Technology Foresight in Hungary

Abstract

  The paper presents a brief survey of Hungarian R+D activity. The influence of the Hungarian economy on research and development is also explained by figures indicating the share of foreign investments is in the CEE countries.

  The very positive attitude of some foreign companies toward joining the Hungarian R+D network is also shown. As a conclusion of a simplified SWOT analysis there is an attempt to explain why it is important for a small economy to deal with technology foresight. Hungary began its Technology Foresight Programme (TEP) in 1997 and this will be finalised in 2000. The Delphi method was used in the research and the questionnaire is a combination of the very characteristic Japanese way and the holistic approach. The evaluation of the responses to the questionnaire indicates that method and topics have been properly selected.

  Besides the application of Delphi method studies were also carried out on each topic. Some special analyses were also performed to investigate the "cross-impact" relation among the various topics and fields."

Introduction

  Hungary has been locating in central Europe at the intersection of East-West for more than one thousand years.

Slide 1: "Map of Europe"

  The population of the country is 10.3 million and the number of those employed is roughly 3.7 million people. Our GDP per capita is about 4700 USD (1998). The total number of persons involved in R+D, at research institutes, universities, company research units and other places is 36 384. Of these the number of scientists and engineers is 23 547 only.

  The R+D expenditure decreased sharply after 1990. We now have some slight increase, as is shown in the diagram.

Slide 2: "Decrease of GERD"

  The structure of the economy is as follows.

  One-third of the total foreign investment in the CEE countries since 1990 has to come Hungary. In 1998 the number of companies exceeded 800 000. The majority of them (around 90%) belong to the category of SME. The rate of private ownership (started in 1990) now is over 80%. The share of foreign ownership in the private companies is around 35%. The private sector produces 90% of GDP. The increase in GDP last year was over 4.5%, a figure well above the European average. 70% of our export production goes to the EU. 40 of the top 50 multinational companies in the world are represented in Hungary in some way. Either they have set up new firms (so-called "green field investment") or they have taken over formerly state-owned Hungarian companies and re-organised them.

  Such re-structuring of the Hungarian economy has also generated a very vital and promising impact on the applied research and technological development segment of Hungarian R+D, besides its other effects. The number of large foreign companies that have already set up research and development centres or intend to do so is increasing. Good examples are Ericsson Hungary Ltd. in telecommunication, Knorr-Bremse Break-Systems, Audi Hungaria Motors and Nokia Motors. As an alternative, Suzuki Motor Corporation, Japan has set up a foundation to foster co-operation between Shizuoka University and Budapest Technical University.

  Most importantly the strongest motivation behind the companies' decisions has been recognition of the intellectual assets available in Hungary and not the relative cheapness of manpower.

  Positive and negative facts characterising the present state of the Hungarian economy and R+D activity can be summarised as follows:

• Despite the remarkable increase that the country's economy has recently achieved, the domestic market is small and the dominant share of exports is produced by big companies with their own research and development strategies.
• The majority of SMEs have not yet requested government assistance for technology development, because their main activity has been production on the basis of licences or know-how
• The government has not yet provided enough incentives for small and medium enterprises by offering them sufficient direct and indirect opportunities.
• Structurally, now the country conforms to the requirements of market economies
• Hungary is preparing for membership of the EU. So far, the R+D sector is the one most appreciated by the EU.
• There has been a high brain drain for some years and the effects experienced so far have been almost all negative.
• There is still a capable basic research system in the country and its activity is noted internationally.
• There is a new and positive tendency in the expansion of R+D centres operated by foreign companies employing Hungarian researchers (including a remarkable number of Ph.D. students). Of course, these centres are basically managed in line with research and development strategy of the headquarters, even so the centres can stimulate Hungarian higher education and through "seed companies" industry, as a whole.
• Hungary is actively participating in the international research co-operations (ESA, CERN, EMBO, EU Framework Programmes, 25 bilateral intergovernmental agreements in science and technology, etc.).

