Innovation policy in Hungary in the light of Europa 2020

László SZILÁGYIDepartment for Innovation and R&D

FIDIBE Final Conference1 December 2011, Székesfehérvár

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Hungary: low R&D expenditureThe GERD was HUF 310 billion Ft in 2010, which is 1.14% of the GDP

– Lisbon target: 3 % of GDP– EU average: 2.01% of GDP (2009)

Source: Hungarian Statistical Office

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The distribution of R&D expenditures by financial sources

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

External resources

Other National

State Budget

Enterprises

Source: Hungarian Statistical Office

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Knowledge-based investments as a percentage of GDP

Source: Intereconomics 2010

Ministry for National Economy

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The Hungarian situation: lag in human resources, business R&D and IPR protection

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

Employment in medium-high & high-tech manufacturing

IT expenditures

Employment in knowledge-intensive

services

Population with 3rd education

S&E and SSH graduates

innovation expendituresPublic R&D/GDP

Business R&D/GDP

Life-long learning

Venture capital/GDP

EPO patents per million population

Source: European Innovation Scoreboard 2009

EU-27

HU/EU-27

EU-27

HU/EU-27

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Significant regional disparities of R&D activity

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Financial intermediation excluded completely or in part for all countries except Austria, the Czech Republic and the United States. Community, social and personal services excluded for Austria, France, Germany, Hungary, Israel, Italy, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia and Spain.Source: OECD

Share of foreign affiliates in GDP (2000, 2008)

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R&D units of multinational companies in HungaryMinistry for National Economy

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Source: NGM-IKF based on OECD data

Number of researchers (FTE) inthe business enterprise sector

Chemical industry (beyond pharma)Machinery products and equipment necRadio, TV and telecommunication equipmentMedical and precision instrumentsComputer servicesArchitecture, engineering and other technical serv.Other business services nec

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RDI policy context – double challenge

• Short-term adaptation to the crisis in the policy field vs. the need to define a long-term RDI perspective

• The global financial/debt crisis forced the Hungarian government to take steps, which influence RDI policy as well

• National RDI strategic priorities should be presented in 2011 / 2012, requred by– EU2020 NRP: GERD / GDP target is set to 1,8% by 2020

– S3 is required by the so-called ex ante conditionality criteria proposed by the Commission for the next period Cohesion policy (Structural Funds)

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The Horizon 2020 packageThe Horizon 2020 package was published on 30 November

(http://ec.europa.eu/research/horizon2020/) – to help Hungarian participation is a key task

• Proposal for Horizon 2020 / the Framework Programme for Research and Innovation (2014-2020): general objectives, European value added, financial framework, controling/monitoring/evaluation principles;

• Proposal for the Specific Programme implementing Horizon 2020: rules for execution and some more specific scientific content;

• Proposal for a single set of Rules for Participation and Dissemination in Horizon 2020;

• Separate proposal for the part of Horizon 2020 corresponding to the Euratom Treaty

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The proposed structure of Horizon 2020

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Hungary has a low participation rate in FP7(EUR)

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Reasons for the low FP participation rate• Structural gap between old and new member states:

95% of the support went to the EU15 and only 5% to the EU12. Reasons include:– Few coordinators, lacking coordinating capacities and capabilities– Project size, difficulties to join consortia, excellence criteria, poor

networking capacities, bureaucratic procedures…

• EU12 countries try to harmonise their views now• A „national Horizon 2020 consultation” was launched

on 29 November 2011

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The Hungarian National Action Plan

The first draft was submitted to the COM November 12,2010

Approving the final version will take place in April, 2011 (during the course of the Hungarian EU Presidency)

Hungary intends to increase its R&D expenditure to 1.8% of GDP by 2020 whilefurther increasing the share of the business sector in financing R&D activity.

Measures of the NAP:• Renewal of the STI (R&D&I) strategy (in 2011);• Restructuring the governance system of the NIS;• Revised, single state aid system.

Important evaluation documents:• OECD Reviews of Innovation Policy: Hungary, http://www.nih.gov.hu/english/oecd/oecd • Evaluation of the operation of the Innovation Fund in 2004-2009,

http://www.nih.gov.hu/english/evaluations/comprehensive

EU 2020 Strategy

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Renewal of the current STI strategy

Main characteristics:

a) Timescale between 2011-2020,

b) Harmonising with the international trends, [Innovation Union, OECD Innovation Strategy], and the best practice of the EU Member States [Austria, the Czech Republic, Finland, Ireland, etc.],

c) State-of the art innovation approach including the non-technological innovation aspects as well,

d) Strong focus on the market and exploitation-oriented R&D activities, the innovation performance of the companies.

Ministry for National Economy

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Strategic necessities

• Economic realities make the government focus RDI policy on business actors, which can stand in the global competition (and on public actors, who can directly serve them)

• At the same time, long-term „maintenance” and „renewal” of the knowledge base should not be forgotten either (in cooperation with other ministries – education, development policy etc. - and other stakeholders)

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A simple model of an RDI system

Source: Guy, K and C. Nauwelaers (2003)

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Vision

„By 2020, with the help of an active RDI policy, key actors of the National Innovation System will be strengthened and become equal participants in global innovation processes, who in turn – as generators of spillover impacts – will be able to provide momentum for the whole NIS, thereby contributing to increasing competitiveness and rendering Hungary a sustainable knowledge economy” (working definition)

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Government

HungarianAcademy of

Sciences

HungarianAcademy of

Sciences

National Council for Research, Innovation and Science PolicyNational Council for Research, Innovation and Science Policy

ParliamentEducation, Science and Research Committee

Education, Science and Research Committee

Ministry of Public Administration

and Justice

Science coord., IP protection

Hungarian Scientific Research

Fund

Hungarian Scientific Research

Fund

National Innovation Office

National Develop-ment Agency

Hungarian IPOffice

Ministry for National Economy

R&D, techn. innov.

Ministry of National Resources

Science policy, higher education

Governance of the NIS, 2011-

Ministry ofNational Development

Single development policy

Innovation and Developmentad hoc Committee

Innovation and Developmentad hoc Committee

A renewed RDI support system is coming

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Thank You for your kind attention!

László Szilágyi

Ministry for National Economy

Department for Innovation and R&D

laszlo.szilagyi@ngm.gov.hu

+36-1-374-2700/2152

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Összefoglalás• A KFI aréna és a játszma globális, a folyamatok különböző innovációs

rendszerekben zajlanak és dinamikusak

• A KKV-k szempontjából lényeges egyes rásegítő keretfeltételek érvényesülése pl. a versenyfeltételek, az adminisztrációcsökkentés, a vállalkozóbarát üzleti környezet, a kiszámíthatóság stb. területén

• A KFI stratégiát – az erőforrások tükrében – fókuszálni szükséges, és (mások mellett) az innovatív fiatal cégcsoport támogatása mindenképpen javasolt

• Kiemelendő az együttműködő társpolitikák (elsősorban az oktatás-, és tudománypolitika, regionális fejlesztés) jelentősége – a korszerű innovációpolitika iránti elvárások egyben nagyfokú koordinációs elvárások is, az innováció jelentőségének elfogadása mellett.