RIO Country Report Hungary 2014

The RIO Country Reports, co-authored by JRC policy analysts and independent experts, give an update on the performance of the national research and innovation systems, and examine policies to address key R&I challenges, assessing their effectiveness. They serve as a tool to inform EU and national policy-makers, and support policy learning in Member States (MS).

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The annual RIO Country Report analyses and assesses the development and performance of the Hungarian national research and innovation system and related policies in the perspective of EU strategy and goals.

The report highlights recent national policy and system developments occurring and assesses the match between national policy priorities and the structural challenges of the research and innovation system. It addresses among others:

  • The progress of Hungary towards achieving the Innovation Union, focusing on areas where action is needed.
  • Progress in responding to the ERA actions, particularly in light of the ERA progress report findings published in September 2014.
  • Country specific R&D and innovation recommendations as indicated in COM(2014) 400 final '2014 European Semester: Country specific recommendations, Building Growth' adopted by the Commission on 2 June 2014 and endorsed by the Council on 27 June 2014.
  • Progress in tackling research and innovation system challenges beyond those outlined above.
  • Areas highlighted by the Commission's Communication on 'Research and innovation as sources of renewed growth' (COM(2014) 339 final) and its accompanying Staff Working Document 'State of the Innovation Union, taking stock 2010-2014' (SWD(2014 181 final).

The RIO Country Report 2014 builds on the experience of the ERAWATCH project. The ERAWATCH Country Reports from previous years are also available for download on this page.

Report year
2014
Official publication date
03/09/2015
Geo coverage
Document type
EU Report or Publication

Country Report file

RIO Country Report 2014_Hungary.pdf
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National economic and political context

Hungary exited from recession in early 2013, and the expansion continued further in 2014. This allowed the government to avoid cutting the research budget and to focus on the implementation of RTDI targets set by the National Research-Development and Innovation Strategy 2013-2020. In the parliamentary election on 6 April 2014 the previous centre-right government maintained its two-thirds majority of votes and the government primary focus is to support the economic growth and increase employment.

ERA priority 2: Optimal transnational co-operation and competition

The National Research, Development and Innovation Office is responsible for STI strategy-making and programme planning as well as for international RDI collaboration e.g. through bilateral cooperation with OECD, NATO, CERN and COST programmes. Although the design of national STI strategies takes into account what is being done in other EU countries, no initiative or experience could have been identified that specifically addresses supporting of joint activities such as sharing information, joint research agendas, joint calls and joint programming.

National R&I strategies and policies

The National Research-Development and Innovation Strategy (2013-2020), entitled “Investment into the Future” was approved by government in July 2013. The strategy aims to raise the RDI investments, and as a result, to mobilise the Hungarian economy and to strengthen its competitiveness. The strategy set the target to raise the amount of R&D expenditures to 1.8% of GDP and the BERD/GDP ratio to 1.2%, as well as to increase the number of researchers from 37,000 in 2012 to 56,000 by 2020.

National Reform Programmes 2013 and 2014

Hungary made significant progress in the last two years towards the quantitative R&D target set by the National Reform Programme that aims to increase the level of R&D expenditures to 1.8% of the GDP by 2020 (1.41% in 2013). Also, the National Smart Specialisation Strategy (S3) was approved by the government in November 2014 that provides the basis for the Operational Programmes supported by the Structural Funds in the period 2014-2020.

ERA priority 3: An open labour market for researchers

Introduction:

The Hungarian higher education and public research sector could be seen as a centrally regulated system, although individual institutions enjoy high level of autonomy within the regulatory framework. Generally, research positions at public research institutes are open to non-nationals. The number of foreign researchers slightly increased compared to 2009, there were 667 foreign researchers (many ethnic Hungarians from the neighbouring countries) working in Hungarian institutions in 2013, out of which 456 came from other EU Member States.

Open, transparent and merit-based recruitment of researchers:

Higher education organisations as well as the research centres and institutes of the largest PRO, the Hungarian Academy of Sciences (MTA) have no special employment requirements towards foreign researchers other than the requirements of merit-based scientific qualification. Research positions at higher education organisations and public research institutes are open to non-nationals.

Access to and portability of grants:

The national legislation does not address the issue of access to and portability of national grants. The Hungarian Scientific Research Fund (OTKA) provides financial support for basic research set in their guidelines and sample contracts that grants (i.e. salaries) are not portable if the successful applicant moves to another country.

EURAXESS:

There is an Euraxess network established in Hungary. Local Euraxess network points are mainly located at universities in almost all seven regions. Contacts of local network points are duly acknowledged on the Hungarian Euraxess portal. The Euraxess Hungary Team assists foreign researchers and their families coming to work or study in Hungary.

