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R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
R Finnagora Seminar 090317 Ade D
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R Finnagora Seminar 090317 Ade D

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Does the secondary education (with skilled labour) in Hungary serve the needs of Foreign Investors?

Does the secondary education (with skilled labour) in Hungary serve the needs of Foreign Investors?

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  • 1. Secondary education – Economy – Regional Development Does the secondary education (with skilled labour) serve the needs of Foreign Investors? Attila, Debreczeni Senior Consultant Finpro CSE – March 17, 2009
  • 2. Topics Are the labour availability & skills the critical factors? Future outlook Case & feedbacks studies & feedbacks Finnish Foreign Direct Investments – Developments & Presence in Hungary Foreign Direct investments – academic & Finnish way © Finpro ry
  • 3. FDI – academic approach & Finnish way in the CSE Region Product life cycle Finnish way Neoclassical – Int. (Vernon) Trade Theory (Smith, Ricardo) Industrial Approach/ Market- Resource Efficiency- Strategy organisation seeking -seeking seeking assets- Region (Mason) seeking Scandinavia X X X Baltic X X X X Russia X X Germany X X Resource-seeking Western EU X X Market-seeking Eastern EU X X X Efficiency-seeking China X X Strategy assets-seeking India X X USA X X Source: Finpro analyses, 2008 © Finpro ry
  • 4. Development of Finnish FDI • Total stock of Finnish FDI: € 60.2 bn. • Quadrupled in 10 years • Major sectors (2007): Manufacturing (~36%), Financials & insurance (~33%) & other services (~31%), • Manufacturing share decreasing • FDI destinations: majority in Sweden (~23-25%), Netherlands (~20-22%), Belgium (~23-25%),, Germany & USA
  • 5. Development of Finnish Trade & FDI in CSE FDI Hot spots
  • 6. Presence of Finnish FDI and companies in Hungary FDI History  350 Exporters  Almost 200 companies with Finnish capital 1990  Appr. 20 manufacturing companies  Finnish-Hungarian trade exceeds 1 bn. euro  Total Finnish investments ca. 1,200 -1,300 million euros  Finnish companies employ close to 20,000 persons in Hungary Sales offices R&D / Planning Productional 1999 Nokia Mobile Phones Nokia R & D UPM Elcoteq 3C Hungary (CCC) M-Real Sanoma Budapest ICM Stora Enso Perlos Martela Savcor Tikkurila M-Real Kone Stora Enso Packaging Kone Cranes 2008 Kemira GrowHow Fiskars Rautaruukki Wärtsilä Scanfil Ensto Lindström Etc. Helkama Forste Clairia Hansa Print ~ € 1.2 – 1.3 bn. Raflatac Huurre
  • 7. Does the secondary education (with skilled labour) serve the needs of Foreign Investors? 1. Main findings of some 1. Future outlooks case studies 2. Feedback from some businessmen Suggestions
  • 8. Case 1 A Finnish software company Evaluator: City Factor weight sub-weight score 1. COSTS 50 % 100 % Cost development (#1 criterion) 70 % 65 Current costs: total cost, personnel costs as key component, travel costs from Oslo and Hki, investment incentives (#2 criterion) 30 % 70 weighted score 66,5 2. COMPETENCIES 30 % 100 % Skill availability (11 person) 70 % 80 Availability of English language and technical skills (from universities) 30 % 90 weighted score 83 3. INDUSTRY 10 % 100 % Existing industry (SW industry, telecom sector (network vendors, operators, billing system vendors –both large and SME’s), also examples for acquisition targets/ partner model 30 % 80 University co-operaration 20 % 75 Outsourcing availability/ culture (less important) 20 % 80 Employee turnover (qualitative estimate), too much competition? 30 % 60 weighted score 73 4. OTHER 10 % 100 % Flight connections/ travel logistics (to Oslo & HKI, EU, CSEE, MENA) (3) 40 % 75 Attractiveness to expatriates (2) 30 % 80 Level of business culture (experiences from working with western companies) and development trend (3) 30 % 80 weighted score 78 TOTAL SCORE/400 100 % 300,5 Factor weighted score/100 100 73
