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Bill : Welcome to soft land central the home of market entry, knowledge and information so today we’re welcoming a great friend Thomas Novak, from the Hungarian Consulate General in New York. Welcome to mash.
Tamas : Hi, everyone. Good to see you again.
Bill : Well, it’s great to see you, Tomash and just so you know our audience are our companies, our economic development professionals, and entrepreneurs from, from all over the world and really what we’d like to do today is, is give them a little sense of the Hungarian consulate in New York and, and certainly what you’re doing and you guys are working so hard, I know that to help Hungarian companies come to the US and also helping us companies find great new opportunities and hungry, so we really just want to spend a little bit of time learning about that but if you wouldn’t mind, it tell us if you, if you wait a little bit about the Hungarian consulate in New York and your mission kind of what what you all are focused on.
Tamas : Yeah, sure. You know, the diplomatic missions has always had the cost to do business and to promote the business between the two countries in the in this case between the United States and Hungary. So we have an embassy in Washington DC and we have a couple of consulates, all over the united states like New York City and in Los Angeles and Chicago. So these are the basic major regional out of our activities here, and the regarding doing business between the two countries we have several tasks to perform. The first is the promotion of foreign direct investments, between the two countries which means that, attracting additional investments from the United States, and at the same time promoting thank you and companies which would like to invest in the United States. The United States is the second biggest investor in Hungary, so there are a lot of US firms has already invested in the Hungarian industries in many many industries. So we have a long history with dealing with American investors in Hungary, and there is a there is a big network in Hungary, which tries to promote and attract investments which are mostly related to the UN year and Export Promotion Agency, and the Hungarian Investment Promotion Agency which means that they provide information for all interested parties which would like to know more about Hank kind of support is available in Hungary, which Indra, in which industries are the best to invest in, what are the competitive advantages of the country. So there are a lot of information which is available for potential investors, and if you want to connect with these Hungarian institutions, just connect us first, and they are happy to reach the right persons and the right institution. So this kind of investment promotion is very important because Hungary is a very, very open country in terms of international trade.
There are many big German companies has already invested in Hungary, Japanese, Korean firms as well. And obviously, American firms as well. So, so we are in the center of Europe, in building the European Union, which also means that if you invested in Hungary, you reach a very big market because there are new barriers to trade among the European Union state, a member states so if you invested in Hungary, you can very easily export your products to Germany, or the US to Spain and to Portugal, and you will not face, trading barriers, that’s very important, and it makes. It’s quite strange that you invest in a very small country like Hungary which has 10 million population that you reach at the same time a very large market, which is a choice of 500 million people. So, it’s, it’s even bigger than the United States in terms of the population of course. So that’s one thing that the promotion of the investment and in relation to investments, of course the export, export in Hungarian products the United States. Because, as I mentioned to you that the Hungarian economy is a very open one in terms of export per GDP Hungary is one of the most open country in the world. There are only a few countries has high or export to GDP ratio than Hungary, so we are very much interested in selling products abroad. And obviously, the United States as a big market, we are very much interested in selling products in this huge market. So this, this is one thing the second basket of our activities is related to, to start up companies, You know, there’s a lot of cultural differences between the United States and Europe and the United States and Hungary, which sometimes makes it very difficult to do business, because first you must understand the target market, you must understand the business practices and you must understand the logic of the people and the and, and the thinking of the people. So that’s why we must educate the Hungarian companies which are interested in the US market. It’s not always necessary because there are very good companies in Hungary where the managers or the CEOs, studied in the United States so they know everything, but in most cases, you see a Hungarian companies as original Hungarian companies do not have such kind of connections with us, then it’s very difficult to understand how to do real business in the US market so we would like to educate these people to educate these companies through various channels, their own is that providing for these companies, education and resources at home in Hungary. So in Hungary there are many incubators or service providers who try to prepare these companies. For us entry that is not enough, in most cases is insufficient. So the next step is to bring these companies in the US, and to show them how does this work. One of the opportunities and, and this is a bright new development that could establish a so called business promotion and Development Center in Washington DC. It means that Hungarian companies can come to this location, and they will get some services from local product service providers so they educate them in marketing in selling practices and finances and things like that. So we would like to show them how does the US market is operating. The second thing is that we are trying to organize for them, various events, beach events, I would say that in most cases in person events, especially in our New York constantly prior to the crisis right, the virus came, then these are very very good and very successful because we have a wonderful location. We have wonderful food and wine, you know, are all of his fame. I’ve always been famous for providing very having to the counseling, and sometimes it’s a very good pairing of pitching competition. Plus, eating Hungarian food and drink in Hungary.
