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Negotiating for a competitive fashion and design industry

The Hungarian Fashion and Design Agency (HFDA) initiated a policy discussion with the Ministry for Innovation and Technology for the development of the sector: they wish to promote the renewal of small and medium businesses in the fashion and design industry by supporting technological developments. Their goal is to strengthen the stability of the industry in the changed economic situation, in parallel to promoting the further development of the sector.

The players of the industry were hit especially hard by the pandemic: the integrative and coordinating organization of the field, the Hungarian Fashion and Design Agency made the hardships experienced by them visible with the help of a comprehensive survey. They conveyed the needs of the sector to the decision makers of economic policy in the form of a proposal package prepared based on the results of the survey. This step resulted in a policy discussion between the Ministry for Innovation and Technology and the HFDA. The aim of the cooperation is to allow entities to preserve their competitive domestic capacities and to reinforce their ability of maintaining workplaces and generating revenues.

The development of the sector is extremely important for the entire economy, as well, as it represents a massive added value in employment and the GDP, too. The fashion industry is one of the biggest employers of Hungary: it provides a living for approximately 90-100,000 workers across the country, and according to estimates, the number of small and medium businesses operating on or in relation to the field of fashion and design approaches 12,000.

The fashion and design industry also has a major role in employment on a regional level: the textile and clothing industry factories are leading in job creation in many areas qualified as convergence regions. The sector’s flagship position in employment is well represented by its net revenue compared to the entire corporate sector: according to the data of the Hungarian Central Statistical Office, the fashion industry employs 2.7% of full time workers, and the sector plays a crucial role in employing the population. 

In addition to its central role in employment, there is also a major potential in the distribution of fashion and design industry goods. Structural changes commenced in the sector on a global level in the face of the circumstances seen in the past months, which opened new export opportunities for the Hungarian fashion and design industry.

“The earnings of those working in the sector depend on foreign clients immensely due to the scarcity of the market. According to the findings of our survey, the number of businesses exporting actively is around three thousand. 81% of the total revenues of the sector come from export. However, successful operation on international markets requires great resources: massive technological developments are needed to allow the entities of the sector to preserve their competitiveness also in the changed economic situation. With the experts of the Ministry for Innovation and Technology, we have been working on providing all necessary support to the players of the sector for a long time” –  told us Zsófia Bata-Jakab, the leader of HFDA in relation to the negotiations. 

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