Contemporary Changes in the Role and Spatial Structure of Industrial Production in Hungary

Abstract

The aim of our paper is to offer a brief survey of the stages of development of industrial productionin Hungary and the transfomation that followed the changing of Hungary’s political system, as well as the maintrends in the contemporary process of re-industrialization. Hungarian industry has long traditions; as early asthe beginning of the 20th century, in certain branches, it was among the leading countries in the world. Afterthe fall of the centrally planned economy of the communist system and following the crisis treatment policiesof the post-communist years, Hungarian industry, today, has to survive in an open economy. The process ofre-industrializaton in Hungary is, basically, an integral part of global industrial change while, at the same time,it is largely dependent on local industrial developments. The volume indices, the value of industrial investmentsand the number of employees in industry, are all indicators of a positive change. The processing industryrepresents a considerable proportion of industrial production in Hungary and, in addition, vehicle manufacturingis the most dynamically developing segment. At the same time, industry in Hungary can still be characterizedby a dual structure; more than two thirds of its production value us produced by large companies.Small- and medium-sized companies have the possibility of being integrated into the production structure assuppliers. Some of Hungary’s traditional industrial branches have deteriorated, while other segments havebeen able to change their structure and become dynamic again. The main focus of industrial production – dueto capital investments by foreigners – has shifted towards the west, and the largest portion of its productionvalue now comes from Hungary’s western and central Transdanubian regions. The process of re-industralizationis beneficial for those regions in which there is an adequate and ready supply of human resources.