RDI MIRROR - UEFISCDItemp.uefiscdi.ro/EDIGIREGION/KFI_Tukor_ENG_NET.pdf · J.63: Information...

RDI MIRROR1. Review on the ICT Sector

2012

RDI MIRROR

1.ReviewontheICTSector

Budapest, 2013

ThispublicationwasmadeundertheauspicesoftheNationalInnovationOfficeRDIObservatoryDepartment.

Preparedby:AttilaCsôke

TiborFlamich

JuliannaIfju-Keresztes

ÁdámMészáros

BenceRapkay

IstvánSzabó

Thispublicationmayonlybequotedeitherinpartorinwholebyproperlyreferencingthesource.

TheNationalInnovationOfficeshallnotbeheldliableforanyconsequencesresultingfromusingthisanalysis

foranypurpose.

Table of Contents

Introduction 7

1.TheICTsector’sstakeholders,inputsandsignificanceforthenationaleconomy 8

1.1DefinitionoftheICTsector 8

1.2TheroleandcompetitivenessofICTintheEU 9

1.3ThesignificanceoftheICTsectorintheHungariannationaleconomy 11

1.4Valueadded 12

1.5Exportandimportperformance 13

1.6NumberandsizeofICTbusinesses 15

1.7Rateofemployment 18

1.8Internationaloutlook 19

2.R&DperformanceoftheICTsector 20

2.1.Numberofresearchunits 20

2.2.R&Dexpenditure,investmentandcost 20

2.3.NumberofpeopleemployedinR&D 23

2.4.RegionaldistributionofICTresearchanddevelopmentpersonnel 24

2.5.Patents–internationalcomparison 26

2.6.InnovativeICTbusinesses 27

2.7.Tendersystem:grantagreementsandawardedamounts 29

Summary 33

Bibliography 35

ListofFigures 36

NationalInnovationOffice 38

Kaleidoszkóp 38

Introduction

ThefirstsectoralreportreleasedbytheNationalInnovationOfficeRDIObservatoryexaminestherelationship

betweentheInformationCommunication(ICT)sectorandResearch,DevelopmentandInnovation(RDI).

TheICTsectorbecamethefocusofattentionforagoodreason.Theanalysesincludedinourpublication

entitled‘StatusReportonEnterpriseRDI’releasedintheSpringof2012clearlydemonstratedthatICThas

RDIpotentialwhichdefinitelymeritsfurtherinvestigation.

TheeconomicweightandR&DpotentialoftheICTsectorfromseveralaspectsoutperformsthatofother

sectorscharacterisedbysimilarlypotentresearchactivity(e.g.intermsofaddedvaluecontributiontothe

nationaleconomyandthenumberofpeopleemployed inresearchanddevelopment).Atthesametime,

ifwe takea lookat itsR&Dexpenditureor investmentand resource requirement,we find thatall those

indicatorsarefarmoremodestthaninothersectors,consequentlytheICTsectoriscapableofgenerating

highaddedvalueevenatrelativelylowlevelsofinvestment.

It isalsocommonknowledgethattheICTsectorischaracterisedbyverysignificantmultiplicatorimpacts,

giventhatpracticallyallformsofeconomicactivityrelyonICTproductsandservices,therebytheICTsector

playsan important role in significantly improving theefficiencyandproductivityofother sectors,andso

theireconomiccompetitiveness.

Inviewoftheabove,theICTsectormayberegardedasabreakoutpointforHungary:itisdefinedasan

engineofgrowthbytheHungarianGrowthPlan,moreovertheNewSzéchenyiPlandoesnotonlyseeitas

basicinfrastructure,butalsoemphasisestheimportanceofprovidingtargetedsupportforICTinnovation.

Yet, there appears to be a sector-specific problem here, inasmuch as often not even those achieving

outstandingICTresearchanddevelopmentresultsrealisethatwhattheyaredoingdoesinfactamountto

R&D,becausecomingoutwithnewdevelopmentsallthetimeisanintrinsicpartofhowthesectoroperates,

therefore,noteventhosedirectlyinvolvedarenecessarilyconsciousoftheirownR&Dactivity.

ThispublicationaimstobringICTstakeholdersup-to-datewiththecurrentstatusofRDIintheirownsector,

andtoincreaseawarenessamongpublicadministrationdecision-makersofthebreakoutpointspotentially

representedbyRDIinHungary.Wesincerelyhopethatthispublicationwillbehelpfulindevelopingabetter

understandingoftheICTsector’sfullpotential.

Inthenearfuture,newreportswillbecomingoutontheanalogyofthisone,analysingtheRDIsituation

inothersectors.

▲

1.1 Definition of the ICT sector

BecausetheICTsectorencompassesanextremelywide

range of activities, it is not easy to separate it from

othersectors.ThedefinitionoftheICTsectorprovided

bytheFrascatiManualbasedonISICRev.3(pp.159-

160) lists a number of key sectors (presented in a

relativelydetailed,four-digitbreakdown)whosemain

activity is production and marketing of ICT products

orservices.Atthesametime,theManualmakesnote

ofthefrequentnon-availabilityofsufficientlydetailed

data,andforthatveryreasonitsuggeststhatcertain

simplificationsoughttobemadewhenanalysing ICT

relatedR&Dactivities.

However,aclassificationsystembasedontheaboveun-

fortunatelydoesnotalwaysworkassuchdetaileddata

areunavailableformosttypesofstatisticaldatasets.

Forthesamereason,ourreporttreatstheICTsectoras

beingmadeupofsectorsandsubsectorsrepresenting

twodistinctivebranchesofthenationaleconomy:the

processingindustryontheonehandandtheservices

industryontheother.Hereinafter,weshallrespectively

refertotheseasthe‘ICTindustry’and‘ICTservices’.

AccordingtoaharmonisedStatisticalClassificationofEco-

nomicActivitiesintheEuropeanCommunity(inHungary:

TEÁOR’08),wecategorisedavailabledataasfollows:

ICTIndustry:SectionC(Manufacturing):

�C.26:Manufactureofcomputer,electronic

andopticalproducts

� C.26.1:Manufactureofelectroniccompo-

nentsandboards

�C.26.2:Manufactureofcomputersandpe-

ripheralequipment

�C.26.3: Manufacture of communication

equipment

�C.26.4:Manufactureofconsumerelectronics

�C.26.5: Manufacture of instruments and

appliancesformeasuring,testingandnavi-

gation;watchesandclocks

�C.26.6: Manufacture of electromedical

equipment

�C.26.7:Manufactureofopticalinstruments

�C.26.8:Manufactureofmagneticandopti-

calmedia

ICTServices:SectionJ(Informationandcommunication)

�J.58:Publishingactivities

�J.59:Motionpicture, video and television

programme production, sound recording

andmusicpublishingactivities

�J.60:Programmingandbroadcastingactivities

�J.61:Telecommunications

�J.62:Computerprogramming,consultancy

andrelatedactivities

�J.63:Informationserviceactivities

As our approach is aligned with the underlying logic of

the Frascati Manual, which divides the ICT sector into

manufacturingandservices,andasthesectorslistedabove

arelargelyidenticalwiththeclassificationproposedtherein,

our analysis provides a solid basis for determining the

economicweightandRDIperformanceoftheICTsector.

Occasionally, less data is available on the ICT

manufacturing as some statistical databases fail to

subdivide this section of the national economy into

further sectors and subsectors, and so our analysis

wasencumberedbythenon-availabilityofsufficiently

detaileddata.Weneverthelessendeavoredtopresent

the fullest possible picture of both the ICT industry

andICTservices,asfarasitwaspossible.

▲

1. TheICTsector’sstakeholders,inputsandsignificanceforthenationaleconomy

8

ICT Tools and servICes play an ImporTanT

role In BuIldIng a dIgITal sIngle markeT,

whICh presenTs a sIgnIfICanT growTh

poTenTIal for The eu.

The European Commission's ’Annual Growth

Survey’releasedin2011Decemberseesthebuilding

ofadigitalsinglemarketasasourceofsignificant

growth;ICTtoolsandserviceshaveapivotalrolein

unlockingthispotential.

The survey highlights - among other things - the

importanceofestablishingsecuremobileandonline

payment systems, making available more radio

spectrums(inparticularforthemobiledatamarket),

investing into high-speed broadband connections,

the roleofonlinepurchases in reducing costs and

improving the quality of delivery of goods and

services, and developing online dispute resolution

systems (to provide fast and reliable arbitration

to consumers and businesses in case of dispute).

Accordingtothesurvey,usingthepowerof ICT is

the key to delivering smart energy and transport

systems linking all corners of the EU, as ‘the

widespreaduseofsmartelectricitygrids,ahighlevel

ofenergyefficiencyandrenewableenergysources

madepossiblebyasophisticateduseofinformation

and communication technologies and world-class

logistics servicing the internal market are essential

components of a modern, competitive economy

andcrucialforEUdevelopmentinthecomingyears’

(EuropeanCommission2012.pp8).

In all-seCToral ComparIson, ICT Compa-

nIes are The BIggesT InvesTors In The eu,

The usa and Japan.

TheEU’s‘InnovationUnionCompetitivenessReport

2011’stressesthatinnovationintheICTsectorand

the ICT-enabled innovation in non-ICT industries

and services make a significant contribution to

the economic growth of advanced economies. Its

significancewashighlightedboth in theEULisbon

ObjectivesandintheEurope2020Strategy,andfor

agoodreason,asthebiggestinvestorsintheEU,the

USandJapanareICTcompanies.In2002-2007the

ICTsectoraccountedforaquarterofoverallBERD1

in the EU (outperforming both car manufacturing

and the pharmaceutical industry/biotechnology)

and employed about third of all business-sector

researchers. IntheEU,ICTservicescontributed3/4

of total ICT value added and employed2/3of the

workforce.

Atthesametime,theICTsectorispartlythereason

whyEUcompanieshavefallenbehindinR&D:asthe

above quoted Competitiveness Report also points

out, theEuropean ICTsector ispartlytoblamefor

thesignificantdisparitywhichhasevolvedbetween

the US and the EU, as shown by their respective

businessR&Dintensity.▲

9

1.2 The role and competitiveness of ICT in the EU

1Business Expenditure on Research and Development: the re-searchanddevelopmentexpenditureofcompanies

NATIONALINNOVATIONOFFICErdI mIrror -1.ReviewontheICTSector

European ICT is significantly falling behind its main

competitorsbothintermsofvalueaddedandinterms

of the two key R&D indicators shown in Figure 1.