  Because of these positive and negative features a question maybe raised:

  Is it necessary in the case of a small, sensitive, prosperous but far from a leading economy to deal with technology foresight? Does this represent more than a wish to join the mainstream?

  I am convinced that he answer is "yes". It is necessary. One of the main reasons for such countries to have versatile means is it can help all players in science and the economy to see more clearly and act more rationally. Besides the question of economic competition we have a rather discouraging trend concerning population.

Slide 3: "The ratio of live-births to death rate 1990-1997"

  and as it proved by the analysis there are factors that have to be improved in the future.

Slide 4: "The influence of various factors on health"

1. The aim of the programme

  The Hungarian government realised the lack of such means when making decisions on R+D in 1992. Still, our Technology Foresight Programme called TEP started only in 1997. The National Committee for Technological Development (OMFB) managed the programme until last December. Since January 1, 2000 this institution has been a part of the Ministry of Education and hopefully the foresight programme will now speed up.

  The basic aim of our foresight programme is to support the formulation of a national strategy that is required to improve the quality of life and to increase our competitiveness.

  TEP applies a holistic approach to the foresight programmes. The procedure is based on panel (working group) activities and the application of the Delphi method.

  In the framework of panel activity SWOT analysis and the working out scenarios and recommendations have been conducted.

  Our first foresight programme (TEP) is expected to be implemented in two phases.

  The first phase was concluded in 1999 and its task was to

• collect and analyse information about R+D, market trends, the week and strong points of our present economy and social requirements, and to
• harmonise co-operation between the education and research sectors, the economy and governmental administration in a better way than at present

  What is the expected outcome of the first phase?

  The reports on the various fields are being finalised. They will present analyses of the developmental status of regions in Hungary and offer scenarios for possible futures indicating the optimistic and pessimistic versions.

2. The structure of TEP

2.1. The main fields investigated by TEP:

  There are seven fields by means of which TEP has tried to cover the most important areas:

• Human resources, education and lifestyle;
• Life sciences, health, pharmaceutical research and production, medical equipment;
• Information technology, telecommunications and media;
• Protection and development of the natural and built environment;
• Manufacturing and business processes (new materials and production, supplier network, etc.);
• Agriculture and food industry;
• Transportation

  All fields are made up of a number of sub-fields and these contained the topics (that is, the actual questions).

2.2. Methodology

  There were advertisements in newspapers and presentations at various forums in order to inform experts of the start of the programme and to offer them the chance to join the work.

  Each of the seven working groups (panels) had to follow a uniform programme, that is:

• Drafting an outline summarising the present situation and giving the possible future sources,
• Preparation of the Delphi Questionnaires,
• Processing the responses given in the 1st and 2nd rounds of the Questionnaires,
• The writing of a report by each working group,
• Revision of scenarios if needed,
• Contributing to the final report on the first phase.

  The working groups also had to consider some global principles important for the investigation of "cross-impact" among the various topics categorised into one field but capable of affecting others.

2.3. Organisation

  The work was monitored by a Steering Committee of 19 members (including the chairman), drawn from industry, the universities, research institutions and the Ministry of Economic Affairs.

  The seven sub-committees (i.e. the working groups) had adapted between 18 and 24 members with the exception of the Sub-Committee for Human Resources that had only 11 members.

2.4. The Delphi Questionnaires and their processing

  The structure of the questionnaires has been adopted on the experience of other countries (Japan and the UK). Some specific additions were made. The main features of the questionnaires were as follows:

1. The expertise of respondents (considered in four categories),
2. The effect of the topics on
   • the economy
   • society
   • the environment.
3. The expected time of realisation (actually: 2004-2020 or never),
4. The present status of Hungary in comparison with the developed European countries in the terms of the existence of
• scientific background
• technology availability
• creativity
• innovation and its utilisation
• the level of manufacturing and service
• regulations and governmental policy
5. Grading in all four sub-categories are marked as
   • "lagging far behind"
   • "lagging not far behind"
   • "about at the same level"
   • "Advanced"
6. The constraints:
   • social/ethical
   • lack of scientific and/or engineering knowledge
   • marketing
   • economic
   • the topic unimportant
   • inappropriate regulations, standards
   • lack of educated manpower
7. The means of enhancement of development and application in Hungary:
• domestic R+D
• know-how adaptation
• trade (purchase of goods).

