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Promoting Invention & Innovation in Hungary

Promoting Invention & Innovation in Hungary. International Inventors’ Day Convention Bangkok, 2-4 February 2008. Ilona Vass, Vice President National Office for Research and Technology, Hungary. Hungary at a glance. A catching up economy in EU Some macroeconomic facts

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Promoting Invention & Innovation in Hungary

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  1. Promoting Invention & Innovation in Hungary International Inventors’ Day Convention Bangkok, 2-4 February 2008 Ilona Vass, Vice President National Office for Research and Technology, Hungary

  2. Hungary at a glance A catching up economy in EU Some macroeconomic facts • GDP growth (4,5% in 2006) • Industrial output growth 6.4%, • Growth propelled by exports (volume index 117.9) • High FDI (3.4 B Euro ) • Unemployment rate 5.5% • Transition to market economy, privatization nearly complete

  3. Hungary at crossroads • Economic development driven by low wage cost FDI, change to high value added, knowledge-intensive development • Unique Opportunity: to promote and accelerate the economic growth, competitiveness of Hungary by investing in R&D and innovation,

  4. Why innovate? Bright ideas are tha secret of prosperity IN THE KNOWLEDGE ECONOMY WEALTH GETS CREATED THROUGH INNOVATION, IDEAS & CREATIVITY • Invention: ability to create something new • Innovation:creative application of new ideas or combination of new ones

  5. Some great inventions from Hungary • János Irinyi (1817-1895) non-explosive matches • László Biró (1899-1985) ballpoint pen • Leo Szilárd (1898-1964) radiotherapy of cancer • Albert Szent-Györgyi (1893-1986) vitamin C • Dénes Gábor (1900-1979) holography • Ernő Rubik ( 1944- ) Rubik cube

  6. Innovation performance of Hungary 2006 Rank: 16th in SII index(European Innovation Scoreboard)out of 25 EU states Weak performance: • Innovation drivers • IPR • Business R&D • Low levels of S&E graduates, broadband penetration, and lifelong learning Good performance: • knowledge creation. • applications • employment in medium-high and high tech manufacturing • high tech exports • Innovation Diffusion

  7. Weak innovation activities of firms

  8. Reforms of the national innovation system • Organisational: setting up funding agency • Financial: Innovation Fund • Regulatory: Innovation Act

  9. Innovation Act • Improves general framework conditions for innovation support and services • Clears IPR regulations, • Promotes spin-off creation • Promotes human resource development, mobility.

  10. The Research and Technology Innovation Fund AIM:to ensure predictable and reliable financing for the implementation of R&D, innovation policy • Enterprises contribute to the Fund,min.0.3% of turnover, offset options • Matching central budget contribution • 50% directly or indirectly to businesses as grants • Open, competitive schemes

  11. R&D and Innovation Government approved STI strategy (2007) • shift towards innovation • Research cannot discussed without innovation • Innovation is not necessarily based on research • takes a systematic, full innovation chain approach to remedy shortcomings and build on existing strengths

  12. Generic stages of research projects Soruce: EIB

  13. Research Commercialization: public finance leverages private Scientific Discovery High IPO Lab Model B Round Irinyi János Program Funding Valley of Death Business Building Phase Technology Development Phase Probability of Success A Round First Customers Prototype Seed Capital Create Business Mgt Team Business Models Market Assessment Manufacturing Model Low Commercialization Progression

  14. Measures stimulating innovation

  15. Public financing of innovation programes

  16. Innovation actors Inventors, researchers financiers entreprenuers

  17. Innovation and Entrepreneurship Innovation and Entrepreneurship are separatephenomena. • Innovation can occur through the economy – as the output of government programs, R&D labs, or corporate / marketing efforts…….. • Entrepreneurship can occur without any defining elements of innovation; in response to particular economic pressures and circumstances……

  18. Intellectual property rights • Intellectual capital at the root of enterprises: without protection, benefits of innovation cannot be reaped

  19. IDEAS Program Grants to inventors, individual researchers to test their idea and create a company to commercialise it • PHASE 1: technical feasibility • PHASE 2: market demonstration • PHASE 3: start-up market entry, investment readiness

  20. Funneling effect Money Money granted Number of projects approved PHASE 3 3 PHASE 2 PHASE 1

  21. Why Incubation ? • THE ECONOMIC-SYSTEM IN GENERAL IS NOT CONDUCTIVE ENOUGH. • INNOVATIVE IDEAS HAVE LONGER GESTATION PERIOD. • THE SKILL SET OF THE ENTREPRENEUR IS NOT FULLY DEVELOPED. • THE NATIONAL POLICY TO DEVELOP A PARTICULAR SECTOR.

  22. Technology Transfer activities Rationale • Special expertise needed to assess the market prospects of ideas, cannot be carried out by professors • Ideas need to be refined, grown before becoming attractive to private funding • Fund-raising, financial engineering: right amount of money at the right time

  23. NEW INITIATIVES • Bio-Incubator program (2005) 2 bioincubators established • Tech-transfer program (2006) 2 national tech-transfer centers established • Establishment of seed capital fund (2006) • Economic Development program (2007-2013) Schemes for establishing technology incubators, innovation centers • Program of Development Poles (2007-2013)

  24. Other innovation services Promoting a more entrepreneurial culture and create a supportive environment for SMEs, especially start-ups • Linking incubators, industrial parks, innovation centres • Development of enterprising culture and skills, Multiplicator training programme • Linking different types of funds, improving access • Enterprise Development Credit Programme • Supporting the co-operation of enterprises

  25. Innovation comes in many forms Financial instruments must be diversified to match needs New, high risk technologies require new policies, new financial instruments Attract private capital Venture Capital Seed Capital, business angels Loans Garantee schemes Reimbursable grants

  26. Thank you for your attention! More information at www.nkth.gov.hu

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