Investments in research and development are on the rise in Hungary, backed up by government initiatives, but the country needs a more unified effort between the public and private sectors to truly deliver on its innovation potential.


On the Up

Globally, R&D spending has been on a sturdy upward growth trajectory in recent years. In 2016, the 34 member countries of the Organization for Economic Co-operation and Development (OCED) increased their cumulative R&D spending by 2.3 percent to USD 1.266 billion. Hungary exceeded this growth rate with tremendous growth in spending of 21.1 percent between 2016 and 2017, reaching HUF 517.25 million (USD 1.8 million) according to figures released last month by the Central Statistical Office. As a percentage of GDP, Hungary’s R&D exposure rose from 1.2 percent to approximately 1.35 percent.

Hungary’s human capacity in research also showed double-digit growth in 2017, with a total of 60,932 staff carrying out R&D in the country – an increase of 11.5 percent from the year before. Research personnel as a percentage of the overall population grew from 0.82 to 0.92 percent in 2016. This year in higher education, the number of employed researchers increased by 8.4 percent. This overall improvement of Hungary’s researcher headcount is likely a reflection of the development in the country’s total number of research and technology institutions – increasing 14 percent in 2017 to 3,109.


A Push from the Top

In recent years Hungary’s government has aimed to have influence the country’s R&D ecosystem more directly. “The aim of the government is to make Hungary the most competitive country in Central Europe. Therefore, the government will spend HUF 1200 billion (USD 4.06 billion) on research, development, and innovation [up until 2020],” proclaimed Prime Minister Viktor Orbán in 2016.

The aim of the government is to make Hungary the most competitive country in Central Europe

Prime Minister Viktor Orbán

As part of a new economic philosophy, shifting from “made in” to “invented in Hungary”, Orbán is encouraging researchers and companies to join forces and innovate their way into the ranks of Europe’s more prosperous nations.

A National Research Infrastructure Roadmap, published in 2018, set the goals of identifying major research infrastructure in the country, presenting the extent of domestic capabilities to potential international partners, drawing the attention of the international research community to Hungary’s research opportunities, setting further development directions, and outlining collaboration points with European infrastructures.


A Long Way to Go

Despite these significant gains in spending and scientific personnel, Hungary’s R&D positioning is still small potatoes on the global scale. For example, Massachusetts General Hospital (MGH) in Boston, USA, has an annual budget of over USD 925 million alone.

Further, Hungary is still a long way from reaching the three percent of GDP target for public and private R&D spending set by the European Commission. “Research and innovation is certainly one of the priorities of the government, but not the main priority,” says József Pálinkás, chairman of the National Research, Development and Innovation Office (NRDI).

While the government can simply make a political decision to increase public R&D spending, “it is another thing to have enough demand for research for private companies,” adds Pálinkás. Hungary’s private industry will also have to boost their spending to reach this goal, and for now, Hungarian companies lack the means to spend a lot on research. This is despite the fact that the share of Hungary’s private sector in total research expenditure is the second-highest in the EU at 74 percent, behind Slovenia (76 percent) for 2016, according to Eurostat.

Therefore, only through a unified effort between the public and private sectors, along with far higher levels of international partnerships and collaborations, will Hungary’s budding research landscape get the boost it needs to become more internationally competitive.