However,bycomparingtheR&Dintensityofindividual

sectorswegetarathermorediversepicture:whilethe

EU’s BERD/value added ratio of telecommunication

servicesisnoworsethanthatoftheUS,theEUhasa

bigbackloginITservicesandsoftwaremanufacturing

(bothcompared to theUSandSouthKorea),while

the EU and South Korea have similar indicators in

termsofthemanufactureoftelecommunicationand

multimediaequipmentandcomponents.

In several key IndICaTors The eu’s ICT seCTor

Is noT suffICIenTly CompeTITIve relaTIve To

ITs maIn rIvals (Japan and usa).

Company-level R&D data clearly demonstrate that

fewernewandinnovativelargeICTcorporationsare

createdintheEUthanintheUS.Itisparticularlytruefor

themostdynamicengineofgrowthwithinthesector:

computerservicesandsoftwaremanufacturing.Asa

furtherdisadvantage,UScompanieswerequickerto

recognizethesignificanceofAsiaandstartedR&D

cooperationwithAsiancompaniessoonerthantheir

European counterparts. Moreover, the ICT sector’s

shareinregisteredpatentsissignificantlylowerinthe

EUthanintheUS.

Out of the EU’s total ICT sector value added,

Germany, France, the United Kingdom, Italy

and Spain account for over 70%, however, the

best relative (to their population) performers in

ICT are the Nordic countries. Among the new

member states, Hungary, the Czech Republic

and Poland recorded significant increases in ICT

manufacturing employment, however, deeper

analysisshowsthatthesecountriesarestillhosting

ratherlow-valueaddedactivities.


10

Figure1:TheEU’sICTsectorininternationalcomparison(2007).Source:EuropeanCommission:EUInnovationUnionCompetitivenessReport2011.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

ICT BERD (% of GDP) ICT Value Added (% of GDP) ICT BERD to ICT Value Added (%)

EU USA Japan South Korea Taiwan

Insummary–asErnst&Young’spaperonEuropean

innovation2 alsopointsout–while inanumber

ofsectorstheEUoutperformsbothJapanandthe

UnitedStates, ithasworsecompetitive indicators

than its rivals in someother technology-intensive

industriesand,asaresult,inanumberofICTareas.

1.3 The significance of the ICT sector in the Hungarian national economy

As individual branches of the economy are

interrelated through many ripple effects,

quantifying so-called multiplicator factors is not

easy. Individual sectors can have an influence

onothersegmentsofthenationaleconomyina

number of different ways going beyond simple

buyer-supplierrelationships,e.g.throughtheflow

oftechnology.Thismakesitalmostimpossibleto

determine the precise weight or significance of

anysectorinanationaleconomy,oritsimpacton

othersectors,aswellastoquantifyanyofthese

influences.Itwouldbesimilarlyhardtofullygrasp

everyaspectoftheICTsector,therefore,wewill

giveonlytwoexamplesevidencingthatthesector

ishavingaparticularlystrongimpactontherest

ofthenationaleconomy.

a large parT of laBour produCTIvITy

growTh In hungary Comes from The ICT

seCTor.

The ICT sector is a significant boost3 to labour

productivity: it isestimatedbyOECDthatlabour

productivity in Hungary improved year-on-year

by an average3.1% in1995-2008, fromwhich


11

2ThePowerofSimplicity–TowardasmarterandstreamlinedinnovationpolicyintheEU

3Averagecostoflabourperunitofoutput

▲

Figure2:AnnualaveragelabourproductivitygrowthandICTcontributiontosuchgrowthintotalindustries,1995-2008(%).Source:OECDKeyICTIndicators,2012.

0%

1%

2%

3%

4%

5%

Slovakia Hungary Czech Republic

Sweden Finland USA Austria Germany

Average annual growth of labour producHvity excl. the ICT sector

The ICT sector's contribuHon to the growth of labour producHvity

0.5%(i.e.nearlysixthoftotalgrowth)wasdueto

impactsfromtheICTsector.

Albeittodifferentdegrees,theICTsectorplayed

an important role in improving efficiency in all

countries under review, and the value for Hun-

garyisevenbetterthansimilarindicatorsofmost

countries,eventhoughitfallsshortofsimilarindi-

catorsforFinlandandSweden,theabsolutelead-

ersinthisregard.

In mosT oeCd memBer CounTrIes

under revIew, ICT InvesTmenTs

generaTe more eConomIC growTh

Than InvesTmenTs made By all oTher

seCTors ComBIned.

Based on 2000-2009 data, the OECD also

evaluatedthecontributionofICTinvestmentsto

economicgrowth.IntheUnitedKingdom,the

US, Germany, Japan, Denmark, New Zealand,

Belgium,theNetherlands,Sweden,Switzerland,

Austria and Finland ICT investments made a

bigger contribution to economic growth than

investments in all other sectors combined.

In other countries under review (Australia,

Canada,Spain,France,SouthKorea,Portugal,

Ireland,ItalyandGermany)thegrowthimpact

of ICT investments is weaker, but not at all

insignificant.

It is clear that the ICT sector has beneficial

effects pointing far beyond itself; and even

thoughthescopeof thispublicationdoesnot

allowustogodeeperintoanalysingtheabove

impacts,thetopicitselfdefinitelymeritsfurther

investigation.

1.4 Value added

The ICT sector is seen as an engine of global

economic growth, whose weight increased

considerably in recent years (see value added

indicators in Figure 3). Even though the sector

was too hit by the economic downturn, for

example, large IT corporations globally were

forced to cost-cutting and downsizing their

workforce,andtheHungarianbusinesssoftware

development market shrank in size like many

others,neverthelessthesectoritselfveryquickly

returnedtothepathtorecovery,partlyduetothe

highlyinnovativenatureofitscompaniesandto

thegrowthofsomesub-sectors,e.g.computer

andmobilecommunicationservices.

In1995-2008theshareofdomesticICTvalueadded

inthebusinesssectorvalueaddedshowedremarkable

growth,whichputtheHungarian ICTsector inthe

topleagueofinternationalmarketplayers.

12

Figure3:ShareofICTvalueaddedinthebusinesssectorvalueadded,Source:OECDKeyICTIndicators,2012.(ThereisnodataavailableforPoland1995)

1.

▲

TheICTsector’sstakeholders,inputsandsignificanceforthenationaleconomy

0% 2% 4% 6% 8% 10% 12% 14% 16%

Poland

Austria

Germany

Portugal

Slovakia

France

OECD average

Czech Republic

USA

Hungary

Sweden

Finland

1995 2008

Finland

Sweden

USA

France

Slovakia

Portugal

Germany

Austria

Poland

Czech Republik

OECDaverage

Hungary

While in1995theshareoftheentire ICTsector

oftotalgrossvalueaddedatlevelofthenational

economystayedbelow4%,by2011itpractically

doubled its relative weight, nearly 3/4 of this

performancebeinggeneratedbyICTservices.This

growthwasnotinterruptedevenbytherecession

thatbegantounfoldin2008;onthecontrary,in

2009thesectormanagedtosignificantlyincrease

itsrelativeshare(tosomeextentduetothedecline

ofseveralothersectors),whichresultedinaslight

increaseofsectoralgrossvalueadded.Itmustbe

noted,however, that thiswasmadepossibleby

ICTservices,asin2009thegrossvalueaddedof

theICTindustrydeclined,howeverslightly.

In 2011 the share of ICT services marginally

declined despite a nominal increase in their

value added; however, based on preliminary

GDPfiguresfor2012,theperformanceof ICT

servicesisontherebound.

The Hungarian ICT sector has achieved sub-

stantial growth although its expenditure level

issignificantlylowerthantheOECDaverage.

Notably,theHungarianICTsectorhasachieved

outstanding growth even in international

comparison despite its expenditure levels

laggingbehindtheOECDaverage.

1.5 Export and import performance

In hungary The ICT IndusTry aCCounTs

for more Than a quarTer of all man-

ufaCTurIng exporTs.

The ICT industry is the most important export

sector within manufacturing: it accounted for

26.6% of Hungarian manufacturing exports

in 2011. This puts it ahead of the automotive

industry,whichhadan18%share, or even the

13

economic recovery in the ICT sector

Many lessons can be learnt from the findings

of the research conducted by the National

Innovation Office in August 2012 among

members of the Hungarian Association of IT

Companies (IVSZ). Even though the research

was not based on representative samples, the

ways in which companies responded to the

crisis offer many sector specific yet forward-

looking lessons. Nearly all respondents said they

were able to weather the crisis by market

launching a new product and/or service,

but exploring new markets and improving

efficiency also came high among the answers

(in addition to the cost cutting and redundancy

methods widely used in other sectors).

▲

Figure 4: Gross value added of the Hungarian ICT sector as apercentage of value added of the total economy, 1995-2011.Source:HungarianCentralStatisticsOffice

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

ICT services ICT industry


pharmaceutical industry, whose share was only

4.5%.Thesectorstoodaboveallothersectorsof

the manufacturing despite a significant drop in

its foreign trade turnover (and relative share)by

2011.Notwithstandingtheabove,in2011theICT

sector’spositiveimpactonthecountry’sbalance

of trade surpassed even the (already extremely

high)levelsofrecentyears.

ICT exports declined due to a decrease in

consumer electronics exports, while the share of

telecommunications equipment, which made up

nearly 50% of sectoral exports in 2011, remained

similartoits2010level.Theexportofcomputersand

peripheral equipment - equally crucial for ICT - has

shownasteadygrowthinabsolutetermssince2009.

Declining imports in 2011 were mostly related to

telecommunicationsequipment(42.6%sharein2011)

andelectroniccomponents(representing22.6%).

The ICT seCTor generaTes a large

surplus In InTernaTIonal Trade.

TheICTservicesector’scontributiontointernational

trade is relatively well-represented by statistical

datapublishedbytheHungarianCentralStatistical

OfficeoncommunicationservicesaswellasITand

informationservices4.TheICTsectorhada7.8%

share from total service exports and7.5% from

importsin2011respectively,resultinginasurplus

ofoverHUF82billion.