And during these events you can network a lot so what we did in the past was we try to regularly organize such kind of big events. Sometimes competitions but in, in other cases only showcases. So that’s, That’s, that’s, that was a very important part of our activity and I believe that after six or eight months we can return to the same person even here. We changed our strategy, due to the circumstances so we started to organize various online events and I think that these were very successful in this comparing to other countries, constantly consulates in New York City that we organize at least four or five such events, it means that we selected three or four companies and Hungary companies in various industries. And then we find we found us mentors like build like you and other very good people. And we organize these events, and short events, one, one hour event when the Valley companies could introduce themselves and they received some feedback from our mentors, and then there is a follow up process, which means that these mentors can start to work with these hanging around companies so that’s what we did in the in the past couple of months. So, this is the other area where we are very active. And the third area is related to Hungarian scientific diaspora and Hungarian business already operating in the United States because in the past several decades, a large number of Hungarians came to the United States, and they became very successful, either in sciences, or, or in or in the business, just to mention that the most recent very successful scientific achievement was related to the COVID-19 vaccine, because the Pfizer vaccine was based on a Hungarian scientific achievement caught on in Korea who is the person who invented the method of creating this vaccine so it’s it’s a great success for Hungarian science, I think. And there are many many more years we have science. Scientists like in the United States who are contributing to the development of science here in the United States when in the United States, who really invented sound. So we are collecting these people work together and we would like to include them into our activities in terms of business promotion in terms of scientific cooperation and things like that. So basically, these three fields, they are the most important in our activity investment promotion, plus the export the startup companies, and helping them to enter the US market, and the Hungarian scientific and business diaspora who are a kind of region between the two countries United States and Hungary.
Bill : That’s, I don’t know how you’re able to spend time with me today, you’re way too busy, you’ve got too much going on.
Tamas : Sure, sure. You know, one thing is that we have a lot of things to do, but the other thing is that we are enjoying it. Man, you’re enjoying what you do and you find time for them.
Bill : Good, there you go, well that’s good. So let’s kind of dive into a couple of things you talked about, I think, one that’s kind of interesting and, and also I think kind of informative to our audiences. So you obviously, you know, have led trade missions and brought companies into the US to tour and learn about our ecosystem here. Obviously, now you’re doing a lot of, as you mentioned, work vertic virtually to have these mentor sessions and sort of virtual pitch events and so on. So let’s maybe move the you know, play the movie forward six or 12 months when we’re able to travel again and we’ve all been vaccinated. Thanks to wonderful Hungarian science. And what, what do you imagine, you know, you know, let’s just assume were able to, you know, go to in person trade missions again and, you know, we’re sort of past this pandemic. How do you see an integrated approach and and being able to utilize some of what you’ve developed here during the pandemic in terms of the virtual interaction that you’ve created for companies to discover the US market, or do you see going back to totally in person what’s what, what do you envision in terms of your systems to to help Hungarian companies.
