Smart specialization and the manufacturing sector in the city regions of Hungary

By today smart specialization has become a crucial part of the growth strategy of the European Union. Smart specialization is an innovative approach for the economic transformation of regions, a complex development strategy that builds on the unique characteristics and values of regions, and contributes to increasing the competitiveness of regions. The basis of Smart Specialization Strategy (S3) is identifying the competitive advantages of regions, including the identification of all economic activities that have determining weight, show growth and stand out due to their innovation capacity and performance in a region. In traded sectors capable of dynamic development, enterprises are able to continuously expand their production and satisfy substantial local and extra-regional demand. In Hungary a significant part of the traded sector consists of the manufacturing sector. The manufacturing sector is one of the determining scopes of economic activities, which provides a considerable proportion of the Gross National Product, and involves economic activities that are associated with consumer expenditures, persons employed, exports and a substantial part of technological innovations. The present study aims to prove the significance of the manufacturing sector in the city regions of Hungary. Given that place-based policies place a particular emphasis on the spatiality of economic activities, we examine the spatial distribution of the manufacturing sector by means of employment location quotient (LQ). The study centres on 13 sub-sections distinguished in the manufacturing sector and the analysis of their geographical concentration in the Hungarian city regions at the time of and following the accession to the European Union. The results show which activities in the manufacturing sector are worth specializing in by the city regions and whose support contributes to the further development of the regions.