Hungary’s Start-up Ecosystem Has Good Potential

The development of Hungary’s start-up ecosystem could be a breakthrough point in talent attraction and digitalization, for which Hungary has a good foundation, but still lags behind its European and regional competitors, according to a recent study by McKinsey.

If domestic start-ups could grow at a rate and scale similar to other European countries, they could attract 2.5-5 billion euros of additional resources to the sector, and a significant share of this, 0.6-1.3 billion euros, would be used in the local economy, the global management consulting company wrote in a statement sent to Hungarian news agency MTI.

A more developed start-up ecosystem would increase tax revenues, help the uptake of digital solutions, and boost the digital transformation of the economy as a whole.

According to the McKinsey study, Hungary is well placed to achieve the goals outlined in the above forecast: it has a sufficient number of start-ups, the amount of venture capital available is within the average of the Visegrad countries, and a skilled workforce is available. In addition, the number of professionals in the IT sector exceeds the regional average.

According to McKinsey, there are seven factors that have a significant impact on the number of start-ups that are formed:

• the ease of starting a business and raising capital
• skilled workforce
• a favorable tax environment
• a strong entrepreneurial culture
• strategic allocation of public funding
• transparency and knowledge sharing
• training for founders and professionals.

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