HUNGARY: The Hungarian Spin-off and Start-up Association welcomes Norwegian partners
BUDAPEST: In recent years, the number of spin-offs and new technology-based firms (NTBFs) has been increasing dynamically in Hungary, the most fruitful fields being life sciences (biotech and medical research), nanotechnology and ICT. Various initiatives have been launched to further enhance the activities and success of these companies.
Notably, the Hungarian Spin-off and Start-up Association (HSA) is an ambitious endeavour representing the interests of such firms. The Association now welcomes Norwegian Partners. The HSA organises events with the purpose of disseminating entrepreneurial culture and skills and networking, and its First International Conference was held in Budapest on the 17th October this year.
As the scope of activities of the HSA, and the broad range of invited presenters at the conference indicates, the HSA has a strong international orientation, with the aim of building a European-wide network of contacts with start-up and spin-off companies, venture capital funds, innovation intermediaries, academic institutes, and consultancy firms in order to disseminate and implement international good practices and co-operative projects to the mutual benefit of Hungarian businesses and international players. After having established firm co-operation with Swedish institutions, the Association has contacted Innovation Norway with the hope of finding relevant contacts with Norwegian entities.
The new phenomenon of spin-offs in Hungary
The creation of spin-off companies in the strict sense (i.e. spinning off from higher education and other publicly funded research units with the aim of exploiting research results as independent business entities) is a relatively recent phenomenon in Hungary. Such firms have only been created since 2005, when the so-called Law on Research & Development and Technological Innovation entered into force and permitted the utilisation of research conducted at publicly funded research facilities by providing for Industrial Property Rights (IPR) to be owned by private enterprises.
A number of innovation policy measures, aimed at increasing research and innovation co-operation among businesses and universities (such as the so-called Regional Knowledge Centres at Universities) scheme have also fostered the creation of spin-offs, start-ups and especially NTBFs. Technology transfer offices (TTOs) have been set up at all major universities carrying out research with market potentials.
Since the approval of the Law on R&D and Technological Innovation, the number of spin-offs has risen significantly. Though no precise figure is available, it is estimated that by 2007 the number of officially recognised spin-offs (i.e. as defined by the Law) had reached around 40, while that of quasi spin-off (university-affiliated) firms was roughly 100-120. Their yearly turnover was estimated to be around €40m. By nature, these are among the handful of innovative and high-tech Hungarian SMEs.
The figures suggest, however, that there is still room and potential for significant improvement in the utilisation of research results. The conference organised by the HSA was discussing the opportunities for achieving this goal from the point of view of high-tech start-ups and spin-offs, investors as well as universities.
The topics of the first international spin-off conference in Hungary
For its first international conference the HSA invited a number of distinguished speakers from all relevant sectors (academia, TTOs, NTBFs, consultant companies, policy-makers) from Hungary and abroad in order to share views, good practices as well as to identify potential investment and co-operation opportunities.
The arrangement was organised in co-operation with Thales Nano, one of the most successful nanotech companies at the premises of Graphisoft, the “flagship” of Hungarian innovative firms, which, having started as a typical “one-man enterprise” with $5000 invested in the early 1980s, has over two decades become market-leader in 3D architectural design software.
With €5m invested in R&D in 2005, it was the one of three Hungarian companies represented in the IRIS Scoreboard of the top 1000 R&D-spenders in the world. Its founder, one of the most renowned entrepreneurs in Hungary, delivered an inspiring introductory presentation, reminding the audience that even the most ingenious and innovative business idea is destined to fail, unless other indispensable conditions (entrepreneurial culture, managerial/financial skills, qualified, motivated and dedicated team) are in place.
The conference was organised in three panels, discussing the most relevant aspects with major bearings on the success of Hungarian spin-off and start-up companies:
• How to strengthen the co-operation between the business and academic sectors in order to foster the exploitation of knowledge? How to allocate IPR? How to provide incentives for socially and economically more relevant research at public research facilities? Invited experts represented the relevant areas: TTOs from the University of Debrecen and Pannon University, Karolinska Innovations AB (the innovation management organisation of Karolinska Institute in Stockholm), as well as innovation management consultants from Deloitte in Belgium (Innovation Centre of Excellence) and N8 Research Partnerships in the UK.
• The experiences and the “keys” to success were presented by successful new high-tech ventures from Hungary (members of the HSA), such as Tactologic Ltd, 3D Brigade Plc, and GreenControl Ltd. and from other parts of Europe, e.g. MDS Analytical Technologies (UK), Molnar-Institut (Germany) and Telematix Software (Czech Republic). How to find and enter international niche markets? How to transfer valuable ideas or research results (inventions) into successful marketable products and services (innovations)?
• In the final session, the central topic was funding new ventures, which is a key challenge for the Hungarian innovation system due to the relatively small size of available venture (and especially early stage and seed) capital. Corvinus Venture Capital Fund Manager, as a state-owned VC fund, represented at the conference, is one of the significant players in this sector. From the private VC side, Primus Capital Partners, an international fund with main focus on Central- and Eastern European, especially on Hungarian early-stage investments was present.
More info about the Hungarian Spin-off and Start-up Association: www.europeanspinoff.com