The Hungarian ICT sector and the role of the Hungarian Chamber of Commerce and Industry Ms. Maria Stark International Director Hungarian Chamber of Commerce and Industry E-Government Final Seminar Naples, 12 June 2008

I.Current situation of the Hungarian economy II. Hungarian IT sector III. The Hungarian Chamber of Commerce and Industry

Hungary in the heart of Europe GDP per capita 2007 estimate US $ 20,700

Characteristics of Hungary In the heart of Europe the country traditionally bridges East and West, North and South Foreign investment of 55 billion EUR, presence of the biggest multinational companies, around foreign companies Business friendly legal environment, qualified and motivated labour force GDP structure: agriculture: 3.3%; industry: 32.5%; services: 64.2% Member of the NATO (1999) and the European Union (2004) → Access to the Internal Market of 490 million people without restrictions of quantity and customs, EU grants

Macroeconomic Growth

Foreign investments by sectors Source: Ministry of Economy and Transport

Hungarian Foreign Trade Restructuring in the 1990’s, Hungary as an open economy Continuously increasing value/volume of the Hungarian foreign trade More than 80% of all Hungarian exports are directed to the EU Export (2007): M EUR Import (2007): M EUR Foreign trade balance (2007): -1,965 M EUR Foreign trade is dominated by industrial products There are no major changes respecting our foreign trade after joining the EU

ICT in Hungary Hungary: land of creativity, information & communications technology One of the main areas of innovation and economic growth Many IT companies begun relocating R&D activities here /HP-Compaq, Nokia, Siemens, Ericsson and SAP/

Characteristics of the Hungarian ICT sector Strong growth in the past couple of years : annual growth rate in Hungary – 6,5 % /in the EU – 2,6%/ Hungarian ICT market represents 15% of the CEE total Total sales in 2007 EUR 6.4 billion – 36% higher than in 2002 ICT expenditures grew at 12% in the period

Growth of the ICT market in Hungary Source: EITO, 2007 Total sales (in billion EUR ) % growth Total IT 1,51,61,81,92,12,213,116,87,45,67,2 Total telecoms 3,23,53,73,94,14,2105,755,23,9 Total ICT 4,75,25,55,86,16,410,565,85,45

Main drivers of the market growth significant investment by SMEs fast growing software market growing FDI regional demand for outsourcing services

Hungarian ICT market by sub-sector carrier services 59% computer hardware 12% IT services 11% software 7% datacom and network equipment 4 % end-user communication equipment 4 % office equipment 1 %

IT export Export revenue of IT companies: 8,756 million EUR (2006) -36,5 % IT activity -63,5 % other activities - /manufacture of electronic components, mobile phones and telecommunications equipment/

Hungary as an investment venue Favourable Policy Environment for the ICT Industry  The Hungarian Information Society Strategy was approved in 2003  The National Development Plan II, , has earmarked 3% of EU funds (EUR 790 million) for the development of the ICT sector  10% tax deduction on software developer’s labour costs

New Hungary Development Plan ( ) 15 Operational Programmes 7 years billion HUF Electronic Administration Operational Programme Amount: 1,43 % of the support fund Overall objective: improve the performance of public administration Priorities: 1.Renewal of the internal procedures of public administration and its services 2.Infrastructural developments aimed at improving access to public services 3.Preferential developments as well as 4.Technical assistance both for the Convergence and Regional Competitiveness and Employment Objectives

The Hungarian Chamber of Commerce and Industry National organization of 23 regional chambers of commerce and industry The chamber represents the whole Hungarian economy: micro, handicraft, small, medium, big and also multinational companies 40 thousand voluntary member companies Legitimacy The members of the voluntary chamber are the most conscious enterprises Proportional representation of 2/3 of the GDP More than 500 employees 95 regional offices covering the whole country

The network of the Hungarian Chamber of Commerce and Industry

Services offered by the Hungarian Chamber of Commerce and Industry Lobbying in economic policy issues, representation of entrepreneurs’ interests Promoting the creation of favourable entrepreneurial environment Defending business ethics (codex of ethics, Conciliatory Bodies in consumer protection disputes)

Services offered by the HCCI I. EU Sector specific information booklets Information sessions, trainings Euro Information Centers in 6 chamber offices Counseling on EU funds and application forms Creation of quality standards for tender advisors, pool of qualified advisors Széchenyi Card System-financial support for SMEs

Services offered by the HCCI II. Business development Matchmaking, partner research Organization of business meetings Transfer of Business offers, business information Organization of conferences, seminars Issuing trade documents (Certificate of Origin, ATA Carnet) Internet portal, newsletters

Services offered by the HCCI III. Participation in Vocational Training Elaboration of the curriculum and examination requirements for the training of 16 professions – affects 40% of the total number of apprentices, in total 25 thousand pupils Definition of quality requirements for the exams on master level, setting up examination board Mediation between apprentices, schools and workshops

International Relations Member of EUROCHAMBRES since 1990 Central European Chamber of Commerce Initiative (CECCI) Priority membership in ICC Hungary Bilateral cooperation agreement with 58 countries’ national chambers

The ICT Strategy of the HCCI Enhanced involvement of Hungarian companies into the information society Close cooperation in this respect with the governmental institutions By acquiring public tasks joining the e- governmental network

Means of the ICT Strategy Development of one-stop-shop, on-line support in the field of business services Providing interconnection between partner institutions (clusters, research institutions, bilateral chambers, etc.) Promoting e-commerce and B2B on-line services, developing data bases Establishing quality assurance systems

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