Developing a ’Vital Part’ of the Hungarian Economy
András Sávos has been managing director of Knorr-Bremse Rail Systems Budapest, the Hungarian subsidiary of the Munich-based Knorr-Bremse Group, since 2015. He became president of the German-Hungarian Chamber of Industry and Commerce (DUIHK) this year, and talks to the Budapest Business Journal about the challenges and opportunities of doing business here.
BBJ: How satisfied are you with the work of the DUIHK?
András Sávos: I have been serving as a board member of the organization for two years now, and in the past years I have been committed to the issues and the direction the chamber has been following. Additionally, this organization has been serving the membership and society at a high level for a long time now. So, I am not planning any radical changes. I also would like to highlight our efficient cooperation with the members of the advisory body, with whom I continuously have lively discussions on our running projects and on the scope of our vision.
BBJ: What are the areas that you would like to develop?
AS: The chamber continues to serve as a bridge between German investors and Hungarian enterprises looking for business opportunities in Hungary. As I mentioned, this is something it has been doing well and effectively. Serving as president, I believe it is important to remain independent and impartial and to provide credible information for potential investors. Beside the opportunities and advantages, we of course also speak about the challenges they may encounter in Hungary. Although there is still room for improvement, Hungary is a good place to invest in compared to other regions or other countries in the region.
BBJ: Is there an industry or field you would promote more or would like to see develop further?
AS: We are not promoting any specific industry to investors; our aim is to help them in their selection and provide them with a comprehensive overview of the country or the specific market they are interested in. This activity has not changed throughout the years, it is “business as usual”. Of course, it is in our interest that even more technology-intensive companies come to invest in Hungary; we have a positive approach to all this.
BBJ: What challenges could impact the organization’s and its members’ activity the most? How do you plan to respond to them?
AS: One is technology. The chamber has certain issues to which we dedicate more time and attention every year: digitalization is one of them. This is an area where Hungary and Hungarian businesses lag behind and something we try and improve by, for example, organizing workshops and training. A new initiative, Netzwerk Digital (Digital Network) has been launched recently. This program mainly targets small- and medium-sized firms, where digitalization is still not something of strategic importance. It is mostly about shaping businesses’ mindset. Digitalization is also strongly related to efficiency, and will help to improve it in the Hungarian economy as a whole, and also on individual business level.
A key area I personally feel strongly about is the country’s competitiveness. As the new president of the chamber, I believe this is a question we should focus on intensively. The country’s competitiveness hangs on a lot of factors: global trends, new requirements we may not see ahead. What we do see is that the era of low wages has come to end. Yet with the dynamic growth of wages an improvement in efficiency at the same pace and level has not come. This will, sooner or later, impact companies of all sizes and it is our job as well to find ways to improve it. The question is how a low-cost country can change paradigm and operate efficiently as a mid-cost market.
BBJ: How can you contribute to improving competitiveness as an organization?
AS: The chamber can pick topics that the board believes it is important are strengthened or that awareness is raised about them. A key area we have always placed much emphasis on is training. We cooperate intensively with the government and other Hungarian partners in helping establishing the dual vocational training system in Hungary; for six years now we have even been awarding a vocational training prize. More practically, we ourselves organize training courses in and for companies, for example in the areas of management, HR or energy efficiency, and we help companies to establish their own training framework.
We also communicate our members’ stance and ideas on certain areas to the government. We are continuously monitoring global trends and seek to sensitize companies, be that education or labor market issues, technological developments or questions of strategic management. In the fall, the board will identify its key medium-term focus areas and outline ways in which to provide practical support to the members.
BBJ: How do you see the relationship between Hungarian and German companies and investors?
AS: There are around 3,000 German firms in Hungary, employing more than a quarter million staff. This alone shows that German companies are a vital part of the Hungarian economy. Many of them serve Hungarian customers with their products, as service-providers or retailers, while others are mainly producing for export markets. Already today, German companies cooperate with numerous Hungarian suppliers, but I think there is room for intensifying the integration of Hungarian SMEs into international production and value chains. This could create sustainable business chances for the local firms and, at the same time, raise the competitiveness of the economy as a whole.
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