Index – Opinion – What depends on success or failure in the global competition of the next decades?

What influences the rise or fall of countries in the global competition of the decades ahead? Looking beyond the daily political battle noise, what can be seen from the long-term processes determining the future of our region? And above all, how does Hungary stand based on the data?

In 2021, the Equilibrium Institute developed its own measurement method called the Megatrend Index in order to be able to measure and compare the most important economic, technological, environmental and social changes in our country and the EU as a whole. The index, published annually, examines the areas of education, digitalization, environmental protection, health, and social cohesion with the help of publicly available data (you can read more about the methodology and the detailed results of the research here).

Based on the aggregated data of the 2024 Megatrend Index, Sweden has maintained its first place among the EU member states since 2021 in terms of its results in the five major trends. The second place this year was Finland, and the third place was the Netherlands.

At the same time, it is a warning sign that we finished in last place among our own direct competitors, the Visegrad countries, between 2021 and 2024.

But what lies behind the aggregate results?

Education: shaky foundations

In the competition of developed countries, education and the general development of human resources play a bigger role than ever before – and this is especially true for countries that are small in size and poor in natural resources, like Hungary. In the knowledge-based economy of the 21st century, the key to success is the ability to continuously adapt and constantly renew. For this reason, the performance of education has a decisive influence on the development of all other defining trends – this is measured by the smart country sub-index of the Megatrend Index.

The latest PISA results have thoroughly rearranged the European rankings. In previous years, Denmark, Sweden and Finland typically competed for first place, but based on the latest data, only Sweden was able to maintain its outstanding position among the Scandinavian countries. In the first three places are the Swedes, the Slovenians and the Belgians – Hungary, on the other hand, is only in 20th place, and in addition, it has slipped three places in recent years.

In terms of spending on the education system, there is a decline in half of the EU countries, and unfortunately Hungary also belongs to this group. At the same time, our country is also in the last third of the EU according to the variables measuring the output results – that is, the performance of education. Overall, the statistics confirm that the Hungarian public education system is constantly losing its competitiveness in European and regional comparisons, which is due to the reduction of expenditures and the inefficient use of resources.

Digitization: exceptionally strong Hungarian infrastructure, weak competencies

In these decades, digitalization is creating radically new frameworks for global economic competition – this is why the Equilibrium Institute sees it as a trend of utmost importance. The Megatrend Index examines the development of state expenditures, infrastructure, and citizens’ digital competences at the same time, since only the joint development of these can outline a proportional development path.

From the Hungarian point of view, the latest figures can give cause for optimism: our country moved up five places and finished in 15th place. The main reason for this is that Hungary also has an advanced digital infrastructure at the EU level. During the period under review, we significantly improved the proportion of people with broadband (either wired or mobile) internet access, the proportion of people who use a computer with internet access for their work, and the proportion of people who make some kind of online purchase.

However, in the field of competences (in which Finland, the Netherlands and Denmark performed best), the situation is no longer so reassuring. Although this indicator also exceeds the EU average, it was still only enough for 15th place. If Hungary wants to break out of the middle field in the foreseeable future, it must improve its position primarily in terms of the proportion of people with basic or better digital skills.

Minimal noise pollution, sluggish climate control

The climate crisis and the destruction of the natural environment threaten people’s living conditions worldwide. It is no less important that the responses to these processes will radically transform all areas of our lives, including the global economic system, and that there will be winners as well as losers. For this reason, the Equilibrium Institute considers the integration of sustainability and environmental protection into everyday social life as a trend that decisively affects the competitiveness of countries.

In the ranking of the environmental protection sub-index this year, Sweden came first, Estonia second, and Italy third. Slovakia has improved the most since 2021: it improved thirteen places to 6th place. In the same period, Hungary moved up one position and finished in 20th place.

At the same time, our results in the indicators for the spread of renewable energy and organic agriculture are particularly weak. Although the country’s performance is gradually improving for most indicators, we still lag behind the EU competition.

