1. The level of economic development of modern Hungary after the turn of the century and its integration into Europe, the quality of life of its citizens and their sense of national identity depend substantially on the standards and dynamism of education, culture and science.

The prestige of knowledge, however, is very low in Hungary today; highly qualified employees are particularly underappreciated in the public sector and, as a number of surveys indicate, badly underpaid. The general public is also oblivious to the benefits of science and culture. One of the key tasks of modernisation is, therefore, to foster a more positive attitude to knowledge as the driving engine of modern, information societies, if possible in the course of the next decade, and to persuade people that permanent self-education, the culture of civil society and a higher level of education are of fundamental personal interest. In the course of modernisation, the reduction of the risk of marginalisation and the chances of improvement for individuals and families may equally be linked to the attainment of higher qualifications.

While it has already been accepted in Hungary that development of the material infrastructure is an issue of strategic importance, a similar breakthrough is now required in respect of the intellectual infrastructure. The modernisation programme seeks to break with the so-called 'residue principle', that is, the notion that the cultural or intellectual sector is 'not productive ' and that the modernisation of the economy should take priority. The state has a decisive role to play in the gradual transformation of current habits and attitudes, even under market conditions in which the private economy must be allowed to flourish. The present government and its successors have a tremendous responsibility to foster both a deliberate and increasing appreciation of education and science among the general public and a modernisation process centred on human resources.

2. The Long-term Economic Benefits of Cultural Modernisation

· If the purposeful development of human capital is given priority in Hungary, its economic competitiveness will also be enhanced and modernisation will obtain cultural and scientific foundations taken in a general sense.

· Excessive polarisation between individual regions and social strata, extreme income differentials and impoverishment not only create inequality of opportunity in culture, they can also impede economic recovery and modernisation.

· The expansion of secondary and adult education is a much more up-to-date and cost-effective way of managing unemployment - particularly among young people - than the provision of aid; labour market flexibility, opportunities for innovation and the conditions of a democratic political culture will also substantially improve through education.

3. The modernisation of the economy will take place primarily through international integration, the import of new technology and the attraction of direct foreign investment. Because of this, when outlining the development trends of Hungarian intellectual capital over the coming decade, we need to start out from the fact that:

- Although the size of the Hungarian market is an unfavourable factor, the country may become the centre of the entire Central and East European region in a number of sectors, provided that our infrastructure and the qualifications of the labour force are adequate;

- Political stability and calculable conditions presuppose a political and economic life free of extremism and subject to the 'European-style' management of social conflict. This largely depends on the stability of parliamentary democracy, the expansion of civil society and so on the development of general education and Hungarian political culture.

4. Social modernisation presupposes a significant transformation of the life models and practices passed down by parents and small communities to the younger generation. The passage from one world historical era to another expressed in the transition has frequently led to severe psychological and emotional adjustment problems among today's parents and grandparents, which are manifested, among other things, in various forms of self-destructive lifestyle. The comprehensive reform of the education and training system must be directed above all at enabling the young to become motivated by the positive values of the evolving social order, helping them to acquire the skills necessary to assert themselves and successfully to manage social and other conflicts. A social market economy and parliamentary democracy require the growth of new generations capable of enforcing their own interests independently outside the all-embracing care of the state, and equally capable of recognising the right of others to do the same.

5. Strategies in Education

· The development of education, the elevation of the level of skills and knowledge of coming generations are decisive factors in economic growth and social and economic modernisation. Because of this, we regard the development of education as a particularly important instrument for enhancing intellectual capital. We wish to determine the main directions, objectives and tasks entailed by development of the education system on the basis of a strategic conception embracing public education, vocational training and higher education. In the course of this, while safeguarding positive national characteristics, we intend to incorporate fully international tendencies in education and the requirements of European integration, aiming at the international acknowledgement and convertibility of Hungarian qualifications. We also regard pre-school education as an organic part of the public education system. It has an increasing role in the development of the skills and capabilities of children, particularly in respect of its ability to assist children in reduced circumstances to catch up with others.

· In public education, our fundamental objective is to extend primary school education to ten years, which would correspond to the period of mandatory schooling, and gradually to increase the proportion of those participating in secondary education. The ultimate goal is that school education be fully enforced for the 14-16-year-old age-group and that 75-80 per cent of the 10-18-year-old age-group participate in secondary education leading to a high school diploma within a decade. To that end, we wish to develop an open democratic school structure in the future which, excluding segregation, early selection and premature choice of career, will enable students to meet their schooling obligation, extend secondary education and better utilise available capacities. The long-term objective is to make 12 years of schooling general.

· The attainment of this objective is inseparable from the reduction of inequalities of opportunity of a social nature using the instruments of education and social policy and from the establishment of conditions facilitating further training and education for young people in deprived circumstances. With respect to children belonging to ethnic minorities, we shall employ positive discrimination in their schooling and upbringing. In order to guarantee education for those who want it, we wish to maintain free state education at least until the sitting of the secondary school diploma examination and, in the case of vocational training, until the acquisition of the first vocational skills.

· Another important objective is modernisation of the content and methodology of education, entailing the continuous review of curricula and the modernisation of training methods (with special emphasis on development of the skills and capabilities of students, learning in study groups and the use of a wide range of teaching methods). We intend to pay great attention to the improvement of students' communication skills, to raising the standard of modern language training, to the humanities and to teaching mathematics and information science in a more efficient manner. We wish to link the qualifications that can be obtained in the various types of school to objective criteria which can also be measured internationally. We shall facilitate the necessary unity of the content of education by issuing the national core curriculum and we shall see that its requirements are being met by means of state examinations (ordinary and advanced level). The national core curriculum will specify about 50-70 per cent of what each student will be required to know, ensuring considerable scope for schools and teachers to determine both content and methodology.

· The staffing conditions proper to the modernisation of public education shall be established through the qualitative development of teacher training: the period of study for lower primary school teachers shall be increased to four years, with a shift to a five-year period of teacher training overall. We also intend to pay great attention to the intensive further training of teachers, and to that end shall set up a comprehensive system. We shall ensure the financial conditions necessary for modernisation by introducing a new system of public education financing utilising financial norms, determined on the basis of actual teaching load.

· We believe that children should commence vocational training and make the related career choice only from the age of 16. The vocational structure of such training will be transformed in accordance with economic policy objectives and labour market projections, developing training profiles of a more comprehensive nature. When modernising the content of vocational training, we shall endeavour to meet the requirements of technical and technological development. Labour market and employment policy considerations render the extension of post-secondary school training a particularly important task, along with the building up of an adult education, further training and retraining system flexibly adjusted to the changes that have taken place in the labour market since the transition got under way. We believe that the role of the business sector in vocational training should greatly increase; it should be encouraged to recognise the importance of such training for its own prosperity and enabled to make its needs known.

· Because of the extremely large number of young people who will wish to participate in higher education as the demographic wave peaks, the need to reduce unemployment in these age groups and the better labour market opportunities of those with higher qualifications, one of the main objectives of higher education development in the next few years will be to increase the number of student admissions. After the demographic wave has ebbed, the growth rate in the number of students will diminish; the necessary recruitment base for higher education can be guaranteed only through growth in secondary education under conditions of a major demographic decline. We consider it a realistic objective that the proportion of regular students - also including those participating in post-secondary training at institutions of higher education - be increased to one-third of the relevant age group by the turn of the century and thereafter exceed it. The number of students should be increased primarily at college level and in post-secondary training offering shorter courses in order to ensure higher quality and to match current higher education capacities. The number of those studying the following subjects should increased: economics, law, information technology, paramedicine, modern language teaching and the provision of social and other human services.

· In the course of transforming the structure of training, we aim to further diversify higher education, to expand the supply of training in accordance with market demand and, depending on the nature of the discipline, to expand multi-level training. We take the view that the primary task of curriculum modernisation is to enhance students' independence and creativity; to that end, we intend to reduce the number of prescribed lectures and to increase the proportion of independently produced coursework with a view to individualising Hungarian education. The development of a credit system is an important condition of the modernisation of the training process, bringing more flexibility and openness to it. Besides full-time (regular) education, we are also committed to the development of part-time education and training (evening, correspondence, distance-learning courses). Such training has an important part to play in expanding the possibilities of further training, the facilitation of social mobility and the further training and retraining of experts who already have high qualifications. At the same time, it is necessary to improve substantially the standard of such training, utilising more modern forms and methods.

