This country profile presents self-employment and entrepreneurship data for women, youth, seniors and immigrants in Hungary relative to the average for the European Union. It also benchmarks the conditions for entrepreneurship and highlights current inclusive entrepreneurship policy issues and recent developments.
The Missing Entrepreneurs 2021
Policies for Inclusive Entrepreneurship and Self-Employment
Entrepreneurship conditions are generally less favourable than the European Union (EU) average. Despite ongoing efforts to reduce administrative burden, new start-ups still face greater administrative burden than on average in the EU. There are several ongoing initiatives that seek to improve these conditions such as the new Strategy on Small and Medium Enterprises for 2019-30 and self-employment is also to be supported by labour market measures planned for the 2020-30 period. Some tailored support measures for youth, women and the unemployed, are in place and focus on combining entrepreneurship training, mentoring, and financial assistance. Overall, dedicated support is strongest for youth entrepreneurs as several measures were introduced following the financial crisis in 2008-09 as part of the Youth Guarantee.
In the period 2016-20, the early-stage entrepreneurship rate was above the EU average (8% vs. 6%), due in part to a high share of young people in new start-ups (9% vs. 7% for the EU). Despite this above-average rate, youth – as well as women and seniors – continue to be under-represented in entrepreneurship. For example, women were half as likely as men to be involved in early-stage entrepreneurship. Eliminating the differences across all population groups (i.e. applying the early-stage entrepreneurship rate of men who are 30-49 years old to the whole population) would result in 300 000 more entrepreneurs. Of these “missing” entrepreneurs, 75% are female and slightly more than half are 50-64 years old.
The self-employment rate remained stable yet below the EU average over the last decade (11% vs. nearly 14% in 2020). Compared to the EU average, there were lower shares of immigrants (1% vs. 7%), seniors (34% vs. 41%) and to a lesser extent, youth (6% vs. 7%). However, the self-employed were more likely to have employees relative to the EU average (39% vs. 30%), notably self-employed women and seniors.
In response to the COVID-19 crisis, the Economy Protection Action Plan 2020 (Gazdaságvédelmi Akcióterv) was introduced in March 2020. A dedicated webpage was launched for entrepreneurs with information on available supports and online training modules. A series of capital programmes were also offered to relaunch enterprises with a total budget of HUF 100 billion (EUR 277.8 million). The maximum amount of the loan was HUF 10 million (EUR 27 780) with 0% annual interest for a maximum of 10 years and a 3-year grace period. More than 5 000 businesses applied within the first four days after the launch with an average loan of HUF 9.2 million (EUR 26 289). Furthermore, a compensation scheme has been introduced for those self-employed who operate in sectors adversely affected by the COVID-19 related restrictions but who were not entitled to the sectoral wage subsidy
Note: The EU average in panels b-d excludes Belgium, Czech Republic, Denmark, Lithuania, Malta and Romania. Please see Chapter 9 for notes on the figures.
Source: Panel a: (World Bank, 2020[1]; Global Entrepreneurship Monitor (GEM), 2021[2]; OECD, forthcoming[3]); Panels b-d: (Global Entrepreneurship Monitor (GEM), 2021[2]); Panels e-f: (Eurostat, 2021[4]). Please see Chapter 9 for the full citations.