Figure5:BalanceoftradeintheICTindustryanditssharefromHun-garian manufacturing industry exports and imports in 2008-2011(%).Source:HungarianCentralStatisticalOffice

14

4Note,however,thattradeinservicesisaccountedforsomewhatdifferentlycom-paredtothelogicweadoptedsofar.TheHungarianCentralStatisticalOffice’strade-in-servicesdatapoolclassifiespostalandcourierservicesascommunicationservices;whereascomputerservices,newsagencyservices,databaseservicesandonlinepublishingareclassedasITandinformationservices.

foreign market entry opportunities

The bulk of primary data shown in the text boxes

of this report were taken from an RDI survey

carried out by the National Innovation Office

RDI Observatory in the spring of 2012 with the

participation of 1,618 Hungarian businesses. The

research focused mostly on analysing research and

development as well as innovation performance

mostly of business partnerships, and to a smaller

extent of non-profit organisations and research

institutes with RDI function. Respondents included

280 companies with a (mainly or exclusively) info-

communication (ICT) profile. The survey revealed

that companies engaging in R&D tend to have

a very strong international sales focus. 51% of

companies under review sell their products to

European markets, and 33.9% of them have

market presence in countries outside Europe.

Even though the same ratios are somewhat

lower for ICT companies (43.3% and 26.2%

respectively), their indicators still significantly

outperform the average foreign market activity

of Hungarian companies..


1150

1200

1250

1300

1350

1400

1450

1500

1550

1600

0%

5%

10%

15%

20%

25%

30%

35%

2008 2009 2010 2011

bln HUF

Balance of trade (right axis)

Share in total exports (leD axis)

Share in total imports (leD axis)

The trade volume of computer and information

services is nearly twice as much as that of

communicationservices;inadditiontowhichthe

computer and information services sector also

recorded a major trade surplus in contrast with

communicationservices,whichischaracterisedby

arelativelysmallbutincreasingtradedeficit.

1.6 Number and size of ICT businesses

In The spaCe of seven years, The

numBer of BusIness enTerprIses In

The ICT servICes seCTor has grown By

14.7%, however, The ToTal numBer of

BusIness enTerprIses deCreased.

The size of the ICT services sector can be

illustrated by the total number of business

enterprises5makingupthesector,whichshows

asteady14.7%rateofincreasesince2003–

withonlyoneminimalinterruption–to2010.

Thisisparticularlyimpressiveconsideringthat,

howeverslightly,thetotalnumberofbusiness

enterprises making up the national economy

declined.Therewerealtogether708,307active

enterprises in Hungary in 2004 compared to

696,680in2010.

Figure6:BalanceoftradeinICTservices(HUFbln)andtheirrelativeproportionwithintheimportandexportofservices(%)in2008-2011.Source:HungarianCentralStatisticalOffice

5Inanygivenyear,abusinessenterpriseisclassifiedas‘active’ifitgeneratessales revenue or employs one or more staff during that year (HungarianCentralStatisticalOffice).

Figure7:NumberofbusinessenterprisesintheICTsector,2003-2010.Source:HungarianCentralStatisticalOffice

15

▲

-‐40

-‐20

0

20

40

60

80

100

120

-‐3%

-‐1%

1%

3%

5%

7%

9%

2008 2009 2010 2011

bln

HUF

Balance of trade in informa?on technology and computer services (right axis)

Balance of trade in communica?on services (right axis)

Export of informa?on technology and computer services (leK axis)

Import of informa?on technology and computer services (leK axis)

Export of communica?on services (leK axis)

Import of communica?on services (leK axis)

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

2003 2004 2005 2006 2007 2008 2009 2010

ICT in total ICT services ICT industry


However, the two subsectors that make up the

ICT industry are characterised by outright inverse

dynamics:asthenumberofserviceprovisionbusiness

enterprises dynamically increased, the number of

activebusinesseswithamanufacturingprofilehas

steadilydeclinedsince2005.Furtherinvestigationis

neededtorevealthecausesofthisprocess.

The relaTIve proporTIon of CompanIes

provIdIng ICT servICes Is rIsIng, and IT

Is now many TImes hIgher Than The

numBer of CompanIes In The ICT IndusTry.

Basedon2010dataandthestandardnationaleconomic

sector classification, the highest number of active

businesses are engaged in the wholesale and retail

trade,repairofmotorvehicles(139,546outofatotalof

700,000activebusinesses),followedinsecondplaceby

professional,scientificandtechnicalactivities(109,881

companies),andthentheconstructionindustry(66,033

companies).In2010,informationandcommunication

(i.e. ICT services) came seventh in the ranking of

various branches of the national economy according

to the number of active businesses involved (34,371

companiesintotal).Therankingofvariousbranchesof

thenationaleconomybasedonthenumberofactive

businessesinvolvedwasidenticalalreadybackin2003

inthetopsixspots.Whilein2003theICTservicessector

(i.e. the Information andCommunication Technology

branchofthenationaleconomy)stillrankedonly9th,

ithasneverstoppedclimbing,movingto8thin2006,

to7thin2007,whichpositionithasretainedeversince.

Theproportionofnewlyestablishedbusinesseswithan

ICTserviceprofileamongallstartupbusinesses6 was

4.5%onaverage in theperiodbetween2003-2009,

while fromall shutdowns3.6%were ICTbusinesses7

on average, which explains the growing relative

proportion of ICT service companies within the total

poolofcompanies.

1.

16

Close CooperaTIon wITh oTher CompanIes engaged In r&d

The scope of the National Innovation Office RDI Observatory’s RDI survey also involved looking at partnerships between respondent companies and other organisations. Based on the answers, a much higher rate of ICT companies than other companies engaged in R&D are looking for partners on the ‘open market’, at the same time, fewer ICT companies cooperate with local and overseas research institutes than companies from other sectors.

Figure 8: Breakdown of respondent companies’ answersto the question ‘Which organisations are you in (regular,close) liaison with?’. Source National Innovation Office RDIObservatory’ssurvey,2012

6Abusinessenterpriseiscategorisedasastartupenterpriseinanygivenyearifinthatyearitispartofthepoolofactivecompanies,whereasintheprevioustwoyearsitdidnothaveanactivestatus.Entitieswithalegalpredecessorarenotclas-sedasdefactonewformations.(HungarianCentralStatisticalOffice)

7Abusinessenterprisewillbeclassedasaterminatedenterpriseinanygivenyearif, for twoconsecutiveyears, itwasnotpartof thepoolofactivecompanies.Entitiesterminatedwithalegalsuccessorarenotclassedasdefactoterminatedenterprises.(HungarianCentralStatisticalOffice)


0% 10% 20% 30% 40%

With overseas research ins4tutes

With overseas educa4on ins4tu4ons

With Hungarian research ins4tutes

With NGOs suppor4ng R&D ac4vi4es (e.g. founda4ons)

With large companies engaged in R&D

With small or medium size companies engaged in R&D

With Hungarian higher educa4on ins4tu4ons

ICT other sectors

17

Figure9:Breakdownofactivebusinessenterprisesbysectorandbranchesofthenationaleconomy,2010.Source:HungarianCent-ralStatisticalOffice

Figure 10: Distribution of ICT companies according tocorporatelifecycle.Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012

Figure11:Distributionof ICT companiesbasedon theircurrent development phase in terms of R&D. Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012

whaT Is The CurrenT lIfe CyCle of hungarIan CompanIes engaged In r&d?

In regard to the life cycle of companies, the National Innovation Office RDI Observatory’s survey indicates that only a small proportion of ICT companies are in the start-up/learning phase of their development, more than half of them see themselves in a development/expansion stage, a good third of them are mature/stagnating and only 5% are declining/phasing out.The R&D potential of ICT companies is also well illustrated by the fact that 15.4% of them have an R&D function in the start-up-learning phase, more than half of ICT companies are still developing, expanding, a good fifth reported a mature-stagnating R&D function and only a very small proportion of companies have reached a phase of decline. Other companies engaged in R&D are characterised by similar percentage rates.

6.1%

52.5%

36.4%

5%

Start-‐up/Learning Developing/Expanding Mature/Stagna?ng Declining/Phasing out

15.4%

58.2%

22.1%

4.3 %

Start-‐up/Learning Developing/Expanding Mature/Stagna?ng Declining/Phasing out


20%

15.8%

9.5%

7.2% 5.5%

5.3% 4.9%

0.2%

4.6%

27%

Wholesale and retail trade, repair of vehicles

Professional, scientific and technical activities

Construction industry

Manufacturing industry (excl. ICT industry)

Administrative and support service activities

Other services

ICT services

ICT industry

Hotel accomodation and hospitality

Other sectors in total

If we look at ICT services sector companies in

terms of size, we find an over-dominance of

micro-businesses employing 1-9 people. The

shareandnumberofSMEsisverylow,andless

than0.001%ofbusinessesemploymore than

250people.

small, medIum and large CompanIes

aCCounT for 11.4% of all BusInesses In

The ICT IndusTry, whIle The raTe Is only

2.4% In ICT servICes.

Small and medium-sized businesses represent

ahigherproportionofallbusinesses in the ICT

industry,yetthereisasurprisinglyhighnumber

and proportion of micro-businesses in this

segment.Althoughthenumberofcompaniesin

ICTservices isovertwentytimeshigherthan in

ICTmanufacturing,bothsectorshaveroughlythe

samenumberoflargecompanies(37inindustry

and40inservices).Atthesametime,itmustbe

notedthatmanycompanieshavenoemployees

ortheirsizeisunknown,somethingwhichcould

distortthestatisticalresulttoacertainextent.

1.7 Rate of employment

sInCe The BegInnIng of The 2000s, we

have seen a sIgnIfICanT and dynamIC

InCrease In The numBer of people

employed In The ICT seCTor.

TheICTsectorhasamajorroleonthelabourmarket:

In2011theICTindustryemployed94,800,whilethe

ICTservices91,800people.TheICTindustrywashit

particularlyhardbythedownturn,butin2011the

sizeofitsworkforceexceeded2008levels,incontrast

with the ICT services sector, where employment

didnotfalltosuchadegreein2009buthasbeen

experiencingarathererraticperformanceeversince.

