Professional services to strengthen competitiveness

The request addresses a crucial problem of the Hungarian service sector, i.e. excessive regulatory requirements for professionals to offer their services. These include entry barriers, mandatory memberships, fixed prices, reduction in entrepreneurial freedom, bans on advertising, direct and indirect territorial barriers, or even the emergence of foreign service providers.

Context

Professional services play an important role in the economy, often appearing as a link between the state and the private sector. There are significant administrative burdens and strict regulations in these sectors. These include entry barriers, mandatory memberships, fixed prices, reductions in entrepreneurial freedom, bans on advertising, direct and indirect territorial barriers, or even the emergence of foreign service providers. These regulations restrict competition between service providers, impede the efficient allocation of factors of production and the incentive to innovate and increase quality. Additionally, there are also strong territorial disparities in the quality and coverage of individual services. The restrictions introduced also reduce trade in services in the single market, which remains lagging behind. 

Support Delivered

The support required is three-fold: (i) establishing the impact of the current regulatory requirements for the regulated services/professions with the highest economic potential; (ii) a technical survey identifying the restrictive regulatory elements for selected sectors; (iii) an action plan to help introducing the relevant changes identified during the survey.

Result achieved

Through the technical support projects, the current obstacles to the competitiveness of regulated professions were assessed. Targeted regulated professions included public notaries, public patent, attorneys, accountants, tax advisors and auditors.  The barriers identified were non-regulatory ones. A special emphasis was given to digitalisation/ automation of processes, registries, education/training. Workshops took place with the main stakeholders to prioritise the identified obstacles and start designing solutions to the most critical ones. The works focused on 4 main areas with an action plan delivered, which detailed each of them: (i) promoting alternative dispute resolution methods for SMEs, (ii) developing an online platform to facilitate SMEs’ access to relevant accounting and tax advisory services; (iii) electronic document handling, and (iv) remote administration processes. Two closing workshops aiming at sharing knowledge and presenting the action plan were successfully organised.

In the medium term, the project is expected to (i) enhance the use of alternative dispute resolution, (ii) support the access of SMEs to financial services providers through an online platform, (iii) development e-document handling. In fine, this should strengthen the competitiveness of SMEs in Hungary. 

More about the project

You can read the documents related to the project here: