European commission Directorate-General for Research Communication Unit B-1049 Brussels Fax (32-2) 29-58220 E-mail:
S 4 Intelligent Transport Systems and Services (ITS) refers to the integration of information and communication technologies with transport infrastructure to improve economic performance, safety, mobility and environmental sustainability for the benefit of all European citizens.
Affordable and accessible transport is clearly fundamental to sustainable wealth and prosperity in Europe. It underpins employment, economic growth and global exports,
while providing citizens with resources and mobility that are essential to the quality of life. The ability of transport systems to respond to mobility needs of citizens
and goods is hampered by a continuous increase in traffic demand as a result of higher levels of motorisation,
and services could reduce congestion by up to 15%,CO2 emissions by 20, %and road fatalities by up to 15%.
Bidirectional communication is needed from vehicle to vehicle (V2v) and vehicle to infrastructure (V2i. This requires the development of C H A p T E R 1 Research promotes integration for Europe-wide intelligent transport I N t E L L I G E
N t t R A n s P O R T s Y S T E M S 5 a communication architecture that provides a common frame for cooperative systems
Several services of the European commission contribute to the development and deployment of ITS in Europe:
Geographical continuity, standardisation and interoperability of services are essential, in order to avoid the emergence of a patchwork of ITS applications and services.
It is increasingly evident that technological improvements involving individual vehicles or infrastructure components and sub-systems are insufficient.
Even with relatively small investments, the integration of existing technologies could create new services bringing more reliable,
as well as reducing the need for new investments in additional roads. Continuing progress in ICT and sensing devices will open the door to even more radical advances.
and expertise of European multi-sector stakeholders involved in providing ITS), no‘umbrella'structure for the advance from research to realisation in the field of ITS has yet been established.
to facilitate the continuity of ITS services, and to do so through a coordinated and concerted action at EU level.
and freight management ITS services in European transport corridors and conurbations; road safety and security;
whenever ITS services or applications are adopted in the Member States. To increase its efficiency, the European parliament and the Council have focused the activity by specifying the six priority actions on which the Commission will start its work:
EU-wide multimodal travel information services; EU-wide real-time traffic information services; road safety-related minimum universal traffic information free of charge to users;
interoperable EU-wide ecall (for emergency calls using a single dial-up number; information services on safe and secure parking places for trucks and commercial vehicles;
reservation services for safe and secure parking of trucks and commercial vehicles. For more information on the ITS Action Plan and Directive, see:
http://ec. europa. eu/transport/its/road/action planen. htm I N t E L L I G E N t t R A n s P O R T s Y S T E M S 8 ROADSENSE Road awareness for driving
and to construct a simulation environment for the evaluation of new technologies. A general-purpose driver behaviour interface test equipment (D-BITE) was produced,
The in-vehicle technologies needed 3g telecommunications for the accuracy and speed of delivery to make services usable and useful
'A strong impetus to progress was given by establishment of the esafety Forum early in 2003, following consultation between the Commission, ERTICO ITS Europe, industry and public-sector stakeholders.
to enable vehicles to‘understand'the environment around them. They facilitate control, accident avoidance and journey planning either by providing the driver with information,
as well as services such as journey planning and dynamic in-vehicle navigation, could thus interact and be networked with each other across whole transport systems.
For example, introducing technologies to make bridges stronger with new materials can also present opportunities to make them smarter,
by adding facilities for self-monitoring and the communication of conditions to passing vehicles.''Interviews conducted as part of the INTRO project confirmed that some road operators are waiting for evaluation of existing solutions
and communication units installed in a fleet of vehicles. Extensive field tests were conducted under operational conditions in Bologna
Communication systems benefit increasingly from the multi-channel wireless connectivity offered by mobile telecommunications, low cost satellite technology, dedicated short range communication (DSRC) and mobile wireless local area networks (WLAN.
Much can be accomplished using mobile communications alone, without incurring the cost of extensive infrastructural investment and complex in-car equipment,
but this has some limitations. For example, issuing a black ice warning to all vehicles approaching a particular stretch of road is helpful,
High investment in fixed equipment for this purpose is justifiable in urban areas, where most congestion occurs,
will permit content delivery to vehicles and twoway communications via onboard units interoperable with Galileo and UMTS systems.
Under the SAFETRIP project, low cost receivers installed in vehicles will provide a range of personalised services,
What will be novel in the next generation of cooperative systems is that they will allow two-way communication over an open platform,
permitting many different services and applications to be added with ease by any vendor. Whereas existing wireless communications technologies use different systems to tackle specific requirements, the new cooperative systems will provide a single, universal solution to many problems.
will greatly increase the quality and reliability of personalised information available to drivers about their immediate environment and impending situations.
while‘always-on'communication would allow safer interaction with home and office, as well as access to information and entertainment content delivered via the Internet.
5 CITYMOBIL Towards advanced road transport for the urban environment. The CITYMOBIL project builds on the results of recent European
Special priority could be given to classes of vehicles involved in emergency or public transport services or even to goods vehicles, where appropriate.
In conventional petrol-or diesel-powered vehicles, electronics improves fuel economy by managing the fuel injection,
a form of demand-responsive ATS that was promoted strongly during the 1960s and‘70s, but foundered due to the lack of maturity of the technologies at that time.
'which can run on demand on existing urban infrastructures that also accommodate pedestrians, cyclists and even a limited numbers of cars.
However, an early application could be the overnight redistribution of car hire fleets e g. between city centres and airports or peripheral parking sites ready for pick-up by customers the following day.
Publishing the content on a standardised platform will bring closer the vision of end-to-end travel services extending from pre-trip preparation to on-trip support and post-trip evaluation.
based on data provided via RTTI services. For passenger transport, the envisaged systems embrace all types of mobility available to users buses, taxis, train, metro, walking, cycling, etc.
With increasing demand, especially in urban areas, it becomes more and more crucial to have ready access to accurate realtime data for pre-trip planning and on-the spot response to changing needs or conditions.
Integrated travel planners could even extend to the provision of information about demand-responsive transport (DRT
so that DRT could be fully coordinated with the fixed line services which would be of great value to people with reduced mobility.
CONDUITS is developing a number of tools to assist local authorities in making informed investment decisions.
'equipped with sensors to make them self-aware, context-aware and connected through global telecommunication networks that support a wide range of information services for transport operators, industrial users and public authorities.
reducing the impact of freight distribution on the city environment.''One more approach to reducing the number of circulating vehicles,
especially applicable in crowded urban environments, is the introduction of multipurpose vehicles that can be adapted for different functions according to demand at any given time.
Building on inputs from several earlier EU-funded projects, HEAVYROUTE derived a prototype satellite-based mapping system for pre-trip route planning that takes account of specific truck characteristics and the identification
/end 01/09/2006 30/06/2009 Website http://heavyroute. fehrl. org Damage limitation The high weight of long range trucks poses some threats to the surrounding environment,
China, India, Russia and South-Africa by establishing a collaboration network that brings together key stakeholders in the fields of ITS, urban mobility and road infrastructures development.
'This is why we are opening our research funding to emerging economies. Supporting interesting and innovative research projects in the field of transport is a great way to start.
and will have positive knock-on effects that will benefit the world economy.''New instruments Three such projects have been launched under FP7, taking advantage of the SICA (Specific International Cooperation Actions) mechanism,
'STADIUM will provide a particularly high-profile showcase for ITS as applied to the control of traffic and public transport during major events that place unusually heavy demands on the host cities'infrastructures.
Cities face ever increasing demands on their transportation systems, especially in developing regions with growing car ownership and rapid urban migration.
