[This post introduces our newest nowEurope contributor, Toby Elwin, writing from Boston - a regional US tech hub once on par with Silicon Valley, but recently finding themselves fighting for relevance. Toby also has deep career experience working in Hungary and China. He'll be looking at Central Europe from a comparative perspective - Steve Carlson]
My interest in Hungary and the region stems from an opportunity to study an advanced business degree in Budapest. After living in America and China, two countries that dominate both their region and much global news, Hungary, the size of Pennsylvania, was a distinct change of perspective.
In 1999 I arrived in Hungary, straight from China. The country and many of the seven countries that border Hungary were shaking off decades of planned-economy paralysis. The region was entering a renewed sense of opportunity and Hungary was stabilizing its voice in the region, in Europe, and in the world.
The opportunity, and the challenge that lay ahead, for Hungary and others in the region was to set the proper goal. The more I worked and studied at Central European University, the more I discovered a region, from the Czech Republic through Mongolia, full of immensely brilliant, able people to have an impact on a global scale. With a brilliant work force, many in government chose a low-wage competitive strategy. I felt then, as I do now, the race to the bottom is a short-term solution.
Continue reading ‘Central Europe: the view from Boston’
CEE Chips bills itself as an online investment network that connects businesses from Central and Eastern Europe seek funding with investors from all over the world. I came across CEE Chips, when founder Alexandar Petkov sent me a contact request at LinkedIn. He offered me free access to his site, and so I had a look around.
The concept of online investment brokerage isn’t new, but to the best of my knowledge this model has never been applied specifically in this region. The US market leader appears to be Funding Universe, but I’m more familiar with Angelsoft. The logic behind such sites is obvious: entrepreneurs want money, and investors want dealflow. Success mean building a critical mass of investors and deals, and providing both parties the means to evaluate each other and build trust.
So the question is, will CEE Chips be able to build that critical mass in Central Europe?
Continue reading ‘Bulgaria embraces entrepreneurial spirit with CEE Chips, but is Central Europe ready?’
I have just found an interesting guide, published by the project “USEandDIFFUSE” that was co-financed by the European Commission DG Research under the 7th Framework Programme. They have produced a guide packed with helpful information advice, quotes and real-life examples from SMEs that participated in 24 Best Practice projects (most of them in the ICT domain, some even in Central Europe). You can download the report here.
I found it interesting because it provides several hints on how you can transfer/uptake technologies!
An Austrian startup company, ASH DEC Umwelt, won third prize at the Eurocan European Venture Contest 2009, held this weekend in Barcelona. ASH DEC Umwelt is a clean tech company that recycle nutrients and metals from incineration residues.
The top prize of €90,000 went a Danish biotech company, Biomodics, while the second runner up was Liquavista, a Dutch ICT startup.
Organized by Europe Unlimited, the EEVC examined 376 European companies (out of 776 applicants) in a series of local and regional competitions. 313 investor experts took part in vetting the competitors. I also spent a day as an expert evaluator in the Budapest semi-final.
It’s also worth noting that one other CENTROPE company, the Hungarian ICT startup, Gravity R&D, made it to the EEVC Top 25.
The Eurecan European Venture Contest, aims to identify world-class innovative companies with the potential to dramatically impact their industry and contribute to increasing European competitiveness and growth.
For the past five years, Europe Unlimited, has been running these events, and I’ve taken part in several as an expert reviewer. I also took part this year, at the EEVC 2009 event held recently in Budapest.
This year was different. Thanks to more than €100M arriving from the European Commission in December 2009, a large number of these companies actually have a chance to win funding.
Continue reading ‘Assessing Hungary’s current generation of startups – the rules have changed’
How odd that I came across this story on China’s People Daily Online, the erstwhile propaganda organ of the Chinese Communist Party.
According to the World Bank, Hungary’s neighbors now provide a more competitive business environment, while the Slovaks lead the region in providing a cozy home to global capitalism:
Hungary is the second most expensive place in terms of gross national product percent capitation to start up a new company in the region after Poland. Almost every country in the Central Europe Estate region beats Hungary, according to the World Bank survey. Slovakia is well ahead in 36th place due to its business-friendly reputation and flat tax.
But wait, there’s more bad news. (Are the Chinese actually mocking Hungary?)
Continue reading ‘World Bank names Hungary as CEE’s least welcoming place to do business’
According to Reuters, SMEs can play a big part in Central Europe’s economic recovery:
Imploding demand and tighter credit have held back eastern Europe’s small and medium firms in the economic crisis, and how they cope could significantly determine which countries in the region recover quicker.
Small businesses provide 60-70% of all jobs across Central Europe, and pay at least half the taxes. That makes SMEs critical to the region’s economic recovery. (Other important factors are governments’ fiscal discipline, demand from Western Europe and the pace of foreign direct investment.)
A major issue for SMEs is limited access to credit. Lending rates in Central Europe have traditionally been less than in Western Europe. With the financial crisis, small business credit across the region has virtually frozen.
In recent years, various cluster organisations in many different sectors have been created in Austria. Especially for Austrian SMEs, those clusters have been a great help and local businesses have profited from the exchange of knowledge, cooperation and opening to the international market. In my last post I talked about a bottom-up approach through which Austrian IT clusters formed a common network by their own initiative. Today I will take a look at an Austrian cluster platform that is organised by the Austrian Federal Ministry of Economy, Family and Youth.
Clusterplatform Austria is an initiative to create a common platform for existing clusters and networks across all sectors in Austria. Its purpose is to bring together separated clusters, which often work relatively independently from each other. One of their activities consists of organising workgroups for various topics such as “clusters and their role in the Austrian innovation policy” or “Connecting the Austrian cluster policy to Europe”. The platform thereby aims to strengthen the innovation and international competitiveness of Austrian enterprises, especially SMEs. Another focus is establishing a connection with R&D institutions as well as increasing supra-regional cooperation of cluster initiatives and federal and provincial cooperation. The platform wants to contribute to the development and realisation of Austrian research-, technology and innovation policy as well as create a link to EU cluster activities.
Continue reading ‘Introducing Clusterplatform Austria’
The IMF recently published its latest World Economic Outlook Update. The forecasts are not surprising: “The global economy is beginning to pull out of a recession unprecedented in the post–World War II era, but stabilization is uneven and the recovery is expected to be sluggish.”
However the situtation is different in China, which is expecting 7.5 % growth in 2009 and 8.5 % in 2010.
Data source: IMF / Chart: PBN
While the output in the Euro area is expected to be -4,8 % in 2009 and still negative in 2010, the Chinese economy is recovering very fast, reaching as high values as in 2007.
How can we profit from this Chinese growth here in Central Europe?