The K&H innovation index remained in a stable range

“The current results show that Hungarian companies are planning more cautiously, but at the same time they have implemented actual developments at an increasing rate. Digital innovations continue to be a driving force, and the application of artificial intelligence has set a record. In the case of large companies, the decline in the first half of the year has stopped”

– said Gergely Lóska, Head of IT and Innovation at K&H.

implemented innovations: more and more companies are taking action
The results of the implemented innovation sub-index show an improving picture. In the past two years, more and more companies have introduced new or significantly improved products or services, which is most noticeable in the service sector and in companies with sales between 300 million and 1 billion forints. A trend-like increase is also visible among companies in Eastern Hungary, which indicates that earlier developments are increasingly appearing in practice.

Planned innovations: stabilization in large companies, caution elsewhere

In the case of planned innovations, the research shows a more mixed picture: the planned innovation sub-index, which has the strongest influence on the main index, has decreased overall, but the previous decline has stopped among companies with sales above 4 billion forints, and a correction can already be seen in several indicators. This is a particularly important indication that the large corporate sector is looking at the developments of the next period from a more stable basis. In contrast, commercial and Eastern Hungarian companies continue to be more cautious about innovations planned for the next year.

On the side of implemented developments, however, there are processes that clearly indicate activity. The proportion of companies that have implemented further developments has continued to grow over the past two years: the indicator rose to 60%, which indicates sustained, strong innovation activity. The expansion was particularly significant in the development of logistics and transport processes, where 17% of companies implemented new or improved solutions – an increase of 6 percentage points compared to the previous half-year. The development of background processes is traditionally the most active area, which is also evident now: the development of internal processes supporting corporate operations is at 41 points. The proportion of developments related to management processes is 19%, while innovations related to the human resources area reach 15%.

Expectations for the next year, on the other hand, have not changed substantially: 38% still plan to introduce new developments, which is in line with the more cautious business planning of the previous semesters. All this suggests that many companies have already implemented the developments that were necessary to stabilize or optimize operations in the recent period, and that short-term innovation planning is currently dominated by waiting.

The use of digital innovation and artificial intelligence is the main driving force

Digital innovation remains one of the strongest drivers of corporate developments. In the past two years, every second enterprise has implemented digital development, which is one of the highest rates in the history of the research. The growth of the digital sub-index is particularly spectacular among commercial companies and enterprises with a turnover of 1.1–2 billion forints. The use of artificial intelligence has reached an unprecedented level, which K&H provides a more detailed overview of in a separate report.

The innovation strategy sub-index above the main index

There have also been several positive developments in the innovation strategy sub-index. The proportion of medium-sized companies, i.e. those with a turnover of between 1.1 and 4 billion forints, with a written innovation strategy has increased significantly, and the presence of an innovation approach is increasingly strong in Eastern Hungary. All this suggests that companies are more consciously incorporating innovation into their operations in the long term, even if short-term planning has become more cautious in some segments.