Hungary Information and Communication Technologies

Over the past several years the added value produced by the ICT sector in Hungary increased by more than 20%, to USD 20 Billion (HUF 6 Trillion), which means that the digital economy makes up at least 20% of Hungary’s overall Gross Value Added. According to the local ICT association, when including in-house digital developments of non-ICT companies (e.g., car manufacturers or financial service providers), the digital economy accounts for at least 25% of the total GDP. One in five people in the Hungarian labor market owes their job to the digital economy, and digitalization has created more than half a million jobs in the past year.
 
Hungary ranks 21st out of 27 EU Member States in the Digital Economy and Society Index (DESI) 2020. Over the last few years, its score improved broadly in line with the EU average. Hungary holds a high rank in broadband connectivity – it ranks 7th after showing significant improvement in the past year, mainly due to good broadband coverage, speed, and high 4G coverage. 
 
Opportunities exist for U.S. solution providers in digital public services and in the integration of digital technologies in businesses. Most companies are not exploiting the opportunities offered by digital technologies, such as cloud computing and big data, and few of them sell online. The use of enterprise resource planning software packages is the lowest in the EU. On advanced digital technologies, only 6% of companies rely on big data solutions (12% in the EU) and 11% use cloud computing (18% in the EU).  As for e-commerce, although online shopping by individuals is increasing, only 12% of SMEs sold goods online in 2019 (compared to 18% in the EU).
 
There seems to be a market consolidation underway in the ICT sector, lead by Hungarian tech company 4iG’s aggressive acquisition strategy. This is expected to disrupt the Hungarian telecommunications market in the near-term as the company’s assets cross most lines of business, from satellite communications to IT services. The company will largely benefit from the acquisition of Invitech’s infrastructure assets (which received approval by the competition authority GVH in October 2021), as it aims to position itself as the largest end-to-end solutions provider in the B2B segment. The company has three key pillars – IT Systems, Telecoms & Infrastructure and Space & Defense – motivating its portfolio expansions in the region.  As a result of its acquisition strategy, 4iG has managed to grow its operating revenues by four times between 2018 and 2020.
 
IT public procurement planning of the various Government of Hungary agencies, ministries and state-owned enterprises was recently centralized through the Digital Government Agency (DKÜ) for the procurement of IT services and solutions with a dedicated EU-funded IT Operative Program for 2021-27. The budget allocated for this period would be USD 2.2 Billion (HUF 700 Billion). DKÜ would welcome U.S. vendors interested in Hungarian market opportunities.
 
For additional information, please contact: Eva Bosze, Commercial Specialist at eva.bosze@trade.gov.