Realizing Hungary's Potential - The Country's Industrial R&D System in Transition

Since the beginning of the transition from real socialism to capitalism the Hungarian innovation system has been going through a number of changes. The turbulences the industrial research and development (R&D) system has been facing have been even heftier than the changes the rest of the innovation system has had to put up with. Despite a number of revisions of governance and funding mechanisms as well as a more realistic approach of government towards short and medium term goals for R&D in Hungary, industrial R&D still is neglected. For an explanation of this fact the interest group structures of the R&D system are analyzed. The results of the analysis imply already a solution for the problem. Finally, a few measures are suggested, which should help to realize Hungary's economic potential.