Asked by its membership to help improve the environment for conducting business in Hungary, the chamber is advocating at the governmental and private levels.
After six months of consultations, involving interviews with more than 80 companies, AmCham Hungary says it has been given a clear mandate: The American chamber of commerce is heeding calls from its membership to help improve the business climate in Hungary through more intensive policy advocacy and private initiatives.
“Our goal here is to improve the competitiveness of our country and therefore the chances of our businesses,” said AmCham Hungary president Ferenc Pongrácz, interviewed in late April.
AmCham has even put the goal in numbers: It will work to improve Hungary’s ranking in the World Competitiveness Report by ten places in ten years. Hungary is currently ranked 60th out of the 144 countries rated in the report, which looks at 12 “pillars” of competitiveness. AmCham decided to address four of those pillars where it felt it could make a real difference: investment, talent, innovation, and health.
Much of this work involves lobbying the government and seeking to influence new legislation. And the AmCham officials say the government has responded well, even allowing AmCham to consult on proposed laws. “Advocacy has always been a key priority for AmCham and a great deal has been achieved in the last 25 years,” according to AmCham CEO Írisz Lippai-Nagy. “What has changed is our approach to advocacy. To be able to better represent the collective interest of our members, first of all,
we have defined those areas where AmCham – together with its member companies – can make a real impact in improving the competitiveness of the country.”
Lippai-Nagy pointed out that the power of the chambers’ membership makes an important source for advocacy. “AmCham proudly groups the most important representatives of almost all business sectors,” she said. “Not only the economic power represented by our member companies but, most importantly, our brain-power, experience, know-how and international outreach provide the professional basis for elaborating recommendations representing common opinion.”
Pongrácz added that the reach of AmCham goes well beyond American firms. “It’s important to mention that the membership is not only American,” he said, explaining that the firms in the chamber are roughly one third American, one third Hungarian and one third from other countries.
AmCham firms are especially strong in the IT sector, according to the chamber president. “All top brands are American firms and all of those are AmCham members,” said Pongrácz, who himself is the business development executive for IBM SEE.
For these companies, the competitive “pillar” of education is particularly important, he said, adding that most firms in these areas are concerned with higher education, because they need university trained engineers.
“We have a very good relationship with the secretary of state for higher education, László Palkovics,” Pongrácz said. “We have represented our members’ interest in the area of higher education for several years, based on roundtable discussions held together with university representatives. One of the outcomes of these talks was that our members could employ a lot more trained engineers and mathematicians to which Palkovics said. ‘Understood, how many will you need?’”
Lippai-Nagy noted that the chamber has a history of initiatives to improve education and the sharing of knowledge, such as the language ambassador program, which sees corporate volunteers, including top executives visiting secondary schools, to offer career advice but most especially to encourage students to learn a second language, and to focus on developing their soft skills. “Talent and education is in the forefront of our activities. We believe it is the basis of the long-term success of the country,” said Lippai-Nagy. “We have experienced that it is important to reach out to secondary school students, as they lack important information when making decisions impacting their future.”
Not all the tech-minded students in Hungary end up working for the big IT firms. A lot of them start firms of their own. AmCham is also looking to support tech entrepreneurs through advocacy that can encourage innovation and innovative industries. “Innovation is a very important driver for the economy nowadays,” Pongrácz said. “With a small group of people, you can create big value and there are some good examples of that in Hungary as well, and I mean not only Prezi and Ustream.”
AmCham’s work in this area includes creating and supporting events, such as partnering with Brain Bar Budapest, a major conference on “tech and humanity” that will be taking over venues all around Budapest from June 4-6. AmCham members can also be the angel investor or matchmaker that startups are looking for, according to Pongrácz. “Significant venture capital is coming into Hungary and we have many members looking at the startup industry here,” he said.
AmCham further cooperates with the government through an advisory group that counsels the government’s innovation office. Two of the nine members of the group are AmCham officers, including Pongrácz himself.
When it comes to the “competitive pillar” of investment, AmCham is particularly well placed to help, and has good opportunities to cooperate with the government, according to the chamber’s president and CEO. Through an agreement with the Ministry of Justice, “we obtain information about planned legislation relevant to our members, and our board and regulatory committee create positions, statements or suggestions on these, well-received by the ministry” Pongrácz said.
He added that AmCham membership includes the country’s top law firms, and their pro bono policy advisory services are very valuable and highly appreciated.
Another important official avenue for encouraging investment is AmCham’s cooperation agreement with the Hungarian Investment Promotion Agency (HIPA), the government office that works directly with potential investors, offering advice and contacts. In fact, much of the investment being made here comes from firms that are AmCham members, who have been in Hungary for a while, Pongrácz said. “According to HIPA, more than 50% is reinvestment from people who are already doing business here,” he explained.
And when it comes to outsiders investing, they often turn to AmCham, Pongrácz said, adding: “We are the ones who are here, so if you come to Hungary, you want to talk to someone who has first-hand experience.”
As for the fourth “pillar of competitiveness”, health, AmCham can do a lot to help through it’s members, according to Lippai-Nagy. “Our aim is to increase awareness of individual and company responsibility for keeping and/or improving the mental and physical health status of the Hungarian population,” she said. “AmCham can reach out to 160,000 people employed by its members, so we encourage companies to motivate their employees to become more actively involved in the management of their own health (through diet, sports, etc.).”
Beyond that, she said, AmCham also reaches out to top management. “AmCham Hungary believes that all stakeholders should view and manage health care as a value producing sector of the economy and consider health care expenditure an investment in the future and a driving force of economic growth,” Lippai-Nagy said.