Even more than heavy infrastructure investment, strategic mobility management is becoming the most important tool for meeting this demand.
and management to support a variety of services. The project will integrate the open platform with local components
and road charging to manage the level of demand. Incentives and sanctions will favour low-impact collective and individual modes of passenger transport,
loading, parking and the associated logistics services. On the positive side, ITS will enable connected vehicle-infrastructure communication systems to deliver real-time
The evolution of mobile communication networks to 4g and beyond will deliver continuous connectivity to vehicles and travellers, giving access to on-line services via mobile Internet links.
Multimodal traffic and travel information services will grow in quality and quantity with mobile handsets becoming increasingly powerful personal mobility terminals.
construction of an e-marketplace in traveller services (predictive traffic management, realtime multimodal traveller information, demand
creation of seamless and ubiquitous connected services (simple, upgradable and scalable) via low-cost universal devices;
development of demand-driven, easy-to-use and affordable services for all users, learning from the success of portable navigation systems and Web 2. 0 social networks;
and improve user acceptance and response to the potentially complex offerings of new mobility services,
combining multimodal traveller information with options such as demand-responsive transport and car sharing or pooling;
and China CCTV Closed circuit television DG Directorate-General DRT Demand-responsive transport DSRC Dedicated short range communication EGCI European Green Cars
GSM Global system for mobile communications HMI Human-machine interface I2v Infrastructure to vehicle ICPC International cooperation partner countries ICT Information and communication technologies ITS Intelligent transport
and goods in response to increase in traffic demand, resulting from higher levels of motorisation, urbanisation, population growth and demographic change.
investment in the future National Research and development and Innovation Strategy (2013-2020) Publisher: investment in the future National Research and development and Innovation Strategy (2013-2020) content 3 content preface...
5 1 overview of the situation...8 1. 1. The international environment of the government RDI strategy...
10 1. 2. National overview...12 1. 3. Framework conditions...17 2 identification of the problem and strategic alternatives...
Review of the implementation of the mid-term strategy on science-,technology-and innovation policy adopted in 2007.89 investment in the future 5 preface everyday conversation anything that is new,
The true meaning of enterprise is the development of new products, the introduction of new solutions and the creation of new markets this is key to the growth of business and also that of the national economy.
This is why the research & development& innovation strategy, adopted after extensive consultation, focuses on enterprise.
While the centrality of enterprise to innovation may seem self-evident, the answer to how innovation should be supported by government is far more complex.
Some would question whether innovation should be supported by the government at all, and would advise that healthy competition
and a good education system are enough, and that enterprises themselves would take care of the rest.
Most people, however, believe that government can and should do more to support research & development & innovation,
One paradox is that the contributions of both small enterprises and large corporations to research and innovation are essential within almost all sectors of the economy.
In practice, it is possible to compile a long list of those inventions and developments which have been created by small enterprises or individual inventors,
but the name of a specific product is more likely to be associated with a large company.
As such, the really great and radical technological breakthroughs can almost without exception be linked to small enterprises.
& innovation is an investment in the future of enterprise and in the country as a whole. The business sector is well aware that behind every advantage in the market place,
which the competition does not have. In fact, only those enterprises which invest now in knowledge creation
and innovation will succeed in the longer term. In a similar way nations will thrive and prosper only if there is the ongoing flow of new knowledge into the economy.
Effectively, there are two main approaches to fostering economic growth and enhancing prosperity: increasing resources such as capital and labour;
and using resources in more efficient ways, for example through technological development. Experience and history have shown us that it is the second approach, that of technological development and at times radical technological breakthroughs,
which contribute to fostering economic growth in more significant and permanent ways than simply increasing resources.
Investment in research & development, and particularly in basic research, has the greatest economic impact when the outcomes and benefits reach consumers as market innovations.
In the Hungarian language, the concept of innovation is used often quite loosely: in preface Prof.
Dr. Zoltán Cséfalvay Minister of state for Parliamentary and Strategic Affairs Ministry for National Economy essential, especially when it comes to transforming those inventions
In terms of the research & development & innovation strategy, it must provide benefits to the whole business sector, meaning small enterprises, medium-sized businesses and large companies.
A second paradox for government is need the to support new enterprises enterprises which do not yet exist and
which are the most likely to bring about radical innovation, at the same time as ensuring the strength of the incremental and systematic research programmes of large companies looking to improve their own market position.
also important are the system of tax benefits, the rules on competition law, the institutional environment of innovation, the forms of higher education,
If the government can nurture such an environment or ecosystem, using the technical jargon for public institutions
and enterprises engaged in research & development, as well as innovative enterprises, this will in turn contribute to providing the opportunities necessary for economic development and growth.
Therefore the research & development & innovation strategy is built upon three components: the production of knowledge, the use of knowledge,
On the one hand, competition is already globalised in the field of knowledge production, on the other hand, the resources are limited
All stakeholders are needed in the production and and commercialisation of knowledge, including Hungarian small and mediumsized enterprises,
as well as foreign-owned small and large companies which are established already in Hungary or will be in the future.
which new knowledge will be embraced by enterprise, and ultimately will reach consumers in the form of innovation.
and those enterprises and workplaces are diminished or even cease to exist. Policy-makers often forget about this duality when developing innovation strategies,
They would like to have innovative enterprises and new jobs while also retaining the old ones.
Dr. Zoltán Cséfalvay Minister of state for Parliamentary and Strategic Affairs Ministry for National Economy government to bet on the future,
and providing innovation services. Businesses know exactly which research & development-intensive sectors they can succeed in,
In this regard, the task of government is creating the necessary favourable environment rather than contributing to sectoral investments.
and enterprises where research & development is especially strong and where technological breakthroughs have taken place. And yet, the overall competitiveness of a country and its ability to catch up with the best performing economies is often significantly more dependent on the widespread distribution of existing technologies.
The spread of information technologies may be the best example of this: the development of these technologies has been limited to only a few small regions in the world,
and spread information technologies have also been able to achieve rapid economic growth. Consequently, the research & development & innovation strategy does
overview of 1the situation 1. 1. The international environment of the government RDI strategy The competitiveness of the European union in the field of research and development and innovation (RDI) has been deteriorating for a long time at the global level.
in spite of the world economic crisis, most of the developed countries in the European union, as well as the EU itself, are endeavouring to increase ther&d support2.
there is only 4 examples that the fall in R&d expenditure was pronounced even more than the economic downturn. 3 Nevertheless,
from the demand-side programmes to the uniform patent and standardization package, from establishing a Union-level institutional system for venture capital to supporting the Joint Programming Initiatives. 10 The size of the research and development sector and its main
internationalized economic activities so the impacts on the national innovation systems and global innovation systems are constantly changing.
During the last decade competition in the world economy has become more fierce, and not just between economic blocks and countries,
In this case it is a competitive disadvantage that access to knowledge is limited territorially more than in the economies of the United states or Asia.
if Hungarian governments prioritise investment into research and development and innovation in the future, recognising that it is profitable in the long term,
and Japan companies fund the majority of investments related to research and development and innovation because it is in their fundamental interest
The structured adaptation in higher education R&d has not been realized as investments during the previous period have at most only been able to conserve fragmented R&d capacities and capabilities.
However, 12 1 overview of the situation 4 The analyses by using elaborate methods always verify that R&d makes a much higher return than for example investments into machinery (See:
At the same time the planned decrease in the volume of university courses in economic-,legal-and social sciences may influence the innovation absorption capacity of the economy.
The R&d expenditures of large companies are proportionately much higher than those of small and medium sized enterprises (see Figures 7 and 8)
. if the whole European union is taken as the benchmark, then these results are more modest in proportion to the population
2000-2012, based on the distribution of resources (billion HUF) Figure 4 050 100 150 200 250 300 350 400 Budget Enterprises Foreign
Meanwhile, the research and development and innovation performance of most Hungarian enterprises lags far behind that of the enterprises in the more developed EU member states.
