From wine, cheese and bread to antibiotics, vaccines and biofuels, biotechnology has a long history in Hungary. Notably, the term itself was coined by Hungarian agricultural engineer Károly Ereky in 1919. Modern biotechnology dates back to the establishment of the Biological Research Center of the Hungarian Academy of Sciences in the early 1970s, followed by a state development program dedicated to biotechnology research in the 80s. Biotechnology became an independent sector after 1990, building on local competence in plant biology, drug development and a traditionally strong pharmaceutical industry. Nowadays the sector is dominated by medical (red) biotech, which involves more than 50% of companies, complemented by bioinformatics and industrial (white) biotech (29%). Meanwhile the share of agricultural and food (green) biotech has been steadily shrinking.
Hungarian biotechnology has experienced strong growth in the last decades, especially between 2004 and 2008, reaching a leading position among new EU member states by 2009. Biotech companies are often spin-offs from one of the major universities, forming clusters in Budapest, Szeged, Debrecen and Pécs. In the early 2000s, the absence of international venture capital for life sciences applications and the avoidance of VC funding among spin-offs for the fear of losing control over their company resulted in the majority of small companies being dependent on state grants. The situation has changed significantly with the 2010-2011 cuts in government funding and the introduction of the Joint European Resources for Micro to Medium Enterprises (JEREMIE), a program initiated by the European Commission with a venture capital fund that distributed €180 million to Hungarian small and medium enterprises in the 2010-2013 interval.
Now producing over €70 million in yearly revenue, a fourfold increase from 2004, a total of 85 biotech companies employ about 1800 people. Most Hungarian biotech ventures are export-oriented as domestic market demand for innovative biotech products and services remains too small to support R&D costs. Less than a third of companies build their business model on in- house product development, others perform contract research or provide services and technology for the global market. The sector is in active development, comprising mostly small and medium enterprises with less than 20 employees. However the largest 15% of companies account for 80% of sector revenues. Currently the main bottleneck is the lack of professional biotech managers with both science and business experience. Specialized training programs for bioentrepreneurship are just becoming available in Hungary.
According to a dedicated chapter on Hungary in the Burrill Biotech 2010 report, the country has great growth potential in biotechnology on a global level. The biotech community is optimistic about future expansion: the sector is expected to develop further, strengthen its global presence and become a recognized EU bioregion. Government programs such as the National Biotechnology Strategy (2005-2010), the Biotechnology National Technology Platform strategic research plan (2010), and the Hungary 2025 vision actively discuss the role of this emerging sector. The Hungarian Biotechnology Association, set up in 2002 as the first of its kind in the former Eastern bloc, supports the development of the sector by formulating strategies and recommendations, organizing training and networking events, and promoting partnerships. Future biotech is envisioned to contribute to societal welfare by boosting the economy, advancing health and wellbeing through improving food quality and biological environment protection, and reducing the country's energy dependence.
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