Innovation and R&D Department, Ministry of Economy and Transport

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Presentation transcript:

Innovation and R&D Department, Ministry of Economy and Transport Co-operation of public and private funding in financing the innovation process Dr. Tamás Balogh Innovation and R&D Department, Ministry of Economy and Transport Finnish-Hungarian Seminar "Innovation and Success”, Budapest, 4 December 2006. Joke: We have long traditions in the co-operation on knowledge based economy issues. 2000 years ago Finnish and Hungarian people marched together from Asia to the West. At the entrance of EUrope, they found a sign: „People who want to live in a knowledge driven economy, having high competitiveness and living standard, shall take a turn right.” All people being able to read, turned right, the rest went ahead here, to the Carpathian Basin.

But: Albert Szent-Györgyi was the only Hungarian born Nobel Prize Laurate scientist obtaining the Prize in Hungary. Scientific heritage

Growth of Hungary and the EU-15 average 1 2 3 4 5 6 7 2000 2001 2002 2003 2004 2005 %, előző év azonos időszakához viszonyítva Magyarország EU-15 GROWTH = EU15 + 2% HUNGARY

Macroeconomic figures 2001 2002 2003 2004 2005 Gross domestic product (%) 3.8 3.5 3.0 4.6 4.1 Industrial production (%) 3.6 2.8 6.4 8.3 7.3 Exports (% - volume) 7.7 5.9 9.1 17.0 10.8 Imports (% - volume) 4.0 5.1 10.1 14.0 5.3 Consumer prices (%) 9.2 4.7 6.8 Balance of foreign trade (bn EUR) -2.5 -3.4 -4.2 -3.9 -2.8 Current account balance (bn EUR) -3,6 -4.9 -6.5 -7.0 -6.4 FDI (bn EUR) 4.4 3.2 2.0 3.7 5.4 Unemployment rate (%) 5.7 5.8 6.0 7.2 Source: Hungarian Central Statistical Office, GKI Economic Research Institute of Hungary

Summary Innovation Index CATCHING UP Source: Innovation Trend Chart 2005.

Gross R&D expenditures per GDP are still in the lower third of the EU, …

Innovation is a top priority of the government. …but the trend is improving. Innovation is a top priority of the government.

Business enterprises should be more active in R&D …

Plus a variety of R&D programmes. … and the government promotes that by generous tax benefits. Plus a variety of R&D programmes.

Tax measures for R&D and IPR intramural and outsourced R&D: 200% (tax base). IPR costs (SMEs only): 200% (tax base). R&D expenditures at university campus or Academia, 400% (tax base), maximum 50 M HUF. Investment tax release from 100 M HUF (R&D only). Students in R&D: tax free up to minimum wage. 150-170% tax base reduction for R&D donations. Small and micro enterprises do not pay in Fund.

Strong foreign presence in corporate R&D activities. World class knowledge base in some fields (IT, maths, physics, life sciences, chemistry, etc.).

CORPORATE RESEARCH CENTRES Bosch Power Tool Audi Magna Steyr General Electric Philips AFT Michelin Flextronics ZF Hungária Samsung W.E.T. Electrolux Samsung Nokia Draixlmaier Philips Samsung GM-Opel Ericsson Continental Temic IBM Sysdata General Electric Nokia Cisco SAP TATA Consulting Sanofi-Aventis Denso Visteon Philips Zeuna Starker General Electric Flextronics Knorr-Bremse Zenon Continental Teves Valeo Auto-Electric Elcoteq Source:ITDH

Consequently, high-tech manufacturing industries play very important role in the economy…

… boosting Hungary’s high-tech manufacturing exports.

Public sources for R&D and innovation programmes (2007-) Research and Technology Innovation Fund Economy Development Operational Programme („GOP”, ERDF co-financed) National Scientific Research Fund (OTKA) EU 7th RTD Framework Programme EU Competitiveness and Innovation Programme Close co-ordination, working as one organic system

The innovation value chain… New idea, basic research Experimental dev’ment, IPR Applied research Market entry, mass production Market success, growth The innovation value chain… … and the applied government tools University and MTA basic financing OTKA National R&D and Innovation programme (GVOP/GOP and KTIA) Market conform enterprise financing tools (credit, capital, guarantee) Supporting stock market entry Innovation and R&D conducive legal environment

KNOWLEDGE BASED HUNGARY

Thank you for your attention! www.gkm.gov.hu