Nyíregyháza Partner Profile

Nyíregyháza is a medium sized city, located in North East Hungary, reasonably close to the Slovakian, Romanian and Ukrainian borders. It has a population of 117,689 and the unemployment rate is just 2.6%.

About the city

• 99.9% of all companies are small and medium sized enterprises (SMEs)
• Key local employment sectors are manufacturing (23%) and public administration, defense, education, human health and social work activities (49%)
• Significant recent economic growth, due mainly to high levels of construction and major investments made by a number of multinational companies.
• The largest companies are in rubber industry (Michelin) and plastics industry (Lego). Many of these companies plan further major investments in the city
• 65% of workers are employed in physical activities with the remaining 35% in knowledge-based activities
• Growing a digital economy is identified by some as a key economic driver locally and there are 397 ICT related companies and 241 creative companies (638 in total). Despite this there is a perceived lack of a real digital community or ecosystem.

About the policy context

The good practice will be transferred within the following policy contexts:

• At national level Tech Revolution is aligned with Info-communication Strategy 2014-2020 which includes the establishment of ‘Digital Hungary’ and, within that, ‘Digital Hungary Nyíregyháza”, launched in 2015 with a budget of approx. €5.5m (see below).
• At regional level, the Regional development strategy of Szabolcs-Szatmár-Bereg county includes priorities around developing and education and innovation system to foster economic development and developing Nyíregyháza as the ‘county seat’.
• At local level the project is linked to the Integrated Settlement Development Strategy (ITS) which includes priorities around developing an advanced local economy with more quality jobs and better wages and advanced high-quality science and innovation.
• The local employment and labour market strategy also includes goals relate to increasing high value businesses, income, skills and activity levels.

Strengths and Weaknesses

Strengths

• The city is a liveable place – affordable, with attractive environment, quality services and rich cultural life;
• Major public investments are being made to develop local infrastructure and further improve the quality of life;
• Growing local economy, investments of multinational companies;
• Steadily decreasing unemployment level;
• Local university with modern campus;
• Developed digital infrastructure and connectivity;
• Various projects have been launched to develop key conditions of the digital economy.

Weaknesses

• Low average wages (in national comparison);
• Most people employed at the largest companies are low-income semi-skilled workers;
• The supply of jobs for highly skilled, talented people is limited;
• Weak local SME sector, limited competitiveness and innovation capacity of SMEs and micro-businesses;
• The number of students participating in higher education is continually decreasing;
• Outdated course portfolio of local university;
• Up-to-date digital skills are not part of primary and secondary education;
• Fragmented, weak enterprise support structure with outdated services;
• Weak digital community, no spaces and places to meet;

Opportunities and Threats

• Connecting digital nomads / communities through creation of spaces and places
• Building on the stakeholder group formed under TechTown
• Resources are secured to develop a physical technology transfer and innovation centre which provides a shell which could house a future tech community
• Supporting digital transformation is a national priority
• The Employment Pact could be used to grow digital talent for the future
• Linking digital and tech with existing tourism and manufacturing industries could generate new digital jobs and start-ups

Threats

• Losing talented young people;
• Increasing competition from neighbouring medium-sized cities (Debrecen, Oradea-Ro);
• Struggling to identify the right person within the municipality to ‘champion’ digital
• Rapid automation of factories renders unskilled workers unemployed;

A description of the Good Practice challenge in the city

The city has defined several project ideas that serve to strengthen the local economy and accelerate digital transformation. Some of these are included in the Integrated Action Plan developed within URBACT’s TechTown Action Planning Network, including the creation of a Technology Transfer and Innovation centre at former Soviet barracks; a co-working space for start-ups, young entrepreneurs in an unused building in the City Centre (low-cost redevelopment); regular meetups for the digital community, mentoring and training for start-ups; work to retain young, highly qualified professionals (scholarship program, housing allowance, etc.) and development of business infrastructure, local economic and product development activities.

Funding has been secured for the build of the Technology Transfer and Innovation Centre and construction should be complete by the end of 2019. The city also has plans to strengthen its dual training capacity based on the needs of local businesses. ‘Digital Hungary Nyíregyháza’ launched in 2015 and supports broadband infrastructure, development of the digital community and economy, development of digital skills and extending online access to public services.