Foreign direct investment which is integrated with the local economy and based on R&d is also relatively scarce.
direct investment. Certainly those prestigious international large enterprises are present in Hungary whose Hungarian R&d centres play an important role in making strategic decisions of the parent companies.
The success rates of the 7th Framework Programme and funding per capita July 2013 (€) Figure 6 y=0, 0003x+0, 1755 R2=0, 34546 Source:
National Innovation Office, CORDA database R&d expenditure per company in Hungary between 2001 and 2011, by size classes (large enterprises and the average of all enterprises, HUF million
KSH (Hungarian Central Statistical Office) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 Large enterprises Total
100 200 300 400 500 600 700 800 900 15 overview of the situation 1 point is the co-operation of small and medium-sized enterprises
%and knowledge-intensive services exports (12%)according to additional data from the Innovation Scoreboard. Indicators in the fields of finance
and support of innovation (especially due to the 32%decrease in venture capital) and of enterprises introducing innovation show a deteriorating situation.
By contrast, the international linkages, primarily for research purposes, of publicly funded research organizations are relatively strong,
There are also opportunities for environmental It is a positive trend that Budapest and its outskirts can already be considered a knowledge-producing region on a European scale from a regional perspective (Borsi and Viszt, 2010);
The elaboration of the reading related to the regional specializations and the so-called smart specialization strategies11 is planned by the government in consultation with local stakeholders during 2013.
the innovation performance of Hungary differs in terms of innovation co-operations, particularly linkages between research organizations and enterprises.
KSH (Hungarian Central Statistical Office) R&d expenditure per company in Hungary between 2001 and 2011, by size classes (micro, small and medium enterprises, HUF million) Figure
20 Micro enterprises Small enterprises Medium-sized enterprises Source: KSH (Hungarian Central Statistical Office) R&d expenditure of enterprises in Hungary, 2000-2010, by main sectors, HUF billion Figure 9 140 120 100
80 60 40 200 Pharmaceutical industry Electronics (radio, TV and telecommunication equipment Motor vehicles Machinery product and equipment Computer services Other business service 2000 2001 2002
2003 2004 2005 2006 2007 2008 2009 2010 knowledge-and technology-intensive start-ups (e g. incubation)
Nevertheless, according to the estimates of the European commission (based on data of the European Venture capital Association) a significant change has occurred in the field of venture capital investments due to JEREMIE funds:
in 2011, Hungary was ranked 5th among EU member states regarding the value of invested venture capital proportional to GDP.
There is relatively little market-driven research and development among mediumsized Hungarian enterprises, and the demand for R&d is also small.
An organisational base through which the innovation development strategy is implemented consistently is missing among the few innovative small enterprises,
where usually the required corporate culture and the financial and human preparedness are also not present.
One problem of the current arrangement is that it seldom reaches the knowledge-intensive but less profitable young and innovative micro and small enterprises.
This is partly why the efficiency of R&d fund-16 1 overview of the situation 12 Török (2006) also draws attention to the fact that Hungarian RDI tries to play a strategic role in the national economy without a strategy.
Data of the Innovation Union Scoreboard, 2011 Hungary Figure 10 Medium and high-tech product exports Non-EU doctorate students Venture capital as a per cent of GDP 2pct patent applications
while the rural areas often struggle to make reasonable use of R&d resources. 1. 3. Framework conditions The state cannot take over the primary role of enterprise in the field of research and development
and innovation but it is an important task of the government in power to establish such framework conditions that encourage enterprise to invest in research and development and innovation.
The most important components of framework conditions encouraging enterprises are the following: The international economic processes and the macroeconomic environment:
this includes foreign working capital financing, advances in the structure of the economy, participation in global processes even amid economic-financial turbulence.
Stability of the institutional system and coordination between related policies: the institutional system of RDI management has been changed significantly with each government since the end of Communism.
The predictable and supportive functioning of the legal environment: the legal system is an essential prerequisite for innovation,
and economic growth based on RDI cannot be expected without it. The stability of public funding of R&d:
Satisfaction of conditions for strong competition: an important framework condition can be established by applying competition law
and by improving the business environment (e g. by further reducing administrative burden, particularly in case of start-ups and innovative enterprises) Improvement of entrepreneurial skills and spirit:
essential for the success of the strategy are displaying the technological entrepreneur as a positive role model
direction to advance the development of a knowledge-driven economy. Greece (2007) Chile (2008) Mexico (2007) 0, 50%0, 45%0, 40%0, 35%0, 30%0, 25%0, 20
) Spain (2007) Denmark Japan (2009) The direct and indirect governmental support of the R&d activities of enterprises,
opportunities and threats of the national innovation system can be summarized as follows (see Table 1). Strengths Weaknesses The market
Generally weak demand towards the services of the Hungarian research organizations (in addition: the research readiness of the university and academic sector and the research needs of the industry are not the same,
Lack of capital by the SMES, weak innovation and growth ambitions and abilities in global comparison.
Demand for IPR protection is weak. Sometimes the lack of entrepreneurial spirit and failure tolerance.
and practice of communication between SMES and research organizations (e g. purchase of service, use of infrastructure etc.)
The level of seed capital is low and the technological incubation processes are inadequate. The processes of technology transfer are not efficient enough
The public innovation management services are insufficient. The evaluation culture taking aspects of RDI into account is underdeveloped.
The uncertainties in education environment and the decreasing prestige of the teaching career hinder talent management and new supply of researchers.
The regulatory-supportive environment and institutional structure defining RDI are not efficient enough the policy objective cannot be realized by the institutional system.
the low quality of venture capital (where seed capital is only component), the innovation weaknesses of the SME sector, the low patent activity and the shortcomings in the co-operation networks within the innovation system.
The development of (company law, competition law, consumer protection, accounting rules, intellectual property protection etc.
legislation relevant to the economic and innovation environment is consistent with the national legislation of developed countries. 20 2 Identification of the problem
and strategic alternatives 2 Opportunities Threats Based on the SWOT analysis-building on the strengths, using the opportunities,
The strengthening of RDI-friendly economic and regulatory environment. The strengthening of university knowledge centres
The strengthening of new R&d-intensive industries and the foreign market penetration of Hungarian medium-sized and large enterprises.
The strengthening of the background industry of suppliers, take off of R&d demand. The further development of the R&d tax benefit system (introduction of normative R&d tax benefits.
Support to the co-operation between enterprises and development institutions or institutions possessing the required infrastructure.
The deepening of the global financial and economic crisis. The lack of needs and interests of economy
and society towards R&d will still prevail. Brain drain, which is weakening public research. There will not be enough professionals with appropriate qualification
interregional level and between different types of enterprises will still prevail. The SME sector will remain weak
and cannot create serious demand for RDI or build capacities. The synergies of international RDI co-operations cannot be utilized.
No (or not enough) FDI based on RDI will be integrated adequately into the Hungarian economy. There will not be strengthened (enough) enterprises on the basis of national RDI.
