Could Budapest become a “startup capital”?
“Let Budapest be one of Europe’s startup capitals” – this mostly utopian goal is written in a document called Hungary’s Digital Startup Strategy (DSS), which was published at the end of the last year by the government. Mno.hu writes that the quite long professional document has a background: startup strategy is part of the Digital Wellbeing Programme launched a few years ago, which determines the government’s vision of novice digital enterprises until 2020.
Startups usually signify new enterprises based on technical innovation, which aim to compete at the world market from the beginning, because their activity is not limited by national borders. Their greatest advantage is that they are able to export products or services in a way that they are not in need of import.
According to the goals written in the document, a “flourishing startup ecosystem” has to evolve in four years’ time to provide essential institutions – incubator houses, mentor network – and necessary money with the incorporation of private investors, lending institutions, and state and EU resources. They also encourage the formation of an environment, which “doesn’t set back but supports the foundation of startup enterprises”, and “encourages the strengthening of the enterprising spirit at all levels of education”. Moreover, it also supports the development of linguistic, communication and marketing competences.
DSS also records that different ways of cooperation (cluster, co-op etc.) equal a significant competitive backup, so they also want to urge companies to live with these opportunities. However, there aren’t too many actual facts in the strategy that divides development into five pillars: the enterprising spirit, the development of competences, the creation of the culture of cooperation, and the initiation of a supporting business environment and financing resources.
On the other hand, the evaluation of the current situation says a lot. Being a governmental document, it could be interpreted as strong self-criticism. It recalls that we are only in the 63rd place on World Economic Forum’s competitiveness ranking list, which counts as a tailender in EU comparison. This is mainly due to the government’s administrative burdens laid on enterprises and the unfavourable taxation environment. Furthermore – as it can be presumed from the points considering development – there are serious deficiencies in approach: it seems like enterprising tendency and the knowledge of competences necessary for enterprises are very weak on an international scale.
“Entrepreneurs won’t be successful just by having a lot of capital. The initiation of a working ecosystem is a cultural matter, and this begins in school” says the study, which concludes that Hungary is only on the regional average level concerning digitalisation.
“It’s good news that startups reach the government’s stimulus-threshold, but all strategies are worth as much as the number of goals that get accomplished” said I.T. professionals, who asked to be mentioned anonymously due to their governmental orders.
It is a consonant observation that the I.T and communication-technical sectors have been signalling for quite a while that there are serious problems with I.T. education, and that youth is not encouraged to start enterprises at home. If the environment and approach would be changed in a few years’ time, we would still have to make up lost ground. For instance, Estonia realised this opportunity 15 years ago and did everything that we started thinking about just now. Not to mention that the I.T. and startup competitions take place on a global market, so being great in the region is not enough.
Copy editor: bm