Small businesses are the break-out possibility of the North-Hungarian Region

Gergely, Sándor

Keywords: small businesses, competitiveness, cluster, network economy

The area of the North-Hungarian Region is 13,429 km2, which is 14.4% of the country’s territory. In terms of area and population the region lies in fourth place in Hungary. The region is remarkable for the beauty of its landscapes, which are rich in untouched natural values with its significant ecological potential. Among its natural treasures we can find medicinal, thermal and mineral water springs. The wine producing regions of Eger and Gyöngyös are well known in Europe, while Tokaj is world famous.
Significant problems in the North-Hungarian Region are unemployment exceeding the national average, caused by adaptation and modernisation crises, low-level employment, and the concentrated appearance of underdeveloped settlements and population groups.
As small businesses represent an outstanding employment ratio in the region - about 70% - socio-economic development is not possible without increasing the number and competitiveness of small businesses. In our research we looked for an answer to what the necessary conditions are for this.
Recommendations for increasing the competitiveness of small businesses in the North-Hungarian Region:
■ Small businesses need to improve in the area of supplier activity, quality, information and confidence.
■ Small businesses must improve precision, supplier discipline and quality.
■ When establishing co-operation and partnership relations the greatest preventative factor is lack of confidence. Most of the businesses are afraid of transferring their own knowledge and information; they are ready to accept every benefit of co-operation but without its risks.
■ Higher-level co-operation will be necessary among small businesses, supporting organisations, chambers and municipalities.
■ Efficient support must be given to the participation of small businesses in the network economy and to the establishment of small businesses’ common efforts.
■ Common large-scale purchasing and selling by small businesses must be efficiently supported.
■ The changing of small business/managerial mentality needs to be supported in the following areas:
- problem solving ability
- business sense
- high-level professional knowledge
- organising ability
- practise-focusing
- high-level communication skills
- managerial knowledge
- co-operation ability
- risk taking ability
- analysing ability
- idea representing ability
- computer skills
■ Efficient, target-oriented training and extension training, needs to be organised for managers and employees of small businesses.
■ Transparent, clear legal frameworks must be established.
■ Tax burdens should be reduced, especially those exerted on labour.
■ Efficient capital search and credit programmes are needed for small businesses.
■ An efficient small business relations system needs to be created with research sites and higher-education institutes using the latest R&D results.
■ Efficient support must be given to small businesses to access new markets.
■ The establishment and efficient operation of the Regional Small Businesses Support System (REKTÁR), planned and worked out by ourselves, would basically help with small business competitiveness. REKTÁR, overseen by small businesses, would provide help at each stage of small business activity in the field of business establishment, strategy development, business development, solving technical tasks, training and extension training, crisis management and winding up.

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