The resources at the service of the desired RDI developments can be overwritten by short-term budgetary aspects.
small and medium-sized enterprises can only reduce their disadvantages in innovation slowly. The potential of public sector innovation has been absent from government policy.
the knowledge bases (all the knowledge bases of the universities and the Academy, the private sector and the nonprofit and community sectors) form the basis of the national innovation system, social and economic actors in the knowledge economy,
particularly private enterprise and the public sector, are interested primarily in the processes of knowledge utilization and creation of added value, in terms of competitiveness,
RDI processes The incentives of technology transfer are not efficient Inefficient adaptive innovations (e g. spread of ICT is slow) There is too few (R&d-based) high-tech small enterprises The R&d tax environment is uncertain The innovation potential of the public sector
is unused Insufficient incubation Slowly strengthening venture capital Missing governmental innovation management services Lack of RDI managers of international level Weak sector of medium-sized enterprises
and sufficiently integrated into the economy Few market-driven development, the demand is tight: the big players compete with each other The shortcomings in KNOWLEDGE FLOW technology transfer
and other transfer mechanisms Low level of productivity, few well-paying jobs{..{{The barriers to KNOWLEDGE UTILIZATION utilizing (primarily business sectors University-Academy, governmental,
governmental) institutional structure and regulatory environment supporting RDI is not efficient (including the system of funding programmes
and the weaknesses of evidence-based decision-making processes) Gloomy macroeconomic prospects of the world economy and Hungary (
slowed down foreign direct investment inflows, worsening attitude towards competitiveness/business environment etc. No balanced, sustainable growth and development{..
investment in the future. It is relevant for the future whether Hungary regards research and development and innovation as a pulling force and a resource to be made more robust-or merely as an area on
Thus the strategy envisages the primary objectives of strengthening the investments in research and development and innovation in Hungary
In addition, the return on R&d investments many times exceeds the return on other investment forms (see Table 2, Enterplan, 2005.
Nevertheless, the social return on R&d activities-i e. the impact of increasing R&d investments on the output of other companies-is significantly higher than the business return (Griffith 2000:
the microeconomic return on investments can be demonstrated better. It is recommended to build the RDI strategy around three priority axes
and business resources spent on the RDI sector in Hungary are a worthwhile investment in the future:
and 3. innovative enterprises intensively utilizing the results of modern science and technology, and in the public sector. These three priority axes also mean that there is a need for a methodical system building in the field of RDI in Hungary.
investment on R&d and invigorating the demand for research and development, introduction of innovations improving productivity, establishment of an efficient support and funding system, completion of the start-up ecosystem.
The RDI strategy provides the national frameworks and the research and development and innovation objectives of the economy and society.
and concentrating resources is not successful There are good solutions introduced in an environment that lacks resources
and policy tries to reconcile many stakeholders at the same time. The result is: stagnating international competitiveness. The trends since the change of the regime prevail,
the country does not take the importance of RDI investments seriously, social and economic slowdown continues Increasing
and concentrating resources as well as the investment in RDI is successful Innovation becomes the most important long-term driver of sustainable development (growth
however, the whole of the economy and the society does not gain from the yields of innovation 25 Identification of the problem
Continuous periodical and overall evaluation-and if needed, amendment-of the strategy is the other important instru-Setting of the planning of smart specialization Figure 14 R&d as a highly profitable investment Country
at least 30%Griffith, 2000 Canada the rate of return on R&d investments exceeds 2. 5-4 times the return on physical investments Hall, Mairesse,
Mohnen 2009 The 17 most developed OECD countries 0. 1%increase in BERD can cause a 0. 3 0. 4%increase in the output of the national economy Bassanini Scarpetta
-3%.Doubling of the R&d expenditure can increase the demand for labour of a given company by 15-20%in sectors with high R&d intensity;
strategic plan Regional S3 strategic plan Regional S3 strategic plan Regional S3 strategic plan National S3 Startegy 2020 Investment in the future National
research and development organisations, enterprises, government institutions, organisations funding innovation developments, universities, high schools and vocational training establishments, research hospitals, libraries, historical archives, museums, public education
commercial (marketing) and other services required for the successful innovation processes. The key participants among them which can bring about a significant follow-through effect:
R&d-intensive Hungarian medium-sized enterprises expanding in international markets15, small enterprises building on RDI and capable of fast growth (by the technical jargon and in David Birch's phrase:
the gazelles 16), innovative supplier SMES, innovative start-ups, early-phase and venture capital investors integrated into the international markets,
Finally the sustainable knowledge economy means such a knowledge-driven organizational system of economic processes that is sustainable from an environmental
The expansion of the‘green'economy plays an essential role regarding environmental sustainability longside economic growth.
and social capital (see KRPIH (2008)), while economic sustainability refers primarily to the requirement of maintaining macroeconomic balance.
while establishing coherence with their public services (e g. provision of services regarding human resources shall be uninterrupted). By 2020 the key participants of the national innovation system will be significantly reinforced through the active support of RDI policy
and thus contribute significantly to enhancing the competitiveness of the Hungarian economy together with transforming it to a sustainable knowledge economy. 15 The policy considers it important that the companies with a Hungarian ownership background should get stronger
but these efforts should be implemented in line with the international competition rules at the same time. 16 David Birch,
+30 R&d-intensive macro-regional medium-sized enterprises will produce and provide services+300 RDI
and growth-oriented small enterprises (so-called gazelles) will find their place in the global market+1000 innovative start-ups will get the funding required for starting their activities many innovative supplier companies with national decision-making
centres will provide services to the global large companies that have already been established or will be established in Hungary Hungary will increase its gross domestic expenditure on R&d to 1. 8%by 2020,
and to 3%by 2030.30 3 vision and objectives 3. 3. Specific goals in relation to the knowledge bases The RDI strategy and the strategy of science policy are interlinked with each other in many respects;
and the knowledge-driven economy and society can not be sustained without ensuring the framework conditions of basic research21.
the RDI strategy separately supports the knowledge bases connecting to national enterprises through professional management structures.
and also strengthen the position of national enterprises in international competition. For the purpose of enabling research centres to compete internationally,
The demand for new knowledge among the foreign and national business sector can be satisfied in a direct way by developing these knowledge bases;
Based on the strategy, the currently known future technologies23, e g. the so-called converging technologies such as info-communication, biotechnology, cognitive technologies, nanotechnologies and mathematics, play a privileged role in developing knowledge bases.
Increasing and concentrating resources as well as the investment in RDI is successful A considerable number of Hungarian research
the strengthening and further development of doctoral schools by using the opportunities of the EIT knowledge triangle. 5) The elaboration
and processes. 9) The setup of a linkage between enterprises and researchers at the academic and university sectors (partly also a task for strengthening the knowledge flow).
2) The support for establishing enterprises and spin-off in research bases. 3) The enhancement of synergy between the research and business sectors. 4) The inclusion of research, education and business into joint projects;
to strengthen the integrated innovation services, all of which can together improve the efficiency of both the private and community-public sectors (see Figure 16).
It is privileged the task of the state to promote the favourable ratio of competition and co-operation (competition+co-operation=co-opetition) in the field of RDI.
Efficient central public innovation services B2. Introduction of decentralized innovation services B3. Strong traditional innovation co-operations B4.
Support for open, pre-competitive and social innovation co-operations B5. Efficient participation in EU and international calls for proposals and initiatives Alternatives to the strengthening of knowledge flow Figure 16 The institutional conditions for enhancing knowledge flow
and concentration of resources and investment into RDI are successful Intensifying intersectoral knowledge flow (business-research unit linkages)
Nevertheless, the facilities can be important spatial junctions for encouraging linkages between enterprises and research organisations that are recognized
and related services when the new developments can potentially serve community (public) needs without the contracting authority committing itself to actually procure the product
way in the 2014-2020 programming period. 7) The better inclusion of the Hungarian processes of the Enterprise Europe Network into the strategy.
Central public innovation services Traditional innovation co-operations 1) The support for establishing and running R&d co-operations functioning in a more efficient way than now (e g. technological clusters.
3) The strengthening of innovation services with a mentoring system. 4) The transfer of the public sector's demand for RDI to the knowledge bases (pillar A) 5) The securing of the quality of RDI services (e g. accreditation, training.
Decentralized innovation services Support for open, pre-competitive and social innovation co-operations 1) The involvement of the users, social participants into the innovation development processes (open innovation.
