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«Study of the innovative potential of Region of Central Transdanubia Study of the innovative potential of Region of Central Deliverable: Transdanubia ...»

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Study of the innovative potential of Region of Central

Transdanubia

Study of the innovative potential of Region of Central

Deliverable:

Transdanubia

3 Situation and Best Practice Analysis

Work Package:

3.1 Preparation of studies on the innovative potential of

Activity:

FIDIBE partners regions

WP Responsible

Centre for Research and Technology Hellas (CERTH)

partner

Final Date: 10/2009

Version:

Report

Type:

Responsible Mid-Pannon Regional Development Company

Partner:

Ákos Szépvölgyi, External Expert

Authors:

Székesfehérvár, October 2009 1 „This project is funded by the European Union and co-funded by the Hungarian Government in the framework of the South East Europe Transnational Cooperation Programme”

CONTENT

Abstract

EXECUTIVE SUMMARY

I.

REPORT ON REGIONAL SITUATION

II.

II.1. INTRODUCTION

II.2. SPECIFIC CHARACTERISTICS OF THE REGION

II.2.1. Geopolitical environment, location in the European space, the special features of internal spatial structure

II.2.2. The Region’s social characteristics

II.2.3. Economic background

Economic performance

B Foreign capital

C II.2.4. R&D situation

A Higher education

B Research and development

II.3. SWOT ANALYSIS OF THE REGION

MAIN ACTORS OF INNOVATION

III.

III.1. GENERAL SITUATION OF THE BUSINESS SECTOR

III.1.1. The fundamental characteristics of enterprises

III.1.2. The characteristics of innovative enterprises

III.1.3. Experiences and behaviours of enterprises

III.2. MAIN ACTORS CONTRIBUTING TO THE DEVELOPMENT OF INNOVATIVE CAPABILITY

III.2.1. Industrial parks

III.2.2. Incubator houses, clusters

III.2.3. The special forms of innovative cooperation

III.3. ENTREPRENEURSHIP POLICIES AND INITIATIVES

II.3.1. Regional Innovation Strategy

II.3.2. The situation of start-up/new-born innovative enterprises

II.3.3. Supporting programmes

II.3.4. Experiences on related domestic and EU funding resources

II.3.5. Current funding resources

II.3.6. Available and implemented EU programmes in the Region

III.4. SWOT ANALYSIS OF THE BUSINESS SECTOR

SUGGESTIONS AND PROPOSALS

IV.

MAIN CONCLUSIONS

V.

BIBLIOGRAPHY

2 „This project is funded by the European Union and co-funded by the Hungarian Government in the framework of the South East Europe Transnational Cooperation Programme” ABSTRACT The Study of the innovative potential of Region of Central Transdanubia is reviewing the current innovation potential of the Region as the 3.1. activity of the FIDIBE project. The study summarizes the structure forming economic and social background, the situation of business sector, the main actors of innovation development, and the entrepreneur policies and initiatives. By the review of the current situation the study identify the fields of further development and make suggestions for the development of the regional innovation system.

By doing so, the study supports further activities of the FIDIBE project, and using common methods of investigation it gives the opportunity to compare the results with other investigated regions.

3 „This project is funded by the European Union and co-funded by the Hungarian Government in the framework of the South East Europe Transnational Cooperation Programme”

I. EXECUTIVE SUMMARY

The Study of the innovative potential of Region of Central Transdanubia is reviewing the current innovation potential of the Region as the 3.1. activity of the FIDIBE project. The study summarizes the structure forming economic and social background, the situation of business sector, the main actors of innovation development, and the entrepreneur policies and initiatives. By the review of the current situation the study identify the fields of further development and make suggestions for the development of the regional innovation system. By doing so, the study supports further activities of the FIDIBE project, and using common methods of investigation it gives the opportunity to compare the results with other investigated regions. This executive summary highlights the most important results of the study.

Overall situation of the region

After the political transformation structural changes of fundamental importance underwent in CentralTransdanubia. One of the most important elements of these changes was that the economy has lost its agricultural-industrial character and by the end of the 1990s industry or more precisely processing industry had become the dominating sector of the region’s economy. Another important feature of these changes is that the typically quantitative changes of the 1990s (a rapid growth in the number of enterprises and in the number of low-skilled labour) were followed by qualitative changes emerging in the early 21th century. This means among others the emergence of new manufacturing and complementary industries in the region enabling the modernization of economic activities and the innovation-oriented development to undergo in the region’s economy.





Industrial restructuring at the late 1990s has definitely resulted in the dominance of machine industry. The number of businesses engaged in machine industry is approximately 900 in the region. Of them the activities of big firms in vehicle industry are considered the most important.

It is important that in the late 1980s Central-Transdanubia Region just like Hungary’s other regions had to face rapid and comprehensive socio-economic changes. The market and sales relations of the region’s economy having mostly been based on trading with socialist countries collapsed and the region’s economic performance and industrial production volume dropped significantly. Now we can take it for granted that the region not only survived the changes but with West-Transdanubia and with the agglomeration zone of Budapest it has developed into Hungary’s one of the most dynamically developing area. Since the early 90s its economic role by far has been surpassing the position it should fill in by its territorial and population size. The success of transformation can be verified by the fact that the value and dynamics of general indicators used for measuring economic development have been higher than the national average since the early 90s and these are accompanied with favourable employment indicators as well. By GDP per capita indicator the Region is the country’s 2nd most advanced area with 10% contribution rate to the national GDP. Industry has a determinant role in the GDP production of Central-Transdanubia. The ratio of servicing sectors in GDP production is lower than the national

–  –  –

R&D capacities The R&D and higher education development of the Region is paradox. The regional system of higher education – just like in the past years – is still dominated by social sciences, business and technology oriented training programmes, i.e. these are the courses having been attended by the majority of students in the academic year of 2007-2008. It was the training courses in economics (business) and engineering that were the most popular having been attended by 47.7 per cent of the region’s students. Courses held in the faculties of health, agricultural and physics had the least audience within the same academic year.

