The HFDA & ITM conducting policy consultations for the development of the fashion and design industry

The Hungarian Fashion & Design Agency has initiated policy discussions with the Ministry of Innovation and Technology to develop the sector. The Parties intend to promote the renewal of SMEs in the fashion and design industries by supporting technological developments. Their common goal is to strengthen the stability of the industry in the current changed economic setting and to promote the sector’s further development while taking into account its exceptional capabilities.

Globally, the pandemic has particularly affected the industry and its professionals. The Hungarian Fashion & Design Agency, an integrative, coordinating organization for those within the industry, has made the difficulties experienced by industry players visible through comprehensive research. Based on the results of the survey organised by the Agency, the HFDA communicated the needs of the sector to economic policymakers in the form of a proposal package. This move has resulted in a number of policy discussions between the Ministry of Innovation and Technology and the HFDA. The aim of the cooperation is for industry players to maintain their competitive domestic capacities and strengthen their ability to retain jobs and generate income.

The development of the sector is also of great importance for the economy as a whole, as it represents significant added value in terms of employment, and also plays an important role in the GDP, as an economic indicator worldwide. The sector is one of the largest employers in Hungary: it provides a livelihood for approximately 90-100 thousand people nationwide. It is estimated that the number of fashion and design SMEs affected is close to 12,000. Therefore, the fashion and design industry plays a significant role in employment at a regional level: in many regions classified as convergence regions[1], textile and clothing factories are at the forefront of job creation. The key position of the industry in employment is also well illustrated by its net income in relation to the entire corporate sector: according to the data of the Hungarian Central Statistical Office for 2017, the fashion industry employs 2.7 per cent of full-time employees, and the sector plays a high role in the employment of the population.

In addition to its significant role in employment, there is also significant potential in the distribution of fashion and design products - Due to the changes that have taken place in the past few months, the structural reorganisation has started worldwide within the sector, opening up new export opportunities for the Hungarian fashion and design industry.

“The income of those working in the sector is highly dependent on foreign orders and customers due to the scarcity of the domestic market. Based on our questionnaire survey, the number of companies actively exporting is estimated to be at around 3,000 and 81% per cent of the sector’s total revenue is from export. However, operating effectively in international markets is very much so tied to resources: major technological developments are needed to keep the industry competitive in the current changing economic climate. We have been working together closely with the experts of the Ministry of Innovation and Technology to ensure that the industry players receive all the necessary support for this - stated Zsófia Bata-Jakab, CEO of HFDA. ”

[1] Note: EU classification, GDP per capita in convergence regions is less than 75% of the EU average