2) The strengthening of the platform-like business and horizontal cooperation. 3) The exploration of and support for opportunities of social innovation. 4) Pre-competitive instruments strengthening the demand-side (e g. pre-commercial procurement (PCP)
which favours in a limited scope the innovative SMES by public tenders) 26.5) The provision of incentives for spreading new, web-based social innovation solutions (crowdfunding and crowdsourcing).
protection. 4) Services that can be provided quickly and are available in quantities (e g. modelled on the national example of the innovation voucher prevalent at an international level,
and objectives 3. 5. Specific goals in relation to knowledge utilization The utilization of spontaneously created new knowledge with prospects of profit is expected primarily of the knowledge-intensive companies engaged in relevant RDI activities
These enterprises: increase the added value of the economy more intensively than the average, resulting in an increasing number of well-paid workplaces.
-provide potential to enable innovative medium-sized enterprises to get stronger, and-enhance the number of ground-breaking, original innovations appearing.
Thus the strategy envisages that the number and economic activity of R&d and growth-oriented small enterprises (gazelles) will significantly grow by providing particular and dynamic incentives to them.
This public investment also means that workplaces generating a higher income can appear in greater number after a few years
and the profit of these companies will be higher. Thus the investment pays off and the added value of this sector grows significantly faster than average in the national economy.
A further goal of the strategy is that innovative young companies shall not lose their determination during the early
critical phase of their life cycles. Therefore an innovation ecosystem which is favourable for them should be created within the framework of the strategy.
The specific objectives related to small enterprises in the field of knowledge utilization: C1. The creation of a start-up ecosystem C2.
and number of well-paying jobs The growth and concentration of resources and investment into RDI are increased successful Significantly number of innovative SMES The Hungarian knowledge is integrated better into the global value chains by the foreign large
enterprises. The dual nature of economy weakens and the added value and the number of wellpaying jobs grow.
The innovation capabilities of the public sector significantly increase Although the conditions of financial resources for knowledge bases and some sectors utilizing knowledge (enterprises etc.)
are sound, there is no breakthrough due to the lack of utilization abilities 27 In addition to the direct impacts improving competitiveness,
the (follower or adaptive) developments and innovations of mediumsized enterprises are required also for enhancing the competitiveness of the economy.
On the one hand the targeted support of these enterprises has a competitiveness-enhancing effect, on the other hand the support enables them to appear later in greater number as buyers and/or users of new knowledge,
when adaptation is not enough to face the competition. The continuously growing knowledge centres and other modernized R&d capacities in the framework of the strategy will be in time able to satisfy this need.
A further goal is that more and more national mediumsized enterprises shall be able to participate in governmental and local council public procurements with an innovative content,
The professional content of the instruments supporting Table 5 the knowledge utilization of small enterprises The creation of a start-up ecosystem Awareness raising, law enforcement and relaxation of intellectual property protection
and operating a technological incubation system advancing young enterprises. 2) Provision of start-ups with complex services (e g. mentoring,
voucher-like support) that improve their survival chances in the early stage of the life cycle. 3) Support for preparing young enterprises for market-based financing 4) The strengthening of the role of seed capital
and venture capital funds and securing of stable, market-compatible financial and legal regulatory frameworks, elements of taxes and contributions. 5) Provision of training and accreditation services for the purpose of making enough suitably qualified project evaluators and managers and coaches available. 6) Support for investors
for the purpose of finding mature RDI projects. 7) The involvement of foreign start-ups and early stage investors for the purpose of transferring knowledge
and social network. 8) The funding programmes shall be suitable for supporting early stage innovation. 9) The modernization of the Act on venture capital and clarification of the incentive mechanisms. 36 3 vision and objectives The specific objectives related to
medium-sized enterprises: In order to reduce the duality of the national innovation system, the priority objective is strengthening the cooperation between business research centres with a multinational background, national higher education establishment,
The research centres of international companies bring advanced knowledge to the national economy and also have an incentive effect on the national knowledge base.
and innovation environment and ensuring a good supply of high quality professionals and researchers. A further goal is to create a culture of new,
Creative researchers and engineers with an entrepreneurial spirit working in multinational companies will be able to start their own R&d-based enterprises,
Demand creation for R&d of medium-sized enterprises C4. Efficient support for foreign market entry C5.
Deliberate public demand for innovation The professional content of the instruments supporting the knowledge utilization of medium-sized enterprises Table 6 Demand creation for R&d Efficient support for foreign market
-border RDI co-operations. 2) The operation of offices providing services in support of innovation activities of Hungarian companies on focused markets and target areas. 3) The support for knowledge
training and other services. 6) The reduction of the administrative burden hindering the growth of innovative companies.
Deliberate public demand for innovation 1) The study of public procurement tenders from a viewpoint of suitability to the RDI policy goals
Specific objectives related to large enterprises: The role of the state is increasingly decisive in modern competitive economies29.
Since public services are labour-intensive and their productivity growth slower than that of processing industries30, the focused innovative development of the public sector results in economic growth and welfare effects.
Increasingly innovative and diversifying SMES The professional content of instruments enhancing the national value creation in the sector of large enterprises Table 7 Large-company workplaces with intensive local knowledge connections Innovative
The stable position in the international competition is guaranteed by the high quality of human resources. 2) This requires such a high-quality training
marketing and service innovation, the information and communication technology (ICT) solutions of which significantly improve the productivity and quality of both the private and public sectors. The objective with regard to adaptive innovation processes:
The enhancement of the spread of adaptive innovation solutions primarily based on information and communication technologies P1.
activities in the health care, environment, energy, education, transport/logistics sectors 1) Elaboration of reading and strategic proposals on the health care, environmental, energy and transport-logistics innovation systems,
and public sector. 4. Public procurement of innovative goods and services based on such performance and functions that require development.
H5 Compliance with global social challenges H6 Sound and innovation-friendly economic and regulatory environment The satisfaction and implementation of the horizontal priorities are detailed in Annex 6. C9.
considering that the R&d tax benefit encouraging linkages between enterprises and research organisations shall be financed from national sources-taking into account the limits of the budget.
success in the international and EU RDI programmes, innovation management services covering the whole innovation chain. the number of qualified innovation services based on the needs of priority business target groups
The main objectives of priority axis Hungarian enterprises intensively utilizing modern science and technology results:+
+30 R&d-intensive macro-regional multinational medium-sized enterprises will produce and provide services, +300 high-tech gazelle companies will find their place in global markets,+1,
000 innovative start-ups will get the funding required for starting their activities until 2020. Other mainly indirect objectives in relation to the priority axis to be monitored:
growth in productivity, growth in rate of exporting SMES (especially the RDIINTENSIVE medium-sized enterprises), growth in rate of innovative companies among active companies with more than 10 employees (the ratio to be increased to 30
thus contributing to the general improvement of society and economy. But an overall and really fundamental improvement in performance can only take place
In the case of market failure, the government intervenes where investments into human capital, infrastructure or capital bringing maximum benefits cannot be realized through market forces.
and takes into account not only the market failures of the mainstream economics 41 vision and objectives 3 and priorities of the RDI strategy by the partner networks of regional stakeholders and local professionals.
coordinated programme based on regions and RDI specialization organizing many partners and innovation stakeholders. The basis of regional policy is formed by the industry and service sectors
which are competitive at an international level, embedded into the regional economic system and the diversified spatial structure.
and in the newly strengthened areas of Hungary are clearly positive (due to the effects of economy of scale) in relation to the process dynamics of growth based on R&d,
the specific dynamics of the key sectors of the national innovation system (health sector, food and energy economies) as well as the national integrated level itself. such methods of task definition which ensure not only the allocation
while the funding preferences of the innovation enterprise programme should appropriately be in line with the programme conditions defined in every region and industry.
and segmented introduction and implementation of such innovation services that provide agency services for enhancing the growth and strengthening the innovation capabilities of the priority,
All of these tasks lay the foundation for the funding programmes (e g. technological incubator programme) in support of the dynamic growth of SMES with fast growth potential and technology-intensive young companies.