If Hungary continues at the current pace the emission reduction necessary to achieve the 2050 climate neutrality goal included in the EU’s joint undertaking and in Hungary’s national climate law, then in the coming decades we will only be able to meet our objectives at a forced pace, at enormous economic and social costs. In this way, we will definitely be left out of the privileged circle of those who will get a favorable position in the new economic order.

Healthcare: the situation is worse in only one country

The general health status of people is perhaps the most important indicator of the well-being of a society, which also fundamentally determines long-term economic performance. This is especially true for Hungary, whose aging population decreases by around 40,000 people every year, meaning that fewer and fewer active workers have to support more and more inactive fellow citizens.

In this dimension, Sweden towers over the ranking: it retained its first place throughout the examined period. In second and third place are Ireland and Malta. Meanwhile, Hungary is 23rd, so we were only able to leave behind Romania, Croatia, Lithuania and Latvia – moreover, in the following years, due to the small difference, the Romanians and Croatians can easily overtake us. Although regular alcohol consumption, measured in pure alcohol, decreased somewhat during the examined period, as did the proportion of regular smokers, our data on the number of deaths from preventable diseases as a proportion of the population deteriorated: within the EU, Hungary has the second worst result.

Social cohesion: the suicide rate is alarmingly high

Based on the research, it is clear that social stability, a healthy sense of community and sense of belonging, and the general mental state of a nation are competitive advantages that can be expressed in money. This is why the Equilibrium Institute considers social cohesion to be a determining factor, which states must also strengthen by all means. This feeling of orderliness is made up of a great variety of factors, so the social cohesion sub-index of the Megatrend Index takes into account, among many others, data such as the level of inequality, the number of suicides or the state of public safety.

In terms of social cohesion, Slovenia, Austria and Cyprus occupy the first three places. Although Hungary belongs to the bottom of the middle field in this dimension as well, in recent years it has progressed above the EU average: since 2021, it has advanced three places to 16th place, in the same league as the Finns and the Germans. At the same time, our own direct competitors, the Visegrád countries, are also well ahead of us in this regard.

If we are looking for opportunities for development, the data that deserves the most attention is that

– this refers both to the poor state of Hungarians’ mental health and to the much-mentioned shortcomings of the care system. The improvement in our ranking is mainly due to the fact that, compared to other European countries, income differences are particularly low, or that the number of children under the age of 15 who live in a household with no active earner is decreasing. In addition to all this, the number of robberies per 100,000 people is the second lowest in Hungary – only Slovakia registered less.

Medium, but not hopeless: Hungary on the Megatrend Index

From the 2024 Megatrend Index values ​​of our country, a picture emerges of a country that is not in a tragic situation, but is unable to break out of the trap of mediocrity, lagging behind not only the old, more developed EU member states, but also, more importantly, our direct competitors with similar characteristics to ours. . Among the Visegrád countries, we can stand out only in the field of digitization: we achieved the second highest index score after the Czech Republic.

As for the other Visegrád countries: the Czech Republic is also at the top in the dimensions of social cohesion, digitalization and healthcare, while Poland came first in the field of education and Slovakia in the field of environmental protection.

However, there is also a positive lesson from the measurement with a European perspective: the positions occupied in the ranking are not predetermined, long-term political action does matter. This is evidenced, for example, by the spectacular progress of Slovenia and Estonia, as well as the decline of Italy and Germany: the former improved six places each, while the latter decreased four places each compared to their results in 2021. It is clear from all of this: although there is no doubt that the endowments and historical heritage matter, good policy interventions can achieve unexpectedly fast results. And from the data it is also clear where we need to work.

The two authors are Gábor Filippov, research director of the Equilibrium Institute, and Marek Bertram, analyst of the Equilibrium Institute.

(Cover photo: Gábor Filippov on November 5, 2021. Photo: Patrícia Bodnár / Index)