National
Development Agency

Although we do have achievements at an international level, the performance of the Hungarian R+D sector today is a long way off the European average. While the 15 „old” member states invest 1.92% of their GDP in research and development (which in relation to the United States and Japan is still relatively low), Hungary only allocates 0.89% of its GDP in this area. Moreover, in Hungary, the business sphere finances less than one-third of R+D expenditures, which is a long way off the EU ratio of 55%. According to surveys, 9 out of 10 Hungarian enterprises do not undertake research and development, and 8 out of ten enterprises did not implement any kind of innovation in company operations.       

It is therefore no mere accident that research and development was a priority area within the framework of National Development Plan I as well: between 2004 and 2006, 743 applicants had the opportunity to invest EU funding of approximately 33 billion HUF in these types of developments. Micro, small and medium size enterprises received a 2/3 share of these resources – the Central Hungary region received the highest share of this funding alongside the South Great plain and North Great Plain regions, thanks to the pivotal role of Szeged and Debrecen.

Innovation has been prioritised to an even greater degree within the framework of the New Hungary Development Plan for the 2007-2013 period, namely: over the course of the upcoming 7 years, Hungarian applicants will have the opportunity to invest EU funding of approximately 230 billion HUF for this objective. 34.6 billion HUF will be made available, primarily for small and medium size enterprises, over the course of the next one and half years.   

The 3 calls for applications of the economic development tender package published on 17 October, as well as the 3 calls for applications of the Central Hungary region running concurrently as mirror tenders help reach this goal. In addition, individual tender scheme offers EU resources covering the overall innovation process, ranging from industrial research through to the development of prototypes and market introduction of the new product.     
Accordingly, exclusively micro, small and medium size enterprises are eligible to apply for a rate of development funding of 2 billion HUF now available in the Central Hungary region, whilst there is a total of 7 billion HUF available in the 6 other regions, for market-oriented research and development, more specifically, industrial research up to the development of prototypes and basic experimental development; the rate of approved funding ranges from 50 million HUF to 300 million HUF. In the case of this particular call for applications, as a general rule, the enterprise approved funding must use 25% of the approved funding to commission university or academic research centres to carry out research activities, in order to strengthen cooperation between universities, research centres and the business sphere.      

As the next phase of the innovation process – tying in with market introduction – once again exclusively micro, small and medium size enterprises are now eligible to apply for enterprise innovation assistance allocated a framework of 3.6 billion HUF in the Central Hungary region, and a total framework of 14 billion HUF in the 6 other regions. Within the framework of this particular call for applications, enterprises may be approved funding ranging from 20 million HUF to 200 million HUF for, amongst others, product, service or technological developments, testing and test runs, as well as marketing activities required for market introduction.      
Naturally, efficiently operating research centres and well-equipped innovation and technological parks are essential for achieving results in the domain of research and development. As a continuation of the call for applications supporting the establishment of cooperation-based research centres and running within the framework of National Development I, a rate of EU funding of 2 billion HUF will be available in the Central Hungary region, and a total of 6 billion HUF will be available in the other 6 regions for the development of research and development centres. The basic objective of this call for applications is to strengthen so-called cooperation centres and regional university knowledge centres operating as business organisations that have been established to promote cooperation between universities, research centres and the business sphere and have already achieved results. As a result of these types of cooperation, knowledge generated by higher education has a beneficial impact on the innovation process, and therefore on the competitiveness of the economy. Enterprises may be approved funding ranging from400 million HUF to 1 billion HUF.

Hungary has spent 110 billion HUF on higher education infrastructure development over the course of the past 17 years. We are now able to invest a huge amount up to the end of 2010, since we will be able to spend approximately 85 billion HUF of EU funding in this area. Since at least 75% of the framework must be invested in the development of the areas of mathematics, technology and IT, as well as natural sciences, we will be able to modernise 80% of the infrastructure. Beyond this funding, in order to make Hungarian higher education competitive, calls for applications targeting curriculum development in connection the Bologna Process, reforming teacher’s training or activities fostering the work of talented students and teachers will also be published in the near future. Consequently, the number of students enrolled in technology and natural science courses will increase by 15% by 2010. This is an essential precondition for making the Hungarian economy competitive.     
In order to achieve this, as a first step, the National Development Agency is about to publish a call for applications allocated a framework of 28 billion HUF from the 4-year higher educational infrastructure framework of 85 billion HUF. Moreover, an additional higher education tender package with a 2 billion HUF funding framework will be available in the Central Hungary region. Within this framework, higher education institutes will be able to apply for the construction and development of buildings and laboratories used for educational, research and innovation purposes, complex spaces used by students and teachers and for research, as well as info-communication development used for research and educational purposes.   

A further 21.7 billion HUF will be added to this package at the beginning of 2008.