The BASF Hungária Entrepreneurs Forum, initiated by BASF Hungária Kft. with significant help from Harald Schwager, member of the board of directors of BASF SE, and Thomas Narbeshuber, CEO of BASF Hungária Kft., took place in mid-October.
István Lepcsény, the State Secretary at the Ministry of National Economy, and Róbert Ésik, the president of the Hungarian Investment Promotion Agency (HIPA), participated from the government side. The German Embassy was represented by Ambassador to Hungary Dr. Heinz-Peter Behr.
Also present were some CEOs from companies in the chemical, automotive and energy sectors that are represented in Hungary. As CEO of BASF Hungária and leader responsible for South-Eastern Europe, Narbeshuber’s specific reason for organising the forum was that Harald Schwager, the president of BASF SE, was visiting Hungary.
A second reason was that Narbeshuber thought such an initiative could contribute to stopping the European economy falling behind other regions in research and development. One reason for this decline is attributed to the very diverse approaches in R&D. While the USA focuses on opportunities for innovation, European legislation concentrates more on possible risks.
“We have slowly forgotten to speak about opportunities,” Schwager says.
Europe risking its innovation hub role
In the meantime the European circumstances have changed to such an extent that the BASF president expressed his concerns that BASF and other innovative companies might have to opt for other countries or regions outside Europe as innovation hubs. This would mean that employment opportunities that could have been created in Europe if the circumstances had been right would be created somewhere else.
Several multinational companies present in Europe have written to European Commission President Jean-Claude Juncker to ask for a change in the legislative practice, and suggesting that higher emphasis is placed on the so-called innovation principle.
“The essence of the innovation principle is that the impact on innovative issues is taken into account by every single legislative step,” Schwager explained. “This is exactly what would be needed in order for Europe not to lose further competitiveness in the global competition.”
At the same time he reminded the audience that Europe is predestined to make its “brains” its main advantage, since the territory is poor in raw materials. In order to be able to advocate the realisation of the innovation principle to Brussels even more effectively, they would need to describe the targeted and expected achievements of innovations in an even more detailed way.
A forum participant underlined: “Real innovations are solving problems.” She pleaded for innovations to always be supported by a solid plan and a similar business model.
Problem not only for chemical industry
Narbeshuber clarified: “It’s important to underline that this problem is not only one for the chemical industry, it affects all the innovative branches ranging from the pharmaceutical industry and the development of new substances to the automotive sector and the development of autonomy driving.” Thus it was important for him that not only representatives from the chemical industry participate at the forum.
It would be important for all the impacted companies to fight for a change in the approach of the European legislators, he said. “It’s crucial for the success of our efforts that the sensitivity of this subject is recognised throughout all the EU member countries.”
Narbeshuber said the role of individual countries and legislators is absolutely important too. “They are able to accelerate, slow down or even completely stop the innovative processes at the companies.”
It would be equally important that all the countries take their part in shaping the future conditions in Europe in this topic too in a responsible way. “The European Union, meaning us and all the member countries,” he said.
Concerning the possible influence on a change in the future EU legislation processes, this relied especially on those countries with an industrial and innovative backbone, particularly Hungary because it was a really innovation-friendly location.
“Hungarians are well-educated people,” Narbeshuber concluded after his 30-months experience in the country. His statement that “education leads to innovation” emphasised his point.
For a stronger consideration of benefits for the national economy
The approach whereby some countries are motivated to keep closer control on their representatives in Brussels when considering more innovation-friendly legislation has probably not been so widespread practice so far as well.
Another participant at the forum said he believed that the decision-makers in Brussels were so overburdened by passing laws that they rather voted as the majority does in doubtful cases. Moreover, past practice proved that the legislators were more likely to accept those options laid before them by the loudest NGOs, to the disadvantage of the economic opportunities that might have opened up.
One participant said innovation-friendly legislation could also be hampered by counter-productive fact. In the past, countries had handed in legislative initiatives concerning certain branches when those branches were not really or only marginally present.
The Budapest Times questioned whether a stronger representation of the innovation principle might lead to higher risks for consumers, to which Narbeshuber replied that this should not be the case at all. He pointed out among other things the Volkswagen diesel scandal, where it had surfaced again that the US legislation was very strict about product liability.
Harsh economic consequences in the USA meant that companies operating there would do everything in their own best interests to avoid being penalised. “In principle this is about placing more emphasis on the own responsibility of the companies.”
At the same time this gave more space to act on creative and innovation potential, which was exactly the thing so urgently needed in Europe.