Hungary is an open economy where particular emphasis is placed on encouraging foreign direct investments. Partnership with potential investors is a national priority, special attention is paid to the needs of already existing companies, and to the further development of the business climate. 

Starting with 2010, Hungary has put a lot of effort into developing the IT sector. Some of the best steps in this direction are: 

• Tax modifications and incentive system related to R&D activities

• Strategic partnership for local IT companies, as well as government projects 

• A dual education system based on the tech industry’s needs

• Adjusted the economical climate to the latest requirements of Industry 4.0

In Hungary, the added value generated by the IT sector was 5,18 billion Euros in 2019, and compared with 2017 and 2018, grew by 5% and respectively 7%, which confirms the steady ground the national IT industry stands on. Additionally, Hungarian IT companies have access to the vast EU digital market, which allows them to export services across Europe. 

The most popular IT services provided by Hungarian companies are Software development, Software engineering, and Cyber Security. However, in the last several years’ local companies focused also on app development and knew an increasing number of projects in the AR and VR branches. 

Why you should work with Hungarian IT companies

Even though the digital market is dominated by foreign IT companies ( 66% ), there are also local companies that are striving in providing cutting-edge technology services, which may compete in some places with US, German, and UK companies. For central Europe, this represents a big step ahead and provides cheaper alternatives to the same services for potential customers. 

In 2019, the value of Hungarian exported IT services reached 1.95 billion euros or 8.2% of the entire export value of the country. The numbers are expected to grow significantly due to foreign direct investments in the sector, which also grew by 19% in 2019-2020 Q1.

What you should pay attention to when working with Hungarian IT companies

Hungarian IT companies are not the best-known on the international market, so far. However their increased potential lately may lead to a market boom in the central European market, and many potential customers could turn their attention to this progressive alternative. But the main challenge the companies will possibly face is a lack of experience in working with big projects. In its turn, the lack of experience can lead to poor project management, late project delivery, or even poorly executed projects. 

How reliable are Hungarian IT companies

Hungarian IT companies don’t have a reputation for providing services in IT, which can turn both as an advantage and disadvantage for the companies. Depending on how well local IT companies will start performing on a larger scale, the reliability of companies will be appreciated. 

How does the Hungarian IT sector relate to the neighboring countries

The V4 countries are working together in many areas including in the IT sector. Companies from these countries benefit from facilities and eased access on national markets, but, they also compete. 

In these regards, Hungary is the 2nd growing country in the IT sector in the group of 4, straight after Poland, which already took the lead with an advantage of 35%. 

Outside the V4 group, Romania and Ukraine are also countries that are direct competitors with the Hungarian IT sector. It is still uncertain whether Hungary, Ukraine, Poland, or Romania will become the largest central-European hub in the EU, and generally, in Europe. 

 

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