It is noteworthy that sectoral employment rose

significantly since the beginning of the 2000s,

furthermore,itcanboastoneofthemostdynamic

ratesofgrowth in employment compared toall

sectorsofthenationaleconomy.

Figure12:TheICTsectorbycompanysize(%),2011.Source:HungarianCentralStatisticalOffice

1.

18

According to the OECD Information and Technology Outlook (2010), two out of the 250 TOP ICT companies founded a subsidiary in Hungary, resulting in hundreds of new skilled jobs for people with IT qualifications.

▲


1-9 empl. 64.2%

Unknown and 0 empl. 24.3%

10-49 empl. 7.2%

50-249 empl. 2.5%

more than 250 empl. 1.7%

Other 11.5%

ICT industry

1-9 emopl. 63.6%

Unknown and 0 empl. 34% 10-49 empl.

2%

50-249 empl. 0.3%


Other 2.3%

ICT services

1-9 emopl. 63.6%

Unknown and 0 empl. 34% 10-49 empl.

2%

50-249 empl. 0.3%


Other 2.3%

ICT services

Suchgrowthwasdrivenlargelybyforeignbusinesses

withanITprofiledecidingtosettledowninHungary.

1.8 International outlook

In Terms of The perCenTage raTe of ITs

populaTIon employed In The ICT seCTor,

hungary ouTperforms The unITed sTaTes,

germany and The average of oeCd

CounTrIes

Hungary’srisingemploymentintheICTsector

isalsoalignedwithinternationaltrends.Ofall

theOECDcountries,theUnitedStatesemploys

themostpeopleinICT(30%ofall ICTstaffis

employedintheUS),followedbyJapan(16%)

andGermany(9%),respectively.Thisdoesnot

mean, however, that each of these countries

has an outstandingly high relative proportion

of ICT employment, as the above results are

largely explained by the sheer scale of the

labourmarketsofthecountriesconcerned.

BasedonitsshareofICTemploymentHungary

is 3rd in the ranking of OECD countries

(after Sweden and Finland), which puts it

ahead of the United States, Germany or even

theOECDaverage.

19

▲

Figure13:ShareofICTemploymentinbusinesssectoremployment.Source:OECDKeyICTIndicators,2012

8BasedonOECDdatafor2009.

0% 2% 4% 6% 8% 10%

Portugal Greece Spain

Switzerland Austria

Germany EU 15

OECD avg. Czech R. Slovakia Norway France Japan

Hungary Sweden Finland

2008 1995


2.1 Number of research units

despITe The CrIsIs, we have seen a

sIgnIfICanT InCrease In The numBer of

ICT researCh unITs BeTween 2008-2010.

Therewasasolidincreaseinthenumberofresearch

units within the ICT sector in the period between

2008-2010. The rate of this increase was much

fasterthaninothersectors:whilein2008therewere

125researchunits,theirnumberwasalready207in

2010.Itisnoteworthythatthisgrowthdynamicswas

notinterruptedevenbythecrisis.

2.2 R&D expenditure, investment and cost

In 2010 8.7% of The ToTal naTIonal r&d

expendITure was spenT In ICT IndusTry

and servICes, whICh Is a good IndICaTor

of The seCTor’s produCTIvITy.

Despite their significant research and development

potentialandperformance,boththeICTindustryand

ICT services have a relatively modest (even though

growing)shareofR&Dinvestments9andR&Dcosts10.

In 2010 Hungary’s gross domestic spending on R&D11

amountedtoHUF310.2billion,fromwhichtheshareof

2.

20

▲

Figure14:EvolutionofthenumberofICTresearchunitsintheperiodbetween2008-2010.Source:HungarianCentralStatisticalOffice

B2B parTnershIps

The RDI survey carried out by the National Innovation Office RDI Observatory also looked at ways in which businesses seek contact with other businesses which they regard as potential partners for cooperation.

Based on this, we may conclude that ICT companies, similarly to other sectors, are predominantly looking for potential business partners for cooperation by relying on their own contact network (more than 9/10 of respondents named this method). Second in the row came the answer ‘we tend to be

contacted by potential partners’, but there was also a significant proportion of companies looking for partners by visiting trade expos and fairs or by browsing specialist magazines, following announcements and websites.

Figure 15: Distribution of the answers of ICT businessesparticipating in thesurvey to thequestion ’Howdoyou lookfor new cooperation partners?’. Source: National InnovationOfficeRDIObservatory’ssurvey,2012

9According to theHungarianCentral StatisticalOffice’sdefinition,R&D invest-mentmeans‘thecostofpurchasingnewandusedfixedassetsandcomputersoftwaretobeusedinconnectionwithandinstrumentaltocarryingoutresearchandexperimentaldevelopments’.

10Costs of research and experimental development: direct and indirect cost oflabourcarriedoutbystaffdirectlyemployed,usingequipmentdirectlyownedlessamortisation(researchandexperimentaldevelopmentbookedasaninternalcost,oralternativelyorderedoroutsourcedundercontract).

▲

R&DperformanceoftheICTsector

0 20 40 60 80

100 120 140 160 180

ICT industry ICT services

numbe

r of research un

its

2008 2009 2010

By using scou+ng methods

By doing market research

With media+on from professional organisa+ons (agencies and chambers)

With the help of professional magazines, announcements, websites

By visi+ng trade expos and fairs

We tend to be contacted by others

By using own social network

0% 20% 40% 60% 80% 100%

The share of R&D expenditure in the ICT sector is

far smaller (8.7%) than in professional, technical

and scientific activities (28%), education (20.3%)

or pharmaceutical manufacturing (16.1%), but it is

higherthan,forexample,inautomotivemanufacturing

(4.6%) or the manufacturing of machinery and

mechanical equipment (2.3%). It marks a positive

trendfromtheICTsector’sperspectivethattheshare

ofbothICTsubsectorsfromR&Dspendingincreased

significantlybetween2008and2010. Forexample,

R&D expenditure in ICT services increased by 2.5

timesatnominalvalue(fromHUF5.5billiontoHUF

13.6billion).

wIThIn r&d expendITure In The ICT seCTor,

The relaTIve proporTIon of r&d InvesT-

menT Is Below The naTIonal average.

Within gross domestic R&D expenditure, R&D

investment averaged 11.4% for the national

economyasawhole,comparedto7.9%inICT;in

21

11R&Dexpenditure:sumofR&DinvestmentsandR&Dcosts

Figure16:GrossdomesticexpenditureonR&Dbysector(withaseparatedetailedbreakdownforthemanufacturingindustry)in2010.Source:HungarianCentralStatisticalOffice

the ICTsectorwasHUF27.1billion; split roughlyevenly

betweentheICTindustry(4.4%)andICTservices(4.3%).

The ICT seCTor’s r&d expendITure Is hIgher Than

The same IndICaTor - for example - of eITher

auTomoTIve or maChIne manufaCTurIng, BuT

IT Is far smaller Than The r&d expendITure of

pharmaCeuTICal manufaCTurIng.

sourCe of funds for r&d expendITure

The RDI survey carried out by the National Innovation Office RDI Observatory also looked at the source of funds that were used by companies to cover their business expenditure on R&D in 2011. A general conclusion of the survey was that respondent companies mostly finance their related activities themselves, and only a small proportion rely on either internal or external financing. According to survey data, this conclusion holds also for companies of the ICT sector. 90% of respondents replied that the necessary resources come from their own company group, and only 6.8% and 1.4% respectively named internal or external financing.

28%

20.3%

7.8% 4.4 % 5.8%

16.1%

4.6% 4.3%

2.3%

1.7%

4.6%

33.7%


Education

Wholesale and retail trade, repair of motor vehicles ICT services

All other sectors of the national economy

Manufacture of pharmaceutical products

Manufacture of motor vehicles

ICT industry

Manufacture of machinery and equipment n.e.c.

Manufacture altogether:

28%

20.3%

7.8% 4.4 %

5.8%

16.1%

4.6% 4.3%

2.3%

1.7%

4.6%

33.7%


Education

Wholesale and retail trade, repair of motor vehicles ICT services




ICT industry


Manufacture altogether:


otherwordsICThadarelativelyhighershareofR&D

costsandarelativelylowershareofinvestments.

Themanufacturingindustry,whichin2010accounted

for nearly 43% of gross domestic expenditure

on R&D, is heavily dominated by pharmaceutical

manufacturing, with the ICT industry representing

nomorethan2%ofallR&Dinvestmentsin2010.

Capitalexpenditure in ICTservices isdominatedby

professional and technical activities andeducation,

and the 4% share of ICT services is by no means

outstanding. Nevertheless, both professional and

technical activities - which in terms of sectoral

Figure17:DistributionofR&Dinvestmentsbysectorsofthenationaleconomy(withaseparatedetailedbreakdownforthemanufacturingindustry)in2010;Source:HungarianCentralStatisticalOffice

Figure18:DistributionofR&Dcostsbysectorsofthenationaleconomy(withaseparatedetailedbreakdownforthemanufacturing)in2010;Source:HungarianCentralStatisticalOffice

2.

22


27%

17.1%

5%

4 %

3.9 %

23.4%

3.3% 4.7%

2.8% 2%

8.7%


Education

Wholesale and retail trade, repair of motor vehicles

ICT services




ICT industry


Manufacture of electrical equipment

All other manufacturing sectors

Manufacture altogether: 42.9%

27%

17.1%

5%

4 %

3.9 %

23.4%

3.3% 4.7%

2.8% 2%

8.7%


Education


ICT services




ICT industry





27%

17.1%

5%

4 %

3.9 %

23.4%

3.3% 4.7%

2.8% 2%

8.7%


Education


ICT services




ICT industry





27%

17.1%

5%

4 %

3.9 %

23.4%

3.3% 4.7%

2.8% 2%

8.7%


Education


ICT services




ICT industry





27%

17.1%

5%

4 % 3.9

%

23.4%

3.3% 4.7%

2.8%

2%

8.7%


Education


ICT services




ICT industry





27%

17.1%

5%

4 %

3.9 %

23.4%

3.3% 4.7%

2.8% 2%

8.7%


Education


ICT services




ICT industry





28.7%

21.1%

8.3%

4.5 %

4.2 %

15.5%

4.9% 4.7%

2.3%

1.5%

4.2%


Education


ICT services




ICT industry





28.7%

21.1%

8.3%

4.5 %

4.2 %

15.5%

4.9% 4.7%

2.3%

1.5%

4.2%


Education


ICT services




ICT industry





usefulnesscanserveawidevarietyofpurposes-and

certaineducationsegmentscanbe interlinkedwith

othersectors,andsoalsotoasmallextentwiththe

ICTindustryandservices.