Tamas : Sure. This past year, we learned a lot. I think country discovered new opportunities as well because it turns out that using virtual environment can be very effective for certain activities, not for not for everything. But in the case of the startup companies and pitch compete competition, sometimes it’s a very good supplement or instrument to impersonate events. So I’m very happy that we did this in the past year because it maintained the continuous in stress. Korean companies in the US market and also needs to be provided a platform for their Hungarians and Americans could meet, and they started to get to know each other. So I think that it was a very important bridge. These virtual events between the two to two different worlds prior COVID writing and after COVID-19 Three. So, that’s why I found this very successful and very important achievement that we could do this during this pandemic time so what I expect now is really a kind of combination of activities. Because, as I mentioned that something can be done very efficiently, effectively through the internet and in the individual environment. And we also have very good partners in Hungary, which are very active in promoting Hungarian startups, you know very well the so called input program, which provides the advices, funding, and suggestions for Hungarian companies which are interested in the US market. And because there is a very big pressure on the Hungarian companies for internationalization, so I expect that the number of the companies, which would like to enter the US market will increase in the coming months, first because we maintain the your interest during this period. So there are already a lot of companies which are preparing to enter in person in the US market so they already started to learn a lot of Environment and the business circumstances. And there are a lot of companies like. And when demand pandemic is over and the inperson opportunities open and more cautious companies also become brave enough to come to the United States. I think that this combination of efforts will result in increasing number of companies which would come to the United States, which means that there will be, I believe, a lot of in person events coming. If everything goes well, of course, in terms of the vaccination. So I think that there will be a lot of Hungarian companies which will come to the United States next year. And regarding the industrial distribution of these companies. I think that everything which is related to COVID-19 implications, which, which might be education, which might be Hasker which might be financial sector which might be cybersecurity, so everything which is related to this, these companies will be very much interested in entering the US market because they will feel that there will be a growing demand for those products and companies which can handle these kind of crisis situations, not just now but in the future as well so leaders be prepared. So, they will feel, in my opinion, that there will be a continuously growing demand for these kind of products and, and services. So I think that there will be a kind of half the combination of virtual events and in person events, but the demand will be very high, to come to the stage, that’s what that is my feeling, and in my experience that, and I expect that it would this would happen.
Bill : That’s great. Well I hope our immigration policy gets back to a place where it’s easier and easier for companies to, to come in and for, and for people to move as, as it makes sense. So let’s maybe flip to the investment side and talk a little bit about the FDI and you’d mentioned that, you know there are a variety of industries that are very strong and hungry. Are there. Are there certain industries that you find either are in high demand now, in, in Hungary in terms of in terms of market entry, or, or ones that you know you find historically have been have been strong what are the what are the kind of the, the primary industries that are, are in demand right now for Hungary.
Tamas : Yeah. In the past, I would say in the past three decades after the systemic changes from socialist key market economies, a completely new economic structure developed in Hungary, so that’s, that’s first, which must be understood. And as a result of that now the structure of the economy is completely different compared to at 25, or 30 years ago. So, our major interest industry now is related to automotive industry in the sub, sub car industry. So we received a lot of German, Japanese and US investments in these fields, which means that we are very, very significant car manufacturers in the world. And it also means that the related indices also developed a lot, the subcontractor system has developed so there are very good companies which are in Hungary, which are able to do to supply parts or components for anything which is related to the car industry. And this car industry also relates to the higher education, because, you know, a lot of human resources are required, highly skilled engineers are required in this sector so it means also that this company started to support the Hungarian several Hungarian universities. So, the, there is the human resources available still in Hungary in, especially in engineering. So this is one very important theme. The other is related to, to do the half half car sector and Health Sciences. In Hungary, we have four very very good medical schools, which he in fact has very strong connects contacts with with US universities and viewers, the to the sector, no class because we have so called Hungarian Medical Association of America, in the United States which includes several hundreds of Hungarian born are Hungarian origin, doctors and medical providers so, so there is this is a sector which is also very important, which means that the medical device sector also quite developed in Hungary, so I would say that this everything which is related to the health care sector is also something which must attract the attention of potential investors, I believe. The third very important field