Innovation is not just technology, but strategy
Table of Contents
Innovation and research and development are no longer just a technological issue, but a long-term economic and competitiveness strategy. In recent years, Hungary has consciously strengthened the state’s role in this area. László Bódis has been responsible for the area as deputy state secretary since June 2022, and since November 2023 he has also led the National Innovation Agency, which works to build an outstanding ecosystem at the international level.
Many people mean many things by the concept of innovation. Which areas are in your portfolio?
This also includes the world of science, research and startups. The essence of innovation is the successful market utilization of new solutions.
We are working to ensure that the discoveries of excellent Hungarian researchers do not remain in the laboratories, but that they give birth to products and technologies that Hungarian small (and eventually large) enterprises, called Deep Tech, can successfully take to the international market.
This vision guides our innovation policy decisions.
How challenging is it to make this happen? According to Mario Draghi’s 2024 report, Europe lost its competitiveness against the USA and China due to its innovation lag. Perceptible progress?
Europe has really fallen behind: only 5 percent of the world’s venture capital is located here, and only 4 of the 50 largest technology companies are European.
Unfortunately, in the European Union, I see that there are many good-sounding strategies, but no meaningful breakthrough has occurred in the last two years.
However, we do not wait for anyone; it is our own responsibility to build our innovation ecosystem and make it a world leader.
The five pillars of the Hungarian ecosystem
How is the Hungarian innovation ecosystem structured?
Success requires the effective cooperation of at least five actors:
* Founders: Talented entrepreneurs with technological knowledge.
* Knowledge centers: The universities and research institutes where knowledge is concentrated.
* Investors: Those who finance promising ideas.
* Corporate sector: Where technologies are utilized.
* State: Which “orchestrates”, i.e. coordinates processes, with regulations, resources and services.
Where is the entire innovation ecosystem now?
Although there is still work to be done, the results are already visible. University students are becoming more and more open to founding innovative businesses, the acceptance and popularity of innovation among researchers is growing, which is clearly demonstrated by the fact that since 2022 we have managed to triple the number of university and research institute patent applications (this represented 164 patent applications in 2025), and more and more spin-off companies are being created in the research sphere.
Only in the first weeks of 2026, three Hungarian startups received significant capital investment, two of them are closely related to the new initiatives that we launched in the last few years:
- The ABZ Innovation (drone production) was helped by the technology transfer company of Széchenyi University in Győr.
- A Novamigra Therapeutics (anti-migraine drug) grew out of an NKFIH grant.
So we can already see the initial successes, which confirm us that the work done in recent years will bear fruit.
Research career and funding
The basis of the best innovations is high-quality research. Do we have the conditions for this? We often hear that research funding is not predictable enough and therefore the career path of a researcher is not attractive for young people.
The numbers belie that claim.
Today, twice as many people work in the R&D sector in Hungary than 15 years ago; this is one of the highest growth rates in the EU. The number of doctoral students has also increased by more than 50 percent in the last decade.
Although there is still a lot to be done in this area, in the last 3 years we have made a lot of progress in creating a predictable and competitive career path for researchers in Hungary. In our approach, this requires stability, a competitive income, a research support system that can be planned and ensures a high level of funding, and an attractive research environment.
For stability a HUN-REN Hungarian Research Network we put it on new foundations. A 25-year framework agreement ensures predictability, and the annual financing has been increased from HUF 41 billion to HUF 90 billion.
As a reminder: 6-8 years ago, the network was operating on a sixth of this amount.
In the contract with HUN-REN, in addition to the performance indicators and 24 research topics of decisive importance for Hungarian society and economy, we also stipulated that the research network must create a predictable, performance-encouraging researcher advancement system. As a result of the salary increases for researchers at HUN-REN and universities, we are now at the point where the average income of researchers now exceeds HUF 900,000 gross, and a doctoral student can earn HUF 400-500,000 net.
We created the Research Excellence Council and under the control of the Council Research Fundthe purpose of which was precisely to create planability and predictability in research funding, in addition to tripling the available resources compared to 2019, with HUF 47 billion available in the Research Fund this year. Established in 2024, it has a strategic role National Research Excellence Program (NKKP), which, as the new flagship program of science funding, supports the development of the best 300-350 research groups in Hungary with HUF 40 billion per year. The involvement of young researchers plays a decisive role in the NKKP.