ThedistributionofR&Dcostswithinthemanufacturing

industry is different from the distribution of R&D

investment: the dominance of pharmaceutical

manufacturingisalsoevidentinthisarea,buttheICT

industry too has a bigger share, alongside with the

automotiveindustry.

FromR&Dcostsincurredonservices,professionaland

technicalactivitiesandeducationhavethebiggestshare.

Itisimportanttonoteheretoo,thepossibleexistence

ofparticular interlinksbetweenvarious sectorsof the

nationaleconomy,eventhoughICTservicesassuchdo

notweightsignificantlyinthisareaeither(4.5%).

2.3 Number of people employed in R&D

The numBer of researChers and devel-

opers employed In The BusIness seCTor

nearly TrIpled In The perIod BeTween 2000-

2011, wITh The mosT speCTaCular growTh

TakIng plaCe In The ICT servICes seCTor.

Thenumberofresearchersanddevelopers12increased

nearly threefold in the business sector during

the period between 2000-2010, with the most

spectaculargrowthoccurringwithin ICT,particularly

its services subsector: starting from 2005 we could

see a slow, then from 2007 an explosive rate of

growth. In the ICT services sector there were four

timesasmanyresearchersanddevelopersemployed

23

oBJeCTIves of r&daCTIvITy

The RDI survey carried out by the National Innovation Office RDI Observatory also examined what motivates the R&D of companies (respondents could select several possible reasons motivating their R&D activity).

Figure19:DistributionofanswersbyrespondentICTcompaniesto the question ‘What was the motivation behind and theobjective of your R&D activity over the last 3 years (2009-2011)?’.Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012

Relative to the companies in the entire sample, a higher percentage of ICT companies engage in R&D activity in order to develop a new product or service (this is partly what motivates 2/3 of the latter, the same ratio being 54.9% for other companies). Also, a slightly higher percentage of ICT companies identified the possibility of increasing their revenue as an important motivation for doing research and development, alongside with motivation to develop their activity and processes, albeit the latter featured as slightly less important. As far as other factors motivating R&D are concerned, ICT companies are fundamentally no different from all other respondents: sixth of them named the desire to develop their organization, and over 50% attached importance to research aimed at developing an existing product or service. It is interesting that 4% of respondent companies named doing research for the sake of research (be to be) as a motivating factor.

12R&Demployment:thenumberofprofessionalsinvolvedindevelopingnewknowledge,products,procedures,methodsandsystemsortheirunderlyingconcept,andinthemanagementofR&Dprojectsconcerned.

▲


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Organisa4onal development

Developing ac4vi4es, processes

Poten4al revenue genera4on

Further developing an exis4ng product, service, technology

0% 20% 40% 60% 80% 100%

in2009thanin2005.Thenumberofresearchand

developmentpersonnelemployedintheICTindustry

continued to increaseuntil2007, thenafteradrop

in2008thesectorcouldonceagainstartmakinga

contributiontotheincreaseinR&Demployment.The

mostdynamicincreaseinR&Demploymenttookplacein

theICTservicessectorcomparedtootherbranchesofthe

nationaleconomy,soby2008theICTservicessectorwas

aheadevenofthepharmaceuticalindustryintermsofthe

numberofpeopleemployedinresearch,eventhoughthe

latter ischaracterisedbyawealthofR&Dtraditionsand

capacity,aswellasnearly400%higherR&Dspending.

ICT servICes employ more researChers and

developers Than eITher The pharmaCeuTICal

or The auTomoTIve IndusTry.

2.4 Regional distribution of ICT research and development personnel

By far The hIghesT numBer of researCh-

ers Is employed In CenTral hungary, even

Though regIonal gaps are narrowIng.

2.

Figure20:RateofR&DemploymentincreaseintheICTsectorandotherbusinesssectorsin2005-2009.Source:Eurostat

13FTE:Full-TimeEquivalent14More than half of research and development personnel is employed in

educationasabranchofthenationaleconomy.TheeducationsectorhasbeenomittedfromthisFiguretoallowforthevisibilityofrelevantindicatorsofsmallersectors.Atthesametime,itshouldbenotedthattheactivityofresearchanddevelopmentpersonnelemployedineducationinvolvesawiderangeofdisciplines,anditisinterrelatedwithseveraleconomicsectors.

Figure21:Numberofpeopleemployedinresearchanddevelopment(FTE)inthenationaleconomyasawhole,inabreakdownaccordingtosectors,excludingeducation.Source:HungarianCentralStatisticalOffice

24

▲


0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009

capita

R&D personnel in the ICT services sector

R&D personnel in the ICT industry

R&D personnel in all other sectors

0 1000 2000 3000 4000 5000 6000 7000

Other sectors in total:

ICT Industry

Manufacture of basic pharmaceutical products and pharmaceutical preparations

Wholesale and retail trade; repair of motor vehicles and motorcycles

ICT services

Human health services

Manufacturing industry (excl. pharma and ICT industry)

Professional, scientific activities

2008 Rate of growth for 2010

25

Figure22:DistributionofR&DpersonnelintheICTservicesector(%)acrossvariousregionsofHungary.Source:HungarianCentralStatisticalOffice

7.7

2.7

2.3 1.1

0.2

3.3

2008 (%)

Central Hungary South Great Plain Central Transdanubia

South Transdanubia Northern Hungary West Transdanubia

Northern Great Plain

Other regions: 17.2

Central Hungary: 82.8

The dominance of Central Hungary within the

ICT services sectorhasbecome lesspronounced

from 2008 to 2010 in terms of the number of

people employed in research and development,

but this region is still playing a central role as

nearly 70% of ICT researchers and developers

still work here. Although currently the number

of R&D professionals employed in other regions

isstillsignificantlylowercomparedtothecentral

region,andCentralHungaryislikelytocontinue

tomaintainitsleadingrolealsointheforeseeable

future, a slow increase has been taking place

inall regionsbetween2008and2010with the

exceptionoftheNorthernGreatPlainregion.The

most spectacular growth was seen in Northern

Hungary: while in 2008 this region employed

just above 1% of all R&D personnel working

in Hungary, in the space of two years this rate

increasedtoabove11%.

The growTh In hungarIan ICT r&d

employmenT Is ouTsTandIng even In

InTernaTIonal Terms.

9.2

2.7

4 11.4

0.9

2.7

2010 (%)

Central Hungary South Great Plain Central Transdanubia

South Transdanubia Northern Hungary West Transdanubia

Northern Great Plain

Other regions: 30.9

Central Hungary: 69.1

Figure23:RelativeproportionofICTresearchanddevelopmentprofessionalswithinthetotalR&Demployment(%).Source:Eurostat

0% 5% 10% 15% 20% 25% 30%

Czech Republic

Poland

Hungary

Bulgaria

Austria

Germany

2007

2009


From2007to2009,thenumberofICTresearchand

developmentprofessionalsemployedintheICTsector

nearly doubled in Hungary, thereby demonstrating

outstandinggrowthevenininternationalcomparison.

OfallVisegradcountries,theCzechRepublicemploys

themostFTEresearchersanddevelopers,Hungary

being roughly at the same level as Poland; and

SlovakiasignificantlylaggingbehindotherVisegrad

countries. As per 1,000 capita of the population,

theCzechRepublicemploysthehighestnumberof

researchersanddevelopers,PolandandSlovakiaare

significantlylaggingbehindHungary(bothcountries

employing2/3fewerresearchersanddevelopersper

capitaofthepopulation).

WhileR&DemploymentwithintheICTservicesector

isonthesamescaleforPoland,theCzechRepublic

andHungaryinabsoluteterms,intermsoftheper-

capitaindicatorHungaryandtheCzechRepublicare

clearlyintheleadforemployingthehighestnumber

ofR&DpersonnelwithintheICTservicesector.

2.5 Patents – international comparison

The relaTIve proporTIon of ICT paTenTs

wIThIn all paTenTs InCreased sIgnIfICanTly

In hungary over The pasT deCade, In

ConTrasT wITh eu memBer sTaTes, whICh

reCorded deClInIng Trends on The whole.

TheR&Dperformanceofa sector ismeasurable

partly by thenumberof registeredpatents. The

numberofpatentswithintheICTsectordoesnot

necessarilyreflectthesector’sR&Dperformance;

as products of the sector have such a short life

cycletheyoftendonoteverreachpatentstage,

as illustratedbysomanysignificant ICTachieve-

ments of the recent past. This notwithstanding,

theratioofICTpatentswithinallpatentshasrisen.

Asaninternationalcomparisonconductedbythe

OECDdemonstrates,Hungaryoutperformed the

averageof theEU27 in termsof relativeweight

Figure24:Thenumberofresearchanddevelopmentprofessionalsemployed(FTE)per1,000capitaofthepopulation(columns)andwithinthattheratioofR&DpersonnelintheICTservicessector(markedinredinthepiechart)inthecontextofVisegradcountries,2009;Source:Eurostat

2.

26

▲


0

0.2

0.4

0.6

0.8

1

1.2

1.4

Czech Republic Hungary Slovakia Poland

Num

ber

of re

searc

h s

cientis

ts p

er

1,0

00 c

apita

of th

e p

opula

tion

12%

88%

16%

84%

1%

99%

17%

83%

ofICTpatentsintheperiodbetween2007-2009.

The 27.8% ratio for this period represented an

improvementcomparedto23.6%in2001-2003.

2.6 Innovative ICT businesses

Nowadays innovation has become a major

competitivefactorfornearlyallcompanies,and

thisisparticularlytruefordynamicallydeveloping

industries, such as the ICT sector. Before we

move on to an overview of the innovation

performance of ICT businesses, it is important

toprovideadefinitionofinnovation.According

to the internationally accepted definition,

innovationmeans‘theintroductionofanew,or

significantly further developed product, goods,

service or process, new marketing method, or

new organizing-organizational method in the

contextofanenterprise’sbusinesspractice,work

organisationorexternalrelations15.Accordingly,

wecanmaketwofurtherimportantobservations

regardingtheconceptofinnovation:

� theproduct/proceduredoesnotnecessarily

havetobenovelforthemarketasawhole,

it is enough for it to be novel within a

specificorganisation;

� it is not mandatory for an organisation to

develop its own products, procedures and

methods, alternatively it can outsource this

activitytootherbusinesses.