that I would like to mention is related to the very new technologies, and this is partly related to the automotive industry because it’s related to automatization, which means that self driving cars, they have a very good, excellent. Test Facility in Hungary for automotive autonomous driving. And I think that this is something very unique, which also can attract us researchers in Hungary, so that’s that’s very important. The third, I would say it’s a completely different sector, which is the agricultural. So we have excellent opportunities and excellent, and moments of fertile soil and healthy food. So we are very famous for that. So the agricultural sector is something which is based more and more on organic food and organic production, which excludes genetically modified production which is not possible, by law in Hungary. So that’s a completely different field, but now it’s also very, very competitive. And also, it requires high technological level as well. So when we are talking about car industry and agriculture, the traditional sense was that, oh, it’s completely different because the car industry is high tech right the agriculture is not itself so low tech, it’s not true anymore, of course, so both sector both sectors are based on high tech technologies which is very very important. So I would say that we must mention the agricultural sector because it’s really really cool. There are a lot of other sectors, I would like the restroom bump or definitely. I was gonna say that it’s a sector, it’s an activity, it’s a kind of service, which is related to cybersecurity. You know, I’m Hungarians, not personally me but many Hungarians are very good at mathematics and logical thinking and things like that. For example, the, the operation on that thought of the computers were invented by a Hungarian friend the following month, when it was gravies in Princeton in fact. So, we were always very good in this kind of STEM sciences, the Hungarian young mathematicians are very famous and they always won the Bondi mathematical Olympics,
or in most cases they won. So they are very good than that. And it also relates to cyber security, which is currently a very important one. So if you ask, I think the real experts in the United States that who are the best in cybersecurity technology and logical thinking. I’m almost certain that they would mention Hungary as one of the top five countries in terms in this field. So this is another sector, it’s a very future oriented sector I think, and I believe which we have, you know, everybody knows that this kind of technological development that we are witnessing today are raising a lot of cybersecurity friends, which must be managed and I think that we Hungarian are very good position in terms of providing services in this field. So, these, this, this is just a kind of sample of industries, because there are many others. There you can find very competitive companies which might protect funding for example foreign directive foreign direct investment, and which would result in a very profitable business in the future. But, so if you, if any one of us is interested, just feel free to contact me I can provide a much more information about various sectors, and various opportunities and as I also mentioned to you that they are dedicated Hungarian organizations which are especially dealing with attracting foreign direct investment, so we have a lot of very good and very well present papers brochures presentations, which can be provided to potential investors, so I encourage everybody to contact us if, if you are interested in entering, not just the Hungarian market but the European market because, as I mentioned to you that it’s not just Hungary. It’s a European Union. In fact, where you can trade American travel and where you can invest very freely, especially after the travel bans are lifted up to a COVID-19
Bill : Yes, that’s no it’s it’s really amazing to see I mean for a country of 10 million people. The diversity of industry, and, and really the, the depth of expertise that’s, that is in Hungary. So yeah I’m just as you were talking I was thinking about your role and, you know, I guess in in US parlance, it seems like your role is in working with companies is much like a quarterback you are able to, already you have so many resources at your disposal either in helping companies go into hungry and the ecosystem there, or in helping Hungarian companies enter the US and and and the networks you’ve developed here is that is that a reasonable metaphor to sort of look at it as sort of the, the, the General. General Contractor of, of, sort of investment and and trade.
Tamas : I would say, a general information provider and network manager that center of the hub. Yeah something like that yeah so we have the, the information we have the contacts, and we have the network and what we do is to manage all these things at the same whenever somebody is interested in Hungary, they are able to provide either personally or through our partners in Hungary the necessary information. Whenever somebody from Hungary is interested in entering the US market, or trying to manage our network here, which includes various multiple service providers. So the must be able to provide them with the necessary information and network, and obviously after that it’s up to the companies to move forward. So what we can do is that creating the setting, as you said, setting the table. In a way, and then it’s up to the companies what to do, is that providing the information and providing the contact persons, and after the companies if they are thinking seriously, they should be able to develop further and should be able to find the right persons through this network through the key persons, and after that they can do business either attracting capital or selling products or elaborating a marketing plan or anything. So what we, we are here, we are supporting them. We are providing every possible way the resources and the information, and then they are still there in behind and we are very happy to hear the success stories.
