1. Ten years after: Hungarian big entrepreneurs in the European Union MihályLaki - Julia Szalai Institute of Economics – Institute of Sociology Hungarian Academy of Sciences Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain

2. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Definition (previous and follow up research) All the interviewed persons are owners of a decisive (in lot of cases majority) share of the stocks and they are the main decision makers at a company or at a group of companies with hundreds of employees and/or with 0.5-10 thousand million HUF (3-4 million Euro) turnover/year.

3. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Basic indicators -male (92%) -highly educated (88%) -living in Budapest or in big towns -older than 40 on the day of the interview (90%)

4. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Turning points of the carrier path and methods of acquisition Turning point indicatorsPrivatization Founding of new companies Party membershiprather party memberrather non party member Rank or positionrather top managerrather staff member Sector changesrather remained in the socialist sector tillv1989 rather moved into the private sector before 1989

5. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Performance measured by company development 1990-1999 START UP SIZE OF THE COMPANY SIZE OF THE COMPANY IN THE TIME OF THE INTERVIEW TOTAL smallmedium size big small-151126 medium size- 7 613 big-- 7 7 uncertain-- 2 2 Total-222648

6. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Conclusion of our previous research „The strategy of adaptation has again been successful, as the earlier statistical data indicate, and domestic grand business has been able to maintain its share and its position. In light of such renewed success EU accession seems to promise easier conditions and mowing forward rather than collapsing. Obviously, it is a new phase with new challenges for adaptation, but after all, this is very area in which Hungarian grand entrepreneurs have for decades shown their most outstanding performance.”

7. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Performance measured by company development 2000-2008 START UP SIZE OF THE COMPANY SIZE OF THE COMPANY IN THE TIME OF THE INTERVIEW TOTAL smallmedium size big small---- medium size98320 big621523 uncertain Total15101843

8. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Growth of GDP industrial production and of the number of companies Period yearly average growth of GDP (%) yearly average growth of industrial production (%) Number of companies 1983-1989 1.5 fast growth 1990-1993- 4.7- 4,6 fast growth 1994-2002 3.6 7.5 fast growth till 1998 later slow down 2003-2008 3.1 6.3slow growth

9. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Taxes as % of GDP in Hungary YearCurrent tax burden Total taxes (including SSC) as % of GDP in Total taxes (including SSC as % of GDP EU 25 arithmetic) 19952353.341,636,9 19962790.140,637,3 19973332.139.037,5 1998 3946.739,037,5 1999 4461.139.137,8 2000 5231.438.537,9 2001 5843.338.337,6 2002 6511.838.037,4 2003 7129.037.737,4 2004 7788.537.637,2 2005 8244.237.537,6 2006 8842.337.237,7 200710113.139.838,2 200810731.5 200910271.5

10. 2011 June 20-22 Barcelona, SpainEighteenth Conference of Europeanists Volume of company loans compare to GDP 1999-2008 (%) 1999200020012002200320042005200620072008 Company loans21.0222.721.4519.3821.5722.6124.1224.8726.1627.42 Loans for small and medium size companies 4.056.688.398.169.4310.7512.7213.1914.3614.09

11. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain The distribution of subscribed capital of enterprises with single and double entry in 1992-2009 THE DOMINANT OWNER IS YearState Hungarian private person Hungarian company Foreign person or company OtherTotal 199252,1 10,2 0,0 11,426,2100,0 199444,5 10,7 17,6 17,8 9,5100,0 199525,7 11,5 19,1 26,817,0100,0 199713,5 10,5 22,6 35,018,4100,0 199812,0 10,7 25,6 40,311,3100,0 1999 9,2 9,1 18,0 51,6 9,5100,0 2000 7,9 9,2 20,6 58,5 6,4100,0 2001 7,7 8,8 17,0 60,1 6,4100,0 2002+12.313.224.540.2 9.9100.0 2003+13.312.922.044.2 7.7100.0 200413.314.024.040.7 8.1100.0 2005 8.915.124.040.9 11.1100.0 2006 8.114.025.044.2 8.7100.0 2007 6.613.130.940.6 8.4100.0 2008 6.510.425.750.0 7.2100.0

12. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Number of popular forms of registered economic organizations YearNumber of company limitedPrevious year =100 % Number of individual proprietorships Previous year =100 % 1989 17341 320619 1990 26807154.6 393450 122.7 1991 43439268.0 510459 129.7 1992 60762164.0 608207 119.1 1993 86867142.9 715105 117.6 1994121128139.4 778026 108.8 1995106245 87.7 791496 101.7 1996125940118.5 745247 94.2 1997147388117.0 659690 88.5 1998162588110,3 648701 98,3 1999165307101,7 660139 101,7 2000171495103,9 682925 103,3 2001177424103.5 698001 102.3 2002186744105.2 708503 101.5 2003197667105.8 716729 101.1 2004214151108.3 717323 100.1 2005228586106.7 710838 99.0 2006242851106.4 670203 94.3 2007261907107,8 702595104.8 2008297060113,41000022142,3 2009324906109,31012770101,2

13. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Optimism/pessimism indicator Questions19971998199920032005200720082009 How do you evaluate the present conditions of the Hungarian economy? -29-27-41 -55-74- 79 How do you evaluate the prospects of the Hungarian economy? 1120-4-26-3-20-62- 26 How do you evaluate the present conditions of your enterprise -11-13-6-11-13-18-17- 26 How do you evaluate the prospects of your enterprise? 142-7-5-8-29- 19

14. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain The usual way of market development in the second decade - the collapse of state owned companies produces additional demand - enter to the (shortage) market or market niches of these previous/privatized companies was lucrative - fast growing market share on these markets stimulate other (Hungarian or foreign) companies to enter - the impacts of the additional demand disappeared these markets began to saturate – mainly in the first years of the new century - the newcomers (multinational companies for example) used very efficient tools of competition - the market share of the previous participants of the competition diminishes

15. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Index of confidence 1996-2010 Prepared by GKI Economic Research Co

16. Eighteenth Conference of Europeanists2011 June 20-22 Barcelona, Spain Some elements of the successful adaptation  diversification  new markets or market niches at home and abroad  restructuring the network capital (cooperation with the multinationals – subcontracting)  implementation of West European management methods