Nyiregyhaza & TechRevolution

It wants to use TechRevolution to inform how the city:

• Builds and manages its local community of digital enterprises – by learning about Barnsley’s practices, tools used to build a vibrant community of businesses, linking start-ups with large enterprises etc
• Creates a viable business model for the operation of the planned Technology Transfer and Innovation Centre which includes consideration of a strong community offer
• Positions the Technology Transfer and Innovation Centre as the hub of the local business and digital community
• Considers the development of a small scale, experimental business support pilot
• Organises events to strengthen the local business community and promoting the establishment of bilateral business links between local businesses
• Uses methods and tools to promote the creation and development of business start-ups.

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The URBACT Local Group (ULG)

The ULG will build on the previous TechTown group. Its functions will include:

• Planning, identifying and engaging partners, delivering consultations
• Overall coordination of implementing the TechRevolution Transfer Plan
• Monitoring progress of implementation of Transfer Plan
• Identifying / initiating new projects contributing to the development of the digital economy

ULG membership will include: businesses (internet service company, graphic design studio, hardware provider, management consultancy, Edtech start-up), university, youth employment foundation, public utilities providers, tourism agency, technical vocational school and the municipality (mayor’s office and project management team).

Assets for, and barriers to, transfer

The city has significant relevant experience in collaborative development of an Integrated Action Plan with an URBACT Action Planning Network, setting up and managing a local employment pact and designing and implementing ERDF and ESF co-financed integrated urban projects. Whilst there is a richness of skill and experience, this is coupled with a sense that stakeholders are not empowered to take or implement autonomous decisions.

A number of projects are already underway which will complement the transfer process. These include the Employment Pact which will help to improve the local entrepreneurial environment and a Junior Engineer Education Programme (JEEP) which aims to increase the number of young people applying to the University of Nyíregyháza and encourage STEM applications in particular. The University is also ollaborating with the municipality to create an ‘experience centre’ for young people between 10 and 17 years of age to orientate them towards STEM careers. The Technology Transfer and Innovation Centre itself should be built during 2019 and provides an excellent opportunity to grow a digital and tech community, based on the Barnsley good practice.

However, there are a number of potential barriers including:

• As things stand, there is a fixed budget for the technology and innovation centre which will only cover the physical infrastructure – leaving little or no scope for new community based activities to be financed from the project unless extra funds can be secured
• Linked to this, there is too much focus on investment / infrastructure elements within the project and insufficient attention has been given, to date, to a sustainable business model
• There is a lack of capacity within the Mayor’s Office in the field of enterprise development – it will be important to have the right skills and experience in city hall to achieve long term and sustainable economic benefits. This needs to be headed up by an individual with drive, energy and commitment – someone who can really champion the digital economy agenda in and amongst other political and strategic priorities
• The is no culture of risk taking or entrepreneurial approaches to service delivery
• A multitude of physical investment projects are being delivered at the same time – limited project management capacity at the Mayor’s Office
• Like many other places in the EU, the city lacks an agile education and training system
• There is a fragmented, weak enterprise support structure in Nyíregyháza;

Practical steps to transfer the GP

Nyíregyháza a is interested in using the following techniques to transfer the good practice:

• Developing personal level commitment of one of the city leaders (mayor, one of the vice-mayors, head of cabinet or one senior council member) (perhaps, through a visit from a high level delegation from Barnsley showing what has been achieved there and return on investment)
• Selection / recruitment of one person responsible for (and committed to) to the successful and sustainable operation of the centre – involvement of this person from an early stage (already at the development phase)
• Involvement of these people in the TechRevolution project
• “Study visit” to Barnsley to see the DMC and the complete enterprise support landscape “in action”
• Continuous consultation with relevant professionals from Barnsley while the business model and service concept are being developed;
• Identification and involvement of future users of the centre’s services as early as possible.

Useful Links

• Chamber of Commerce and Industry of Szabolcs-Szatmár-Bereg County
• University of Nyíregyháza
• Nyíregyháza website
• Tourism Destination Management Office