Bill : Well, and that’s actually a perfect segue for where I’d like to go is to talk about, uh, you know, and maybe if you weren’t while I’m sort of introducing this think of a company that you’ve worked with, that has, has, whether it’s the they’ve gone from the US to hungry or hungry to the US. And, and done it really well, a company that you would see as sort of a blueprint for how to do it. It maybe you could tell us a little bit about what that company did that was different than maybe some of the companies that don’t do it so well, what, what are some of the things whether you know it was what the people did or their timing or what were some of the attributes that made that company’s internationalization, more successful than the normal or the average.
Tamas : Yeah. What is so that, in, in most cases, and I think that 90% of the success cases are the owners, or somebody at the company had already knew Who knew a lot about the US market, so the previous knowledge of the market was always very important. So the most success stories are were based on the previous knowledge of the owners or the managers, either because they studied in the United States, or because they already had some business contacts in the previous decades I would say, so that was always a very important point that they knew the market. It does not mean that companies which know the market would not be able to become successful, but they must understand that first they must learn. So it’s a kind of learning curve. So, the first step is, should be that they must understand the market, either because of they had already contacted the country, or they want to study this, they want to learn this, and they want to, to explore the market in terms how does it work. What are the prices, that’s very important, what costs they face. How can they settle in the United States. How can they open a bank account, so they must know all of these details, and they must understand the American business culture. So, in our experiences. After you know those companies were the most successful which done, they are, this kind of homework, either through their earlier contacts, or because they learned that, so that’s that’s I think that’s very important. The second point is the product. So if you want to sell something, which is worthless. It doesn’t matter who will give you a suggestion or advice, because then they wouldn’t be able to say that so the product is very important, it simply must reply to a real demand. I’ve mentioned here, a very interesting company, its course sign or sign or which is a company that tries to translate spoken text to the deaf, which means that they are using their hands and they are able to translate the text into written form. I think it’s an amazing initiative and amazing technology, and this company has worked so hard in the past three years in the United States. They step by step, entered into various universities where there are American sign language departments, and now they have more and more contracts in these kinds of companies, so they are here, but it’s a step by step project. So it’s very difficult and it requires a lot of efforts from their side. Obviously they have the capital because they, they, they are very promising, it means that they could, the secure, you’re the first round the second round the third round, so many many rounds of investments because the investors believe that, that definitely they must be very dedicated to the staff. So that’s the second point that you must have the product. You must have dedicated people, and you must have the capital and steer you must decide whether it’s worth enter the US market and spend a lot of money compared to other locations, that’s that’s a key question, you must answer to the question very clearly, clearly, is the US market is right for me or not, is the US markets really where I want to sell my products or it’s rather you will get market because it’s much easier for Hungarians, it’s very, it’s closer it cheaper you no matter what the culture. So that’s the second point that you must have the product and you must be. You must be read and not just as believed but you must know that this product can be served sold in the US market. So I think that this is the second very important point. And the third point, which I observed recently that sooner or later you must be here. You must be here so it’s not enough to, to sell your products, virtually, but you must somehow be based in the United States either establish establish a company or, or by a US company we also observed some kind of some examples run by the Hungarian
company in various sectors to simply mod, a US competitor for example and then market. So that’s, that’s also a very, very important thing that you must somehow, check your location in the US. Personally, this also means a lot of administrative barriers and a lot of costs. So that’s the, that’s the, it’s only the third step, I think that the first you must really know everything, so you must understand the market, you must understand your product, you must understand how can you sell this product in the market, and after that. Only after that, you must come to the US market. I saw several examples when various programs and we also try to do something similar through our through our Business Development Center in Washington that must show the market personality to this company so these somehow should elaborate the program, through which the companies can come to the United States spend three months, two months, learn about the market, and the in person. Person activity here, meeting the guys who are deciding here on finances or marketing or selling products and things like that. So, you must be here. And after that you can decide that, okay, this, this market is right for me and I can think in, in, relocating or creating a company in the United States. So I think that basically these are, these are the most important things that you must answer to these questions, you must have a product, you must understand that race market is right for you. And only after that you can be here. Personally, it’s my experience maybe some other concentrates or some other trade missions has different experiences because they might have different strategy or they might have different programs, but this is my, My experience.
