2019, more than HUF 700 billion, or 1.48% of GDP, was spent on research and development in Hungary, which puts the country in the mid-range of the EU. With minor fluctuations, the amount of R&D expenditure at current prices and as a share of GDP has increased significantly over the last 10 years. The role of the business sector, which is the main foundation for research and development, has further strengthened. Between 2016 and 2018, 29% of enterprises with at least 10 employees carried out innovation activities.

increase compared with 2010 (€184 per person). The highest allocations were recorded in Luxembourg (€648 per person), followed at a distance by Denmark (€519) and Germany (€443). EU countries with the lowest R&D budget allocations per person were Romania (€15 per person), Bulgaria (€21), Hungary (€39) and Latvia (€42).

“In terms of R&D spending, we see a slightly positive trend,” Detre Horváth, senior tax manager, told the Budapest Business Journal. “Government funding and overall spending have both been increasing, recent data by the Central Statistical Office and also our experience shows,” he adds. Although the overall 2020 ranking figures for European Union are not yet available, local data suggests slow but steady improvement in the field. In 2019, the country placed 22nd among member states with a spending of cca. 1.5% as proportionate to GDP. By comparison, the EU-average stood at 2.2%. Last year this figure was 1.61% according to data by KSH. Considering the pandemic, this growth rate is fairly good, Detre says. “Overall, we place in line with our rate of development – with the Czech Republic ahead of us and Romania behind us”, he says. Whether last year’s figure is due to a more moderate GDP growth or steady R&D spending (or a combination of the two) is hard to say, but despite the crisis companies did not cut back on their spending significantly. “We mostly work with medium-size and large corporations. Where they may have put a break on R&D spending was to decrease their future target figures. There weren’t examples for companies dismissing highly qualified professionals though some cut back on their compensation”, Detre says. This would make sense as no one knows how long the crisis last and setting up a research team in general takes time. Plus, talent is scarce these days so most cannot afford to let go of such professionals. To prevent that, the government offered compensation for firms to retain high added value employees. When it comes to boosting research and development, money plays a

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PAVING HUNGARY’S PATH TO THE FUTURE THROUGH INNOVATION Zoltán Bay Research Institute managing director Norbert Grasselli talks about the importance of innovation and the unique offerings of the institute. BBJ: What is the importance of innovation in the life of the Zoltán Bay Research Institute? Norbert Grasselli: Hungary is currently undergoing a transformation phase, a more protracted process of moving from a manufacturing country to an R&D country. This also means that more research and development centers are being established here, and Hungarian companies are also setting up such centers, a process that the Zoltán Bay Research Institute supports. Innovation has always been important in the life of the research institute since we have been involved in socalled applied research, industrial research, since the very beginning in 1993. These are research and development areas that can be brought to market and turned into a product or service relatively quickly. In 99% of cases, we help businesses, primarily Hungarian companies or foreign firms based in Hungary, implement their developments. In addition, of course, our colleagues also work on their own projects, which can grow into independent products or services, which we can take all the way to production. Our company can thus serve many market needs from industrial research, product development, service development, manufacturing development right through to production.

BBJ: You mentioned that a lot of companies are moving to Hungary. Does this mean that competition in the market is also becoming fiercer, and could you also say a few words about international relations? NG: There have been a lot of companies coming to Hungary, mainly for the skilled and relatively cheap labor. This has started to reverse in recent years, and research and development centers have also begun to settle in the country. They are also coming to our country for well-trained engineers, and we hope that this is also because an innovation ecosystem has been created in recent years: a network that can support these research centers with universities, engineering companies, and research institutes. So there is a research development employee pool and institutional system in Hungary. The Zoltán Bay Research Institute has always been open to foreign partners, which is very much supported by the European Union’s research development programs. We have been participating in these since the fifth Framework Program, and we are very active in the so-called Horizon Europe program. This is a multi-billion euro framework for European countries, institutions, and companies. Within this, the European Union supports research and development projects.