  • 9. Case 2 A Finnish electronics company Costs 30% Cost of Labour Basic structure of labour costs Statutory minimum wages Annual development of average gross wages (region & local/blue collar, white collar, management) Annual development of average net wages (region & local/blue collar, white collar, management) Employers contributions 2006 Employees contributions 2006 Development of employee contributions 2000-2005 Development of employers contributions 2000-2005 Typical benefits on top of base salary for blue collar workers Typical benefits on top of base salary for managers Typical benefits on top of base salary for white collar workers Market movement 2000-2005 on base pay and total compensation Government and EU employment support availability?
  • 10. Case 3 A Finnish manufacturing company Factor weight sub-weight 1. SUPPLIER BASE 20 % Within ~400 km radius / 8-9 hours truck drive 100 % 2. RESOURCES 35 % 100 % Management & other white collars 40 % Blue collars 40 % Corporate support, `easy access` 20 % 3. OPERATIONAL SCALABILITY 15 % 100 % Factory in 6,000 sqm; 10,000 sqm; 20,000 sqm (in 2011) 80 % Outside storage space: ~ 20,000 sqm 20 % 4. POLITICAL INVESTMENT MANAGEMENT 10 % 100 % Enforceability of local contracts 50 % Possibility for investment incentives 50 % 5. COST COMPETITIVENESS 20 % Labour 80 % Facility 20 % 100 %
  • 11. Table 1: Decisionattractiveness on labour issues 2: Country factors Feedbacks from Finnish Businessman 5 Finnish businessmen were interviewed; Sectors: ICT & Manufacturing Special note: Not representative research Decision factors Country attractiveness on labour issues Factors Weights, % Poland Slovakia Hungary Romania Bulgaria Country macro-stability Skill availability 3 1 2 4 4 10 Labour costs 25 Technical skills 3 1 2 4 3 Labour skills 10 Availability of Location 30 English language 4 3 4 1 2 Incentive system 5 Motivation & Infrastructure, commitment 3 3 2 3 4 education system Innovative skills 3 2 2 4 4 20 Supportive Total: 100 % educational system 3 3 3 3 4 Total 16 13 15 19 21 Ranking III. I. II. IV. V. 1 - the Scales: best 7 - the worst
  • 12. - Main findigns Hungary vs. CSE Region New comers Labour issues as Critical factors: 1. Skills; 2. Available quantity in 50-60 km radius; 3. Other foreign companies in the neighbourhood - negative 4. Near by universities (mainly at ICT);
  • 13. Future outlook: GDP – forecast for 2009 ? -1,2 USA -09 EU -09 ? -1,6 JPN -09 -1,8 -1,4 -2,4 -4,7 USA 2010 EU 2010 JPN 2010 ~ 10 - +1,7 +0.5 -1,0 -6,9 +2,0 -0,5 12% -5,0 -2,8 -4,0 -2,0 n.a. +2,0 -1,9 -2,3 -0,9 +1,7 -4,0 India +2,7 & China -1,8 -1,2 -1,6 +0,6 +1,8 -2,0 +1,0 -1,6 -2,0 +7,0 +1,8 +1,0 +0,2 UAE +1,5% +0,7 +1,1 SA +2,5% Source: EU Commission © Finpro ry
  • 14. Future outlook: Unemployment and forecast > or < ? 7,8> EU -09 ? 8,7 7,9> 8,8> EU 2010 10< ~8- +9,5 4,5> 10,4> 14% 9,7> 8,2< 8,8> 4,1> n.a. 8,4> 8,0> 7,7> 4,9> 5,7> 2,2> India 10,6< & China 9,8-> 5,1> 8,8> 5,2< 7,0< 12< 8,2> 8,8> 16,1> 20 6,3> 11 9,0> UAE n.a. 7,4> 5,1> SA n.a. Source: EU Commission © Finpro ry
  • 15. Suggestions Updated Cooperation Promotion database on Improve available English English With ITD resources webpage language skills Hungary & -Alumni- & of students relevant Trade & Success stories promotion agencies 50-60 km radius © Finpro ry
  • 16. Introduction of Finrpo CSE & ME Matrix organisation Industries Region Construction 5 Logistics RITs Machinery ICT Energy Environment Black See Hqr: Vienna Forestry Prague Regions Power Triangle Life Science Budapest Bucharest Sofia Istanbul Riyadh Dubai More information: www.finpro.fi © Finpro ry

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