Top Manager in Discussion: László Ábrahám, general manager of National Instruments Hungary
“We simply want to highlight, with con-structive intent, those points in the [National Reform] Programme (Széll Kálmán plan) that we find problematic or too vague," László Ábrahám, general manager of National Instruments Hungary, of Debrecen, says with reference to the nature of criticisms made by many representatives of the business sector. He spoke on the topic at an event organised by the Joint Venture Association. The Budapest Times spoke to him about the basis for the remarks he made there.
What is your opinion of the National Reform Programme as it stands?
The direction set by the programme is certainly the right one. So far, however, it seems like little more than a set of intentions. Concrete steps are lacking. Now the individual points of the programme need to be fleshed out with specific measures so that the volition of the government is expressed in clear, exact plans. We simply want to highlight, with constructive intent, those points in the programme that we find problematic or too vague. We don’t have any hidden agenda. Our only concern is Hungary, the country of our children and grandchildren. Quite understandably we care about what direction the country develops in. The business sector is at pains to get Hungary’s development on the right track. I am an optimist and believe in the power of publicity. If large numbers of sound-minded people put forward their views, such impulses will achieve results sooner or later. If I were not convinced of that, then I would spare myself the effort of persistently putting forward my opinions at all possible forums.
Or the pace it has set itself is too fast.
Yes. I don’t understand why the government frequently acts at such breakneck speed, allowing itself such little time for the various steps.
In which areas of the free economy is there potential for creating more jobs?
Right now I can’t see which branches of industry would be capable of absorbing the envisaged number of unemployed people and former recipients of disability pensions or early pensions. Innovative sectors are certainly not in the position to do so. They need employees with degree and foreign-language skills. Less-qualified people could be better put to use on assembly lines in series production. It needs to be ensured that the unemployment benefit is at an appropriate level. If it is set too high, then people lack the motivation to rejoin the working world, as is currently the case.
What is the situation with regard to medium-sized businesses?
There is a Catch 22 situation here. If such companies want to boost their competitiveness – and they have little choice in the matter – then there is no way around increasing their efficiency, either by investing in machinery or reducing their workforce. Investing in machinery is often not possible because of a lack of liquidity or markets. Cutting jobs is diametrically opposed to the government’s job-creation plans. That is a contradiction to which I don’t know the answer myself.
Let’s speak about specific points of the plan, starting with bureaucracy and the associated costs.
Reducing administrative costs for companies is the declared aim of the government. So far, however, I have seen little sign of that. The reform plan could tackle that issue. Unifying the various registration systems, for example, would be a sensible step. Currently employees have a social security number, a tax number and a personal identification number. Students also have an additional number. Why can’t one number suffice as it does in the USA? It would also make it easier to prevent fraud. Action needs to be taken on taxation and customs harmonisation. It should not be the case that the tax offices here in Debrecen construe things differently from those in Budapest. We need clear and predictable rules without too much room for subjectivity.
What improvements would you welcome in terms of research and development?
It would be advisable, for example, to take a close look at the massive army of organisations established to support SMEs in their research and development activities. As far as I can tell they have failed in that. The problem is that these organisations received public funds to set themselves up but in many cases not for their actual operations. Now they are preoccupied with applying for funds to secure their continued existence. They are so caught up with simply keeping their heads above water that they are incapable of fulfilling their actual tasks. The upshot is that the money spent has essentially been squandered. I can see few results of their activity. The EU is also to blame because it allows such funds to be distributed too lightly with insufficient emphasis placed on concrete results. Once just for the fun of it I tried to count all such organisations here in this county. I gave up at 30. Where would we be now if they would all actually perform their tasks? The sad thing is that while such organisations invariably skim off the available funds, there is a dearth of money for several really brilliant inventions with a lot of economic potential.
What alternative would you propose?
I would suggest, for example, the establishment of knowledge centres, where expertise would be concentrated. Such centres could actively support SMEs with advice or by providing further training for staff. It would also make sense to set up centres for the loan of instruments and specialists. Great care needs to taken that investment chains are completed so that marketable products result. Anything else is a sheer waste of money. In terms of foreign investors it would be possible to tie the award of subsidies very clearly to R&D capacities also being established here in Hungary. It is only with a raft of such measures that we will manage to raise spending on R&D from the current one per cent of GDP to the planned two per cent by 2020.
How does education need to change?
We need to invest a lot of money and care. Young people leaving schools and universities today don’t have the necessary knowledge. That is not because children are less intelligent than, say, 30 years ago. It is the system that is lagging behind the practical demands of today and teaching things that are irrelevant. The education and business sectors need to cooperate closely. Experience has shown that nothing good comes of learning institutes trying to figure out off their own bat what is good for the business sector. I would also advocate certain changes in teaching methodology. The focus should be to shift from pure rote learning to developing creativity and problem-solving skills. More emphasis needs to be placed on learning foreign languages. That needs to begin in nursery schools. Reaching a stage where all the country’s nursery teachers are capable of teaching children at least the basics of a foreign language shouldn’t be impossible. That for once is a question of willpower, rather than money. It would help to stop dubbing all foreign films. Schools need to play their part in raising the esteem in which productive work is held by society.
How should they do that?
Teenagers could be encouraged to do placements at companies during the holidays. Many young people today have no concept of productive work. Often they experience their parents bemoaning their work at home and treating it as a necessary evil. Such impressions systematically teach them to shy off productive work and seek out other ways of making money. Such placements would be helpful in another respect. Adolescents would learn things such as a feeling of responsibility, respect for their superiors, the satisfaction of creating value. They can hardly learn those by mooching around in shopping centres. The media can do its bit in raising the esteem in which society holds skilled labourers in particular. Why are early-evening television series peopled with dubious characters with similarly dubious professional backgrounds? Why don’t carpenters, metal workers or, say, electronics workers appear instead? Rather than low-life characters making money by not entirely licit means, the younger generation should be shown models of people earning a living through decent hard work and creating social value. More generally the achievements of our skilled workers, engineers and scientists should be given greater prominence in television programming.
National Instruments Hungary celebrates its tenth anniversary this year on 7 October. Its US parent company chose Debrecen ten years ago above all because of the existing infrastructure, its good university and the tax concessions of the time for investments in structurally weak regions. Today the firm has a workforce of 1,100 and last year recorded turnover exceeding HUF 90 billion (EUR 339.45 million). The product range of around 2,500 of its own items consists largely of electronic components and measuring instruments, which are exported all over the world. The CERN research project in Switzerland is one of the company’s most prestigious customers. Electronic instruments from Debrecen worth some HUF 553.36 million (EUR 2.08 million) integrated in the Large Hadron Collider (the world’s largest and highest-energy particle accelerator in a tunnel beneath the Franco-Swiss border near Geneva) ensure that protons moving at nearly the speed of light remain on a stable circular path.