The completion of the technological incubator programme ensures the environmental conditions-the so-called ecosystem-required for the permanent growth of young innovative micro-and small enterprises (gazelles.
including the orientation of venture capital investments and special contributions and tax benefits. 34 Particular attention shall be paid to the community-led local developments (CLLD) on the microlevels of systemic building.
and encouraging the co-operation between the stakeholders of the settlement and the members of the local community.
Efficient networked economy Globally competitive research centres+30 larger labs in the world elite A3.
Thoughtful government demand for innovation Integrating large foreignowned companies based on R&d+30 global MNC centre of R&d C6.
More and more innovative SMES with diversifying markets Globally competitive knowledge bases Intensive flows of knowledge Efficient knowledge utilisation Integrated innovation services B1.
Efficient central innovation services provided by the state B2. Introduction of decentralised innovation services, aligned with local needs B5.
Efficient participation in EU and international grants and initiatives Medium-sized firms gaining momentum based on R&d and technology+30 R&d intensive macroregional medium-sized MNC C3.
Creating the demand of medium-sized firms for R&d C4. Efficient assistance to entering global markets Capitalising on the innovation potential of the public sector P1.
Thoughtful government demand for innovation System of objectives: invigorating the economy on the basis of RDI Figure 18 C8.
Fast diffusion of adaptive innovations based mostly on ICT C9. Europe's most competitive R&d tax incentives H1.
Stable and innovation-friendly business and administrative environment getting rid of the red tape, evidence-based RDI policy governance, evaluation and learning strategic RDI management of the state 2020:
but the effective use of the instruments creates opportunities for financially efficient policy interventions: direct instruments mean the direct financial support for RDI;
the use of demand-side instruments (e g. innovative public procurement, pre-commercial public procurement) in Hungary over the time horizon of the strategy does not primarily mean that additional resources shall be ensured for the purpose of purchasing RDI results
but to the completion of the national innovation system through encouraging intersectoral relationships and networking or developing policy management, official acts or services.
and instruments of the tax incentive system giving benefits to RDI co-operation. 4. 3. Instruments supporting innovative business target groups Innovative small and medium-sized enterprises
which make a return on investment at the level of the national economy, and are perfectly in line with the given phase of the life cycle (see Figure 21).
The instruments targeting large enterprises will be elaborated on the basis of the value chain concept. In this case the central element of the instruments is the support of in-46 4 The main instruments of implementing the strategy Grouping of the RDI policy instruments Figure 19 Indirect instruments supporting RDI
Fiscal instruments (e g. taxes) Systematic interventions Other regulation (e g. qualification) Capital market instruments Systematic interventions Venture capital (e g. seed capital) Guarantee (e g. for market development) Direct instruments supporting RDI Supply-side instruments
(e g. funding programmes) Systematic interventions Demand-side instruments (e g. procurements) Source: Adaptation based on Raising EU R&d intensity, 2013 edition 47 The main instruments of implementing the strategy 4 The support for public sector innovation
and the strengthening of deliberate public demand for innovation shall not only result in direct, competitiveness-enhancing effects of strengthened RDI capacities and activities,
in order to tackle the problem of the dual economy (see Table 11). 4. 4. Instruments supporting the invigoration of public sector innovation The elaboration of separate RDI strategies
and action plans is required in public subsystems providing community services, e g. in the health care, energy, education and transport sectors.
not only provide a development opportunity for the RDI in the health sector but can also fundamentally contribute to the strengthening performance of the Hungary economy by improving the health status of the population
thus improving its work skills and promoting the higher-quality and more cost-efficient operation of the social security system.
Indirect support Indirect support, demand-side intervention Direct support Direct support, capital measure Application oriented R&d Start-up firm Growth stage Maturity stage
tax allowance Smart procurement Mentoring Company life cycle-illustration Venture capital Cooperative research RDI grants for companies IP support Incubation, seed capital PCP
Shareholder options to motivate outstanding innovation performance Voucher scheme Support to ICT-based adaptive innovations 48 4 The main instruments of implementing the strategy 4. 5. Review
SYSTEMATIC INTERVENTIONS Demand-side interventions Supply-side interventions professional content Source of funding Tax incentive Other regulations Venture capital instrument Guarantee
Indirect tax incentives by enterprises qualification, legislative rationalisation---Strengthening of research universities; technology transfer offices; assistance in international calls for proposals;
making spinoff rules more flexible Growth-oriented high-tech small enterprises Research support; innovation voucher; qualified innovation services;
IT calls for proposals; intellectual property protection advices ERDF, KTIA Pre-commercial procurement; innovative procurement Contribution relief in case of employment of researchers;
incubator programme; mentoring; intellectual property protection advices ERDF, KTIA Pre-commercial procurement--Legislative relaxations Seed capital in relation to market entry of a product Central and decentralized innovation services;
Medium-sized enterprises able to innovate and grow R&d calls for proposals for medium-sized enterprises;
qualified innovation services; IT calls for proposals; ERDF, KTIA Innovative procurement Contribution relief in case of employment of researchers;
Tax incentives and tax return; Regulation of share options36 qualification, legislative rationalisation Venture capital export guarantee; preferential loan Support for foreign market entry Hungarian research centres of multinational large companies Targeted calls for proposals;
Training support ERDF, KTIA, EKD--Contribution relief in case of employment of researchers; Tax incentives and tax return qualification legislative rationalisation---Support in line with smart specialization;
distortion of tax benefits in the less-favoured areas Innovative supplier SMES Support for developing workplaces ERDF, KTIA--Contribution relief in case of employment of researchers;
Tax incentives and tax return qualification, legislative rationalisation---Support for cluster activities Implementers of the public sector innovation activities in the health care, environment, energy, education, transport/logistics sectors elaboration
Because RDI is a long-term investment in the future, we can calculate the growth in funding policy instruments with public financing needs, within ongoing budgetary constraints,
and capital-,loan -and guarantee-type financial instruments. Without enhancing public R&d funding, it is not possible to achieve the targeted 1. 8%GERD/GDP ratio commitment of Hungary set out in the framework of the Europe 2020 strategy.
Nevertheless, it is also a fact that significant opportunities lie in the improvement of the efficiency
Primarily the opportunities lying in the more efficient utilization of the existing resources shall be used in the initial 37 The funding of targeted development of human resources (talent management,
Public funding of business R&d and its importance in the national economy Figure 22 00,5 1, 0 1, 5 2, 0 2, 5 3, 0 3
2013 2014 2015 2016 2017 2018 2019 2020 400 000 Enterprises National budget Foreign investors Nonprofit sector The funding trends of R&d
and by the public sector. Under these objectives the R&d performance of enterprise will increase from a level of HUF 210 billion in 2012 to above HUF 330 billion in nominal value by 2020, for
The 2014-2020 EU programming period is a good opportunity to establish an efficient tax-side incentive mechanism.
tax incentives available for every enterprise engaged in R&d activities will be established that are supplemented by the targeted support of beneficiaries
and other policy aspects (in the form of grants) and the capital-and loan-type financial instruments will have pronounced a more role than before.
symbolizing investment in the future as a central, priority indicator. Increasing the GERD/GDP ratio to 1. 8,
and also accept that the current funding structure can be regarded as stable in the long term then the improving R&d performance of the national economy can be ensured by increasing the business funding to around HUF 350 billion (from appr.
o 8%of purchase of innovation services by SMES (including financing also the costs of intellectual property protection) 46, o 7%of the incentives for R&d investments of large companies,
The use of financial instruments for RDI purposes (e g. seed capital and venture capital: in an annual amount of HUF 2-3 billion.
high-level management of independent evaluations related to the advanced management of the instruments intended for implementing the strategy, observation of the science-,technology-and innovation policy and RDI policy competitive environment and observation and evaluation
Based on international practice, this task is supported by an advisory body consisting of high-level independent professionals The governmental RDI strategy management tasks are managed by the ministry responsible for the economy.
and governmental use of information and communication technologies; health-related researches. The appointment of the president of the Hungarian Academy of Science (HAS) as chairman of this high-level body (the Governmental Chief Scientist Forum) would be recommended highly for the purpose of representing the science policy.