The R&D sector have been determined by the fact that between 1977 and 2007 the number of research organizations rapidly increased in Hungary but the volume of growth was different in each region. By the early years of our decade the region – thanks to the growing number of research organizations with a homogenous spatial distribution in all of its constituent counties – was able to close up to the other regions and its number of research organizations now is exceeding the figures of West-Transdanubia and North-Hungary. However in the past few years the process of this spectacular growth seems to halt in Central-Transdanubia Region. We can observe an intensive growth in the number of research organizations on regional level until 2004. In 2005 however due to a sharp drop in the number of research organizations in Veszprém County a fallback is seen but this was followed by another period of expansion which was principally due to an increase in the number of research organizations in Fejér County.

General situation of the business sector

It was a typical phenomenon in Hungary that the overwhelming majority of state property concentrated in the hands of big firms which were split up or closed following their privatization or as a consequence of changes in the market. Their positions were filled in partially by multinational and partially by newly formed Hungarian companies. However the majority of these newly founded Hungarian firms were small business enterprises only.

All these increased the role of SMEs in Hungarian economy. By the end of year 2007 the great majority of the Hungarian business organizations employed a staff less than 250 and the number of firms with staff over 250 was 900 only.

Further important characteristics is that the contribution of businesses to the GDP was different in each region in

2006. It can be stated that their contribution to the GDP was greater in economically more advanced regions than in less advanced ones. In Central-Hungary, West-Transdanubia and Central-Transdanubia two-thirds of the region’s overall economic performance was generated by profit-oriented organizations. These are the three regions that have attracted the majority of investors and foreign capital.

By innovation activity Central-Transdanubian enterprises can be regarded the most successful. The ratio of enterprises implementing successful development plans was the highest in this region. Furthermore in this region every second business organization has invented not only new products and services but also introduced new methods having not applied before. Investigating innovative enterprises from the aspect of economic sectors it

–  –  –

Main actors of innovation Hungary has 204 industrial parks now and their spatial distribution shows a relative homogeneity not reflecting the otherwise existing regional disparities. Hungary’s 204 industrial parks are hosting 2016 firms and enterprises. The industrial parks of Central-Transdanubia Region are hosting the highest number of enterprises (400) surpassing the figures of Central-Hungary and Central-Transdanubia Hungary’s two economically most advanced regions. A special feature of industrial parks is that they are not profiled for providing innovation and technology transfer services for their enterprises.

The region’s typical feature is that the tasks of innovation and technology transfer centres are merged so incubator houses are providing such type of services as well. The region has four incubator houses such as the Enterprise Centre and Incubator House of Technology in Székesfehérvár, the Regional Innovation Centre of Veszprém, Entrepreneurs’ House in Komárom and Innopark Incubator House of Technology in Dunaújváros.

Clustering process which has become an indispensable organizational form for the successful operation of an innovation system has been accelerated in Central-Transdanubia during the past few years but it still does not play a determinant role in the region’s economy.

Entrepreneurship policies and initiatives

The actors of the regional innovation policy of Central Transdanubia Region – preferably the Regional Innovation Council of Central Transdanubia (Hungarian abbreviation: KDRIT) and Regional Innovation Agency of Central-Transdanubia (Hungarian abbreviation KDRIÜ) – prepared the updated regional innovation strategy (RIS) of Central Transdanubia in February 2009.

The document – in accordance with the ‘Cohesion Policy in Support of Growth and Jobs’ Community Strategic Guidelines following the principles of the renewed Lisbon Agenda – is targeted at promoting innovationoriented growth, at better employment and at increasing competitiveness in areas as regional economic networks and business environment. For this reason it encourages and favours investments in areas with high development potentials and investments aimed at economic growth and better employment.

A highligted element of enterprise support is the Technology Incubation Programme (TIP) starting in 2009. TIP provides incubation services for innovative, R&D enterprises with high development prospects needing technology incubation by an active involvement of private investors and by offering fair compromises, guarantees and advantages for stakeholders in return for participating in the programme. A major goal of this programme is providing support for enterprises needing primarily technology incubation as the highest potentials and start-up risks are bound to this segment.

Summary

–  –  –

• Innovation activities in Hungary are one-sidedly process industry oriented

• The dominance of manufacturing can be experienced in carrying out innovations.

• The embedment of higher education into the innovation chain is inappropriate.

• The adaptation of external knowledge into the innovation activities of SMEs remains low.

• Business environment still favours implemented developments and investments to be funded by own resources.

• The absence of private investors in the early life cycle of businesses in Hungary.

• Obtaining bank financing resources is difficult.

• Businesses carry out developments on their own, their inclination for cooperation is low

• The number of patent applications is low and showing a declining tendency

• The majority of incubator house development projects are focusing on infrastructure meeting in this way only a small part of the demands of the real target group.



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