K&H innovation index: Hungarian corporate innovation at a low point

By: Trademagazin Date: 2024. 11. 22. 11:22

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The results of the K&H Innovation Index for the second half of 2024 show a worrying decline in the innovation performance of domestic companies. The index, which measures the innovation activity of Hungarian companies with an annual turnover of over 300 million forints, reached only 26 points this time, which is a significant decrease compared to the previous period and the worst performance measured since the start of the measurement. The willingness and performance of Hungarian companies to innovate are still far from the ideal level in an economic environment where even large and medium-sized Hungarian companies are quite pessimistic about the future.

Innovation bottoms out: the worst result of the 4-year measurement

The K&H Innovation Index measures the performance of companies based on four sub-indexes: implemented innovation, planned innovation, digital innovation and innovation strategy. In the past half year, the implemented innovation sub-index in particular fell sharply, showing a decrease of 10 points. Similarly, digital innovation and innovation strategy also showed a significant decline, by 5 and 6 points respectively. Although the planned innovation sub-index remained unchanged, this can only give reason for moderate optimism about the future.

“The K&H innovation index highlights that a significant number of Hungarian companies struggle with a lack of resources, support difficulties and structural challenges that hinder their innovation efforts. In order for companies to successfully compete in international competition, a change in attitude, more efficient use of resources and targeted support are needed,”

– concluded Balázs Németh, K&H’s head of innovation.

Differences in size and sector: large companies hold their own

Innovation performance remains strongest in companies with the highest sales (over HUF 4 billion), where the index stagnated at 39 points. In contrast, smaller companies (with sales between 2.1 and 4 billion forints) have achieved growth, and they have been trying to catch up with the largest ones for a year now – their index has risen to 35 points. According to the sectoral breakdown, commercial companies lead with 27 points, just ahead of the industrial, construction and service sectors, each of which achieved 26 points. The innovation situation of agricultural companies is the most critical: their index has fallen to 16 points, which is the lowest point in the measurements so far.