Bill : Well it’s actually it’s interesting that you started with. I would I would position it as market knowledge or intelligence, and, and network, because at our at the expo we held in late October, we had several case studies that were presented, and 100% of the company executives that were sharing their case study started with network being the number one thing that helped them be successful in whether they were going from the US out or from an international company into the US 100% of their first, you know, sort of, first objective or first priority was building the network as they saw is the thing that made them most successful. So I think it fits in exactly to what you’re saying. And, you know, you have obviously many priorities looking ahead to the in the coming 12 and 24 months, are there particular connections or resources that you’re looking to connect to or that would be particularly helpful for you.
Tamas : In fact, yes. And this relates to a one time opportunity in every four years, it sounds very mysterious and now. You know, there is a country group in Central Europe which is called Visegrad Four countries, a regional kind of regional cooperation between four countries the Slovakia, Czech Republic, Poland and Hungary, and each of the country is the president of this group for one year and Hungary, they have become the president of this initiative. This tool, and it lasts for about a year. And always, during this period we want to promote the whole Russia graph for countries, but especially Hungary, obviously. So I think that there will be an increased demand from Hungary to come to the United States to show us. This is the real the, the platform where we can show our companies, show our experiences and resources so I think that there will be a very big demand from Hungarian companies to come to the United States beginning June this year. More at least one year so I think that we are going to organize, even more events in the in the coming years and probably be programs as well, which might include a short programs just a couple of days or two weeks or something like that, but I think that there will be several companies here and Hungary companies, which would require multiple and various services only for some of them only just the taste of the US market for others much more concrete plans, but I believe that this journey. This will generate a large demand from the Hungarian side, and we are, we are here. So we are definitely try to help them. And that’s why we also want to further strengthen our network here, which could include any kind of service provider, I would, I wouldn’t say now, only one kind of service or this kind of service because I don’t know at this stage because I don’t know the companies, but what I know is that there will be a lot of companies, and there will be a lot of events where I can, I would like to rely on you guys, and service providers. That’s why I would like to work still a lot on this network building with you and the other providers and other networks so that, that, that’s what I’m going to do in this first half of the year to preparing for these huge inflow, thank you.
Bill : That’s fantastic. Well this is, this has been really delightful commotion and I think our audience has gained a lot is there, is there anything in the end here that you’d like to share as a sort of a closing thought about maybe even looking ahead in terms of the, I think you’ve been very bullish in terms of your view in terms of the the opportunities to internationalize and, again, whether it’s companies going to Hungary or or Hungarian companies coming to the US but anything else that you’d like to share with the audience.
Tamas : I think that only one thing that I’m very happy to be involved in this network, for example, because you are the guys with whom I can work, you know and you are who can help me. In fact, so I’m utilizing your resources. In fact, because this is how can I provide some meaningful promotion to our companies and advices to our companies so you as a mentor or you as a service provider or subcontractor. So there are a lot of opportunities, I think ahead. And because I also see the, the, the demand from the Hungarian side as well. That’s why I expect this bones to become even stronger in the coming year. That’s my expectation and I will, of course,
Bill : fantastic. Oh well, it’s always delightful and certainly, please come back some time and give us some updates, we’d love to hear of your plans as as the, as it sounds like after the middle of the year after June, there’ll be additional opportunity and certainly we’d expect to be well vaccinated or or more vaccinated by June. So, almost a double opportunity in terms of the economy’s opening back up and then and then obviously your priorities and the influx you’re expecting so please come back and give us updates as you have them.
Tamas : Sure, thank you so much for your SEO. Thank you.
Bill : Yeah, Sounds good. Well, I’ll sign off for now and please join us on our next podcast, and in the meantime, just subscribe so that you get updated on all of our upcoming podcasts. Thanks so much.
Tamas : Thank you.