BBJ: This is the third iteration of Policy Agenda. What is the biggest change in this version compared to its two predecessors?
Zoltán Szabó: Since 2015, Policy Agenda has been the roadmap to our advocacy work, outlining our commitments and highlighting areas where improvements must be made to increase the competitiveness of the Hungarian economy. For this third agenda, we reviewed our priorities after consulting with the members and pinpointed new issues our organization must address in addition to the areas where we have not yet accomplished all our goals.
These subjects and challenges were categorized in three areas (smart growth, human capital, and business environment) and addressed with 70 propositions.
Based on this new direction, we are planning to introduce a new structure for our working groups with a more project-based approach that allows us more flexibility and gives members an increased role.
BBJ: How successful were the previous two publications in terms of achieving AmCham’s goals?
ZS: With the first policy agenda, we basically overhauled our entire advocacy work by introducing the advocacy cycle which to this day determines our way of working. This system coordinates the efforts of our working groups, our annual recommendation package, the agendas of our events as well as our consultations with the government, all based on the principles of the Policy Agenda.
As a result, our chamber has become more effective, achieved tangible results, and made a bigger impact in the business community since 2015. We were involved in achieving the decrease in the corporate income tax to 9% and the decrease of labor taxes; the launch of several new OKJ training programs as per corporate need; incentivizing workforce mobility; shifting to a more innovation-based national economy, and a new grant system for corporate R&D activities, just to mention a few examples.
Moreover, we launched several industry corporations and member driven initiatives such as BSS Hungary for the promotion of the business service sector which entered a partnership with the Hungarian Investment Promotion Agency last year. We also have a unique U.S. Financial Institutes project and a Healthcare working group who work for reforms in the sector, the Career Orientation Program which continued last year despite the pandemic, the digital signature and paperless HR process projects and our labor code group which drafted proposals to amend the regulation to support flexible working schemes.
Since the COVID-19 outbreak, we have posted several recommendations regarding the kurzarbeit (short-time working) subsidy scheme, taxation and even staff canteens that were implemented in the government’s economy protection action plan and relief measures. We are here to work with the government to aid the recovery of the economy.
BBJ: What are the areas in the new publication where you expect to make most progress and which do you envisage being more of an uphill struggle?
ZS: Hungary has a pro-business government which prioritizes attracting investors and encouraging expansion and reinvestments. Based on the track record of our cooperation, it is reasonable to believe we could see favorable developments in the general business environment through a more optimized regulatory framework, a more efficient and user-friendly administration, a favorable tax system and a strengthened domestic supply chain.
However, education is an area where we have struggled to step forward. As the country is looking to shift toward higher value-added activities, new challenges emerge, and the supply of a highly skilled workforce remains number one.
AmCham has advocated for a new education strategy and drastic increase in spending to launch a reform to adapt our education system to the demands of the new and future economy and labor market. We must equip younger generations with the future-proof skills they need to succeed in the market and help teachers with professional and financial support.
Productivity is another area where we see untapped potential. It is probably the most effective way to increase per capita GDP, but it poses a complex challenge as it spans across several fields from resource allocation, the use of EU funds through the competitiveness of SMEs to investments in innovation, R&D, process optimization and new technologies. One cannot solve all this at the stroke of a pen; we need a mindset change across the board.
BBJ: All the suggestions are important, otherwise they would not have been included in Policy Agenda, but if you were forced to pick just one, which would it be and why?
ZS: Sustainability which has become an overarching principle in our Policy Agenda. The COVID-19 pandemic made it evident that sustainability is a competitive advantage as economies and businesses with advanced sustainability programs were more resilient in the face of the crisis. We are not just talking about environment protection and renewable resources here. It is about creating value with innovative solutions that withstand environmental and economic impacts.
Sustainability should be the guiding principle in our economic policy from smart and green investments, infrastructure development and the promotion of circular economy through new technologies, disruptive innovation to future-proof education and healthcare, all supported by sustainable financing and tax systems as well as a transparent regulatory environment.
With a growing number of legal requirements and an increasing demand from consumers and even employees, sustainability has become a cornerstone of modern business, a value that is already championed by several of our member companies; therefore, we are dedicated to lead on this issue with all decision makers in business and government for a modern, resource-efficient and competitive economy.
By Robin Marshall
This article was first published in the Budapest Business Journal print issue of February 12, 2021.