Hungary - European Semester Country Report
Total spending on R&D increased in recent years, but public R&D has been decreasing leaving Hungary in the bottom group of EU Member States on this account. This weakens the science base which provides the knowledge and human resources for business development. Business innovation that doubled as a percentage of GDP over the past ten years is highly concentrated in a handful of large foreign-owned companies.
Overall, innovation is not sufficiently embedded in the Hungarian economy. This is reflected in the wide productivity gaps between foreign-owned and domestic companies as well. Based on the European Innovation Scoreboard, Hungary ranks 21st of the 28 EU countries in innovation performance. The lack of highly-skilled professionals is a major obstacle that puts at risk investments in knowledge-intensive activities.
The government's economic strategy puts emphasis on promoting innovation, but weaknesses in policy coordination tend to limit results. R&D grants do not appear to have the desired broad effect in stimulating innovation across the economy. There is only limited policy coordination to ensure the complementarity and continuity of different programmes.
At the request of the Hungarian authorities, a peer review was conducted on the country's research and innovation system under the Horizon 2020 Policy Support Facility, which concluded in drawing up several policy and operation recommendations