STRATEGY FOR THE DEVELOPMENT OF HUNGARIAN ENTERPRISES
Introduction
Due to their weight in employment and value added, small and medium-sized enterprises are the most important One of the most important conditions for sustainable conver- target group for the development of enterprises. In this gence is to increase corporate productivity. In the reform group, at present mobilising the demonstrable growth scenario, on the whole, we assume annual productivity reserves in the SME sector represents the greatest potential. growth of 4.0 percent on average, which is considerably Additionally, an entrepreneurial ecosystem should be higher than the previously recorded figures (the rate was created that significantly contributes to the revival of the 1.8 percent between 2000 and 2017). The domestic economy and the increase in its flexibility. corporate sector is characterised by significant heterogeneity; the main differences between large corporations and In addition to the SME sector, it must also be taken into SMEs are observed in productivity, capital intensity and account that the world has changed significantly in the past wages. Development policy must be formulated with an eye three decades, along with the fact that nowadays global to this heterogeneity. value chains fundamentally determine the productivity of a country. Considering that Hungary’s integration into global Chart 6-1: Per capita difference in productivity between value chains and its economic openness are remarkable in a SMEs and large corporations European comparison as well, the macroeconomic benefits of foreign-owned companies that are already active in or will come to Hungary in the future as well as the relevant spillover effects should be maximised. In addition, in the case of Hungarian medium-sized and large companies the direct investment opportunities arising in the region should also be utilised in a more intensive manner.
<≈3
4,8 million HUF
13,5 million HUF
SME
LARGE ENTERPRISE
Source: MNB.
Average annual growth of 3.0 percent in the large corporation sector and 6.0 percent growth in the SME sector is needed for the Hungarian economy to reach the productivity growth rates presented in the reform path (Chart 6-1). The magnitude and complexity of the challenge is underscored by the fact that in recent years average productivity growth in the corporate sector was lower than the above figures in both company groups. Chart 6-2: Changes in labour productivity (2005–2015, percent) 10
Percent
5 0
Large firms Large firms (mean) Source: MNB, based on NTCA.
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
-10
2005
-5
SME sector SME sector (mean)
In the following, we provide an overview of the most important challenges and tasks related to the development of Hungarian enterprises. First, the challenges affecting the SME sector are discussed, followed by an analysis of the structure of the economy and its ability to create value.
6.1 Development strategy of small and medium-sized enterprises The SME sector is crucially important on the convergence path. Firstly, this is explained by the weight of SMEs: the SME sector accounts for 71 percent of corporate employment, 47 percent of value added and 20 percent of exports. In addition, the SME sector is mostly Hungarian-owned and is much more embedded in the Hungarian economy than the foreign-owned large corporations, which often operate in isolation.98 Consequently, the SME sector is an important player in the Hungarian economy. Secondly, significant productivity reserves can be identified in the SME sector. According to our calculations, this productivity gap partly stems from the structure of the sector, and
Concerning island-like operation and low multiplicative characteristics see Subchapter 4 on the structure and value-creating ability of the economy.
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