The latest GEM Hungary National Report reveals a significant shift: "earning a living" has become the main motivation for entrepreneurs. Nearly 90% of early-stage and 85% of established entrepreneurs are driven by this motivation.
“This trend is crucial because it suggests a reactive rather than proactive motivation among Hungarian entrepreneurs, possibly reflecting economic uncertainty,” according to the report authors (Judit Csákné Filep, Áron Szennay, and Gigi Timár from Budapest Business University’s Budapest LAB team). “It impacts the nature of entrepreneurship, leaning towards survival-focused rather than innovation-driven enterprises, which could have implications for long-term economic growth and adaptability within Hungary’s economy.”
This report provides a critical snapshot of Hungary’s entrepreneurial ecosystem and offers a pathway for enhancing its resilience and adaptability. The state of the business environment saw a slight decline, with the National Entrepreneurship Context Index (NECI) dropping from 4.7 to 4.5 over the past year. Commercial and professional infrastructure; ease of entry into free, open, and growing markets; and government policy: taxes and bureaucracy; have reached or exceeded the satisfactory score of 5. As in previous years, entrepreneurship education in schools received the lowest rating.
Key recommendations include:
- Increase access to entrepreneurship education. Only a small fraction (16.2%) of Hungary’s adult population has received entrepreneurial education, mostly outside of formal schooling. Expanding access to entrepreneurship education could equip more individuals with the skills needed for sustainable business success.
- Support financial security. Offering financial stability programs or start-up incentives might reduce the pressure to pursue entrepreneurship solely as a means of survival, fostering an environment where innovation can thrive.
- Improve predictability in the business environment. Increasing regulatory and fiscal predictability is crucial to supporting entrepreneurs. A stable and clear regulatory framework, including consistent tax policies and streamlined bureaucratic processes, would allow entrepreneurs to make informed, long-term business plans. Such predictability would shift the focus from short-term survival to growth and innovation, fostering a healthier entrepreneurial ecosystem.
Budapest Business University (BBU) has been the lead institution of GEM Hungary since 2020.
“This partnership benefits not only policymakers and business leaders but also significantly enriches BBU’s academic and educational activities,” stated the authors.
GEM data are incorporated into BBU’s curriculum, including teaching materials shared with the entire faculty and an intensive, multi-day course offered to students. Additionally, the data has formed the basis for scientific publications, advancing academic research on entrepreneurship in Hungary and contributing valuable insights to both national and international scholarly communities.
GEM Hungary is supported by the Ministry of Innovation and Technology, OTP Bank, Foxpost and the Makronóm Institute.