· One of the principal functions of higher education institutions is academic research. In Hungary, institutions of higher education constitute the main base of such research. Pure research and research of an interdisciplinary nature constitute important tasks of the universities, but the expansion of applied and development-oriented research is also warranted in a number of institutions and faculties. With a view to the European integration of research work conducted in institutions of higher education, the development and extension of international scientific contacts, participation in international research projects and the mobility of teachers take on ever greater significance. The main problems facing the development of research work in institutions of higher education are staff recruitment and establishment of the appropriate financial and organisational conditions; to that end, priority support must be given to secondary schools with a scientific orientation, to promote scientific recruitment within the framework of doctoral education, gradually to increase the financial support of scientific research from various sources and to develop a rational organisational framework for university research.

· In order to reduce fragmentation in higher education, to alleviate the detrimental consequences of such fragmentation and to make concentrated use of the available intellectual and financial resources, we wish to encourage the development of multi-disciplinary universities embracing a wide range of faculties and disciplines and of integrated colleges with wider training profiles, as well as the establishment of associations and alliances of institutions of higher education to facilitate their effective operation. We regard close co-operation in teaching and research between universities and research institutions as highly desirable, in various forms (integration, association, joint faculties, research groups, research projects, etc.). The coming into being of larger institutions of higher education also entails the modernisation of the organisational and management structures of such institutions.

· Establishment of the necessary staffing conditions is an important element in the modernisation of higher education. Our principal aim in this regard is to raise the standard of teaching, giving priority to the scheduled succession of university professors (for example, we intend to make possible longer periods of creative leave - so-called sabbaticals - as well as longer foreign study trips, and to expand the post-doctoral scholarship system), the involvement of a wider range of highly qualified external experts in education and the development of a new, flexible wage system based on the evaluation of teaching and research work, making it possible to raise wages in accordance with an individual's attainments.

· We also wish to ensure the financial well-being of higher education modernisation. While the state budget will continue to guarantee expenditure on state institutions of higher education - and expenditure in real terms will increase from the end of the 1990s - it will be increasingly necessary to draw on other financial sources, not only proportionately but in absolute terms. We shall seek to engineer a shift to the determination of expenditure on training and, partially, on maintenance on the basis of norms. By eliminating unwarranted financial constraints, we shall promote the economic independence of institutions of higher education, and by more vigorously enforcing professional and economic rationality, we aim to improve management efficiency. In the longer term, we intend to let some institutions of higher education function as public foundations.

6. Supporting Cultural Values and Self-education

· Hungarian cultural life, the enrichment of both universally and domestically oriented national culture and the reduction of cultural inequalities will be important social and political objectives of the coming decades. The democratic enforcement of an approach to cultural concerns emphasising pluralism as regards genres, attitudes and tastes, yet based on Hungarian traditions, can contribute to their achievement.

· The traditionally fine art and literature-centred structure of Hungarian elite culture is undergoing a transformation in favour of the modern natural sciences and media culture without, however, devaluing national cultural traditions as such. Nevertheless, we can expect that a number of social groups will be forced to continue to reduce their cultural consumption in the coming years due to straightened economic circumstances. Partly because of this, universal recognition that libraries, adult training and the national and local mass media (radio and television), among other things, are public services, and that they should continue to be supported by the state as specified by law, is indispensable.

Taking the requirements of social modernisation at all levels as the point of departure, selective institutional development is needed in state financial support of the cultural sphere, which may bring about perceptible improvements in the institutional structure within 5-10 years. Such support is concomitant with reasonable economies and the transfer of a substantial portion of tasks currently performed by the state to non-profit organisations, foundations, and voluntary community groups.

· Adult training and education are crucial elements of employment policy. In addition to market regulation, the state may contribute to the efficient building up and operation of this sector through scholarships, support for retraining and language learning, vocational orientation (not implying the provision of concrete jobs) and the unambiguous enforcement of quality and qualification requirements.

· Although cultural life and free education outside school may function partly on a business basis, the basic services of the various local and national cultural institutions, art and leisure centres must continue to be financed and even developed from state and municipal funds. The protection and development of public libraries in towns, villages and schools and of the major national (scientific, university, etc.) libraries is a strategic issue, apart from anything else because many indispensable manuals and textbooks are accessible to many only here, a situation which is only likely to consolidate in the future. Library modernisation in a technical sense - especially as far as computerised information systems within and outside the country is concerned - is not only a requirement of Hungarian culture and education, but both a possibility and an obligation of European integration.

· The role of the National Széchényi Library, the National Museum, the National Archives, the National Gallery and the county public collections in cultural life and as national public institutions should be enhanced. The values and basic institutions of domestic book and periodical publishing, film, the fine arts and theatre culture should be safeguarded and modernised.

