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Mobility and multimedia in Budapest

Friday 07 October 2011

Budapest hosted a CLUSNET seminar from 3-5 March 2010 focussing on cluster development in Hungary and specifically on Budapest’s Mobility and Multimedia Cluster (MMCluster).

Hungary prides itself on a strong tradition of knowledge and creativity and the MMCluster seeks to capitalise on its potential for technological innovation. The city of Budapest – home to MMCluster - dominates the Hungarian economy, and the cluster is the largest and most successful in the country.

Cluster development in Hungary is supported by its national ‘Pole Program’ which streamlines and structures financial support, most of which is generated through European funding. The Pole Program allocates funds to cluster-related activity through a national office and seven regional offices, including one in Budapest. Nevertheless, the majority of cluster development policy is handled at national level, through a government agency and various ministries.

MMCluster was established in 2007, bringing together SMEs, and some larger companies, working in the field of mobility and multimedia. The cluster focuses on innovation and technology development including mobile technology applications and multimedia content provisions. Currently, the cluster employs some 12,000 people, has 60 members (75% of which are SMEs) and yields a yearly net income of €2.5bn. The cluster also involves the Budapest University of Technology and Economics as well as six other academic institutions. It supports SMEs in making the transition from research-based organisations into commercial firms operational in the international market through support services such as innovation management and business planning.

The cluster still faces a number of challenges including ensuring that ideas and prototypes are translated into viable commercial products and bridging the gap between knowledge institutes and businesses so that the latter is able to capitalise on the wealth of research and innovation being generated.

The CLUSNET team has made a series of recommendations for MMCluster and for cluster policy more generally:

- Cities need to play a more prominent role in ensuring the success of clusters and economic development should be a higher priority. A clear economic strategy should be developed in Budapest in conjunction with the Budapest Enterprise Energy.

- The cluster must do more to bridge the gap between SMEs and universities. This can be done through workshops to foster dialogue. By facilitating links with universities, the cluster can ensure an adequate supply of skills to meet the needs of the cluster members.

- The city needs to take a more proactive role in building partnerships to gain access to international supply chains, for example by developing an inward investment strategy with the International Trade and Investment Agency.

- The cluster needs to seek out new financing streams for innovation. Since cluster funding in Hungary mainly originates from public or EU sources, MMCluster must identify areas in which it is eligible to receive support. The cluster is already forming partnerships to compete for a number of FP7 public funding opportunities.

While the Budapest cluster demonstrates significant potential in the field of innovation, it is important that it addresses these factors in order to avoid the relocation of its members to more established clusters across Europe. In order to develop a truly dynamic cluster, MMCluster can play a critical role in bridging the gaps identified by the CLUSNET team.

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