Led by Nobel laureate Professor Ferenc Krausz – and three other Nobel laureates and Abel Prize-winning mathematician László Lovász – this year’s FRONT LINE program and its mission is to attract the best minds from all over the world to Hungary, and of course to keep the most talented Hungarian researchers at home by creating an extremely competitive financial and infrastructural environment for them, even by international standards.
Knowledge market: Technology transfer
How do they encourage the practical utilization of research results?
This is perhaps one of the most significant challenges, since here we have to shed a new light on approaches that have been in place for decades, which is not a Hungarian peculiarity – the United States and Asia are also struggling with this challenge in addition to Europe.
We do not expect all researchers to be innovators, this is not the case anywhere in the world. But they do think about the social and economic benefit of their research.
To help with this, we completely reorganized the university technology transfer organizations, and we managed to convince the top leaders of the institutions of its importance. Based on the best international examples, we supported for-profit companies 100% owned by the institutions Technology Transfer Companies (TTCs). The National Innovation Agency had a decisive role in the fact that today 15 universities and HUN-REN have TTCs, whose primary task is the market utilization of research results generated at universities and research institutes.
Photo: NIÜ
New last year under TTCs management Proof of Concept We have created (PoC) funds that researchers can use to validate their ideas; the program “lured” hundreds of innovative developments. In the program, it was possible to attract hundreds of innovative development ideas from the researchers working in the institutions. We can already see the results of the operation of the TTCs: there are many more patents, more industrial income and more and more spin-off companies.
Is there a technological area in which you see outstanding potential?
There are several, but if I had to single out one, it’s definitely this one field of life sciences would include drug development, medical device development and biotechnologies, the potential is huge. It was launched last year Life Sciences Catalyst more than expected, more than 40 project proposals were received for our program. The aim of this program is to support promising, early-phase drug developments with significant costs, and to help these developments until human trials, from which venture capitalists have a much higher chance of continuing to finance the most promising projects. In the medium term, it would be worthwhile to consider the creation of a life science innovation valley centered in Budapest, where life science startups, incubators, investors and research groups could be physically concentrated.
Based on what has been said, institutional structures have been built in the past period and support programs have also been started, so that as much research as possible can become innovation. But do the researchers know how to build a business? Do they have to bring these developments to market at all?
In the world’s most advanced innovation ecosystems, we see that in the case of technological enterprises based on research results, researchers only rarely perform company management tasks, in most cases they continue to work within the created startup as the manager responsible for technological developments. So they don’t necessarily have to run the company, but they need an entrepreneurial approach. It plays a decisive role in the transfer of this approach and skills, which is also unique at the international level Hungarian Startup University Program (HSUP), within the framework of which 20,000 students learned about innovation over five years.
The goal of the two-semester program is to provide participants with comprehensive theoretical and practical knowledge about the world of innovation and startups. HSUP has been completely renovated in recent years, and is now available to students in English, supplemented by renewed curriculum and a mentor network. We thought about this program further and launched it last September Pathway to Business program, which specifically prepares the participants in the doctoral training to market their scientific results.
I must admit, I was also positively surprised that 115 people signed up for the program in two weeks,
which has been running successfully since then and ends with a Demo Day held in front of investors in the summer, and then starts again with a new year in September.
Regulation and corporate innovation
He mentioned that in the development of the ecosystem, the state has not only a financing, but also a regulatory and “orchestrating” role. What steps have been taken in these areas?
When I entered my current role in 2022, I saw it as a challenge that the cooperation between market ecosystem actors – such as investors, incubators or startup organizations – and state actors was not active enough. In 2023, we created the National Innovation Agency with the aim of establishing the necessary collaborations and thereby catalyzing the entire ecosystem. In 2024, in the spirit of this, we launched the Startup Roundtable, organized by NIÜ, where we sat the key actors of the ecosystem around a table. Important results:
* We introduced the loans convertible into equity opportunity, which a good number of investors take advantage of.
* We have created one of the most favorable – if not the most favorable – in Europe employee stock incentive plan (ESOP) taxation rules.
* We made the contribution of patents in spin-off companies tax-free.
