About the scientific and innovation ecosystem of Hungary – in a nutshell

HUMAN CAPITAL

Today, Hungary is in the upper house of international ratings on human capital. In the current Human Development Index, Hungary is ranked 43rd out of 189.

Medical studies in Hungary withstand European standards and are considered to be of the highest quality. International students can apply to four universities that offer medical, pharmacology, and dentistry programs in English, with degrees recognized by the EU and US. No need for better evidence than the fact that most of 1,000 Israeli students in Hungary study medicine.

Thanks to the unique educational methods, academia-industry collaboration e.g. dedicated Audi faculty, dual training with Mercedes, Opel, Suzuki, Knorr Bremse, etc., annually 15,000+ students graduate in engineering and IT. In the ICT sector there are 400,000+ employees, with developers regularly ranked in Top 5 by Hacker Rank, Skill Value etc. In recent years some of the fastest-growing international tech companies such as Cloudera, Tansferwise or Blackrock opened large development offices in Hungary to utilize the great STEM talent pool of Hungary, the most advanced IT outsourcing market in Central and Eastern Europe.


 

DOING BUSINESS

When recovering from the global financial crisis 10 years ago, the Hungarian government made a bid for innovative entrepreneurship. The development of the startup ecosystem has become government policy and it seems to be paying off. In the Ease of Doing business list, the country is ranked 52, which is also a fairly high indicator.

What are the key benchmarks of an attractive business environment?

  • Fast track for setting up a company.
  • Secondly, the high professionality of local IT-specialists.
  • Thirdly, a lower salary compared to the EU average.
  • Fourthly, significantly lower rent and cost of living.
  • Finally, tax incentives for business angels: 9% corporation tax rate + ‘early stage status’ tax reductions. No wonder that in a recent study by Startups.co.uk, Budapest ranked number one out of 80 European cities for launching a startup in the post-Brexit era. The 9% tax rate is the lowest of all 80 cities and a whopping 10% less than the UK rate.

Tax rates are of course not everything: quality of life. Budapest is a thriving startup city, with a strategic location on the river Danube, a wide range of educational institutes, a large pool of highly skilled developers and an upward trend in investments. In addition, the cities of Szeged and Debrecen have their own startup communities – the latter being a favorurite destination for Israeli medical students.


 

FUNDING

In terms of funding, currently, around 1 billion USD is available on the Hungarian VC market for startups. The Hungarian Venture Capital and Private Equity Association (HVCA) is representing the interests of private and venture capital industries.

Hungarian governmental funding, EU grants and further supporting programs are available for Hungarian legal entities, EUR 3.4BN between 2014-2020. Hungary and State of Israel are offering annually EUR3+3M for collaborating RDI companies developing market ready products together.

Hungarian and international funds are quite available through the state-supported venture funds as well as local and international private investors, 35 Venture Capital Funds are willing to invest EUR 850M to the ecosystem.

Cash subsidies from the Hungarian Government for: Business service centers; R&D projects; Workshop establishment and development; Training.


 

TAX INCENTIVES

Development tax allowance: may be claimed for a 13-year period (beginning once the development is completed) in Corporate Income Tax returns within a maximum period of 16 years from the original application for the incentive. In any given tax year, the tax incentive is available for up to 80% of the CIT payable.

CIT based R&D tax allowance: tax benefits capped at 145,000 EUR and a more generous rate applies to collaborative R&D activities. Outstanding credits may be used during the next 5 years to decrease up to 50% of the taxpayer’s tax base.

Energy efficient investments: the taxpayer is entitled to tax allowance based on investment for energy efficiency. The tax allowance is 30-65% of the counted costs related to the investment, but maximum EUR 15 million. It can be used in the tax year following the year when the investment was placed into operation and in the following five tax years.


 

LATEST STARTUP SUCCESS STORIES

  • Turbine AI is using AI in the bid to fight against diseases. Not only that they can help pharmaceutical companies in understanding how a disease works, but also matchmake patients with right drugs, and personalize therapy combinations.
  • InSimu provides the most comprehensive Virtual Patient Simulator for assessing and improving clinical reasoning skills.
  • Sineko’s main product is called GRAID which provides AI-assisted Structured Reporting for cross-border Teleradiology.
  • Oncompass is a molecular diagnostics based therapeutic information service for precision oncology.
  • AIMotive: Technology company working towards Level 5 autonomous vehicles, EUR 60M raised, 200 employees, partners with industry leaders (Nvidia, Samsung, Volvo, etc.).
  • Commsignia: R&D and manufacturer of Cooperative Intelligent Transportation Systems (C-ITS) - the fastest growing V2X solution provider on the market, EUR 10M funding.
  • Rollet: Seamless drive-through payments, without pushing any buttons in the application, and no Internet connection is required. EUR 1.2M funding.

