Quality is the new quantity in FDI

Quality is the new quantity in FDI

Quality is the new quantity in FDI for Hungary

The Hungarian Investment Promotion Agency (HIPA) completed another exceptionally successful year in 2017 with a record number of 96 positive investment decisions for Hungary. As a result of almost 100 projects with a total investment volume of EUR 3,512 million, 17,021 jobs will be created in Hungary. The largest asset management company of the world has chosen Budapest for its innovation centre, e-mobility and autonomous-driving related investments are on the rise and the food industry is becoming more diversified.

96 positive investment decisions in the value of EUR 3,512 million, creating 17,021 jobs

96 positive investment decisions in the value of EUR 3,512 million, creating 17,021 jobs

Despite the intensifying global competition to attract investors, the Hungarian Investment Promotion Agency (HIPA) has managed to beat its last year's records in 2017. With regards the relative distribution of the results in 2017, Germany dominates in every aspects. 29 positive decisions were made by German investors, having a share of almost 40% in the results in job creation. The United States of America kept its position as one of the TOP 3 most important partners of Hungary, with 10 projects creating 1,616 jobs. A record number, 18 projects are related to Hungarian companies, which represents well how the Hungarian economy is developing.

Between 2014 and 2017, nearly 300 positive investment decisions for Hungary – supported by HIPA – created 58,000 jobs in our country. That is equivalent of creating a job for every person living in Zalaegerszeg, city with county rights. Our clear objective is further promoting "Invented in Hungary" type of investments. This means that quality is the new quantity in FDI

- said Róbert Ésik, president of HIPA.

Looking at the trends by sector, Hungary further strengthened its position in the automotive industry as the regional hub for autonomous driving related R&D and
e-mobility. All together 36 of the projects are related to the vehicle industry, with an investment volume of EUR 1,548 million resulting in 6,727 new jobs. The supplier base related to automotive has also been expanding: for example, Ten Pao, the Hongkong-based battery supplier of Bosch has chosen Hungary for its first overseas unit. France's Valeo and German Continental group both continue to expand their manufacturing and R&D locations countrywide. These projects create a high level of automated production environment which provides an opportunity for increasing labour-intensive areas generating higher added value.

In the business services sector, the clear trend is the increasing number of high value added positions and digitisation, while 80% of Hungary-based SSCs plan to expand in short term, so robotics does not result in downsizing in Hungary. What is also important, there are companies which decided to supplement their production activities with shared services. FrieslandCampina voted for Budapest to set up their third services centre after the Netherlands and Malaysia, while Viessmann, a leading manufacturer of heating, refrigeration and industrial heating systems announced an investment in Pécs for technical services and after-sales support.

Food industry held its strong position: 7 projects with EUR 215 million investment to create 1,281 jobs. These seven projects cover various fields: waterfowl, snail and milk processing plants, but also the country's largest food warehouse has been established.

Countryside locations are on the rise

Countryside locations are on the rise

In terms of regional distribution, most projects were implemented in Budapest (15). It is followed by Pest county (10), Borsod-Abaúj-Zemplén, Hajdú-Bihar, Heves and Győr-Moson-Sopron counties (8 each). An increasing attention can be seen for the south part of the country: for example Magnus and Viessmann investment in Pécs, and BP's new service centre opened in Szeged.

HIPA is committed, besides promoting Hungary as an investment location, to develop TIER-2 countryside cities and turn our country into an even more investor-friendly location. Last year, the management team of HIPA visited several cities which have increasingly become a subject of interest for investors. These meetings – part of the after-care of HIPA's Investor Friendly Location program – aimed to ensure that municipalities manage both companies already established and potential foreign investors in an even more professional way and to discover new potential development sites.

The Hungarian investment environment has also received a prestigious international recognition: based on the remarkable IBM Global Location Trends 2017 report, from among the three most important categories, in two Hungary ranked among the world's top 10. According to the report, 18,900 new jobs are being created in Hungary based on 2016 FDI investor decisions, which is the 9th best result in the world per inhabitants. However, what is even more important that Hungary ranked 5th based on value of new jobs created, right ahead of countries like Switzerland, Japan or Sweden.