University-Enterprise Cooperation in Hungary: R&D and Innovation Policies

1. Hungarian Spectrum ofUniversity–Enterprise Cooperation Prof. György BAZSA University of Debrecen, former Rector; Hungarian Higher Education and Science Council, President; European Centre for Strategic Management of Universities Brussels, Board Member TEMPUS IN TOUCH Seminar AMMAN (Jordan) – 9/10 April, 2006

2. Europe – Hungary - Jordan

3. Hungary ~ 93.000 km2 ~ 10 million inhabitants Education: - 12 years obligatory public education - 18 state, 5 church, 2 private universities - 12 state, 23 church, 11 private colleges ~ 200.000 state funded,~ 200.000 fee payingstudents

4. University of Debrecen 11 faculties – 28.000 students

5. Hungary – social conditions • until 1990: state centralized economy • early 1990-s: society in transformation to a market oriented democracy • since 1996/97: market based economy in function – but a present only in midway • privatisation nearly complete • 2004: full right EU membership

6. General background of R&D&I: • High growth of GDP (4%) and export (17%) • Low R&D expenditure, mainly by public funding • Low innovation intensity of enterprises, especially of SMEs, • Some MNEs have R&D units in Hungary • Strong science base (universities and HAS), but inadequate linkages with industry • Regional disparity, Budapest predominates

7. EU vs. Hungary in R&D&I:

8. Regional distribution of R&D expenditure population R&D Budapest region: 20 % 52 % All others: 80 % 48 %

9. Actors of R&D&I in Hungary • State: interested in R&D&I, has good regulatory forces, but it is poor (GDP ~1%); • Universities: state funded, traditionally basic research oriented, less innovative, without market experience, no capital; • Enterprises: • partly big multinational firms – R&D units at headquarters, some already in Hungray • a lot of SME-s, but with small research and innovation abilities; • Venture capital: first spots already active

10. State policy: to promote and accelerate the economicgrowth by investing in research, develop-ment and innovation, strengthen regions. • Applied methods: • general policy supporting R&D&I • National Development Plan/EU • legal framework • funding policy and structure

11. Act of Research and InnovationFund (2004) • ensures predictable and reliable financing of implementation of R&D • consists of mandatory contributions of enterprises calculated on tax base (0.1-0.3 % of net adjusted revenues) • matching resources from state budget • to be spent directly or indirectly on R&D and innovation goals • 25 % dedicated to regional innov. objectives • 75 % merit based competitive funding

12. Act of Innovation (2004) • enables creation of innovative firms, e.g. spin-offs, innovation parks etc. • strengthens R&D adoption capacities • increases attractiveness of research carriers • supports industry-university relationship viaregional centres & networks • supports provision of innovation services (lack of bridging institutions) • Tax incentives: double amount of R&D expenditure(common with universities) can be accounted.

13. National Development Plan • Increase GERD/GDP to 1,5% by 2006 • Shift R&D to innovation • Stimulate more enterprise R&D expenditure • Helping SMEs to catch up innovation • Enhancing regions • Setting up Regional Innovation Agencies • Promote industry-academia collaboration

14. University: produces new, disseminates/applies (old and new) knowledge – mainly in a scientific interest (curiosity)driven (non-profit) way. Published results! Enterprise: applies (old and new) knowledge in order to produce goods – mainly in a financial profit driven way. Confident results! University–Enterprise cooperation: a good synthesis of these functions, to achieve a common goal – in the interest of both parties – in general serving society (mankind) [We consider mainly hard sciences.]

15. U&E self-initiatives in R&D field • Access to special equipment of enterprise/ university with or without assistance of the owner’s organisations • Deposition of hardware and software at universities – for research and for advertisement reasons) • Donation of modern instruments, complete labora- tories) for training and research (e.g. IT, medicine) • Research contracts financed by enterprises • „Outplaced” U-chairs with collaborative research • Joint patents and their realisation (rare in H/EU) • Consultation services (e.g. agriculture, technology)

16. Cooperation initiated by state programme funding: • Hungarian Central Development Fund (KMÜFA) – supports U&E cooperation, requires measurable impacts. E. g. • Biotechnology 2000; • Technology for environmental protection; • Infocommunication techn. and applications • Up-to-date equipment purchase (for uni-s); • Setting up high tech R&D laboratories • These represent mainly infrastructure support for research, which develops cooperations

17. Cooperation forms forced by state programme funding: • Cooperative Research Centre-s (KKK) – uni based, but with enterprises (5 examples); • Széchenyi Plan – National Research and Development Programme – R&D projects of consortia led by HE or R&D institutes; • A broad system of R&D&I programmes – introduced by National Research and Development Office – since 2003.

