Context of the organization

Most of the businesses, especially SMEs think that they do not carry out any innovation activities. However, all companies operate in a business related context which is under constant change. If a business is unable to adapt to the changes of its context it is bound to go bankrupt. Adaptation requires information. Therefore, if a business can keep its competitiveness, or even increase it, it certainly does innovation. It might not be aware of it.

The organisation has to determine external and internal issues that are relevant to its purpose, and that affect its ability to achieve the intended outcomes of its IMS. The organisation should determine the boundaries, and applicability of the IMS to establish its scope.

The organisation should regularly scan and analyse the external environment, to identify present and future challenges. This external analysis should consider aspects such as:

  • market aspects (user needs, competitors, partners, suppliers, etc.);
  • technical aspects (intellectual property, standards, science development, etc.);
  • political aspects (legislation, regulations, interaction with public administration, etc.);
  • economic aspects (macroeconomic context, financial and tax reduction possibilities, etc.)
  • social aspects (demographical data, diversity, trends, effects of sustainability, etc.).

Innovation financially is a highly risk-involved activity, especially when R&D is involved. It certainly has some costs, but it is not evident at all, whether it will bring income, not to speak about profit.

To facilitate innovation and R&D activities the government gives tax benefits, and the EU and the Hungarian government provides support via tenders.

In Hungary, for example companies can reduce their own R&D costs from their Company tax (based on Hungarian Law 1996. /LXXXI. on Company taxation and Taxation of Dividends) and from their local business tax (based on the Hungarian Act on Local Taxes).

R&D&I activities are supported from various resources by the EU and the Hungarian budget. The common feature of these supports is that they can be accessed by tenders.

The tenders basically have three sources:

  • The EU (at present the programme Horizon 2020, previously the 7th Framework Programme
  • The EU and the national sources jointly. These include in Hungary GINOP and VEKOP
    • Hungary gives support to all GINOP approved R&D&I projects in all regions but the Central Hungarian region.
    • VEKOP channels sources only to the Central Hungarian R&D&I projects. But VEKOP is a much smaller type of bid in its financial scope as in Hungary the central region is the most developed region.
  • Hungarian national resources.
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