The Hungarian government’s National Research, Development, and Innovation Office (NKFIH) has just announced a new grant scheme titled Invented in Hungary. Local companies that are willing to take on research and development projects can apply.
‘Foreign direct investment (FDI) continues to play an important role in Hungary’s economic development. Our country can be considered one of the manufacturing centres of the region, and in order to move up the value chain and realize the Hungarian government’s “Invented in Hungary” vision, development projects by foreign companies will also be necessary,’ Péter Goreczky, senior analyst at the Hungarian Institute of International Affairs explains in his piece on the Hungarian business site Világgazdaság.
However, he also warns that not all R&D projects are beneficial to the country. If a foreign company is in charge of the project, it can attract top talent with better salaries and more promising career paths, thus depriving local companies of the best of the local talent pool. Foreign companies also do not necessarily involve local companies in their R&D projects. It also may happen that a multinational company focuses its R&D activities on an area that is of little significance to the economy of the country concerned, thereby diverting technological and human resources from other, more useful areas.
Thus, Goreczky argues, more targeted grant allocation is needed by the government for R&D projects—which is exactly what the new Invented in Hungary programme is trying to solve.
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