Doctoral training:

Doctoral training is carried out at 27 higher education institutions at 165 thematically organised “doctoral schools” in Hungary. Hungarian universities are autonomous to develop and promote their own doctoral programmes. In academic year 2014-2015, the state finances 1,270 PhD scholarships, out of which 850 scholarships in “hard sciences” and 420 in “soft sciences”.

HR strategy for researchers (HRS4R) incorporating the Charter and Code:

According to the Euraxess website, 16 Hungarian universities and research organisations declared the implementation of the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers by the end of 2014. So far none of the Hungarian universities obtained the logo of HR Excellence in Research.

Education and training systems:

The insurance of sufficient supply of (post)graduates in science, technology, engineering and mathematics (STEM) is clearly a priority of the STI policy in Hungary. In this respect the government stimulates the orientation of the younger generations towards STEM studies and limits the support for other specialisations at state HEIs.

Policy developments related to Council Country Specific Recommendations

No country specific recommendations relevant to the research and innovation policy in Hungary have been adopted by the Council of the European Union in 2014.

ERA priority 5: Optimal circulation and access to scientific knowledge

E-infrastructures and researchers electronic identity:

The National Information Infrastructure Development (NIIF) Programme serves as a framework for the development and operation of the research network in Hungary. Hungarian researchers of the MTA and HEIs are requested to use and update regularly their publications in the scientific bibliography database of MTA (i.e. List of Hungarian Scientific Works, MTMT in Hungarian).

Open Access to publications and data:

The Hungarian Academy of Sciences (MTA), the largest PRO network, introduced several actions with regard to open circulation and access to and transfer of scientific knowledge. The president of MTA issued an Open Access Mandate Decree in 2012. According to this decree, the researchers and employees of MTA – including researchers of the subsidised research units and the Momentum research groups – should make their scientific publications Open Access.

Framework conditions

The Government is committed to increasing the R&D expenditures, especially in the business sector and aims to make Hungary an R&D centre in Central and Eastern Europe. Several RDI related strategies were elaborated and consulted with stakeholders in the past two years, and most recently a new Law on “Scientific Research, Development, and Innovation” was approved in November 2014 in order to support the competitiveness of companies based on research, development and innovation and the creation of high added-value jobs.

Science-based entrepreneurship

Several support schemes were implemented in the past few years that specifically aimed at the facilitation of knowledge transfer and supported the creation of university spin-offs. Technology Transfer Offices (TTOs) were established at major HEIs, however these university organisations face the challenge to sustain their operation after termination of funding.

Funding trends

Funding flows:

The Hungarian GERD was fluctuating between 0.9-1.17% of the GDP between 2000 and 2010 and reached its peak in 2013 (1.41% according to Eurostat). Although the economic crisis had severe impact on the Hungarian economy, the GERD grew in all years between 2009 and 2013. The business expenditures on R&D constitute the biggest share of the total R&D funding and stayed almost at the same level between 2009 and 2013 (46.4% and 46.8% respectively), while the public funding decreased significantly from 41.9% in 2009 to 35.9% in 2013.

Project vs. institutional allocation of public funding:

The institutional public funding for R&D decreased significantly in the past few years. The Hungarian government’s central budget spends every year less on R&D. The austerity measures had a major impact on the institutional funding of the higher education organisations that decreased by one-third between 2009 and 2013. Nevertheless, universities and PROs got substantial project funding from the Operational Programmes of the Structural Funds. This trend is likely to be continued because the government would allocate more funding (10.0% of the total compared to 8.5% in the previous period) from the Structural Funds to research and innovation in the period 2014-2020.

R&I funding:

There are a large number of measures in place that cover the entire research and innovation process. Bottom-up funding for fundamental research is provided by OTKA, larger scale (applied) research and innovation projects are funded by the National Research, Development and Innovation Fund (NKFIA) and various operational programmes of the Structural Funds.

Smart Specialisation

Approved by the government on 14 November 2014, the National Smart Specialisation Strategy defines the national smart specialisations that were formulated in the course of the strategy building process in accordance with the types of regions outlined in the S3 strategy. The national smart specialisation axes are: i) systems science, ii) smart production and iii) sustainable society. In addition, the RIS3 defines six sectoral and two horizontal national research priorities.

Knowledge markets

Fees relating to applications and prices of intellectual protection services could be considered efficient, affordable and effective even if Hungarian patent applications are relatively low compared to other European countries. A dedicated government-owned non-profit company, the Hungarian Intellectual Property Agency (Hipavilon) supports the creation of knowledge based products and services and assists their commercialisation on Hungarian and foreign markets.

