It has been one of the objectives of Hungary’s economic policy to move towards high added value production within which the strengthening of research, development and innovation are to play a key role, Minister of State for Economic Strategy Zoltán Cséfalvay said at a speech he gave in the Center for International Private Enterprise (CIPE) in Washington.

The Minister of State pointed out that by 2020 Hungary intends to increase R&D spending as a percentage of GDP from the current 1.2 percent to 1.8 percent, establish 30 new research centres with a global reach, up the number of researchers from 37 thousand to 52 thousand and help launch 300 technological start-ups which have potential for international success.
In the opinion of Zoltán Cséfalvay, the Hungarian R&D sector will develop primarily within the fields of pharmaceuticals, life sciences, biotechnology and the car industry.

He emphasized that an optimal R&Đ&I environment requires three basic conditions: economic openness, financial stability and dynamic regulation. As he said, Hungary has already stabilized its central government budget, has implemented reforms aimed at improving competitiveness and has come to a stage which leads to a shift towards higher added value production via research, development, innovation and industrial policy.
Speaking about the economic openness of Hungary, the Minister of State said that Hungary is ranked as the 9th most globalized and open country in the world, adding that exports constitute 90 percent of GDP and out of that, 20 percent are products of high added value.

The amount of foreign direct investment (FDI) exceeds USD 100bn. He also referred to a recent Financial Times article which places Hungary as the second country after Ireland in which foreign companies had expanded production to the largest extent.
As far as the country’s financial stability is concerned, the Minister of State stressed that in Hungary the general government deficit is steadily below 3 percent, government debt is on a downward path and the country has managed to exit the European Union's Excessive Deficit Procedure.

With respect to flexible regulation he mentioned that the flat rate personal income tax introduced as part of the taxation system reform “no longer punishes performance”; taxes on income and labour have been reduced while emphasis was shifted to levying consumption. As a result of the reforms introduced so far, the Minister of State called the Hungarian labour market one of the most flexible in Europe, adding that vocational training options had also been improved to facilitate the harmonization of labour supply and demand.

“Investor feedback is signalling that the quality of suppliers and infrastructure are traditionally attractive factors, to which favourable labour market regulation has now been added. This is important, as the skilled labour force pool has been one of the country's most prominent resources” the Minister of State said.

Zoltán Cséfalvay spoke to MTI on arriving to the East Coast of the US after having held talks in Canada and Silicon Valley: “My goal was to place Hungary on the map of Canadian and American investors as a potential R&D&I investment destination and make them comprehend that Hungary has now got much more to offer than basic assembly capacities.”

In Washington, the Minister of State also participated at a business breakfast with investors and met with Cathy Campbell. President and CEO of CRDF Global, a non-profit organization active in the field of stimulating international scientific and technological cooperation, and with Staff Director of the Oversight and Government Reform Committee of the US House of Representatives Lawrence J. Brady. He also gave an interview to the Bloomberg news agency.

Zoltán Cséfalvay concludes his one-and-a-half-week North-American tour in New York on Tuesday, where he will attend an investor breakfast organized by Barclay’s Bank and a business forum hosted by Ernst&Young. The latter forum will also be attended by László Korányi (National Innovation Office), Lajos Reich (AmCham, GE Healthcare), Imre Hild (iCatapult), Illés Müller (Mediso) as well as Gábor Gleisz and Péter Kertész (Leonar3Do). The Minister of State is also scheduled to meet with Business Council for International Understanding President Peter Orszagh (who also holds several managerial posts at Citigroup) and representatives of Morgan Stanley.

(Ministry for National Economy)