Introduction: The Innovation Hothouse

KEEPING INNOVATION HUNGARIAN

This year could fairly be described as the most complex in decades. With recession and growing budget deficits in sight, governments are looking at cutting costs. This can harm long-term projects such as funding research, development and innovation. How is the Hungarian administration handling this situation? The Budapest Business Journal talks with State Secretary László György at the Ministry for Culture and Innovation.

By Balázs Barabás

BBJ: Under the pressure of the budget deficit, the Hungarian government has started cutting expenses. How will this impact R&D funding? László György: University budgets have doubled since January 2022. A certain percentage of their operation is R&D and innovation. Consequently, the increased budget will also result in more funds for R&D and innovation. On the other hand, cutting costs now will impact future spending. Our research facilities and universities are currently accessing the funds we have provided in the previous two to three years. As for the next year, the funding will be different: 40% of it will be performance-based. Also, we aim to access as much EU funding as possible for our universities, institutions and companies. It is essential to see that of the total EU funds for innovation, Eastern European states, that is, those that joined the EU most recently, have access to only 5% of those funds. The remaining 95% are available to the “older” member states. True, we have to do our “homework” and spare no effort to access as much as possible of these funds, but we must also see that the competition for innovation funds is not even for all competitors.

BBJ: A new concept arose in recent years: the social usefulness of R&D and innovation. What are the latest developments in this area? LGy: There have been considerable changes in the R&D and innovation system in Hungary beginning in 2018. One of these is the creation of the Eötvös