18. R&D&I Knowledge Centres – aims • Regional concentration of skills and know-how over critical mass • Securing postdoctoral jobs • Fostering new roles of universities in their regions • Collaboration between university + enterprise • Encourage creation of innovative SMEs, start-up, spin-offs, innovation parks etc. • Strengthen research and technology adoption capacities

19. R&D&I Knowledge Centres (2005) – based on research universities • e-Science – ELTE, Budapest • Vehicles and Vehicle Control, BME, Budapest • Infobionic Knowledge, SE Budapest • GENOMNANOTECH – UDebrecen • Mechatronic & Logistic Systems, UMiskolc • Neurobiology, USzeged

20. New Act on Higher Education(effective March 1, 2006) • Cooperation in training – national level • Vertical structure of HE • 3 linear cycles: Bachelor – Master – PhD • professional skills (competencies) and • HE qualification earned in parallel • in most vocational (R&D related) fields: +1 semester for work experience (in field) • Hungarian Bachelor welcome – March 2006.

21. Cooperation in training – national level • Horizontal structure of HE: • degree programmes in training fields of humanities, arts, social, religious, economic, business, agricultural, natural, medical, technical sciences • distribution of state funded places among training fields and institutions – based (partly) on labour market demands • This is one of the main functions of Higher Education and Science Council

22. New Act on Higher Education:Cooperation of special Hungarian art • U-Senate (all decisions) – supported by an • U-Economic Council(Advisory Board) – in state- owned higher education institutions. • Aim of Economic Councils: • separates academic and management affairs • takes initiatives for strategic decisions • controls measures for efficient management • import of experience and mentality of excellent leaders, experts in economy, business, public affairs, institutional management etc.

23. New Act on Higher Education: • Never enjoyed high level of freedom in insti-tutional economy and management (differsfrom the provisions of public finances regulation) • transfer appropriations, • keep their own income in a separate account, • pursue business activities without the obligation to pay any taxes and duties, • have the right to found businesses, economic enterprises and foundations (without state permission), • take out loans subject to certain conditions, • launch investment projects with loans, • subscribe government securities, • set up risk funds.

24. Cooperation at individual level – in training • Lectures of enterprise experts held at universities (honorary professor titles) • Lectures of faculty members held at enterprise (in field trainings organized by the firms) • Joint supervision of Master or PhD theses • Ad hoc consultations between the parties • Joint publication of university and enterprise staff

25. Cooperation at institutional level – in training • second degree programmes (with tuition fee, therefore labour market oriented) • degree specialization programmes (chemical engineer – specialist in plastics, pharmacy, environmental analysis, silica etc.) – all fields are covered • support of innovative and outstanding research students (with awards and money) • R&D cooperation agreement in wide variety • Partnership with chambers, Hungarian Innovation Association etc.

26. Evaluation of skills of graduates by enterprises (scale 0 – 5) Practical skills -------------------- Computer knowledge ---------- Technical skills ------------------ Economic knowledge ---------- Calculation skills ---------------- Communication and writing -- Foreign languages ------------- Independent working ---------- Work discipline ----------------- Working culture ----------------- Co-operative skills ------------- Average - - - - - - - - - - - - - - -

27. Co-operation in international level • Lisbon agenda • European Hugher Educaion Area • European Research and Innovation Area • COST, ESF, EUREKA, • EU frameworks (ERA-NET, INCO-NET) Tempus: many actions (incl. this seminar) + Handbook University-Enterprise cooperationTempus Output Programme (Phare) Kurt König, Head of the CORDIS Unit at OPOCE (20-03-2006): there is currently a communication gap between the science and business communities.

28. Random Hungarian media mirror – in black and white • The most creative researcher is lost in business world • Researchers don’t leave the professorship for venture • Stable civil servant payment is more attractive than withdrawal from venture • Venture is a hard task for European talents

29. Random European U-E examples – in black and white • Teknia – Kuopio (SF) • Otaniemi International Innovation Centre – Helsinki, HUT (SF) • LU Innovation – Lund University (S) • etc. • Please, continue!

30. My conclusion: The spectrum and effectiveness of University–Enterprise Cooperation both in Hungary and Europe is definitely in progress, but could and should be broadened. Thank you for your kind attention!