Evaluations, consultations, foresight exercises

STI policy monitoring and evaluation culture is weak in Hungary. Ex-ante and ex-post evaluations are under way that address financial support mechanisms and indicators related to the cohesion policy. Apart from these evaluations, no comprehensive evaluation of the STI policy has been carried out since 2010. This situation has changed with the establishment of the Science and Technology Observatory (called Kaleidoscope information service) within the former National Innovation Office in 2012, however Kaleidoscope published no reports in 2014.

Knowledge transfer and open innovation

The exploitation of public research results, including knowledge transfer and spin-off creation is not yet a well explored area, even if TTOs are established at all major HEIs. These intermediary organisations are not yet ready to efficiently mediate between academia and business and to transfer the research results to companies. It is foreseen by the RIS3 strategy that dedicated “Higher Education and Industry Collaboration Centres” (FIEK) will be established in selected regional centres in order to support broad cooperation between industry and the higher education sector.

 

Performance of the National Research and Innovation system

Hungary improved its innovation performance between 2006 and 2013. The Innovation Union Scoreboard 2014 report concludes that Hungary belongs to moderate innovators, a group of countries characterised by an overall innovation performance below that of the EU-28. High growth was observed for R&D expenditures in the business sector, R&D expenditures in the public sector declined.

Structural challenges of the national R&I system

The challenges of the Hungarian R&I system are fairly similar to those of the previous years as the situation and framework conditions for RTDI have not changed significantly. The main structural challenges are: (i) low level of innovation activities, especially that of the SMEs; (ii) low occurrence of co-operation in innovation activities between academia and business; (iii) insufficient quantity and supply of human resources for R&D and innovation; (iv) unfavourable framework conditions for innovation; (v) deficiencies in the STI governance system and the institutional framework.

 

Meeting structural challenges

The most recent policy documents, including the RDI strategy 2013-2020, the National Smart Specialisation Strategy, the new Law on Scientific Research and Innovation, the new higher education concept as well as the operational programmes of the new financing period 2014-2020 (i.e. GINOP, VEKOP, EFOP, TOP) recognise well the situation and propose measures that could offer solutions for a faster and more effective development of the Hungarian R&I system. However, a lot depends on the quality of implementation of those strategies and measures if the  expected outcomes and impacts are to be achieved.

Innovation framework for SMEs

More than 70 clusters and 20 accredited innovation clusters are registered in the website of the National Research, Development and Innovation Office. SMEs could receive support for their innovation activities from the new National Research, Development and Innovation Fund and the Operational Programmes (mainly GINOP and VEKOP) co-funded by the Structural Funds. It is foreseen that 60% of total the total Structural Funds will be spent on economic development and SMEs will receive 15% of this support in the period 2014-2020.

Venture capital markets

By the end of 2014, altogether 28 Jeremie Funds were created out of which four funds focus on the early stage investments. According to the report published by the Hungarian National Bank in January 2015, 70% of venture capital invested in Hungary was connected to one of the Jeremie Funds in the period of January 2010 and end of June 2014.

Innovative public procurement

Innovative public procurement is not yet a well explored way to support innovation. The National Innovation Office (NIH) launched a pilot programme to elaborate a pre-commercial procurement (PcP) strategy in 2012 and the National Smart Specialisation Strategy, approved in November 2014, foresees a PcP pilot action in order to examine whether the domestic application of PcP will require amendments to the existing regulations or the introduction of new legislation.

The country in the European R&I landscape

Hungary is a medium-sized European Union member state since 2004, with a territory of 93,036 km2 and 9,908,798 inhabitants (about 2% of the EU-28 total). Compared to the EU-28 average, the Hungarian GDP in terms of PPS (purchase power standard) was 66.9% in 2013. The Hungarian GERD reached its highest value in the last two decades with a value of 1.41% of the GDP in 2013.

Main features of the R&I system

Hungary is a unitary state with a centralised decision-making system with regard to major policy domains, including science, technology and innovation policies. Business expenditures on R&D constitute the biggest share of the total R&D funding and stayed almost at the same level between 2010 and 2013, public funding decreased in the past decade (35.9% in 2013), while R&D funding from abroad has a quite high and increasing share of the GERD (16.5% in 2013).

Structure of the national research and innovation system and its governance

The key players of the Hungarian STI policy system are the Parliament, the Prime Minister’s Office and the National Development Cabinet as well as the Ministry for National Economy, Ministry of Human Capacities, Ministry of National Development and the Ministry of Agriculture. At operational level, the National Research, Development, and Innovation Office (NKFIH) is the governmental body responsible for research, development and technological innovation from 1 January 2015.

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