 

FLAGSHIP PROJECTS

#ZalaZone - https://zalazone.hu/en/

The proving ground is an optimal test enviroment to the future cars and their communication technologies on multi level and contributes to the testing these from the concept condition to the final product status.

The proving ground also has the opportunity to test cars which have conventional powertrain. Besides, drivving-support-systems and autonomous (self-driving) cars are able to be tested at the faciality for example by validation. The newest infocommunication systems can be developed. Furthermore Research & Development activities in the vehicle industry are able to be continued as well.

The unique test track is a technological and commercial demonstration site. First ever OEM independent test track specifically designed for autonomous vehicles and their ecosystem (5G connection, V2X communication, etc.). Dynamics tests for conventional vehicles and research and development infrastructure for connected, autonomous and electric vehicles, providing multi-level system for validation tests. With RSU installation under way on designated public roads and 5G-equipped city next door, unique opportunity to combine experience on track with real-life testing. Due to proximity to major OEMs and suppliers presence for startups provides excellent point of market entry.

Supported by flexible and enabling legal environment: Fast and only two stage public road tests approval process within Hungary with NO territorial and NO time limitation; availability of cross-border development and testing (Hungary-Austria-Slovenia).

Hungarian Electromobility Strategy: 450,000 electric vehicles on domestic roads by 2030; installation of 45.000 charging stations nationwide. Hungary will become the largest EV battery manufacturer in Europe thanks to several new plants (Samsung SDI, SK Innovation etc.).

#ELI - https://www.eli-alps.hu/

The Extreme light infrastructure (ELI) is the first infrastructure in the world capable of the investigation of the interactions between light and matter with the highest intensity, in the so-called ultra-relativistic range. ELI is the first civilian large-scale high-power laser research facility to be realized with trans-European cooperation and the worldwide scientific community. Hungary, the Czech Republic and Romania, with a coordinated management and research strategy, will simultaneously implement the project through the construction of the three laser facilities with the respective mission in the attosecond, beamline and photonuclear applications.

The main objective of ELI Attosecond Light Pulse Source (ELI-ALPS) is the establishment of a unique attosecond facility which provides ultrashort light pulses between THz (1012 Hz) and X-ray (1018-1019 Hz) frequency range with high repetition rate for developers and end-users.

Activities and services: ELI-ALPS, the Hungarian pillar of the Extreme Light Infrastructure, is dedicated to support fundamental and applied researches in physical, biological, chemical, medical and materials sciences at extreme short time scales. The ground-breaking laser systems together with the subsequent outstanding secondary sources generate the highest possible peak power at the highest possible repetition rate in a spectral range from the E-UV through visible and near infrared to THz. The facility – besides the regular scientific staff - will provide accessible research infrastructure for the international scientific community user groups from all around the world. The first three laser systems, namely the mid-infrared, the Terahertz and the High Repetition Rate lasers are installed and becoming operational, the beamlines are gradually becoming available by 2020.

The main research fields and applications at ELI-ALPS:

  • The development and parameterisation of Attosecond light sources
  • Biological imaging technologies
  • Medical applications
  • Energy research: from solar cells to artificial photosynthesis
  • High-peak power photonics

 

COOPERATION OPPORTUNITIES

LINKS

The National Research, Development and Innovation Office (NRDI Office) aims to create a stable institutional framework for the Government coordination and predictable funding of research, development and innovation (RDI) in Hungary, ensuring the efficient and transparent and value-creating use of available resources. (https://nkfih.gov.hu/for-the-applicants)

The Eötvös Loránd Research Network (ELKH) research institute network currently comprises 10 research centers, 5 research institutes, and around 150 additional supported research teams operating at universities and other public institutions, conducting basic and applied research, exploring the most varied disciplines of mathematics and natural sciences, life sciences, social sciences and the humanities. ELKH Secretariat is an independent, non-profit public budgetary institution. It was established by the Hungarian Parliament on August 1, 2019 with the aim to manage and operate the publicly funded independent research institute network in Hungary, which constitutes a central pillar of the country’s scientific domain. ELKH is led by a 13-member independent Governing Body whose President and most members are academicians (https://elkh.org/en/).

RocketShepherd is a marketplace and comparison engine for CEE Region startup. RocketShepherd’s automated, one-stop- shop platform cross-compares stakeholders all in one place (https://rocketshepherd.com/public/landing).

Pozi.io is the Hungary based global initiative for a marketplace where you can find all the help you need to make your ideas come true. They invite you to join of you are looking for a co-founder, mentor, Experts, Investors, or team to join (https://pozi.io/).


 

For more information or if you wish to get in touch with us, please contact our Embassy at: Trade.science.tlv@mfa.gov.hu

Science and Technology Attaché: Mr. Szabolcs SZOLNOKI