In addition to the enactment of special laws governing cultural issues and the development and enforcement of the provisions of the Constitution pertaining to basic cultural rights, it is time to modernise the financing of the cultural sector. The taxation system should be transformed into a more culture-friendly one and provide greater incentives for sponsorship.

The development of a scholarship system for adult education and training linked to successful examinations, the transformation of 'private' foundations of state origin into public foundations, the transformation of the structure and financing of the National Cultural Fund and the reinvestment in the cultural sector of the proceeds of the privatisation of cultural enterprises could also serve the objectives of modernisation.

7. Media Strategy

· In the Hungary of the 21st century, the importance of the media will range far beyond international and domestic media law, press freedom, unbiased and balanced public service information and plural commercial mass communications; not to mention technical development, telecommunications and satellite financing. Its role in everyday and political culture, elementary education, self-education, language teaching, further training, the more demanding forms of entertainment, the maintenance of both modern and classical values in art, and the spread of scientific knowledge will be greatly enhanced, all the more so as more and more people will be forced to restrict their cultural life to radio and television. As the modernisation of the two national mass communication institutions proceeds, attention should be paid to much more than the protection of 'national characteristics' and their 'own' programmes. Using indirect means, the state should facilitate the provision of public cultural services, including youth, minority and 'community health' services through radio and television. A modernised media sector, given the widest possible national publicity, may have a beneficial impact on the management of social and cultural inequalities, alleviate the negative effects of social conflict, assist in making the burdens of modernisation more bearable and promote innovation.

· The transition to an information society has already begun in Hungary. A sure sign of this is that information itself has become the most rapidly expanding product in terms of both quantity and value in all manufacturing and service sectors. With the help of multimedia and interactive networks, more and more newspapers are also available online, more and more programme providers offer a videotheque-type choice which can be utilised even through television sets, to which teleshopping, telebanking and even distance learning and language teaching services may be linked. Even the best education system, which develops the students' capabilities rather than forcing them to regurgitate facts, can bring to the fore highly qualified personnel with convertible skills only from a very wide and deep recruitment base. Because of this, in addition to their informative function, the media's cultural, intermediary, educational and opportunity-equalising capabilities are of great importance.

· The media, in tandem with the so-called 'information superhighway', may become an important factor influencing our long-term competitiveness. It is well-known that international corporations, when deciding where to invest, give particular priority to the evaluation of the marketing and communications possibilities presented by the media of the given country, as these are both important instruments and cost factors in introducing their products to the market.

· Traditionally, public service functions tend to be assigned mainly to state-run organisations; public service and competition appear to be mutually exclusive concepts. Nevertheless, it may sometimes be more beneficial if competitive tendering is set up for public service functions, along with the concomitant financial support or tax concessions. When granting the concession the state may stipulate, not only the adequate performance of a particular public service function, but also some sort of technical advance. Countries with small markets, such as Hungary, can benefit from granting concessions on the basis of partial financing and tax allowances with well-defined objectives. It is also through concessions, partial financing and tax allowances that economic regions straddling borders and even smaller regional units can build up strong regional media bases. The acquisition of state-of-the-art technology can be brought within the grasp of such organisations and could become potential bases for new national broadcasting networks already in the course of their establishment. In addition to their role as economic catalysts, regional media centres broadcasting across borders provide important cultural support to ethnic Hungarians living abroad. The expansion of these broadcasting bases - supported in their public service functions - may also provide opportunities for Hungarian artists and intellectuals to present their work.

8. Prospects for Scientific Research

· In the course of the 20th century, Hungarian science has made a successful and universally recognised contribution to world science and technological development; our scientific attainments have also become an important element of our national culture and sense of identity. The continuous long-term task of government science policy is to guarantee the conditions necessary for the efficient operation of science, utilising instruments that correspond to its specific features: its free development in accordance with its own professional rules, its exemption from politics, the co-ordination of its autonomous institutional activity and appropriate financing. The direct task of Hungarian science policy over the next few years will be to encourage and facilitate the analysis and solution of the major national problems posed by the transition, Hungary's accession to the European Union and the establishment of the necessary conditions.