Figure25:ICT-relatedpatentsasapercentageofnationaltotalin2001-2003and2007-2009.Source:OECD,2012

27

▲

paTenTs and Trademarks

13.6% of ICT companies participating in the National Innovation Office RDI Observatory’s corporate RDI survey had a patent registered in Hungary, while 7.9% also had a patent registered in a foreign country. This ratio is slightly more modest when it comes to trademarks: 10.4% of respondent ICT companies had a trademark registered in Hungary, and only 3.6% had a trademark registered in a foreign country.

15OsloManualguidelinesforcollectingandinterpretinginnovationdata,3rdedition,2005,pp146.

0% 10% 20% 30% 40% 50% 60%

Czech R.

Spain

Germany

Poland

Austria

Norway

EU27 avg.

Hungary

France

Sweden

Finland

2001-2003 2007-2009


is significantlybehind the51%ratiomeasured for

theEU27.

The ICT servICes seCTor Is The mosT

InnovaTIve of all servICe seCTors

From all the sectors covered by the survey, the

pharmaceutical industry came on top, with 75% of

companiesclassedasinnovative.TheICTindustryisfifth

intherankingofmanufacturingindustrysectors,whereas

ICTservicesarethemostinnovativeofallservicessectors

Itisakeyissueforcompanies,towhatdegreetheycan

renewthemselvesandtowhatextenttheycanfollow

changing market needs, to adapt and develop their

productsandservicesaccordingly,andtowhatextent

theyarepreparedtorenewthemselvesandhowthey

canimprovetheefficiencyoftheiroperations.

According to the findings of the Community

Innovation Survey (CIS), in 2006-2008 28.9% of

Hungarian businesses fulfilled the criteria of an

innovative business, then for 2008-2010 this ratio

improvedmarginallyto31.1%,butevensoHungary

2.

28

Figure26:Shareofinnovativebusinesseswithatleast10employeesinvarioussectorsofthenationaleconomyandinthemanufacturingindustry,2008-2010.Source:CIS2010,HungarianCentralStatisticalOffice


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Manufacture of leather and related products

Manufacture of basic metals; manufacture of fabricated metal products

Manufacture of wood and paper products, and printing

Other manufacturing, and repair and installation of machinery and equipment


Manufacture of rubber and plastic products

Manufacture of food products, beverages and tobacco products

ICT industry


Manufacture of public transport equipment

Manufacture of chemicals and chemical products

Manufacture of basic pharmaceutical products and pharmaceutical preparations

Manufacturing

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Transportation and storage


Wholesale trade (excl. vehicles, motorcycles)

Water supply

Financial and insurance activities

Electricity, gas, steam and air conditioning supply

ICT services

Services

Share of innovative enterprises in total (product, process, organisational, marketing) Share of non-innovative enterprises

29

coveredbythesurvey.ThemajorityoftheICTsector’s

innovativecompanieswithatleast10employees(like

themajorityofothersectors)areengagedinproductor

proceduralinnovationandorganisationalormarketing

innovationatthesametime,withasmallerproportion

of companiesengagedonly inproductorprocedural

innovation or only in organisational and marketing

innovation.ItisnoteworthythatwithintheICTsector

organisational or marketing innovation is the second

mostimportantinnovationorientation.

Bycomparingtheinnovationperformanceofthetwo

subsectors comprisedby the ICT sector in theperiod

between 2008-2010 and the previous period (2006-

2008),wefindthattherateof innovativecompanies

withintheICTindustryactuallyfell-evenifatarelatively

modestrate(downfrom42%to38.4%)-whenthe

rate of innovative ICT service provision companies

went up (from 47.6% to 48.4%). Decrease in the

manufacturing industrywascausedprimarilybyafall

inthenumberofcompaniesengagedonlyinproduct

and/or procedural innovation (down from 15.2% to

10.8%), whereas increase in the relative proportion

of innovative companies within the services sector is

explainedbyagrowingnumberofcompaniesengaged

onlyinorganisationaland/ormarketinginnovation(up

from8.1%to14.7%).

we are seeIng a deClInIng Trend In The

numBer of InnovaTIve CompanIes In The ICT

IndusTry, maInly BeCause The numBer of

CompanIes ImplemenTIng TeChnologICal

InnovaTIon only Is droppIng

Figure27:Shareof innovativecompanieswithat least10employeesbytypeof innovationin2008-2010.Source:CIS2010,HungarianCentralStatisticalOffice


0% 10% 20% 30% 40%

Manufacture of textiles, wearing apparel, leather and related products, including footware

Manufacture of basic metals and fabricated metal products

Manufacture of paper and paper products, printing

Manufacture of rubber and plastic products


Manufacture of food products, beverages and tobacco products

Other manufacturing, repair and installation of industrial machinery, equipment and instruments


ICT industry

Manufacture of chemicals and chemical products

Manufacture of public transport vehicles

Manufacturing of basic pharmaceutical products and pharmaceutical preparations

Manufacturing

0% 5% 10% 15% 20% 25%

Transportation and storage


Wholesale trade (except: vehicles, motorcycles)

Water supply

Financial and insurance activities

Electricity, gas, steam and air conditioning supply

ICT services

Services

Share of innovative enterprises engaged in product or process innovation and organisational or marketing innovation

Share of enterprises engaged only in organisational or marketing innovation

Share of enterprises engaged only in product or process innovation

2.7 Tender system: grant agreements and awarded amounts

The credit crunch brought about by the financial

crisis and further deepened by high funding costs

accentuated the importance of all forms of grant

funding,offeringcompaniesawayoffinancingtheir

developmentsatbelow-marketrates.Thefollowingis

abriefoverviewofhowtheICTsectorisusingavailable

domesticinnovationfundingaswellasEUfunding.

Innovation grants are a significant boost to the

competitiveness of the ICT sector, and given

the relativelyhighvalueaddedof this sector (as

analysedabove),thishasapositiveknock-oneffect

on thenationaleconomyasawhole; therefore,

unsurprisingly,supportingsuchgrantsisseenasa

priorityalsointheNewSzéchenyiPlan.

InformaTIon TeChnology sCIenCes aCCounT

for 24.4% of ToTal awarded domesTIC

Tender fundIng and nearly 18% of The

numBer of suCCessful Tender applICaTIons.

WhenanalysingtheICTsector,itisimportanttotakeinto

accounttheshareofindividualsectorsfromtotalavailable

domestic innovation funding. Figure 23 shows the

respectiveshareofinformationtechnologysciencesfrom

theResearchandTechnologyInnovationFundintermsof

awardedtenderamountsandthenumberofsuccessful

tender applications in 2007-2012.16 (For the sake of

comparison,wealsoincludedpharmaceuticalsciences.)

Information science accounts for 24.4 % of total

awardedtenderfunding,and18%ofthetotalnumberof

successfultenderapplications.Thesebeingexceptionally

highpercentageratesmeanthatinformationtechnology

sciencecouldproveanengineofHungarianinnovation

alsointhelongterm–providedofcoursethattender

fundsareusedtogenerateadequatereturns.

The share of InformaTIon sCIenCe from To-

Tal fundIng Is muCh hIgher Than fundIng

awarded for pharmaCeuTICal sCIenCes.

Figure28clearlyillustratesthattheshareofinformation

science disciplines from total funding in Hungary is

muchhigherthanfundingawardedtohighlyinnovative

2.

30

Tender parTICIpaTIon

From the 280 ICT sector companies taking part in the National Innovation Office RDI Observatory’s RDI survey, nearly 60% responded to a call for tender bids at some point over the last five years in Hungary (the highest level of activity demonstrated by small and medium size enterprises, with participation rates exceeding 65% and 71% respectively).

16ItshouldbenotedthatwhileourreportfocusesontheICTsectorassuch,theheadingofthetablereads‘informationtechnologysciences’.Thereasonforthisisthatofallscientificdisciplinesdesignatedbytenderapplicantsintheirtenderapplications,informationtechnologyisthedisciplinewhichisclosesttotheICTsectorandsoitisbestpositionedtoprovideadequateinformationforevaluatingthetenderperformanceoftheICTsector.At the same time, our results could be distorted by tender applicants failing todesignate all applicable scientific disciplines: in 2007-2012, applicants achieveda 66% rate of completion. This Figure shows tender applications in a breakdownbyscientificdiscipline.

Figure 28: Share of information science and pharmaceutical sciencedisciplines from the Research and Technology Innovation Fund in theperiodbetween2007-H1of2012(takingintoaccountthedateofthedecisionawardingthetenderfunding,inalltenderapplicationsclassifiedaccording to scientific disciplines); Source: Research and TechnologyInnovationFundtendermanagementsystem(PKR)


0%

5%

10%

15%

20%

25%

30%

Allocation of awarded tender grant amount Distribution of the number of successful tender application

Information science Pharmaceutical science

▲

and traditionally competitive pharmaceutical science

disciplines, which are linked closely to the pharma

industry. It is evident at the same time that even

though the shareof informationsciencewashigher

inbothcomparisonspresentedabove,itsprecedence

overpharmaceuticalscienceisfarlesspronouncedin

termsoftheamountofawardedfundingthaninterms

of the number of tender applications. Companies

with an IT profile have probably implemented a

highernumberofsmallerprojects,incontrasttothe

pharmaceuticalindustry,whereasuccessfulinnovative

developmenttendstobealotmorecapitalintensive.

This being the case confirms the observation made

earlierregardingR&Dexpenditure,namelythattheICT

sector is lessR&Dintensive. Itservestodemonstrate

thepotentialinherentinITalsofromatenderaspect,

as compared to highly capital intensive industries

(likepharmaceuticalmanufacturingandthemachine

industry) in ITrelatively lowinvestmentcangenerate

veryhighreturns.

EUgrantshaveparamountimportanceamongavailable

formsof funding,as theyallowcompanies toobtain

largeamountsoffinancingforvariousdevelopmentsby

contributingonlyalimitedamountoftheirowncapital.

