In his follow-up study to an earlier one written in 1997, the author draws on analysing and interpreting professional literature of the last four years to tackle a number of questions. These and the provisional answers to them are as follows:

Has the process of shrinkage in R&D and innovation capacity stopped yet? The accessible statistics lead to the conclusion that the real value of the corporate R&D by firms has stabilized, at a rather low level of about a third of its value ten years ago.

What role do wholly foreign-owned and joint ventures play in this? Has technical development strengthened at foreign-owned firms? Both Hungarian-owned companies and those in partial or total foreign ownership have created small, R&D-intensive groups. The subsidiaries of foreign companies, relying on the existing intellectual capacities of companies sold to them by privatization, maintain smaller researcher groups dealing with product development and adaptation, and with the general technical field belonging to the company's profile. Some of these companies have come to recognize that it would be unwise to let the accumulated specialist knowledge go to waste. Moreover, some investments with expressly R&D aims have been made recently, mainly in telecommunication and software development. Despite all these facts, it is not possible to speak of a breakthrough. Relatively few foreign-owned companies are involved. Surveys in recent years have found a lower proportion of wholly or partly foreign-owned ventures R&D-intensive than was the case in 1994.

How should the widening relations of multinationals and Hungarian research institutions be interpreted? News of this kind proved to refer to isolated instances or to conceal some other event in the background. Multinationals are only giving out considerably more orders for examinations and the issue of certificates required for official licences. Only a tenth of the revenue of industrial research institutes comes from corporate research orders.

Is the contribution made to techno- logical renewal by supply and subcontracting activity increasing? Do certain favourable examples that have become widely known indicate a new period? The surveys of recent years suggest slow growth in the supply contribution of Hungarian-owned companies in certain sectors and in certain regions. This, however, is not at all general. According to estimates, plants doing mass production and having been established by greenfield foreign investments, including the basic public services as well, buy about one tenth of their input from Hungarian companies. The surveys also confirm that the technical help of those ordering the supply generally still brings an improvement in the quality-control and information system and concerns only to a small extent production technology. Thus one can hardly speak of a new era...