* We launched Hungary’s first startup platform, which we created for domestic and international actors active in the startup ecosystem or interested in it. This is startup.niu.hu. A startup and ecosystem database, legal aids and event catalog are available here, and international visitors can get information about the strengths and opportunities of the Hungarian startup and innovation ecosystem. We will soon expand the platform with domestic support options available to startups.
But it is also thanks to the Round Table that every September we now traditionally organize the Hungarian Innovation Week, which brings together domestic innovation-themed events. Last year, 24 events were organized as part of the week, with more than 10,000 participants and the Connexions: CEE Deep Tech Summit, which aims to put the Eastern and Central European Deep Tech ecosystem on the global map.
Finally, he mentioned the corporate sector as the fifth defining actor of the ecosystem. Are domestic companies innovating?
When examining the domestic corporate sector, it is worthwhile to treat large international companies operating in our country and Hungarian-owned enterprises separately. In the case of the former, I consider it a very significant result that since 2018, nearly 40 new R&D centers have been established under the leadership of HIPA, within the framework of an investment of nearly HUF 400 billion.
In recent years, more and more large companies have chosen Hungary as the location for their developments, in which the competitive tax system, the supportive environment and Hungary’s features that ensure outstanding livability play a decisive role. So we are making good progress in this area.
In the Hungarian-owned corporate sector, together with the MNB, we identified 150 fast-growing, innovation-driven companies (Hungarian Innovation Driven Enterprise). These enterprises punch well above their weight: they play a significant role in exports and in added production capacity, their increase and targeted development is an important common goal of ours. In the case of Hungarian businesses, we want to achieve that by 2030 every second Hungarian company with more than 10 employees innovates (currently only every third does this). This is crucial because innovative companies are 58 percent more efficient and pay their workers 31 percent higher wages.
Our innovative company sector is the backbone of our economy: one third of innovative companies account for 67% of GDP, nearly 70% of exports, and 54% of employment.
With the HUF 340 billion grant program package launched last year and this year, we will reach nearly 2,500 businesses, two-thirds of which will start working on innovation through these programs.
Another strategic task of ours is to connect the innovative corporate sector as closely as possible with universities and research institutes – cooperation is now a basic requirement for all grants.
Vision: 2026 and beyond
What are the most important tasks this year?
As NKFIH President Ádám Kiss already announced to the Index in 2024, we will move in the direction of non-reimbursable grants in the direction of venture capital type financing in innovation financing. We have already followed this logic with the Startup Factory program, within the framework of which 10 market incubators were launched or continued to operate with the cooperation of state support and private capital, which in total support the early development of more than 100 startups financially and professionally.
This year, we are launching a new life science capital fund and an early-stage co-invest fund. The development of our venture capital ecosystem is one of the most important tasks in innovation policy for the next year or years. Today, there are still few fund managers and funds that invest exclusively in Deep Tech, i.e. startup companies that bring research results to market. This requires special expertise, the structure of which is of strategic importance in the next period.
Our strategic goal is also to include public procurement in innovation financing – since the state can develop the ecosystem not only with support, but also with orders, creating demand for technological, innovative Hungarian enterprises. By the end of this year, we plan to carry out two pilot programs in this field and create an action plan broken down into sectors.
Our third priority task this year is the 20 billion euro budget, which was also announced for the first time at the end of last year. Mission-driven National Laboratories start-ups in areas such as AI, quantum technology, healthy living or energy. The goal of the program is to launch far-reaching innovation programs that bring solutions to significant social or economic challenges at universities and HUN-REN.
This also shows that the orchestrating role in the ecosystem includes not only cooperation with market players, but also cooperation with partner ministries.
The professional relationship with the health, energy and defense policies, among others, is excellent. Many new technological enterprises will also be launched from these flagship researches in a period of 3-4 years.
What priority goal would you indicate in the medium term?
In the past period, we created the institutional and program structures in which it is worth investing community resources, because they produce concrete economic and social results and impact. In the medium term, it is therefore important to further increase the current level of funding for research, development and innovation – from 1.4 percent of GDP to close to 3 percent – of which the state – in line with international models – needs to undertake a one-third share. For this, the annual budget of the National Research, Development and Innovation Fund needs to increase from the current 100-120 billion to about 200 billion forints. With this, we can make Hungary one of the most innovative countries in the world by the end of the next decade.
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