Howefficientlyandhowfullyitisabletodrawdown

suchfundingisofvitalimportanceforHungary.

According to Figures 30 and 31, Hungary has a

majorbackloginEUcomparison(bothintermsof

thenumberofgrantagreements,andintermsof

awardedgrantamounts).However,bycomparing

Hungary’s performance with new accession EU

member states it becomes evident that Hungary

actually ranks rather high on both indicators, its

performance being roughly similar to that of the

CzechRepublic,acountryofsimilarsize.Allinall,

withintheFP7FrameworkProgrammeamongEU12

memberstates,Hungaryhasthehighestnumberof

signed ICT grant agreements after Poland, and it

has3rdplaceintermsofawardedgrantamounts.

31

what can the government do to boost the r&d performance of ICT companies?

In their answers to the National Innovation Office RDI Observatory’s survey, 3/4 of ICT companies – similarly to respondents from other sectors – mentioned tax allowances as the single biggest help which the government can extend to boost their R&D performance. The second most common answer was putting greater emphasis on direct forms of support (69.6%), followed by (nearly 2/3 of companies) announcing more RDI tenders and greater predictability of the regulatory environment (61.1%), with more than half of respondents also stressing the importance of having access to regional tender funds and to guarantee funds.

Figure29:Answerstothequestion‘HowcangovernmentactionboosttheR&DperformanceofICTcompanies?’.Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012

0% 20% 40% 60% 80% 100%

By promoting technology transfer

By strengthening the protection of intellectual property rights

By relying on venture capital and JEREMIE funds

By providing education and training

By providing access to regional tender funds and guarantee funds

By creating a more predictable regulatory environment

By offering a wider range of R&D tenders

By putting more emphasis on direct forms of support

Through tax allowances

ICT other sectors


Through tax allowances

By putting more emphasis on direct forms of support

By offering a wider range of R&D tenders

By creating a more predictable regulatory environment

By providing access to regional tender funds and guarantee funds

By providing education and training

By relying on venture capital and JEREMIE funds

By strengthening the protection of intellectual property rights

By promoting technology transfer

BycomparingEU-27countries individually,wemay

concludethatHungaryhas16thplaceintermsofthe

relativeproportionofsuccessfultenderapplications,

17thplace intermsofawardedtendergrants,and

20thplaceasaproportionofthesizeofitspopulation

intherankingofthesememberstates.Eventhough

therestofnewaccessioncountriestoohaveabacklog

in termsofhowmuchEUfundingtheyhavebeen

abletoactuallydrawdown,Hungarystillhasalong

waytogotocatchupwiththeaverageoftheEU-27.

12.9% of ICT proJeCTs presenTed under The

fp7 framework programme were approved

for fundIng, and Tender applICanTs were

aBle To seCure an even smaller perCenTage

- only 11.6% - of ToTal requesTed fundIng.

2.

32

R&DperformanceoftheICTsector30.4

181

16.1

28.7

0

20

40

60

80

100

120

140

160

180

200

PL CZ HU SI RO CY BG SK EE LV LT MT EU 27 avg

EU 12 avg

V4 avg

mill

io €

122

461

67

115

0

50

100

150

200

250

300

350

400

450

500

PL HU CZ SI RO BG CY SK EE LT LV MT EU 27 avg

EU 12 avg

V4 avg

num

ber o

f sig

ned

agre

emen

ts

Figure31:EUfundingawardedtoICTsectorcompanies(EURmillion;undertheFP7FrameworkProgramme,2007-2012)E-CORDA

30.4

181

16.1

28.7

0

20

40

60

80

100

120

140

160

180

200

PL CZ HU SI RO CY BG SK EE LV LT MT EU 27 avg

EU 12 avg

V4 avg

mill

io €

122

461

67

115

0

50

100

150

200

250

300

350

400

450

500

PL HU CZ SI RO BG CY SK EE LT LV MT EU 27 avg

EU 12 avg

V4 avg

num

ber o

f sig

ned

agre

emen

ts

Figure30:ThenumberofsealedandsignedICTgrantagreements(undertheSeventhFrameworkProgrammeforResearchandTechnologicalDevelopmentfor2007-2012);Source:E-CORDA

Summary

InmostOECDmembercountriesreviewed,ICTinvestmentsmakeagreatercontributiontoeconomic

growththantheinvestmentsofallothersectorscombined.TheEUattributesavitalroletoICTtoolsand

services,asitiswiththeirhelpthatwecancreateadigitalinternalmarketthatcouldbringnumerous

potentialgrowthopportunitiesfortheregion.TheEuropeanUnionhasseveralcompetitivedisadvantages

comparedtoitsmainrivals(e.g.JapanortheUS),whetherwelookattheICTsector’sR&Dintensity,its

valueadded,orshareofpatents.

HungaryisclearlynotaninfocommunicationpowerhousewithinEurope,yetitdemonstratedimpressive

growth in thatarea in recentyears, supportedby indicators thatgivecause foroptimism regarding

the sector’s future.Agoodexampleof theabove is thata significantpartof the rapidproductivity

improvementintheHungariandomesticeconomy(nearlysixthofit)isattributabletoICTproductsand

services.At thesametime,sectoralvalueadded increasedconsiderablywithin totalvalueaddedfor

thecorporatesector-exceedingtheOECDaverage–,which illustratesclearlythepotentialwhich is

inherentinthissector.Itisalsonotable,thattheHungarianICTsectorhasachievedoutstandinggrowth

ininternationalcomparisondespiteitsexpenditurelevelsarebelowtheaverageofOECDcountries.

Themacroeconomic significanceof the ICT sector is demonstrated alsoby the fact thatmore than

25%ofHungarianmanufacturingindustryexportsaregeneratedbyproductsoftheICTindustry,with

ICTservicesplayingalsoasignificantroleinthetradeofservices.TheICTindustryandICTservices-

bothdistinguishedbyabalanceoftradesurplus-havebothbeenmakingasignificantcontributionto

maintainingthecountry’sexternalbalance.

WhileinrecentyearstherehasbeenarisingnumberofICTcompaniesinHungary,neverthelessthe

HungariannationaleconomyhasaneconomyofscalewhichdeterminesthescaleoftheHungarian

ICT sector too: i.e. the majority of companies operating in the sectors covered by our analysis

aremicro-businesses.Thebigpicturebecomes slightlymore subtle ifweconsider that small and

medium-sizedbusinessesrepresentarelativelyhigherpercentageofallbusinessesengagedinthe

ICTindustrythaninthenationalaverage.

Ifweexaminethesectorfromtheaspectofresearchcentres,wefindthattheICTindustryandICTservices

bothpresentsignificantR&Dpotentialalsowithregardtoresearchunitswithastrongincrease inthe

numberofICTresearchunitsbetween2008-2010,atrendthatwasnotinterruptedevenbytheeconomic

downturn.Thesizeoftheresearchanddevelopmentpersonnelnearlytrebledinthebusinesssectorin

theperiodbetween2000-2011,withthemostspectaculargrowthtakingplaceintheICTservicessector.

Duringthesameperiod, ifwelookatnot juststrictlythenumberofresearchanddevelopment

professionals,therewassignificantgrowthalsointhescaleofoverallICTemployment.

33

▲


Summary

34

Speakingofexpenditure,itneedstobeunderlinedthatR&DexpenditureintheICTsectoriswellbelow

the expenditure of other sectors. From the gross domestic R&D expenditure of the economy, R&D

spendingisproportionatelymodestcomparedtoothersectors,butithasanincreasingtrend.

TheICTsectoristhe5thmostinnovativesectorintherankingofmanufacturingindustrysectors,while

ICTservicesareat thetopof the innovation leaguetablewithinall servicesectors in theHungarian

economy. It is awarning sign,however, that currentlywearewitnessingadecreasing trend in the

relativeproportionofinnovativecompanieswithintheICTindustry.

Innovation grants contribute to improve the competitiveness of the ICT sector. Information science

disciplinesaccountforahighpercentageofawardedtenderfunding,withtheirsharefromgrantswell

exceeding those inpharmaceutical sciencedisciplines that are extremely innovative and traditionally

competitiveinHungaryandarecloselylinkedtothepharmaceuticalindustry.

Inviewof thisanalysisof the ICTsector’sstatusonR&D, it isclear that thesectorcanrightfullybe

regardedasapotentialbreakoutpointfortheHungarianeconomy.FacilitatingRDIperformanceofthe

ICTsectorwouldwithoutdoubtimprovethesector’salreadyremarkableresults,whichisintheinterests

notonlyofsectoralplayersbutalsoofthenationaleconomyasawhole,giventhatICTactivitiesare

interlinkedpracticallywithallsectorsoftheeconomy.

Bibliography

CsonkaLászló:Researchanddevelopmentandinnovationinthelightofglobalisation-acasestudyofsmalland

mediumsizeenterprisesintheHungarianITsector(Kutatás-fejlesztésésinnovációanemzetköziesedéstükrében

–amagyarinformációtechnológiaiágazatkis-ésközépvállalatainakesete.Külgazdaság,2011.9-10.)

EuropeanCommission:EUInnovationUnionCompetitivenessReport2011

http://ec.europa.eu/research/innovation-union/index_en.cfm?section=competitiveness-report&year=2011

EuropeanCommission:AnnualGrowthSurvey,2012

http://ec.europa.eu/europe2020/pdf/annual_growth_survey_en.pdf

Ernst&Young:ThePowerofSimplicity–Towardasmarterandstreamlinedinnovationpolicy

intheEUhttp://www.ey.com/Publication/vwLUAssets/Growing_Beyond:_Government_and_

Innovation_2012/$FILE/Growing%20Beyond%20Summit_Report_final_spread.pdf

EurostatStatisticalDatabase

http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database

HCSOFirstRelease,serialno.:124(KSHGyorstájékozató,142.szám),2012.

http://www.ksh.hu/docs/hun/xftp/gyor/gde/gde21206.pdf

HCSOStatisticalReflection:Innovation,VolumeVI.Issue59(KSHStatisztikaiTükör:Innováció,VI.évf.59.

szám),2012.http://www.ksh.hu/docs/hun/xftp/idoszaki/innovacio/innovacio10.pdf

HCSODisseminationDatabase(KSHTájékoztatásiadatbázis)

http://statinfo.ksh.hu/Statinfo/themeSelector.jsp?&lang=hu

ResearchandTechnologyInnovationFund-tendermanagementsystem(KutatásiésTechnológiai

InnovációsAlappályázatkezelőrendszere,PKR)

OECD:FrascatiManualProposedStandardPracticeforSurveysofResearchandExperimentalDevelopment,

2002

http://www.nih.gov.hu/innovaciopolitika/publikaciok-tanulmanyok/frascati-kezikonyv-080523

OECDInformationandTechnologyOutlook(2010)

http://www.oecd.org/internet/interneteconomy/oecdinformationtechnologyoutlook2010.htm

OECD:KeyICTIndicators

http://www.oecd.org/internet/broadbandandtelecom/oecdkeyictindicators.htm

OsloManualguidelinesforcollectingandinterpretinginnovationdata,3rdedition,2005,pp146.