Provision of central and decentralized innovation management services, the management of the service system: one pillar of the RDI strategy is to establish standard innovation services aimed at the bottlenecks and taking into account local needs.
The establishment of an innovation service structure has an impact on organisational funding and training.
there is an opportunity in the next EU programming period to transfer a significant share of the funding intended for RDI to tax benefits
and adjusting aspects and the related instruments of special innovative small enterprises. Management and monitoring of the funding programmes:
significant amounts of public procurement can also mean a significant potential demand for research and development and innovation,
the ELI major investment (Extreme Light Infrastructure) in Szeged, the pharmaceutical industry, the IT sector, the automotive industry, environmental RDI, R&d in the agricultural and food sectors, energy and health RDI
and the demands of the 2014-2020 programming period to bring smart specialization into prominence.
In the area of economic policy: the implementation of the RDI strategy assumes a predictable business environment,
tax-side incentives and direct support such that ensuring the implementation framework is established through fiscal policy In the area of science policy:
the RDI strategy encourages the creation of a critical mass of R&d capacities and more intensive co-operation with the business sector in the long term49.
the RDI strategy can be interpreted on the area marked with deep blue Economic policy Science policy monitoring,
while strategic management shall also cover the planning, management, evaluation of the implementation, taking into account changes in the environment.
The driving forces of economic growth: panel data evidence for the OECD countries. OECD Economic Studies No. 33,2001/II. http://www. oecd. org/economy/productivityandlongtermgrowth/18450995. pdf Baumol, William (2005:
Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements. In: Adam B. Jaffe, Joshlerner and Scott Stern (eds..
Innovation Policy and the Economy. MIT Press, Cambridge, MA, pp. 33-56. Baumol, William, Litan Robert and Schramm Carl (2007:
and the Economics of Growth and Prosperity. Yale university Press. Borsi, B. Viszt, E. 2010: A kreatív és kulturális ágazatok (CCI) szerepe és növekedési lehetoségei a Budapest Metropolisz Régió gazdaságában the role and growth opportunities of Creative and Cultural Industries (CCI
) in the economy of the Budapest Metropolis Region scientific report, December 2010 GKI Gazdaságkutató Zrt.
GKI Economic Research Co. Borsi, B. és Lengyel B. 2011: A közszféra innovációinak kontextus-függosége A hazai természettudományos és technológiai oktatás, valamint idegennyelv-oktatás példája The contextual dependence of the innovation in the public sector The Hungarian example of the education
The 2011 EU Industrial R&d Investment Scoreboard. http://iri. jrc. ec. europa. eu/research/docs/2011/SB2011. pdf EC-IPTS (2011b:
How important is business R&d for economic growth and should the government subsidise it? The Institute for Fiscal Studies, 2000 http://www. ifs. org. uk/bns/bn12. pdf Guy, K and C. Nauwelaers (2003), Benchmarking STI Policies in Europe:
Evaluation of public investment in R&d towards a contingency analysis. Ministry of Research, Science and Technology, Wellington, New zealand. http://www. oecd. org/sti/innovationinsciencetechnologyandindustry/1822593. pdf
Investment how to do it? Élet és Irodalom Life and Literature vol. LVII. No. 1.,4 january 2013 Kay, John (2011:
az innovációs rendszerek szinergiáinak térbelisége Measuring the knowledge based organization of the Hungarian economy: the spatiality of the synergies in the innovation systems Közgazdasági Szemle The Economic Review 55 León, L. R.,Simmonds, P. és Roman, L. 2012:
Trends and Challenges In public Sector Innovation in Europe, Technopolis Group, funded by the European commission http://ec. europa. eu/enterprise/policies/innovation/files/psi/psitrend-report en
which the companies take account of the interests of society by having regard to effect of their activities on their business partners, suppliers, employees, shareholders and also the environment.
Direct instruments concrete financial supports or services that are addressed to the applicant or beneficiary (e g. funding programmes,
investment subsidies, consulting). Dual economy: the co-existence of well capitalised, relatively modern, competitive, mainly foreign owned enterprises and Hungarian owned enterprises suffering from low competitiveness and a lack of capital.
More than one-fourth of the GDP, half of the GDP growth, three-quarters of the export is generated by foreign enterprises
while only 15%of all employees are employed by them. The growth potential of national economy providing two-thirds of the employment is weak,
it is not capable of technological development by itself, it has a low degree of human resources.
The connection between the two sectors is weak and incidental the foreign enterprises operate as islands,
they lean on imports instead of Hungarian suppliers. So the follow-through effects of technology transfer and technological developments are not typical at all in the Hungarian circumstances.
The students have an opportunity to develop their theoretical knowledge to practical knowledge during their stay by a company where they can have access to a much more complex knowledge (understanding of technology, creativity, responsibility, team work etc.
An additional aim of the training is to ensure that the graduated engineers have gained meaningful practice in business environment,
which connects the economy, society and culture of every country in the world through real or virtual networks together.
to facilitate the knowledge-based European economy and enhance the competitiveness of the EU and its member states by strengthening their innovation capacities.
and small enterprises that can improve their chances of success. The business incubator (house) means such joint industrial
and provide services at a higher quality for manufacturing advanced products and using modern technologies.
a new production process (renewed production or transport method), a new market (new markets, opening of a new placement opportunity),
We can distinguish between product innovation, process innovation, marketing innovation, organizational innovation and innovative business model.
They intend to implement the average R&d expenditure of the EU industry in their mid-term business plans.
Medium-sized enterprises able to innovate and grow: Those enterprises whose total number of employees is between 50 and 250
and their annual net turnover does exceed not EUR 50 million or their balance sheet does exceed not EUR 43 million.
business culture, qualification of the labour force, education and training institutions, services supporting innovation, technology transfer mechanisms, R&d and ICT infrastructure, mobility of researchers, business incubators
therefore the national and regional governments have to elaborate a so-called smart specialization strategy in co-operation with the enterprises,
It takes into account the different innovation capacities of the regional economies. IUS (Innovation Union Scoreboard:
RDI and growth-oriented small enterprise: The total number of their employees is between 10 and 50
A significant foreign market growth up to an annual 10%is estimated by their 2-3-year business plans.
a bottom-up, self-organized, cooperative, noncompetitive group of enterprises operating in a network along the same value chain which can permanently integrate the fragmented resources of research, development, manufacturing, distribution, service etc. companies.
Primarily the preliminary qualification process initiated voluntarily and optionally by the enterprises and furthermore, the expert contribution in the ex-post tax inspection processes of the National Tax and Customs Administration of Hungary.
Funding paid out before the starting phase of the enterprise in order to carry out research, planning or elaborate a concept.
Venture capital: Private capital provides companies not listed on the stock exchange with share capital. The private capital is provided for developing new products,
introducing new technologies, increasing circulating capital, buying-ins and improving the balance sheet of the company.
