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Bringing Innovation Consciousness to Hungary’s Businesses

Innovation

István Szabó

While state expenditure on research, development, and innovation (RDI) is growing, there are several areas where supporting RDI is not a matter of money. Small- and medium-sized companies must realize that innovation is a vital element for generating profit. István Szabó Ph.D., vice president for science and international affairs at the National Research, Development and Innovation Offce, sat down with the Budapest Business Journal to explore the R&D support strategy.

BBJ: On what is Hungary’s RDI financing system based?

István Szabó: A few years ago, we restructured the financing system of RDI to mirror Horizon Europe, the framework program for supporting RDI across the European Union. The basic concept here is that if you want to impact RDI, both in terms of science and innovation, you have to make sure you form some critical mass among the scientific branches and create networks between science and innovation. To this end, Horizon Europe came up with the concepts of “mission-oriented research” and the “challenge-based” approach of RDI projects. Again, you have to form within the communities certain hubs capable of making breakthrough achievements in their respective thematic fields. These are not only scientific disciplinary fields. Climate change is an excellent example here because it is not just about engineering and environmental sciences but also involves economics and society, in a way. This is the concept of the so-called “challenge-based” approach, which we have primarily mirrored in designing our RDI funding.

BBJ: How is this done specifically?

ISz: We have three main “pockets” in RDI funding. The first is for individual researchers, and we support what we call “curiosity-driven” research activities. There are two criteria for providing funding: one is obviously the researcher’s curiosity in a topic, and the other is that a researcher already has a proven track record of achievements. This concept is pretty much in line with international best practice, meaning individual researchers are granted the funding based on their previous successes. We have also introduced “scientometrics,” a system for measuring scientific performance. Thus we can make sure that we fund curiosity-driven research for those who will likely impact their respective scientific branches.

This logic pertains to researchers who already have a proven track record, but it is also the funding scheme for the to-be scientists. For this reason, we have introduced the New National Excellence Program, which provides funding to students at the earliest stage of their studies, to help them begin their research. In their first years, they may not make any impact, but they will become familiar with the concept and methodology of research. For the final years of the academic activities, covering the full spectrum of a research’s career path, we offer the “Up with Science!” (Tudományra fel!) program, aimed at doctorate graduates who have received their degree in the past three years.

The second pocket of funds is, again, in line with the Horizon Europe concept. This is for the institutions where the top-down and the bottom-up approaches of RDI are somewhat mixed. Bottom-up here means that higher education institutions have to find the fields of comparative advantage where they can allocate their resources and show the international community that they are strong in particular thematic areas, which, again, are much broader, such as the health industry. Here institutions have to decide the directions in which they go to have a lasting impact. As for the top-down approach, together with the scientific community, we have identified some challenges, and we expect higher education institutions to respond to them.

To support these two concepts, we recently launched the “Thematic Excellence Program.” It aims to help institutions strengthen their respective fields, and it targets mainly RDI. It is essential for the institutions to be able to provide a single point of contact for each of these thematic fields. This is pretty much in line with the concept of national laboratories, launched last year. These serve as a single point of contact, but they incorporate all the relevant scientific players for each thematic field identified by the national laboratories.

We believe that domestic science needs to be part of the international networks, so we encourage researchers to go global. With the national laboratories, we are trying to make sure that institutions have international access as well. In the case of thematic research, it is also important that the institutions conduct their R&D and contribute to national innovation. There is what we call the European Paradox: Europe is strong in R&D and not very strong in innovation. Hungary is no exception because we are still lagging in innovation performance, mainly because most Hungarian enterprises do not really see why they should innovate. This is surprising because surveys show that innovative companies have nearly twice as much revenue per employee as those who don’t innovate.

BBJ: How can doctoral students cooperate with companies?

ISz: Innovation never happens by itself. We have to create specific networks of innovation. That is why we have introduced regional platforms for companies already active in innovation in their region and those potentially interested in it. Here, innovators can provide newcomers with their insight, advice, and connections.

At the individual level, there is the Cooperative Doctoral Program, launched in 2020. Doctoral students can conduct their Ph.D. studies in their way, working along with a professor. But there’s also an external consultant from a private enterprise who, by introducing the student to its business needs, can drive the research toward innovation, and the research findings can be utilized by the enterprise. This is how the academic sector and private businesses can cooperate on the level of innovation.

Finally, funds from the third pocket go to businesses and address business innovation. We are pleased to see that the demand for RDI support in the business sector has been steadily increasing. The tendency in the number of new patents has also been pleasantly improving for the past two-to-three years. Patents are crucial for any business as they are the signs of conscious innovation; I am convinced that such innovation consciousness will be the key to our success in the coming years.

Description of the new Open Science initiative: nkfih.gov.hu/openscience

Description of the international Frontline Research Excellence Programme nkfih.gov.hu/english/forefront

This article was first published in the Budapest Business Journal print issue of November 5, 2021.

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