Hungary on Track for Self-driven Innovation


Gergely Botár/

Not more than 20 years ago, technology users and enthusiasts were in awe about companies (or products and services) like CompuServe, AOL, Napster, Palm, Iomega, Altavista, AskJeeves, GeoCities. Some brands, like Corel Draw, Motorola or Blackberry still exist, but are a mere shadow of the giants they once were, buried by ambitious newcomers, self-sufficiency and an inability to keep pace with the changing world. In short, by lack of innovation.

Prime Minister Viktor Orbán (center), Minister for Innovation and Technology László Palkovics (right) and ZalaZONE managing director András Hári collectively press a button symbolizing the start of operations at the self-driving test track on May 21.

Technology, an area once seen as limited to geeks and nerds typing unfathomable endless codes into the night, now dominates the world. The changes driven by the tech sector in society has accelerated so much that the world today is barely able to keep pace with itself. Everyday life has become ruled by networks, data and digitalization.  

Consumers rejoice about simpler, faster solutions for spending their money. Regulators are trying desperately to foresee and control the risks and adapt legislation accordingly. Governments are waging endless wars against company giants seeking to minimize taxation. Tensions are mounting among world economic superpowers, while a new financial crisis unfolds.

Recently the U.S. administration announced an investigation into France’s proposed tax on internet giants like Google, Amazon and Facebook. In a nutshell: the French digital services tax would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than EUR 750 million and French revenue exceeding EUR 25 mln.

The bill aims to stop multinationals from avoiding taxes by setting up headquarters in low-tax EU countries. Currently, the companies pay very low taxes in countries where they have large sales like France. The tax primarily targets those that use consumers’ data to sell online advertising. U.S. Trade Representative Robert Lighthizer has expressed concern that the tax “unfairly targets American companies”.

Unfair is also the word Chinese telecom equipment provider Huawei uses to address the hostile position of the United States administration against the company. The U.S. has concerns about certain risks that using Huawei equipment in telecom networks would pose.

‘Actual Risk’

Secretary of State Mike Pompeo addressed these fears during his visit earlier this year to Budapest, suggesting the government should be warry of “actual risks to their own people, to the loss of privacy protections for their own people, the risk that China will use this data in a way that is not in the best interest of Hungary”.

Hungary, however, has a different view of what is in its “best interest”. In July, the government signed a memorandum of understanding strengthening the role of Huawei in the development of the country’s ICT sector. Last year the Chinese company carried out successful next-generation 5G telecom network tests with Magyar Telekom and Vodafone Magyarország.

The provider of the equipment looks of secondary importance in this matter. In 2012, the Orbán administration started building a state-owned mobile phone operator service, but the project failed. Now the government is focusing on the next-generation 5G network.

“The state must assume a role in the deployment of the infrastructure of 5G networks,” Minister for Innovation and technology László Palkovics said back in June. As he explained, this has importance points far beyond telecommunications; it the catalyst of technology in a host of innovative areas.

“These include IoT applications and self-driven vehicles; we are currently only aware of some of the related opportunities,” Palkovics pointed out.

According to the roadmap, the commercial launch of 5G in industrial facilities is expected in 2020, and by 2025 Hungary’s 5G network will cover all major cities and transport routes. A Government Commissioner will be appointed for the coordination of 5G development projects, Palkovics added.


The mentioning of self-driven vehicles by the minister was almost certainly not accidental; only one month earlier, the Prime Minister himself inaugurated the first phase of the ZalaZONE automotive industry test track in Zalaegerszeg.

This HUF 45 billion self-driving vehicle test track project includes a 2 km handling course, 300 m-diameter dynamic platform and multi-surface braking platform, plus five hectares of the track’s smart city and a 2,000 sqm garage. The second phase of ZalaZONE will be built by 2020. Other elements will include test track modules for rural roads, highways and motorways and a noise measurement track.

All this, however, will not contribute much to bringing Hungarian innovation to a next level without progress in artificial intelligence and robotics. A conference held in Budapest in January this year highlighted some of the current and future issues, as covered by BBJ Online.

Taira-Julia Lammi, managing director of the Swiss-Swedish engineering company ABB in Hungary, pointed to the statistics on robot density as an indication of one means to boost productivity. According to data from the International Federation of Robots, Hungary has 57 robots per 10,000 manufacturing workers, compared to 309 in Germany.

While Germany leads the robotic rankings in Europe, it is also true that other countries are ahead of Hungary: in 2016, robot density was highest in Slovakia, at 135 per 10,000 workers, followed by Czech Republic on 101. Martin Wodraschke, a partner with the CMS AutoTech group, expressed concerns over the ability of domestic small- and medium-sized enterprises to cope with the many tasks ahead.

“How can the SMEs, out in the countryside, do the same changes? This is not a [subject] only for the international elites, this is a thing which is going through the whole Hungarian automotive industry. I think this will be the most difficult thing in the future,” Wodraschke said.

Electric Cars: The Answer to the Wrong Question?

According to scientists, the question we should ask ourselves is not how to make electric cars more efficient, but rather should we use cars at all.

A report compiled by the Center for Research into Energy Demand Solutions (CREDS) and summarized by BBC says: “no”. Electrifying cars and developing self-driven cars will not address traffic jams, urban sprawl and the need for parking spaces, the authors, more than 80 academics across the United Kingdom argue.

Yes, there will always be people who depend on cars, especially in the countryside or suburbs. But in the cities, it is a different story. Here young people are increasingly using public transport, car and scooter sharing services, walking, cycling, taking minicabs or hiring cars as and when they are needed.

CREDS says most cars are parked for 98% of their lifetime, with a third of cars not going out every day. Encouraging electric cars is not the solution, the report notes. These will not contribute to less congestion, while another problem arise, such as the need to setting up charging spots, which is a huge challenge in urban areas with no off-street parking.

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