We have also been involved in several exciting projects in recent years, such as with the European Space Agency, ESA, where we have carried out various developments. We are also working outside Europe. There are excellent opportunities for this through the NKFIH’s S&T (Science and Technology) cooperation programs, which operate outside Europe and can support smaller and larger projects in the framework of international cooperation. BBJ: Could you give us an example of a successful project in Hungary from the last few years? NG: This year, we concluded a longer successful collaboration with Suzuki Hungary Zrt., a four-year joint research and development project in which we participated in cooperation with universities and research institutes. We also carried out production, manufacturing, laser technology, and logistics development in Suzuki’s production system. When such a research and development program is completed, these technological innovations are not immediately transferred to the production system; it can be a longer process, even taking several years. BBJ: What do you see in the labor market now; what can we expect from the next generation? NG: At the Zoltán Bay Research Institute, as an industrial research institute and

INVENTED IN HUNGARY

GREENTECH, ZALAZONE GROW HAND-IN-HAND The silver arch that serves as the roof of the ZalaZone services building near the unique test track on the outskirts of Zalaegerszeg (225 km southwest of Budapest) ends by forming a giant letter “Z.” Arriving at the annual GreenTech conference and seeing the facilities at ZalaZone, one cannot help but note that these two venues are all about innovation, spanning a broad spectrum of green technologies to support sustainable business for a better future.

By Christian Keszthelyi In the fall of 2021, ZalaZone was once again home to the local sustainability conference GreenTech, an understandable marriage for many reasons. The Budapest Business Journal attended to peer behind the curtain at the rapid development the area has seen in the past years.

Zalaegerszeg is the capital of Zala County, located in southwestern Transdanubia, close to the Croatian and Slovenian borders. The town of about 65,000 is the crib of the GreenTech conference, which is spearheading environmentally conscious thinking, climate protection, and energy security and efficiency by investing in

technological development to fuel the area’s economic growth. “It all started with a vision; that is all we had. With some friends, we came together and started pondering how we could live our personal lives in line with sustainable values and green practices. This contemplation started in the context

INVENTED IN HUNGARY

A GUIDE TO SOME OF HUNGARY’S LEADING RESEARCH CENTERS

Photo by Gorodenkoff / Shutterstock.com

Hungary’s research infrastructure is not easy to take stock of; there are many entities with different affiliations and “owners.” The main stakeholders in the domestic research and science ecosystem are the government, universities, research institutes, and businesses. They collaborate with venture capital funds, incubators, accelerators, UniversityIndustry cooperation centers (FIEK), centers of competence, centers of excellence, science parks, national labs, and research infrastructures. By Zsófia Végh According to a tally by the National Research, Development, and Innovation Office (NFKIH), in 2018, there were 127 research institutes, 1,333 higher education institutions, and 1,996 R&D businesses: 57% of the research units in Hungary are operated by companies. Through NKFIH, Hungary has joined several international research infrastructures in recent years to enhance its global cooperation. The RDI office spends more than EUR 10 million annually on membership fees associated with participation in international research infrastructures and organizations. INTERNATIONAL SIGNIFICANCE Below we look at some of the national research infrastructures and laboratories in Hungary of international significance. The Budapest Neutron Center, a consortium of research institutes established in 1993 to coordinate the utilization of the Budapest Research Reactor. The center’s activities include neutron scattering, spectroscopy, and

activation and imaging methods which can reveal the nano/micro/macrostructure or the composition of materials. The International River Basin Management and Climate Adaptation Center launched in 2019 at the Water and Environmental Management Institute of the University of Debrecen. The center is a state-of-the-art research facility in Central Europe in the agricultural water management discipline. The climate adaptation solutions developed here have brought significant breakthroughs in addressing drought, inland waters, and urban hydrology. The Biobank Network at Semmelweis University consists of 14 institutes and

15 biobanks. The aggregate sample size for these institutes currently stands at 87,000, registering more than 10,000 new samples in 2019. Sample types vary from DNA, skin, and nerve to muscle and other biopsy tissues. Areas covered by the Biobank Network include cardiology, neurology, psychiatry, hematology, nephrology, rheumatology, ophthalmology, endocrinology, and dermatology. The Internet of Living Things is part of the Department of Software Engineering at the University of Szeged. It enables the assessment of the impact of environmental factors determining the growth and stress reactions on individual plants. In medical practice,

Top Expat

CEOS In Hungary 2021

As well as an economic background to Hungary’s economy, Top Expat CEOs presents some of the leading market players in the country. As such, it is an essential aide to getting to know the personalities behind the business.

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