  The evaluation of the responses was performed from various standpoints. Some of the classifications were as follows, regarding:

• breakdown of the rate of responses,
• distribution of so-called average expertise,
• expertise of respondents by demography and occupation

  economic and social effects of all events (represented by the questions/statements) in each field,

  Slide 5 "The Report of the Agricultural and Food Industry W.G."

  Slide 6 "Economic (x) and social relations (y)"

  Slide 7 "The occurrence of some constraints in the field of production & business" (1st round)

  economic, social and environmental effects globally and specifically of the 10 most advantageous ("top 10") events. The "influence indices" were also calculated.

  Slide 8 "An estimation of noise-emission of vehicles"

  Slide 9: "Forecast CO₂ emissions by traffic in Hungary"

  The top 10 topics of each of the seven fields:

• selection of the 10 most advantageous events (topics) by fields,

• some comparisons were made between the effects of the various factors (social, realisation, marketing, economic, less importance, regulation and governmental policy, knowledge) to make apparent the weight of each,
• estimation of the relative status of Hungary calculated by sub-fields in each of the 7 fields in terms of scientific, innovative services and regulation (2.4 d),
• estimation of the relative status of the country with regard to the 10 most advantageous events according to 2.4. d),

  The country's relative status is in the range of 29.8% and 37.4% considering each field as a whole and between 24.2% and 35.7% as minimum and 33.4% and 51.6% as a maximum, respectively with regard to the 10 mostly advantageous topics.

  A few examples are presented to indicate in actual figures also the relevance of responses and respondents (Table 1 and 2)

Notice:

H: human resources;

L: Life sciences, healthcare;

I: informatics;

P: protection and development of natural and built environment;

M: manufacturing & business;

T: transportation;

A: agriculture and food industry

  Finally, as a closing action the Delphi reports examined the suggested paths for development (Table 3).

  Note: * means "Domestic R+D" not excluding joint research

2.5. Other approaches and analyses

  There is no doubt that application of Delphi method supplied the backbone of the Hungarian Technology Foresight Programme. At the same time we used other types of foresight in addition.

  So, each sub-committee has made or will make a survey on the basis of its Delphi results and the experiences of the Committee members. It will be a kind of explanatory study with respect to economic and social relationships and will focus mainly on the reasons for particular events and effects.

  Special analysis will be carried out in these so-called sub-surveys to discover "cross- impact". For example, the Transportation Sub-Committee investigated those responses available in the Delphi analyses of another five reports out of the seven ("Protection and development of natural and built environment". "Manufacturing and business processes", "Life science and healthcare" "Informatics and telecommunication", "Agriculture and food-industry") relating to transportation.

  Besides applying the Delphi survey the sub-committees produced studies in the form of working group reports in their own fields. These reports have three common features. Firstly, they give a general picture concerning the present status of that field secondly, they draw up the alternative prospects for that specific field that might come to apply in the future (a "pessimistic", a "neutral" or "stand-by" and an "optimistic" one), and furthermore they present recommendations (on socio-economic measures and priorities for scientific and technological development).

Slide 10: "The suggested path to improvement in agriculture"

  These reports have been revised sometime during the present period of the Hungarian Foresight Programme and will probably be finalised when the Steering Committee prepares its final report.

  Here I must to express my sincere appreciation to my colleagues at the former National Committee for Technological Development (OMFB), where the Office for Technology Foresight Programme was located for the tremendous work they have done so far. My gratitude also due to the committee members for processing information, preparing studies and letting me use these for this presentation.

  I do hope that this conference will contribute to a common way of thinking and an improvement in the life of our societies.

  Further information on the conference can be obtained from www.omfb.hu or from the TEP Office: attila.havas@ofmb.x400gw.itb.hu

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