Hungary has one of the highest employment rates in Europe, matching Germany at 81.1%, but its relatively weak performance in innovation and digitalisation has dragged it down to 22nd place overall in a new business environment ranking.
The 2026 Doing Business in Europe study by Leadfeeder ranks 29 European countries based on nine indicators covering labour productivity, employment, investment, innovation, knowledge-intensive employment and the adoption of technologies such as cloud computing, artificial intelligence and e-commerce.
Hungary ranks 22nd overall, despite recording the joint sixth-highest employment rate among the countries included in the study. Its 81.1% employment rate for people aged 20–64 puts it level with Germany and ahead of Austria, Ireland and Denmark.
The figures suggest that Hungary’s challenge is not primarily getting people into work, but making the economy more productive, innovative and digitally advanced.
Hungary’s strong employment rate
The Netherlands records the highest employment rate in the ranking, at 83.4%, followed by Czechia at 82.9%, Sweden at 81.8%, Estonia at 81.7% and Cyprus at 81.3%. Hungary and Germany share sixth place, both recording an employment rate of 81.1%. At the other end of the table, Türkiye has the lowest employment rate at 58.1%, followed by Bosnia and Herzegovina at 59.5%.
Leadfeeder’s analysis points to a clear distinction between employment and productivity. A large proportion of the working-age population may be employed without the economy necessarily generating correspondingly high output from that labour.
Norway, for example, has the highest labour productivity in the ranking, with a score of 123.0, but finishes sixth overall. Its employment rate is therefore not the only factor behind its strong performance.
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Investment offers little relief
Hungary performs somewhat better on gross fixed capital formation, ranking joint 16th, alongside Finland, with investment equivalent to 21.9% of GDP. However, the country’s weaker results in several other areas prevent this from translating into a strong overall ranking.
Hungary ranks 24th for innovation, while enterprise adoption of artificial intelligence stands at just 10.4%, placing the country 22nd. Its share of e-commerce orders is 21.3%, corresponding to 21st place.
Knowledge-intensive employment also remains relatively modest. Hungary and Slovenia are joint 14th, with 36.5% of employment classified as knowledge-intensive. Together, these figures point to a gap between the number of people working and the sophistication of the activities they perform.
Digitalisation closely linked to overall performance
The Leadfeeder study also found a strong relationship between digitalisation and countries’ overall positions in the ranking. Digitalisation rank has a correlation of 0.89 with the overall ranking, while investment rank has a much weaker correlation of just 0.14.
This suggests that simply investing more is not necessarily enough to create a stronger business environment. The ability of companies and economies to turn investment into productivity, innovation and digital capabilities appears to matter considerably more.
The contrast is visible elsewhere in the rankings. Germany, Europe’s largest economy, ranks fifth overall and records the highest number of patents per million people. Norway has the most productive workforce but finishes sixth, while Türkiye has the highest investment relative to GDP but ranks only 19th overall.
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Sweden tops Europe’s business environment ranking
Sweden takes first place in Leadfeeder’s 2026 ranking, with an overall score of 74.8. Denmark comes second with 69.2, followed by the Netherlands with 64.6. Germany ranks fifth despite being the largest economy covered by the study.
According to Leadfeeder, Sweden’s success comes not from dominating the individual indicators but from maintaining consistently strong performance across them. It leads only one of the nine metrics, yet has the largest gap between itself and the next country in the top nine.
The study covers 29 European countries with complete data across all nine indicators. Eleven other countries — including Switzerland, Iceland, Luxembourg, Malta, Montenegro, North Macedonia, Albania, Ukraine and Kosovo — were excluded from the overall ranking because of missing data for one or more indicators.
Leadfeeder says differences of less than 0.1 points in the overall score should not be interpreted as meaningful separations. Several individual indicators also contain exact ties, including Hungary’s joint sixth-place position with Germany for employment and its joint 16th-place position with Finland for investment.
The full Doing Business in Europe: Where the Action Is in 2026 study is available from Leadfeeder.
