The Budapest Business Journal met with two senior executives of the office to explore in more depth what they do and how what they offer differs from what a company can expect in terms of support navigating the markets.
It is a long-held ambition for innovators to claim a far greater share in overall economic growth in Hungary. Still, businesses, small and large, often encounter hurdles that they have difficulties overcoming. The NKFIH was established for this exact purpose, as vice presidents Zsuzsa Szabados, who oversees business innovation, and László Lengyel, who is in charge of scientific innovation and international relations, told the BBJ.
As they explain, the operation of the office relies on three pillars:
– Supporting Hungarian companies’ advancement on domestic and international markets
– Supporting researchers in their work
– Taking successful initiatives international
As a driving principle, the NKFIH operates on the notion that innovation and R&D will have to play a far more significant role in the country’s overall economic competitiveness, including international trade. Szabados points out that the small size of the Hungarian economy necessitates going global, which in turn often requires cooperating with companies and researchers from other countries to achieve success.
Over the past 18 months, the office has developed a new operating framework with a stronger focus on supporting innovations that significantly enhance competitiveness and align with broader national economic interests. Particular emphasis is placed on projects with high societal value, such as those in the healthcare sector. In addition, the commercial viability of these innovations is now a key expectation. To achieve this, the framework includes close collaboration with follow-up experts and mentors, helping applicants overcome challenges in areas they may be less familiar with. Companies are also required to define clear targets, including revenue projections.
That being said, Szabados and Lengyel both stress that, although the methodology by which they operate has become far more refined over the years, it is (and likely always will be) a work in progress since an initiative coming from a university or a company can be very different, and must be approached accordingly.
The goal is to create and strengthen an ecosystem that includes not only universities but also a range of other key institutions. These include professional organizations that can provide industry expertise, nonprofit knowledge-transfer companies that facilitate the spread of innovative ideas, and financing institutions such as venture capital (VC) firms, which play a crucial role in funding and supporting the marketization of promising concepts or products, said Lengyel.
To achieve its goals, the NKFIH is tasked with finding the companies, researchers, and research hubs best suited to becoming competitive in the international market. This is an ongoing journey. It is a positive development for the economy in general that the number of companies that can successfully travel this road is growing. The office aims to orient those businesses with the potential to reach the best societal, economic and intellectual outcomes, and preferably all three simultaneously.
The goal is to moderate all these efforts, oversee the funding, and keep initiatives on track. It is also crucial to focus on the best ideas and support advances in these fields.
This year, the NKFIH has a funding budget exceeding HUF 176 billion, much of which has already been allocated. Based on the size of the company applying and the project involved, the financial support can reach hundreds of millions of forints, the ceiling being HUF 800 million. Over the years, the selection process has significantly been refined to achieve the best outcomes for all involved.
The NKFIH focuses on three main areas:
– Supporting preventive, curative and care systems to maintain healthy living
– Supporting the green transition and the development of a circular economy
– Supporting the digital transition of the economy and society
These sectors are deemed to have the best potential to achieve international success. The office maintains a dialogue with the members of the ecosystem through counseling at professional events and also holds the applicants to higher standards when it comes to presenting the potential marketability of the given service or product.
This aims to incentivize companies to start the application process only once they have thoroughly mapped out what they want to achieve and how they plan to go about it. The NKFIH notes that it not only makes demands from its client businesses, but also provides advisory assistance, for instance, through reviewing projects every six months.
The NKFIH says it is delighted to promote successful projects and cooperate across sectors to boost the innovative development of the Hungarian economy. These are just a few examples of organizations it works with.
Semmelweis University is one of the largest healthcare institutions in Hungary. Collecting biological samples and related databases are critical elements in establishing and operating biobanks, which are a cornerstone of Semmelweis University’s strategic research infrastructure and have garnered international recognition. At the university’s first-class facilities, experts can collect and store genetic samples that can be used for research. Being able to store, document and access these materials can contribute significantly to the treatment of a number of illnesses. The SE Biobank Network covers 26 institutes and has well over 100,000 samples. It is a member of an international organization specializing in the field; the university is already a destination for patients from other countries who require specialized treatment.
Econ Engineering Kft. specializes in digital simulation technologies that make aviation more efficient. This includes the virtual design of prototypes and the integration of new automation technologies. Aviation and space research are both intensely growing industries, providing fertile grounds for the Budapest-based company to promote its services on an international stage, and it has branches in Kirchheimbolanden, in southwest Germany, and Huston, Texas
Among the larger corporations cooperating with NKFIH is Budapest-based 77 Elektronika Kft. The company specializes in producing medical diagnostic devices and related IT support. Its biggest seller on an international scale is a device of its own creation that can provide highly accurate diagnoses from urine samples. In terms of overall production, this equipment constitutes the largest share of the company’s 80% export rate.
Based in Sopron (218 km west of Budapest by road), Horváth Fólia Packing Technology is a family business specializing in environmentally friendly packaging. It caters to 90% of industrial users and collects 20% of its revenue from abroad. The firm expects to capitalize on the fact that regulations are becoming more strict regarding environmental considerations, especially for plastics, which the company can replace with a sustainable solution.
This article was first published in the Invented in Hungary 2024-2025 issue of October 18, 2024.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