Strictly speaking, venture capital is only one subset of private capital investments that are used for starting companies,
developing companies in their early stages or expanding their activities. Consortium: co-operation of the parties (members) based on the division of tasks regulated by a civil-law contract for the purpose of jointly carrying out research and development
and technological innovation activities or jointly implementing a research and development and technological innovation project. Public sector innovation:
which is a significantly novel solution without any profit targets, enhancing competitiveness, increasing well-being or having indirect positive effects.
processes or services or advancing the significant development of already existing products, processes or services.
which is necessary for the industrial research, particularly for generic technology validation, to the exclusion of prototypes. c) experimental development:
business and other relevant knowledge and skills for the purpose of establishing plans and regulations for new, altered or improved products, processes or services.
the sum of all those institutions, enterprises and other organisations and also those resources, rules, conditions and measures in the country that influence the creation, transfer, dissemination and utilization of new knowledge and technology.
Its aim is the competitiveness enhancement and professional and business development of a certain area of the national economy.
and developing the regulatory environment supporting the implementation of the plans. Thus the platforms provide a strategic partnership for elaborating national innovation strategies
an enterprise established for the purpose of commercializing the development results of a university or public (nonprofit) research organisations.
or process have an interest in the spun off enterprise. Start-up: starting knowledge-intensive enterprise which can produce fast growth small with a small investment in capital or Labour policy:
innovation can only be studied and interpreted in a wider social context due to its social-economic embeddedness.
, class, enterprise) and quality of life of people. Technology foresight is very widespread in the developed countries.
ethical and legal consequences of specific technologies during their application and provides information on establishing a more efficient future regulatory environment and strategic planning for the policy decision makers.
of which the receiver of the technology will be able to produce new products and services. The understanding includes the knowledge, the transfer 74 the most important definitions 75 the most important definitions Enterprise life cycle:
The enterprises undergo different, well-separated phases, similarly to the growth of a human being. This metaphor is used by the so-called enterprise life cycle models
in order to make the owners realize that they have to face different problems, challenges, traps in the different growth phases that require different solutions.
The phases of the enterprise life cycle: formation, growth, evolution, stagnation, decline, cancellation. Similar industrial, product and organisational life cycles exist.
Voucher: The system of innovation vouchers (introduced in The netherlands in 2004 and in Ireland in 2006) enables the small and medium-sized enterprises to purchase the knowledge
and strategic consultation services required for their current projects from the knowledge centres and so encourage the co-operation between the knowledge centres and enterprises.
If a company needs a service related to patent, research etc.,then it will order it
and accept the service provider's invoice, which will be paid out by the supporting organisation directly to the account of the organisation issuing the invoice. and receipt of knowledge in the same way as tangible knowledge (machines, instruments, processes).
diffusion of the accumulated knowledge in the institutional and corporate network and in the broader economy for the purpose of maximum utilization.
and Innovation Communities (KIC) bringing together higher education institutions, research organisations and enterprises, and the cooperating partners.
Operational Programme for Developing the Economy and Innovation FTE: Full-time-Equivalent IP: Intellectual Property R&d:
Ministry for National Economy NFM: Ministry of National Development OTKA: Hungarian Scientific research Fund OFTK: National Concept for Development and National Concept for Regional Development PCP:
Strengths, Weaknesses, Opportunities, Threats SZTNH: Hungarian Intellectual Property Office Tét: Science and Technology STI: science-technology-and innovation 76 abbreviations 77 annexes Annex 1:
opportunities and threats of the knowledge flow processes are collected (see Figure 28). The summary of the detailed SWOT tables is included in the chapter on problem identification of the strategy.
System-dynamical approach 28 ábra National level Human resources human and social capital Science system research capacity The development of the economy and the markets absorption capacity
and services mobility research results joint R&d works mobility Regional level Intwernational level The dynamic establishment (based on flows) of the stocktaking of the National Innovation System Figure
28 Analytical approach The analytical structure of the stocktaking of the National Innovation System Figure 27 Macro-and industrial economic environment Modern,
and training system Information management abilities (demand) Conditions of the product market (input) Conditions of the factor market I.:
and communication technologies (ICT) is EUR 8, 975 million including EUR 1, 795 million for photonics and micro-and nanoelectronics, EUR 4, 293 million for nanotechnologies, advanced materials and advanced manufacturing and processes, EUR
the participation in implementing pan-European research infrastructure investments and maintaining and developing large instruments to be implemented provide the national innovative companies
and SMES with an opportunity for participation (supply) -thus generating follow-through economic processes. It means an unprecedented opportunity and also challenge for the Eastern part of Europe
strictly speaking, for the Central and Eastern European region, that one of the projects on the ESFRI Roadmap can be implemented in this region-after Hungary,
indicating whether Hungary and the region are capable of successfully implementing projects of similar volume (that can mean an opportunity for further large-scale developments by/beside the prestige-enhancing effect).
The beneficiary key sectors of (scientific and industrial) use can include the health sector and medical science, the environment-friendly solutions (e g. energy efficiency), the food production, the IT sector etc.
the investment and operating costs of infrastructures required for carrying out high-level R&d activities have increased significantly in the last decade,
facilitates the development of an adequate legal and financial environment and makes recommendations to research infrastructure development projects important for the progress of the European Research Area (ERA).
The project of national economic importance can have an invigorating effect on the economy through innovation
e g. new investments in the science park in Szeged; effects generated by the construction, operation, maintenance;
Macro-regional multinational medium-sized enterprise: Typically a company of 50-500 persons, the seat or strategic decision-making of which is in Hungary
RDI and growth-oriented small enterprise often called gazelle by literature: A company with less than 49 persons,
and its turnover increases by 10%for 3 years. t is desirable that the company has own product, process, intellectual property, business model.
The enterprise can be a potential investment area for venture capital and it is suitable for incubation.
The enterprise has introduced novel or significantly improved goods or services in its own markets, or process, organisational or marketing innovation before its competitors.
Small and medium-sized enterprise possessing innovative products and services, carrying out R&d activities, capable of increasing its added value creation by continuous developments,
and the actual funding shall implement the policy objectives in such a way that it shall not conflict with the prevailing rules on funding, competition etc. 85 annexes In case of the planned instruments for intensifying knowledge flow:
business models), o organization of educational events with the involvement of public collection and public education institutions, o launch of regular programmes in the electronic media and publication of regular articles in the written
and significantly influencing the national and international knowledge flow can be started in the fields representing the strengths and important challenges of the Hungarian society and economy.
H6 Sound and innovation-friendly economic and regulatory environment: Confidence-building measures towards RDI activities and less bureaucracy are essential.
o Strengthening creativity, problem solving and innovative thinking in the whole formal and non-formal, informal education sector, o Strengthening the view and instruments of creative team work (workshops, competitions etc.
Objectives related to knowledge bases until 2020 GERD/GDP ratio Macroeconomic indicator based on international statistical standards The numerator is the own research and development expenditure aggregated at the level of the national economy
aggregated at the level of the national economy (Business Expenditure on Research and development, BERD) the denominator is the gross domestic product (Gross domestic product,
In case of a public research institution, it has multilevel and multidirectional interactions with enterprises; In case of a private research organisation, it typically has significant linkages with the public research sector.
information systems and services that are essential for scientific research activities and the dissemination of results. The related human resources form an integral part of RIS that enable the professional operation, use and services.
The structure and size of the research infrastructure largely depend on the characteristics of the specific discipline
it provides a research opportunity for more independent research groups and it is open, with equal opportunities for users if they meet the conditions set out in the publicly available regulations;
and concentrating a critical mass of knowledge effects of the economic crisis, a proposal had been made for the STI programme of measures for 2009-2010,
and economy at its meeting on 17 february 2010 to evaluate the 2007-2008 tasks of the STI programme of measures
More environment-friendly legal environment: The new rules improve the efficiency of processes in the fields of mobility and calls for proposals.
Ministry for National Development and Economy-National Office for Research and Technology 27 tasks; Ministry of Education and Culture 20 tasks;
Priority funding for corporate and regional innovation by means of tenders and capital market instruments.
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