ABSTRACT

This chapter aims to provide the impact of liberalization and privatization on the industrial technological capacity in a formerly centrally planned economy, with Hungary as a case. It outlines the general features of Hungarian industrialization between 1948-89 which are of special relevance for the research project. The chapter analyses the micro level technology changes, presents an analysis of the changes in trade structure and in interfirm relations, and discusses infrastructural barriers to technological innovation. The study of technology change in Hungarian industry is based on qualitative interviews in twenty production companies involved in machine building and food processing. The food producing companies which sell their products mainly in Hungary feel the changes mainly as a decrease in the size of Hungarian customers. Concepts of 'the technological capacity of society' and Porter's Diamond inspired the approach which focuses on qualitative aspects of technology change. Economic development is a result of changes in many different areas of society.