The ICT manufacturing sector in Hungary
18 Pages
English
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The ICT manufacturing sector in Hungary

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18 Pages
English

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The ICT manufacturing sector in Hungary. Magdolna Sass. Institute of Economics of the. Hungarian Academy of Sciences and. ICEG European Center ...

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The ICT manufacturing sector in Hungary
Magdolna Sass
Institute of Economics of the
Hungarian Academy of Sciences and ICEG European Center
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Problems with identifying ICT manufacturing and data availability
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ICT manufacturing in Hungary – basic facts
Dynamic growth
Regional leader
The determining role of FDI (relocation)
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Share of Electronics and subsectors in total manufacturing output
Output at constant (1992) prices
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Romania
Other CEE countries
Share in ICT manufacturing output of the region in 2002
5
Hungary
Poland
Czech Republic
Russia
%)
0
re (Sah
40
35
30
25
% 20
15
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ael  redI nim TCgiRealonactuanufring
oc enwo  seinapmoe rTe03gnre o o%(,)D  L-2022 00compned s inanie
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Gross value Employment Number of Own capital Subscribed Sales Labour costs Trading Entreprenurial After tax added units capital profit/losses profit/losses profit/losses
20
10
irgni  nuHgnrayin ICT manufactuSahn-owreigf fore o
Why Hungary?
Open to FDI (both wide sense and narrow sense incentives and privatisation to foreigners) IFTZ-regulation up till EU-membership- unique (esp. favourable for export-oriented scale-intensive assembling operations) Availability of (un-, semi and) skilled and relatively cheap workforce (privatisation and bankruptcy of SOEs) Geographic proximity Traditions (for example Tungsram, Videoton)
Extent of ICT
The majority of production and export is a result of relocation through FDI and OPT (role of companies with foreign participation) Production: magnitude: per capita ICT production: Hungary: 0.8 million USD, EU: 0.6 million USD; Share in world production: 0.8 % (2002, EU-15: ~20 %) Export: share in world export (2002) in leading products: Telecom appliances and parts: 2.4 % (EU-15: 41%), Computers and parts: 1.5 % (EU-15: 27.3%), Television receivers: 2.2 % (EU-15: 16.5%)
Further characteristics of the ICT manufacturing sector in Hungary
Concentration (few products, few big producers, few export products, regional concentration)
Export-orientation + most dynamic export growth + most important export products
Low local value-added –growing?
Little linkages
Foreign dominated
Further relocations –upgrading?
Concentration
Few products: top ten products represent more than 1/3 of production (DL) Few producers: 1. own brands: Philips, GE, Samsung, Sanmina-SCI, Electrolux, Sanyo, Sony, Nokia, Siemens, Ericsson, IBM; 2. contract manufacturers: Flextronics, Solectron, Elcoteq (+ Hungrarian: Videoton, Orion, Hajdú) Few export products: top ten products represent 40 per cent of DL exports Regional concentration of production: Central and North-Western regions of the country (however, more dispersed than the automotive sector)
120
100
80
60
40
20
0
Role in exports 1 Strong export orientation
1992
1998
Export/sales (%)
2004
Manufacturing 30 - Office machinery 31- Other electrical machinery 32 - Communication equipment 33 - Medical, precision, optical instruments