Hungary’s strong growth of knowledge-intensive occupations came to stop in 2020

The ECEPR and Nordic Capital Brain Business Jobs Index, measures the share of the working age population across Europe employed in highly knowledge-intensive enterprises, in 31 countries and 284 regions.

Hungary’s growth of brain business jobs came to stop in 2020
Before the corona crisis, Hungary experienced a significant boost in brain business jobs. Between 2012 and 2019, Hungary added 110 000 jobs in knowledge-intensive companies. That is one of the highest numbers of brain business jobs added in all of Europe during this time. However, this positive trend came to an end during 2020, as Hungary lost 4 500 jobs in highly knowledge-intensive industries during the year. Despite this drop, the concentration of the population employed in knowledge-intensive occupations remained at 7.2 percent.

Central and Eastern Europe experienced significant loss of brain business jobs in 2020
In Central and Eastern Europe as a whole, approximately 58 400 brain business jobs were lost between 2019 and 2020. While Estonia and Poland were successful in adding jobs during the turbulent year, the rest of the area suffered significant setbacks. Notably, Romania lost a large amount of brain business jobs during the year.

Fostering brain business jobs important aspect of reducing regional unemployment
The region with the highest concentration of brain business jobs, the Slovakian capital region of Bratislava, has an impressive unemployment rate of 2.4 percent. This does not seem to be a coincidence. A comparison of 281 European regions shows that a strong link exists between high brain business jobs concentration and low unemployment, and that this link is driven by regions with low brain business jobs concentration. Amongst regions with up to 50 brain business jobs per 1 000 working age population, a straight-forward linear regression shows that 28 percent of the variation of unemployment can be explained by differences of brain business jobs concentration.

Geographical equalization of brain business jobs taking place in Europe
According to Dr. Nima Sanandaji, President of the ECEPR, the overall trend is that Central and Eastern European countries are catching up to Northern and Western Europe. Knowledge-intensive firm occupation is also growing in several Southern European countries, such as Cyprus, Portugal, and Malta:

“Since 2014, Cyprus has had an almost 50 percent increase of brain business jobs per capita. Slovakia, Hungary, Poland, Latvia, Portugal, and Bulgaria have experienced a growth of a third or more. Cost of labor is a main driving force. Brain business jobs are growing in places which combine an ample supply of talent with lower wage costs”.

Budapest in top three knowledge regions of Central and Eastern Europe
With a concentration of 18.0 percent of its working age population employed in knowledge-intensive firms, Budapest places in the top three of knowledge regions of Central and Eastern Europe. Ahead of it is only Bratislava (22,4 percent) and Prague (19,7 percent). This highlights the rise of Central and Eastern Europe as major knowledge centers of Europe.

Budapest has several innovative start-up companies, such as Banzai Cloud which offers cloud native solutions for enterprises, Shapr3D which provides computer-aided design services, and Almotive which is a developer of automated driving technologies.