Hungarian grand entrepreneurs in the
System of National Cooperation: the
chances of civil/bourgeois development
after 2010
(extension of a research )
Mihály Laki - Julia Szalai
Institute of Economics – Institute of Sociology
Hungarian Academy of Sciences
Budapest 2017 19-21 May
The (unbalanced) structure of the
presentation
•
•
•
•
research history
subgroups, social indicators
false conclusions and estimations
weakening company performances and their
social-mental consequences before 2008
• fundamental systemic changes since 2010
• continuing and new elements of business
environment and behavior after 2010
Budapest 2017 19-21 May
Research history
- Basic research (48 interviews in 1998-2001)
Mihály Laki – Júlia Szalai: The Puzzle of success: Hungarian Entrepreneurs at
the Turn of the Millennium Europe Asia Studies Vol. 58 N2 3 May 2006 317347 pp
- Follow-up research (35+7+31 interviews in 20092011)
Laki Mihály – Szalai Júlia (2015) Ten years after: Hungarian Grand Entrepreneurs
in the European Union, Budapest, Institute of Economics HAS
- Time extention of the research (without
interviews in 2010-2016)
Budapest 2017 19-21 May
Definition
All the interviewed persons are owners of a decisive (in
lot of cases majority) share of the stocks and they are
the main decision makers at a company or at a group of
companies with hundreds of employees and/or with
0.5-10 thousand million HUF (3-4 million Euro)
turnover/year.
Budapest 2017 19-21 May
Basic social indicators
Indicator
Interwiev partners
1999-2001 and 20102011 (%)
TARKI
representative
survey (2000) (%)
Controll group
2010-2011 (%)
male
92
93
84
older than 40
(1999-2001
university or
college degree
90
79
36
88
84
80
living in
Budapest or in
big towns
73
75
Budapest 2017 19-21 May
Turning points of the old guard’s carrier
path and methods of acquisition
Turning point indicators
Privatization
Founding
companies
of
new
Party membership
rather party member
rather non party member
Rank or position
rather top manager
rather staff member
Sector changes
rather remained
in rather moved into the
the
socialist
sector private sector before 1989
tillv1989
Budapest 2017 19-21 May
Frequent (typical) characteristics
of life/carrier path
indicator
old guard
profession of the father
middle level manager at a owner of a small private
state owned company
company
education
university - college
university - college
foreign language skills
weak
advanced
dominant places of
learning by doing
state owned big company family business or
foreign owned company
(in Hungary or abroad)
involvement in
professional-political
activities
moderate
control group
weak
Budapest 2017 19-21 May
What is permissible (acceptable) in our
economic system?
Salaries wages defined by the market (instead of the state)
37
Private ownership of big companies
37
Foreign ownership of companies
57
59
28
Incompetent employees lost their jobs
4
69
25
Enrichment of succesfull businesmen
6
23
3
70
5
73
3
Exitence of big private landed property (big private farms)
20
77
Real estate owned by foreigners
20
78
3
3
Big energy producers (energy power stations) owned by foreigners
8
89
4
Hungarian soil in foreign ownership
8
89
3
0
Permissible
20
Not permissible
40
Don't know
60
80
100
Budapest 2017 19-21 May
120
Conclusion of our basic research
„The strategy of adaptation has again been successful, as the
earlier statistical data indicate, and domestic grand business
has been able to maintain its share and its position. In light of
such renewed success EU accession seems to promise easier
conditions and mowing forward rather than collapsing.
Obviously, it is a new phase with new challenges for
adaptation, but after all, this is very area in which Hungarian
grand entrepreneurs have for decades shown their most
outstanding performance.”
Laki-Szalai (2006)
Budapest 2017 19-21 May
Performance measured by company
development 1990-1999
START UP SIZE
OF THE COMPANY
SIZE OF THE COMPANY IN THE TIME OF
THE INTERVIEW
small
medium size
TOTAL
big
small
-
15
11
26
medium size
-
7
6
13
big
-
-
7
7
uncertain
-
-
2
2
Total
-
22
26
48
Budapest 2017 19-21 May
Performance measured by company
development 2000-2008
START UP SIZE
OF THE COMPANY
SIZE OF THE COMPANY IN THE TIME OF THE
INTERVIEW
small
medium size
TOTAL
big
small
-
-
-
-
medium size
9
8
3
20
big
6
2
15
23
15
10
18
43
uncertain
Total
Budapest 2017 19-21 May
Changing values and attitudes before 2008
(older ones)
•
•
•
•
a remarkable part of them withdrew from the public life
and/or lost previous social roles and functions
they consciously stressed their conformity.
their interviews often contained indicative concepts phrases and
figures of speeches of the so called national discourse.
• they adapt to the newest wave of xenophobia which overwhelmed
Hungary in the last year of the republic of 89’s.
• they complained the unequal distribution of European benefits
among the member states.
• they marked often – by the multinational companies represented
foreigners – as a cause of their personal failures
Budapest 2017 19-21 May
Values and attitudes before 2008
(the new generation)
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•
•
•
•
learning by doing: family businesses
competitive environment
working abroad (language skills)
moderate company growth expectations
market niches – cooperation with the
multinational companies
• family instead of social activity (technocratic
attitudes
Budapest 2017 19-21 May
Symptoms of the non conventional change of
government in Hungary in 2010.
• the so called invisible constitution of 1989 was replaced by
a new Basic Law.
• the structure, the management of the state administration
have changed remarkably
• there were fundamental shifts in the system of public
education and in the financing of the health care system.
• until now never applied approaches and tools of regulation
of the economy and of the taxation system were applied.
• systemic changes in supporting the poor and unemployed
• the legal and financial status of local governments was
modified
• the share of the state sector has increased in the Hungarian
economy since 2010 the
Budapest 2017 19-21 May
Methodology
We haven’t managed any field work after 2012. Based
on internet and media sources and on personal
communications we used secondary information
only. Collection of information was focused but not
restricted on our previous interview partners but we
documented news reports and interviews on other
owner-managers of companies with Hungarian
majority share.
Budapest 2017 19-21 May
Continuing tendencies
• retirements, going out of businesses because of
age (mainly under the pressure of unfavorable
conditions)
• typical business failures of the older ones
(overestimated company growth)
• postponed company reconstruction – for example
slow reducing the number of employed
Budapest 2017 19-21 May
(Partly) new reasons for failures and
retirements
• direct influence of politicians
• buying pressure of companies which have close
relationships to the governing political coalition
• the Simicska affair
• politically oriented changes of regulation
(tobacco-market)
• company relocation abroad
Budapest 2017 19-21 May
Careful comments
The collected and presented anecdotic events
and stories of the last 2-3 years would rather
suggest that the behavior the regulative
activities and economic policy of the new
regime and the responses of the business
people to this development, are more
favorable to the spread of dependency
mentality and relationships rather than to the
strengthening of free and independent
citizenship
Budapest 2017 19-21 May
Thank you for your attention!
Budapest 2017 19-21 May