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

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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," IEHAS Discussion Papers 0205, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  • Handle: RePEc:has:discpr:0205
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    References listed on IDEAS

    as
    1. Attila Havas, Attila, 2000. "Foresight in a small country in transition: Preliminary lessons of the Hungarian Technology Programme," MPRA Paper 79512, University Library of Munich, Germany.
    2. Freeman, Chris, 1995. "The 'National System of Innovation' in Historical Perspective," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 5-24, February.
    3. Freeman, Chris, 1994. "The Economics of Technical Change," Cambridge Journal of Economics, Oxford University Press, vol. 18(5), pages 463-514, October.
    4. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    5. Havas, Attila, 1998. "A Long Way to Go: The Hungarian science and technology policy in transition," MPRA Paper 63533, University Library of Munich, Germany.
    6. Attila Havas, 2003. "Evolving foresight in a small transition economy," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 22(2-3), pages 179-201.
    7. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
    8. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988.
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    Cited by:

    1. 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.
    2. 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.
    3. Iwasaki, Ichiro, 2004. "Foreign Direct Investment and Corporate Restructuring in Hungary," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 45(2), pages 93-118, December.
    4. 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.
    5. Attila Havas, 2002. "Identifying Challenges and Developing Visions - Technology Foresight in Hungary," IEHAS Discussion Papers 0206, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    6. Inzelt, Annamaria, 2004. "The evolution of university-industry-government relationships during transition," Research Policy, Elsevier, vol. 33(6-7), pages 975-995, September.
    7. 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.
    8. 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.
    9. Attila Havas & Lajos Nyiri, 2004. "The Socio-economic Impacts of Framework Programmes in Transition Countries - A systemic Approach of Assessment Methods," IEHAS Discussion Papers 0401, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. Dirk Czarnitzki & Kornelius Kraft, 2006. "R&D and Firm Performance in a Transition Economy," Kyklos, Wiley Blackwell, vol. 59(4), pages 481-496, November.
    15. Havas, Attila, 2004. "EU Enlargement and Innovation Policy in Central European Countries: The case of Hungary," MPRA Paper 69872, University Library of Munich, Germany.
    16. 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.

    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 - Economic Systems - - Socialist Systems and Transition Economies

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