Legal background
Act XC of 2003, approved by the Hungarian Parliament on November 10, 2003, established the Research and Technological Innovation Fund, which provides stable and reliable financing for RTDI activities. The independent government Fund is envisioned to promote demand driven innovation and the knowledge based competitiveness of companies. The Fund is financed by mandatory contributions of all companies registered in Hungary, matched yearly by the government budget. The so-called innovation contribution, based on the of the (adjusted) net turnover, for medium size and large companies grows from 0.2% in 2004 to 0.3% by 2006. Micro-enterprises and small-size enterprises are exempt from paying a contribution. Direct R&D expenditures, both intramural and ordered from public R&D units, can be deducted from the contribution thus stimulating innovation activities. The company payments into the transparent, dedicated RTDI Fund shall be used for the direct or indirect benefit of the private sector, as stipulated in the legislation creating the Fund. It is also a legal requirement that resources of the Fund be spent through competitive calls, and at least 25% should go for regional innovation purposes.
Use of the financial resources of the Fund
Strategic issues relevant to the Fund shall be addressed by the Research and Technological Innovation Council. The majority of the members of the Council shall comprise of non-governmental representatives of the economic and scientific communities. The Council shall have a right of approval concerning the establishment of the utilisation plan and the strategy for the calls for proposals for the Fund, including determination of the means and tools of funding and decision-making relevant to the provision of financial assistance.
Competitive schemes financed from the Fund
The various competitive schemes include:
- Regional University Knowledge Centres
- Regional Innovation Agencies
- National Research and Development Programs
- Creation of R&D and Innovation Centre for Mobile Communication (Mobil 2004).
