Automotriz

Out of the 98 social enterprises interviewed during the research project, 34 enterprises are located in Budapest, and another 12 are located in the county of Pest (or region of central Hungary), which seems reasonable, since almost 30% of the Hungarian population lives in this area⁷³. Budapest is the economic centre of the country. All branches of its economy, except agriculture, have national significance. The economic structure in Budapest has undergone a fundamental transformation. The changes in the sectoral structure of the economy are characterised by a decreasing importance of manufacturing segments (especially industry and the building industry) in favour of services⁷⁴. Most social enterprises that operate across the country or are internationally active but have Hungarian headquarters opt for an office in Budapest for a number of reasons: Budapest has a more developed infrastructure compared with the rest of the country. It is from here that the rail and road networks branch out, linking the counties and Europe's larger cities to Hungary. Moreover, Budapest offers dynamic business, financial services and trade sectors, with foreign investments being mainly directed to the services sector⁷⁵. With regards to enterprise support, Budapest gives priority to the promotion of small and medium-sized enterprises. There are several foundations based in Budapest which were established in order to encourage the formation and development of small and medium-sized enterprises. Also, there are special financing facilities for enterprises in Budapest⁷⁶.

Based on the research sample, the social enterprises located in Budapest have a variety of social goals: 26% of the companies in the sample operate in the business activities sector, e.g.

green companies or promoting sustainable development, 24% work in the education sector and a further 13% offer services in the health and social work sector – helping children or the underprivileged as a whole. Other social enterprises based in Budapest aim to promote democracy, tolerance and individual responsibility or liberal ideas. This is important, because most social enterprises in Hungary that are located in less fortunate parts of the country

Among all Eastern and Central European countries, Hungary suffered one of the worst consequences of the global economic slowdown set off by the financial crisis of 2008 (Bocian & Sadowski, 2008). Economic activity in Hungary started to contract at the end of 2008. This was mainly due to Hungary’s high foreign debt, which deepened the country's dependence on the situation of markets worldwide and to the crisis in public finances which has been ongoing since 2006 (CESifo, 2012). The worsening economic situation and the austerity measures introduced by the Hungarian government led to an increasing unemployment rate (from 7.5% at the beginning of 2007 to 11.8% by April 2010). The cuts in public spending worsened the social situation of vulnerable groups in Hungary, e.g.

permanently unemployed and Roma population, and led to a significant impoverishment of a considerable proportion of the population (Farkas, 2010). Due to the socio-economic circumstances, there is a high demand for new solutions to social problems.

However, so far the concept of social enterprise is still unfamiliar to most Hungarians.

According to Toth et al. (2011), the sustainability of the Hungarian civil society is at risk, as most civil society organisations focusing on employing people with disabilities or people from other marginalised groups are dependent on one or very few financial resources. This hinders their ability to sustainably solve critical social problems. Non-profit organisations realise the need to diversify their funding resources, but only a few accomplish this, especially by means of carefully planned and deliberately implemented entrepreneurial activities. The main problem of most organisations and individuals planning to launch a social enterprise is the absence of an enabling environment or a well established support infrastructure (Toth et al., 2011).

Another overrepresented area in the survey is the county of Szabolcs-Szatmár-Bereg. 16% of the sample is based in this region, whereby most social enterprises are located in the centre of the county, namely in the city Nyíregyháza. Nyíregyháza is the 7th largest city in the country, with a population of approximately 118,000 inhabitants and is the centre of the eastern county that is home to just 5.7% of the Hungarian population. Szabolcs-Szatmár-Bereg county is the poorest in Hungary, with many social problems including high unemployment, lack of a well-trained workforce and insufficient investment in the region. The population in this region strongly depends on aid and subsidies from the central government. Due to the various socio-economic problems, this specific region has a high demand for social enterprises and non-profit organisations, in particular those offering services to help the poor, providing job opportunities (or helping to find jobs) and educating the very disadvantaged

children, especially those of the Roma minority. 62% of social enterprises based in Szabolcs-Szatmár-Bereg operate either in the health and social work sector or offer education services.

All the other social enterprises in the survey are scattered evenly across the country, but there are a few smaller differences. The southern city of Pécs is home to 6 social enterprises, the county of Somogy (with the county capital Kaposvár) also hosts 4 social enterprises, which seems a bit more than average. However, this small anomaly is most likely due to the method of RDS. Since most companies in the region know other near-by companies best (also, because their work is closely related), they sometimes tend to refer to social enterprises in the same region, mostly in the same city.

Figure 24 Geographical location of the SELUSI dataset in Hungary.