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Making Debrecen youthful and entrepreneurial

Elected mayor of Debrecen in 2014, László Papp, 43, replaced outgoing mayor and fellow Fidesz party member Lajos Kósa. Papp is a tireless promoter of his city as a center for innovation and technology. He has made it clear he believes it is important for Debrecen to attract both local and international firms in the technology sector, and to encourage a young, capable workforce to staff those firms. With a population of roughly 200,000, Debrecen is Hungary’s second-largest city after Budapest and is already home to a host of innovative firms. In this exclusive interview with the Budapest Business Journal, Papp explains how he wants to build Debrecen’s reputation as an innovation, technology and economic center, and to encourage the growth of foreign and local businesses there.

László Papp, Mayor of Debrecen.

Do you feel that Debrecen has the kind of environment that encourages entrepreneurship and development? 

In Debrecen there are many international companies, but even national ones also occupy a good market position. There are many entrepreneurial success stories, including small family factories that have become important, even on a national level. For example Tranzit-group, which was founded in 1990 and operates in the food sector [specializing in duck, goose, fruit and nuts], started as a small family business and is now the third-largest such firm in Europe. Electronics and construction are other sectors that are already well-developed here.

Debrecen Regional and Innovation Industrial Park has brought a lot of business to the city. What has been its impact on Debrecen?

Debrecen Regional and Innovation Industrial Park definitely represents a concerted effort by the Municipality of Debrecen to encourage innovation. The first tenant was National Instruments Hungary [the U.S.-based electronics and software firm] and one of the latest to enter was Flexi Force [a multinational making overhead door hardware]. The park’s industrial area is really important for the city’s economy, having created 5,000 jobs.

Hungary has one of the lowest rates of youth unemployment in Europe. Can you tell me why young people here in Debrecen are doing well on the labor market?

Even while still in school, our young population comes into contact with the world of work. In the city’s technical schools, for example, the Municipality of Debrecen facilitates a lot of training. We are trying to implement a dual education model between city schools and entrepreneurs, through practical internships. Debrecen’s schools have much collaboration with computer companies, electronics firms and companies in the automotive sector. We also have a very important collaboration with the University of Debrecen, especially the Faculty of Engineering. A good example of cooperation is a Debrecen technical school that started a partnership with [multinational automotive and ball-bearing manufacturer] FAG, which has a training center for affiliated students. Through collaboration between company training programs and schools we will create more jobs. This school year, we will start a new trilateral project that involves the Municipality of Debrecen, local schools, universities and businesses.

You seem to have a focus on young people as an important element for development. Why do young people like Debrecen, and what do you think they can do for the city?

In Debrecen there are more than 70,000 students, and the education system offers great potential for this city. Creativity and culture are fundamental attractions for them. Young people are the engine behind our city’s increasing number of inhabitants – the population is expected to reach 250,000 by 2050. The Municipality of Debrecen puts its faith and hope in young people, trying to show them that it is worth staying here.

Recently, you participated in the inauguration of the Debrecen Chapter of Singularity University, which provides educational programs, innovative partnerships and a startup accelerator in an effort to encourage innovative new enterprises. What do you think will be the significance of this organization for Debrecen?

Singularity University (SU) is definitely important for the city because it puts us in touch with innovators in the United States. The most important brand in Debrecen is its innovative economy, and our dream is to become the most innovative center at the national level. SU certainly helps in this direction. National Instruments has already created an information research center in Debrecen, promoting innovation and giving a boost to the economy of the city. SU can help keep innovative energy in our city.

You mentioned the benefits of a connection with the United States. How important are foreign enterprises to Debrecen?

International companies have a very important role in Debrecen’s economy. The bigger companies are 100% foreign firms. We definitely have good relations with foreign administrators, and we have created an urban and economic center, named EDC Debrecen, in order to improve our contact with them. Recently, Flowserve, a company that deals in energy and oil equipment, opened a branch in the city, and was added to the already high number of multinational companies here.

The Municipality of Debrecen is now seeking to create an international school that will offer an international diploma, in order to encourage foreigners and other successful entrepreneurs to settle in Debrecen permanently with their families.

Why do you think there is so much interest in this part of Hungary? Why are so many foreign enterprises opening branches right here in Debrecen?

Debrecen has a very positive view of the future. The economy’s foundation is on a high level, and the infrastructure is the best in all of Hungary. And don’t forget the city’s ease of accessibility, thanks to a modern railway, a good highway system and the presence of an international airport. The atmosphere here is also very youthful, and enterprises are more hopeful of finding the workers they need.

What developments are you undertaking to encourage more enterprises to come to the city?

Among future plans, there is the creation of an industrial area both to the north and south of the airport area. In the northern area, we are starting the construction of an industrial innovation park of 40 hectares, where offices and administrative services will be established. In the southern area, in 200 hectares made available by City Hall itself, there will be a production area.

How do you think the presence of large foreign enterprises helps fuel local entrepreneurship?

We still have a lot to do on this point, as innovative technology businesses make up only a minority of small- and medium-sized enterprises, while in Debrecen it is precisely the technology sector that is growing fastest. It is therefore hard for local firms to give real competition. Still, there are some encouraging exceptions: FAG has itself become a supplier for smaller companies. Another local success story is represented by EMD, which deals with medical implants, and has achieved a good position in the national market.

What can we expect for the next semester and the next year?

We will definitely be busy. During the first quarter, we were already seeking HUF 38 billion in appropriations for projects. In the near future, among the ongoing projects, there are definite plans to redevelop the railway station, to respond to requests from potential new business and to better promote tourism in cities with which we are linked by direct flights.