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Does Innovation Policy Matter in a Transition Country? – The case of Hungary

Author

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  • Attila Havas

    (Institute of Economics, Hungarian Acedemy of Sciences)

Abstract
The political and economic transition posed a complex, tremendous challenge in Hungary in the beginning of the 1990s. Not only macroeconomic stabilisation was required, but fundamental organisational and institutional changes were also needed to transform the country into a stable, middle-income economy, capable of catching up with the more advanced ones in the longer run. Having completed the first round of transition, Hungary has again reached a cross-roads. While the oneparty system has been replaced with a multi-party parliamentary democracy and the planned economy with a market economy based on private ownership, the world has significantly changed during this historically short period of time. Hungary now has to consider what role to play in the globalising learning economy, i.e. what future it envisions for herself. To be more specific, does the country passively accept the fate of a mere surviving economy, drifting without having its own strategy? Or, by implementing a clear strategy, does Hungary intend to be prosperous country, where in 15-20 years most citizens will enjoy high living standards, good health and a clean environment? The paper argues that a sound, coherent innovation policy is one of the cornerstones of an overall development strategy, required if a country is to excel. Yet, in spite of a number of efforts/ trials in the 1990s, no such policy document was approved in Hungary. The article first provides a brief overview of the transition process, emphasising the simultaneous need for systemic (institutional) changes and macroeconomic stabilisation in order to improve (micro)economic performance. Its core section analyses recent changes in the S&T decision- making system, various efforts to draft S&T and innovation policy documents, as well as the inputs and outputs of R&D and innovation. It concludes that the lack of an explicit innovation policy may hinder longterm development as such a policy is required to signal the main policy directions and commitments of the government, to strengthen the national inovation system – thus anchor FDI – and to align all public and private efforts, resources for development.

Suggested Citation

  • Attila Havas, 2002. "Does Innovation Policy Matter in a Transition Country? – The case of Hungary," CERS-IE WORKING PAPERS 0205, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:0205
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    References listed on IDEAS

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    5. Attila Havas, 2003. "Evolving foresight in a small transition economy," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 22(2-3), pages 179-201.
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    Cited by:

    1. Inzelt, Annamária, 2004. "Az egyetemek és a vállalkozások kapcsolata az átmenet idején [Relations between universities and business in the transition period]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 870-890.
    2. Balázs Lengyel & Tamás Sebestyén & Loet Leydesdorff, 2015. "Challenges for regional innovation policies in Central and Eastern Europe: Spatial concentration and foreign control of US patenting," Science and Public Policy, Oxford University Press, vol. 42(1), pages 1-14.
    3. Halpern, László & Muraközy, Balázs, 2010. "Innováció és vállalati teljesítmény Magyarországon [Innovation and company performance in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 293-317.
    4. Karsai, Judit, 2006. "Kockázati tőke európai szemmel. A kockázati- és magántőkeipar másfél évtizedes fejlődése Magyarországon és Kelet-Közép-Európában [Venture capital through European eyes. The development of venture a," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1023-1051.
    5. Susana Callao & José I. Jarne & David Wróblewski, 2019. "A New Perspective on Earnings Management in Emerging European Countries: Investigation on Environmental Factors that Explain Differences in Earnings Management," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 7(2), pages 59-81.
    6. Klapper, Leora & Sarria-Allende, Virginia & Zaidi, Rida, 2006. "A firm-level analysis of small and medium size enterprise financing in Poland," Policy Research Working Paper Series 3984, The World Bank.
    7. Iwasaki, Ichiro, 2004. "Foreign Direct Investment and Corporate Restructuring in Hungary," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 45(2), pages 93-118, December.
    8. Dirk Czarnitzki & Kornelius Kraft, 2006. "R&D and Firm Performance in a Transition Economy," Kyklos, Wiley Blackwell, vol. 59(4), pages 481-496, November.
    9. Havas, Attila, 2004. "EU Enlargement and Innovation Policy in Central European Countries: The case of Hungary," MPRA Paper 69872, University Library of Munich, Germany.
    10. Parmendra Sharma & Neelesh Gounder, 2012. "Obstacles to bank financing of micro and small enterprises: empirical evidence from the Pacific with some policy implications," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 19(2), pages 49-75, December.
    11. Arogyaswamy, Bernard & Koziol, Waldemar, 2005. "Technology strategy and sustained growth: Poland in the European Union," Technology in Society, Elsevier, vol. 27(4), pages 453-470.
    12. Klaus Schuch, 2014. "Participation of the ‘New’ EU Member States in the European Research Programmes — A Long Way to Go," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 8(3), pages 6-17.
    13. Merit Tatar & Tarmo Kalvet & Marek Tiits, 2020. "Cities4ZERO Approach to Foresight for Fostering Smart Energy Transition on Municipal Level," Energies, MDPI, vol. 13(14), pages 1-30, July.
    14. Attila Havas, 2002. "Identifying Challenges and Developing Visions - Technology Foresight in Hungary," CERS-IE WORKING PAPERS 0206, Institute of Economics, Centre for Economic and Regional Studies.
    15. Inzelt, Annamaria, 2004. "The evolution of university-industry-government relationships during transition," Research Policy, Elsevier, vol. 33(6-7), pages 975-995, September.
    16. Lengyel, Balázs & Leydesdorff, Loet, 2015. "The Effects of FDI on Innovation Systems in Hungarian Regions: Where is the Synergy Generated?," MPRA Paper 73945, University Library of Munich, Germany.
    17. Parmendra Sharma & Neelesh Gounder, 2011. "Obstacles to Financing Micro and Small Enterprises: Empirical Evidence from a Small Island Developing State," Discussion Papers in Finance finance:201110, Griffith University, Department of Accounting, Finance and Economics.
    18. Sabiiti Mulema, 2019. "Long term Financing and Development of Small and Medium Enterprises in Uganda: A case study of MPK GRAPHICS," International Journal of Science and Business, IJSAB International, vol. 3(3), pages 310-325.
    19. Attila Havas & Lajos Nyiri, 2004. "The Socio-economic Impacts of Framework Programmes in Transition Countries - A systemic Approach of Assessment Methods," CERS-IE WORKING PAPERS 0401, Institute of Economics, Centre for Economic and Regional Studies.
    20. Havas, Attila, 2007. "O alargamento da UE e a política de Inovação nos países da Europa Central: O caso da Hungria [EU enlargement and innovation policy in Central European countries: The case of Hungary]," MPRA Paper 69874, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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