· The professional standard of Hungarian science essentially meets current international requirements. In contrast to, for example, our economic and financial circumstances or even public opinion, science can be regarded as compatible with the conditions required by the European Union at the level of expertise, even if shortcomings with respect to equipment and infrastructure are in some cases significant and growing at an alarming rate. Hungarian scientific life is an important part of the human-resource or intellectual capital which can be regarded as one of Hungary's principal competitive advantages and so one of the main sources of growth. The task of Hungarian science policy is to safeguard this situation by the rational and effective use of all available means, to facilitate its qualitative development and to ensure that we do not lag further behind.

· Although it has suffered severe losses in terms of assets and staff, the Hungarian research network still has sufficient intellectual capacity to address the tasks facing the country. Instead of the extensive development of the institutional network, efforts should be focused on functional and structural modernisation, and substantially more economical utilisation of human and infrastructural resources. The various forms of domestic and international co-operation between individuals and institutions should be supported by economic measures and the building up of an efficient system of incentives between universities, research institutions, manufacturing, business, public and civil organisations. It is also important from the viewpoint of social modernisation that Hungary participate in major international projects and international scientific organisations.

The independently run multi-channel funds and foundations financed by the state for various purposes may ensure or encourage, in an efficient manner, different pure, applied and development-type research projects in the form of a co-ordinated and well-registered system of competitive tendering. The state may facilitate the spread and operation of private foundations through tax concessions.

· A substantial number of pure research projects are carried out within the framework of higher education and to an internationally acknowledged standard. Support, hopefully increasing, for higher research education is very much in the national interest as it would undoubtedly be a strong factor in achieving prosperity for Hungary. Regular, continuous and institutional co-operation between the university and the institutions of the Hungarian Academy of Sciences is similarly important.

· The conditions under which pure research can function successfully should be guaranteed primarily from budgetary sources, while for development opportunities financing should be sought from competitive funds (National Scientific Research Fund, National Priority Social Science Research, Catching Up With European Higher Education Funds). Applied and technical development research, together with innovation, can be selectively encouraged within an organisational framework in conformity with market principles. They should establish their operational conditions primarily on the basis of their results and contributions to the productive sphere. An increasingly important role and substantial scientific contributions can be expected from the various innovation organisations, scientific and technology parks and associations. Long-term contracts between the service-providing research and educational institutions (such as clinics and pilot farms) and their clients (social security, agricultural and industrial businesses) could ensure the fundamental 'start-up' phase of operations and development, to be supplemented by central budget support for higher education and the specialised foundations.

· Some areas of research must be afforded priority support in the interests of social development and modernisation, on the basis of extra-budgetary funds set up by the government or the various ministries or financing provided by goal-oriented competitive tendering. They include technologies that save energy and materials, the development and application of environment-friendly and bio-technologies, research serving the modernisation of the food industry, health care and medical research, the use of modern information technologies, research into contemporary Hungarian society and culture and their history, and the functioning and institutions of the market economy in Hungary, including research aimed at legal harmonisation and integration with the European Union.

· The Hungarian Academy of Sciences, now in the course of modernisation, will retain and renew its professional, social and national prestige, its status as a public institution, notwithstanding the increasingly pluralistic nature of scientific life and research in Hungary. The European integration of Hungarian research and development has up to now played a decisive role in our accession to the European Union. This applies both to state-supported participation in European academic programmes (Accord, Cost, Eureka, Tempus, Copernicus, Socrates, etc.) and to our involvement in international organisations or projects (CERN, ESA, EMBO, etc.). This is also the purpose of the intergovernmental scientific-technical co-operation projects and bilateral funds and the international scientific events which can be invited to our country, and which should be supported for the same reasons and from the same funds. A mobility-enriching research culture is an integral part of science, while the improvement of domestic research conditions, the provision of adequate support for mutually beneficial co-operation projects and the establishment of a post-doctoral research system may slow down the brain-drain.

· The regional structure of Hungarian scientific life, in common with many other sectors, is far too Budapest-centred. In the interests of the country as a whole it would be worth looking at the possibility of locating some new development projects in the major provincial university towns within the framework of the integrated universities, university associations or alliances to be established (see above). Besides the traditional research tools specific to the workplace (instruments, machinery, books, periodicals, etc.) the successful pursuit of science now requires that such facilities as international information systems, data bases, computer networks, and communication facilities be available in virtually every area. Organisations functioning with government support should ensure access to these facilities, allowing active involvement (use and provision of services) and their development. The modernisation process in Hungary, given the demands of human resource development and scientific innovation and the fact that intellectual capital is its engine, requires that expenditure on scientific research should reach at least 1.8-2 per cent of GDP.