Hungary overtakes Slovakia in new EU ranking, but challenges remain
Hungary has surpassed Slovakia in research and development (R&D) spending relative to GDP within the Visegrád Group (V4), according to Eurostat’s latest report. However, the data reveals significant room for improvement, particularly in education-based R&D investments.
EU R&D spending trends
In 2023, EU member states collectively spent EUR 381.4 billion on R&D, marking a 6.7% increase from 2022, Növekedés reports. While this equates to 2.2% of the EU’s GDP—a figure unchanged from the previous year—Hungary’s R&D spending relative to GDP dropped to 1.39%, down from 1.63% in 2021. Among V4 countries, Hungary lags behind the Czech Republic (1.83%) and Poland (1.56%), narrowly leading Slovakia (1.04%).
A closer look at Hungary’s R&D spending
Hungary allocates the smallest share of GDP to education-based R&D in the EU, despite government claims that university funding reforms would bolster research. Corporate contributions dominate Hungary’s R&D spending, accounting for 73%—one of the highest proportions in the EU.
However, these figures can be misleading. In nations with lower GDPs, higher relative spending may not translate to significant absolute funding. When viewed on a per-capita basis, Hungary’s R&D expenditure is among the lowest in the EU, falling below both the V4 and EU averages.
Consequences and the path forward
The limited investment in R&D directly impacts Hungary’s competitiveness in knowledge-driven sectors. While other V4 nations, such as Poland, have achieved notable increases in R&D spending over the past decade, Hungary’s growth remains sluggish.
Despite this, experts caution against solely focusing on spending levels. Efficient allocation and outcomes, such as innovation and export growth, ultimately determine the effectiveness of R&D investments. Future data, including Hungary’s placement on the EU’s Innovation Scoreboard, will shed light on the country’s progress in leveraging its R&D efforts.
Hungary’s modest R&D spending underscores the urgent need for strategic investment in innovation, particularly in higher education. As knowledge and technology become the primary drivers of economic growth, addressing these gaps is crucial for the country to maintain and enhance its global competitiveness.
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