The Small Business Act (SBA) Fact Sheets reveals that overall Hungary´s SMEs sector continues to be affected by the crisis. While this is also true for other Member States, the stagnation in the Hungarian SME sector predates the outbreak of the financial crisis and goes at least 2-3 years further back. From 2008 onwards, however, the decline in numbers of SMEs and employees and the reduction in value added accelerated. Only after 2011 did the downturn seem to start bottoming out and give way to a very modest recovery. As a result, It is estimated that by the end of 2013 Hungary’s SME sector will employ 92 000 fewer people than in 2008. There is a silver lining, though, as the forecast for 2014 points to a more robust upswing for the number of SMEs, employment and value added. For this to translate into a real SME recovery, however, decisive policy action to improve the business environment is needed. Some progress has already been made, especially in the area of entrepreneurship and — to a lesser extent — in access to finance. Policy measures have also helped to reduce administrative red tape.
However Hungary still has to step up its implementation activities so as to continue its catching-up process. Areas with a particular need for action are ‘kills & innovation’ and ‘internationalisation’. As far as ‘responsive administration’ and ‘think small first’ is concerned, more needs to be done to create a stable regulatory framework, including by steadying the rate of regulatory changes. In both these categories, Hungary trails its EU peers by the biggest margin. That there is potential is evidenced by Hungary´s nascent IT sector, which has in recent years generated a number of internationally successful businesses. This suggests that broader based reforms could well trigger more such success stories in other sectors too.
Research, articles etc.
|Key indicators on access to finance|
Source: Chart compiled using ECB data
Note: Loan volumes and interest rate data for 2013 are to the period September 2013 only (due to data availability as at November 2013).
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Source: Chart compiled using AECM data
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Source: Chart compiled using EVCA data
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