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Economic analysis

Background of the survey

The city of Debrecen, among other things, has set up the EDC Debrecen Urban and Economic Development Center in order to help local small and medium-sized businesses, advance the development of Debrecen, thereby contributing to create more workplaces and boost the economy. The most important basis for the growth of the city is the local economy, its deliberate development, which is a priority for EDC Debrecen, based on the opinion of Debrecen actors. As part of this, active dialogue has been going on for years between the owners of the big companies, the managers of the SME sector and EDC Debrecen.

Three years ago, the city and EDC Debrecen decided to conduct a research that focused on local SMEs and assessed the opinion of CEOs about how business-friendly Debrecen is. For the survey, they selected an internationally renowned market research firm based in Debrecen, which guarantees a high level of professionalism: this is Szinapszis Ltd.

The purpose of the survey

The purpose of the research is to provide a continuous feedback on the perception of the business environment and to have a detailed picture about the areas that local business owners also think that should be developed. Therefore, the survey is repeated every year in order to have a meticulous evidence about the business processes in Debrecen and show in which areas and how EDC Debrecen's activities can help the local businesses.

The professionalism of the research is the responsibility of the international market research company, Szinapszis Kft., thus the research is carried out in accordance with international standards (both in terms of anonymity and representativeness). Local business executives are contacted by phone and online to complete app. a 15-minute questionnaire, which is completely anonymous. This anonymity is extremely important for business executives in order to truly express their opinions, suggestions and perceived problems.

History of the survey

In October 2018, third wave of the survey was completed, so we have a picture of the previous state of Debrecen economy, that is, we have a benchmark for identifying trends. In order to minimize the statistical error, we always target the minimum of 200 respondents, which have been reached in all the three waves. In addition to the annual telephone survey, EDC Debrecen has an active dialogue with businesses to collect opinions and suggestions more widely. For this reason, the company has organized roundtable discussions in different sectors, where entrepreneurs can name the areas where intervention is required, in order to report their problems in detail and to find solutions together.

The key findings of the third wave

The business environment in Debrecen is improving, as business index of Debrecen is growing steadily. The percentage of positive judgment is increasing with the size of the business: while 60% of micro-businesses evaluate the local business environment positively, this ratio is 77% for Debrecen's medium and large companies. This positive image is also reflected in the willingness of reinvestment (91% of Debrecen enterprises – regardless of the size of the enterprise – would re-invest in Debrecen) and also regarding the vision (87% of the respondents expect improvement in the business environment of the region).

It is important to mention that in assessing the business environment in Debrecen, the rate of responses recognizing the predictability of local economic policy has risen sharply (from 38% to 56%), which is also highlighted by executives in personal contacts: in Debrecen everything happens in the way as the city communicates.

Opening of the BMW car factory is highly appreciated by local businesses. Most (81%) believe that opening the factory will increase competition for employees and 61% believe that average wages will increase in Debrecen (the proportion of opinions is independent of the size of the company).

61% of the responding companies positioned themselves as supplier, 16% as buyer and 24% as supplier and buyer regarding the local market. Suppliers feel that the relations are the most required development area and they would rely on the help from EDC. According to buyers, suppliers should develop in terms of

qualified workforce capacity to become suppliers and in order to involve suppliers they require help about transmission of information and building links from EDC.

Half of the companies are present on foreign markets, but 44% of them only export 1-10% of their sales. The presence in foreign markets is significantly lower among micro-enterprises. The export share from sales revenue increases with the size of the business. In order to increase the export revenue, capital, technology development, staff expansion and marketing development are needed. Companies that are not present on foreign markets typically do not want to appear there.