Technology developed abroad was brought to Hungary by investors who also brought new management and work methods. This is how most countries that have successfully caught up started, said György Matolcsy, Governor of the Magyar Nemzeti Bank (MNB).
The involvement of capital and technology remains essential for both developed and catching-up economies. However, success is ultimately due to a domestically owned business sector being built up based on domestic innovation and capital, in addition to the business sector built on foreign ownership, technology and management, he said.
According to the central bank governor, most success stories occur due to a new wave of technology. Some of the greatest examples are the Danish food industry with its niche products, the Finnish and Irish IT sector, the universities of Singapore, the Swiss banking system and Austrian alpine tourism. However, it is much more difficult for a new country to succeed. Hungary’s success became sustainable because the country had a domestically owned technology and business sector that was among the best in the world, Matolcsy wrote.
The development of giant companies or megacities may not be expected in the Carpathian Basin, but the construction of innovation parks around large universities is, he added.
Universities, however, need more leeway, something that has started with the new maintenance system whereby universities are run by independent foundations, he said.
There is also a need for a large-scale government program that will provide space, infrastructure, venture capital and credit for the new parks. A program to invite leading Hungarian scientists working abroad to come home is also essential. As part of the program, there should be an opportunity for the universities to participate in the operation of businesses within the innovation park as well, and business advisory boards are a good idea so science can constantly impact business thinking, he said.
Hungary needs “smart gardens” that combine several economic sectors, such as agriculture, water, chemicals, digital technology, pharmaceuticals and health. A fusion of technology, economic know-how and funding is recommended for all university research groups. This could lead, in just a few years, to a brand new business sector based on domestic innovation and ownership, with a regional or even global role, Matolcsy concluded.