INSTITUTIONAL SUPPORT FOR TECHNOLOGICAL IMPROVEMENT - THE CASE OF HUNGARY

The technological ''time warp'' in which Hungary, like other Central a nd Eastern European countries, has found itself since the 1950s is at an end. This article concentrates on the transformation of institution al structures that support innovation and industrial technological dev elopment. First, it summarizes the types of institutions that support technological development. In a market economy, the process of generat ion and diffusion of innovation largely depends on the institutional a nd economic structure of the country. In a narrower sense, those insti tutions might be included in this group whose aim is wholly or in part to assist firms in experimenting with, understanding, and implementin g new products and new production processes and improving quality. Thi s article then details forms of inter-firm cooperation and highlights some empirical research findings based on three sectors-the pharmaceut ical, machine tool, and car parts industries - which represent three d ifferent cases in the restructuring of Hungarian manufacturing. The ma in lesson of the study is that industry during its redeployment can cr eate few demands for technology development institutes. Because of inh erited structure, the accumulated knowledge of existing institutes and the supply and scattered demand of industry for technological support do not regularly coincide.