WorldBankDatabase

http://data.worldbank.org/

▲

35


All figures together with underlying tables are accessible through the National

Innovation Office Kaleidoszkóp internet portal www.kaleidoszkop.nih.gov.hu).

Figure 1: TheEU’sICTsectorininternationalcomparison(2007).Source:EuropeanCommission:

EUInnovationUnionCompetitivenessReport2011...........................................................................10

Figure 2: AnnualaveragelabourproductivitygrowthandICTcontributiontosuchgrowthin

totalindustries,1995-2008(%).Source:OECDKeyICTIndicators,2012...........................................11

Figure 3: ShareofICTvalueaddedinthebusinesssectorvalueadded,

Source:OECDKeyICTIndicators,2012.(ThereisnodataavailableforPoland1995)........................12

figure 4: GrossvalueaddedoftheHungarianICTsectorasapercentageofvalueadded

ofthetotaleconomy,1995-2011.Source:HungarianCentralStatisticsOffice...................................13

Figure 5: BalanceoftradeintheICTindustryanditssharefromHungarianmanufacturingindustry

exportsandimportsin2008-2011(%).Source:HungarianCentralStatisticsOffice...........................14

Figure 6:BalanceoftradeinICTservices(HUFbln)andtheirrelativeproportionwithinthe

importandexportofservices(%)in2008-2011.Source:HungarianCentralStatisticalOffice............15

Figure 7: NumberofbusinessenterprisesintheICTsector,2003-2010.

Source:HungarianCentralStatisticalOffice.......................................................................................15

Figure 8: Breakdownofrespondentcompanies’answerstothequestion‘Whichorganisationsareyouin

(regular,close)liaisonwith?’.SourceNationalInnovationOfficeRDIObservatory’ssurvey,2012......16

Figure 9: Breakdownofactivebusinessenterprisesbysectorandbranchesofthenational

economy,2010.Source:HungarianCentralStatisticalOffice.............................................................17

Figure 10: DistributionofICTcompaniesaccordingtocorporatelifecycle.

Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012..................................................17

Figure 11: DistributionofICTcompaniesbasedontheircurrentdevelopmentphasein

termsofR&D.Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012...........................17

Figure 12: TheICTsectorbycompanysize(%),2011.Source:HungarianCentralStatisticalOffice..................18

Figure 13: ShareofICTemploymentinbusinesssectoremployment.

Source:OECDKeyICTIndicators,2012...........................................................................................19

Figure 14: EvolutionofthenumberofICTresearchunitsintheperiodbetween2008-2010.

Source:HungarianCentralStatisticalOffice.....................................................................................20

Figure 15: DistributionoftheanswersofICTbusinessesparticipatinginthesurveytothequestion

’Howdoyoulookfornewcooperationpartners?’.Source:NationalInnovation

OfficeRDIObservatory’ssurvey,2012.............................................................................................20

Figure 16: GrossdomesticexpenditureonR&Dbysector(withaseparatedetailedbreakdown

forthemanufacturingindustry)in2010.Source:HungarianCentralStatisticalOffice......................21

ListofFigures

36

List of Figures

▲

37

Figure 17: DistributionofR&Dinvestmentsbysectorsofthenationaleconomy(withaseparatedetailed

breakdownforthemanufacturingindustry)in2010;Source:HungarianCentralStatisticalOffice.............22

Figure 18: DistributionofR&Dcostsbysectorsofthenationaleconomy(withaseparatedetailed

breakdownforthemanufacturing)in2010;Source:HungarianCentralStatisticalOffice.................22

Figure 19: DistributionofanswersbyrespondentICTcompaniestothequestion‘Whatwasthemotivationbe-

hindandtheobjectiveofyourR&Dactivityoverthelast3years(2009-2011)?’.

Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012..................................................23

Figure 20: RateofR&DemploymentincreaseintheICTsectorandotherbusinesssectors

in2005-2009.Source:Eurostat.......................................................................................................24

Figure 21: Numberofpeopleemployedinresearchanddevelopment(FTE)acrossthenational

economyasawhole,inabreakdownaccordingtosectors,excludingeducation.

Source:HungarianCentralStatisticalOffice.....................................................................................24

Figure 22: DistributionofR&DpersonnelintheICTservicesector(%)acrossvarious

regionsofHungary.Source:HungarianCentralStatisticalOffice.....................................................25

Figure 23: RelativeproportionofICTresearchanddevelopmentprofessionalswithin

totalR&Demployment(%).Source:Eurostat..................................................................................25

Figure 24: Thenumberofresearchanddevelopmentprofessionalsemployed(FTE)per1,000capitaofthe

population(columns)andwithinthattheratioofR&DpersonnelintheICTservices

sector(markedinredinthepiechart)inthecontextofVisegradcountries,2009;Source:Eurostat.................26

Figure 25: ICT-relatedpatentsasapercentageofnationaltotalin2001-2003and2007-2009.

Source:OECD,2012.......................................................................................................................27

Figure 26: Shareofinnovativebusinesseswithatleast10employeesinvarioussectorsofthenationaleconomy

vsmanufacturingindustrysectors,2008-2010.Source:CIS2010,HungarianCentralStatisticalOffice............28

Figure 27: Shareofinnovativecompanieswithatleast10employeesbytypeofinnovation

in2008-2010.Source:CIS2010,HungarianCentralStatisticalOffice..............................................29

Figure 28: ShareofinformationscienceandpharmaceuticalsciencedisciplinesfromtheResearchandTechnology

InnovationFundintheperiodbetween2007-H1of2012(takingintoaccountthedateofthedecision

awardingthetenderfunding,inalltenderapplicationsclassifiedaccordingtoscientificdisciplines);

Source:ResearchandTechnologyInnovationFundtendermanagementsystem(PKR)........................................30

Figure 29: Answerstothequestion‘HowcangovernmentactionboosttheR&Dperformance

ofICTcompanies?’.Source:NationalInnovationOfficeRDIObservatory’ssurvey,2012..................31

Figure 30: ThenumberofsealedandsignedICTgrantagreements(undertheSeventhFramework

ProgrammeforResearchandTechnologicalDevelopmentfor2007-2012);Source:E-CORDA................32

Figure 31: EUfundingawardedtoICTsectorcompanies(EURmillion;undertheFP7

FrameworkProgramme,2007-2012)E-CORDA...............................................................................32


38

national Innovation officeGovernmentDecree303/2010(XII.23.)establishedtheNationalInnovationOffice(NIH)asthegovernmental

body responsible for research,developmentand technological innovation.TheOfficeoperatesunder the

directionoftheMinister for National Economy.

Main activities of the National Innovation Office:

uRDIstrategicanalysisandplanning

uoperatetheKaleidoszkópsystem

ubeinvolvedinthedevelopmentandapplicationofRDIpolicy

ucoordinateandfacilitateinternationalRDIcooperation

International activity:

uattractforeigninvestmenttoHungary

uharmoniseinternationalandEURDIpolicies

ucoordinatebilateralscientificandtechnologicalcooperation

SME-support activities:

uprovideeasieraccesstodomesticRDIresultsformarketplayers

usupportresearch-relatedcooperationandpromotenetworkingbetweenRDIplayers

uprovideinnovationmanagementservices

uboosttheinnovationactivityofSMEs

Topromotetheseobjectives,NIHworksinclosecooperationwithothergovernmentagencies,ministries,bureaus,the

HungarianAcademyofSciences,highereducationinstitutionsandresearchinstitutes,nationalandregionalorganisations

andmarketplayerswithanRDIinvolvement.

kaleidoszkópKaleidoszkóp(thenamereferstothemultifacetednatureofRDI)isthenameoftheinformationsystemusedbythe

NationalInnovationOffice.Kaleidoszkóp’sobjectiveistocreateanintegratedRDIdatabaseoftherelevantinstitutions

andcompaniesofthesector,aswellasdataandanalysessupportingRDIpolicyrelateddecision-making.Withthe

helpofthisdatabase,RDIstakeholderscanbeinvolvedindiagnosingproblemsasmayexistwithinthesectorand

workoutpossiblesolutions.AllKaleidoszkópsystemdataandservicefunctionalitiesaremeanttoassistpublicsector

institutionsandotherorganisationsintheirnetworking,strategydevelopmentandmarketanalysisefforts.

Kaleidoszkóp is operated by the National Innovation Office RDI Observatory Department.

Kaleidoszkóp’s homepage: www.kaleidoszkop.nih.gov.hu

▲▲

Kaleidoszkóp’s main objectives:

upromotenetworkingwithintheRDIsector

uassistfacts-baseddecision-making

uassistnationalandinternationalstatisticalactivity

uprovidesolidfoundationsforRDIstrategy-making

Kaleidoszkóp’s services:

ugenericandspecificsectoralRDIanalysesandstatistics

uqualitydatasourcesinforminganalysis

uinformationonpublicfundedRDIprojects

uregisterofHungarianresearchinfrastructurefacilities

umap-based search engine of RDI organisations

andbusinesses

ufindingprojectpartnersandmappingprojectopportunities

Bemutatkozó

Phone: +36 1 484 2500Fax: +36 1 318 7998

E-mail: [email protected]: http://www.nih.gov.hu

http://kaleidoszkop.nih.gov.hu/

ISSN 2063-7748ISBN 978-963-08-5934-9

NATIONAL INNOVATION OFFICEINFORMATION SYSTEM

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