Design-conscious product to lift Hungarian economy?

Incubators

From the Budapest Business Journal print edition: Design Terminal (DT), an NGO set up to boost the Hungarian creative industry, became a budgetary institute this January. With the changes comes a longer name – to Design Terminal National from Centre Creative Industries – and an overall budget of HUF 1 billion for 2014, plus a seven-year plan to help well qualified and talented creative experts tap their business potential and attract capital. DT’s former strategic director, Gergely Böszörményi-Nagy, has been promoted to general director, and talked to us about new strategies and plans.

BBJ: What changes will this transition bring about?
Böszörményi-Nagy: Instead of continuously applying for funds to finance our projects, from now on we can calculate with a secure state support. It will allow us to plan ahead – further than just one year. All of this has come precisely at the right moment: Design Terminal’s new, long-term strategy is now adjusted to the EU’s 2014-2020 budgetary period, a policy frame in which creative industries has emerged as a strategic priority for the European Commission.

The reason why both Budapest and Brussels find promoting the creative industries ever more important is that this field is able to address challenges typical in the European labor market. Among these are the manufacturing jobs’ traditional exposure to outsourcing, SME vulnerability, and youth unemployment. Unlike jobs in low value-added industries, where the single most important factor of employment is labor costs, creative jobs are easier to retain with the right policy incentives. Also, a highly skilled creative workforce provides a competitive edge for the country that is steady, as opposed to cost of labor.

How can the creative industries solve the problem of outsourcing? Manufacturing has long been outsourced to developing countries. These nations are also getting more involved in design.
It isn’t necessarily about deploying designers for multinational companies. What is more important is to match traditional SMEs and local designers. Involving designers in the development processes taking place at SMEs not only gives them a job but also makes their products more competitive. Design-conscious products can strengthen the national economy and make it more attractive. Competing against cheap knockdowns with well-designed, thoughtful, design-conscious goods is Europe’s one breakthrough.

SMEs today hardly invest in design: they are far more preoccupied with the economic problems they are currently facing. How can Design Terminal help in this?
Embracing a design-conscious mindset is not something firms can postpone or spend on only once we are out of recession. It is part of the way out; Design Terminal is currently launching a new directorate for investor relations: a unit to help venture capitalists willing and able to invest in creative enterprises so they can take it up a notch and create a portfolio for an SME.

Our directorate will select and mentor the most promising and marketable newcomer entrepreneurs to prepare for the market. Design Terminal will also provide ad hoc strategic, communications and legal support for those already practicing and about to enter the market. Mentoring means a long-term contact on a daily basis; it is not confined to preparation for trade shows and events. While some public bodies will ensure a presence at foreign fairs, we will focus more on the quality of that appearance.

The number of businesses that can participate in international fairs without risks and have the capacity to serve a real commission is currently not more than ten. The field where we can help them the most is PR – to achieve proper press coverage and expert feedback on the spot. Foreign press and PR are the areas these firms hardly have time or money left to manage. An ongoing cooperation with certain markets and trade fairs will also allow us to bargain for better terms for Hungarian business to appear later.

So even enterprises with more modest production and capacities might participate in the mentorship program next year or afterward?
With a good strategy and well-defined goals, definitely yes.

The pool of potential businesses is large. How will Design Terminal decide whom to mentor?
We are working together with HR firms and communication agencies specialized in design on the final criteria. Experts all agree that it is the human factor that has to be measured prior to making an investment, so our focus will be that. The program is scheduled to start in the fall with three-to-five firms per half a year as a maximum.

We don’t want to manage too many, as that will be to the detriment of quality. As for VCs, any firm can subscribe to monitoring. However, we wish to work together in person and not reduce it to a newsletter service.

Will you not fall into the trap of supporting businesses that already operate well, leaving out those more in need?
Our aim is to support those with a potential to become strong businesses. The already strong will not apply to this program.

 

How do will you measure a project’s impact on the economy, the overall aim being to boost the Hungarian economy?
This spring, Design Terminal will have a team of economists prepare the first-ever horizontal study of the Hungarian creative industry: its state and value added to the economy. In the future, it will help us check figures and the industry’s hopefully growing impact on GDP. However, on a daily basis it is success stories that prove our effectiveness: creative enterprises that, I hope, will be visible in the coming years.

On Design Terminal and its home
Originally a bus terminal built in 1949 in the Bauhaus style, the Design Terminal building was first set to become a design hub in 2003. Then Prime Minister Péter Medggyessy aimed to establish the institute from EU funds. The building was to open in 2006, but delays in renovation and lack of occupancy permits prolonged the process and in the meantime, the revamped building started to decay.

In 2009, representatives of the design industry called for action but only after the 2010 elections did Design Terminal open. It now belongs to the Administration and Justice Ministry, and has housed several design and innovation-related projects focusing on homegrown and regional talents. Of major recognition is ‘Gombold újra’ (‘Re-Button it’), a contest aimed at allowing young fashion designers in Hungary and the CEE to introduce their work.

Innovation forums, international design exhibitions and Christmas fairs are among the major events Design Terminal has organized and supported. Beyond running its own talent projects from 3D printing to fashion industry contests, Design Terminal’s downtown HQ is a home to major events of the Budapest start-up community as well.

Gergely Böszörményi-Nagy is a communications professional with an MA in International Relations from the Corvinus University of Budapest. For years, he worked as a strategist for political, corporate and non-profit campaigns in Budapest and in Washington, D.C. He was a founding associate of Nézőpont Intézet, a Hungarian think-tank, and then served as Deputy Head of Strategy at the Department of Government Communications. Since summer 2012, he has been with Design Terminal, first as strategic director, now as general director. As head of the state agency, he is responsible for enhancing the role of creative industries in the Hungarian economy.

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