Entrepreneurship is considered an attractive and socially valued career path in Hungary, and the number of businesses has started to rise again, according to research by Global Entrepreneurship Monitor and Erste Bank sent to MTI on Wednesday.
Despite the turbulence of the past year, the public's assessment of the entrepreneurial climate in Hungary is basically stable, according to the latest data from the world's largest entrepreneurship survey, the Global Entrepreneurship Monitor, based on recent Hungarian data. As in the previous year, one in two people know someone who has started a business in the last two years, and almost as many (47.4%) think it is easy to start a business in Hungary.
At the same time, the share of those who think there are good opportunities to start a business in the next six months has fallen significantly from 36.5% to 27.2%. There are also more people who are deterred from starting a business by fear of failure, up to 43.5% from 38.2% last year, according to the survey, for which the Hungarian data was collected by the Budapest University of Economics and Business. The majority of Hungarians (64%) still think entrepreneurship is an attractive career path.
The survey also found that one in ten Hungarians plan to start a business (including self-employment) in the next three years. The proportion of those with an established but early-stage business is 9.9%, while the proportion of those with a so-called established business that has been paying wages continuously for at least 3.5 years is 6.9%. While these figures may seem low and the early-stage rate is indeed slightly below the international average, the share of established businesses is close to the international average.
The proportion of people leaving the business has also not changed significantly compared to the previous year. Family or personal reasons, the emergence of another job or business opportunity, or the effects of the crown virus epidemic were the most common reasons for exiting a business.
According to Erste Bank's research, most businesses started this year were in the construction, transport and services sectors. A quarter of Hungarian businesses are in agriculture, and 98% are micro-enterprises: operating with no or few employees. According to Erste's survey, they are the ones who do not advertise and their customer base is mostly shaped by their own personal network of contacts.
As the survey shows, last year's negative trend following the abolition of the flat tax on small businesses (kata) has been reversed this year, and the number of domestic businesses started to grow again in April. According to KSH data, there were 1,830,000 registered business organizations, while 579,000 sole proprietorships were in operation. In April, the number of business closures fell below 9,000, compared with double-digit rates in previous months, they said.
Erste's lending data also show that entrepreneurial sentiment is holding up: the stock of newly extended small business loans grew by 23% in the whole of last year, and the pace of expansion has not slowed significantly this year, with a 21% increase in the first quarter compared to last year.


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