Here is a link to the information that I am referencing.
http://mtva.hu/images/download/hungary_matters/2014/morning/hm0505am.pdf
József Pálinkás, who is the president of the Hungarian Academy of Sciences (MTA), said that under his leadership the academy had reformed its research organization, implemented important infrastructure projects and launched a successful program to encourage Hungarian scientists living abroad to return to their homeland.
This directly relates to our supply and demand graph. Jozsef has implemented these reforms in order to increase education. Increasing education affects the supply of many different products. An easy one to point out is the market for cellphones. With an increase of education, there will be new ideas for technologically advanced cellphones. Because of the technological advances, there is a shift in the supply curve to the right in the market for cellphones. This causes the equilibrium price of cellphones to drop and the equilibrium quantity to increase.
These reforms and programs will have an immeasurable positive externality. We discussed in chapter 10 of Reinventing the Bazaar by John McMillan the effects of externalities. There is a negative externality for every person that drives on the road. They add more pollution into the air and also add to congestion on the road which causes people to have to sit in traffic for an hour or more when they could have been using that time effectively. Jozsef, however, has brought a positive externality to Hungary. He has brought in about 40 million Forints worth of assets to the country. He is reaching out to the Hungarian scientists to keep them in the country. He has taken 43 facilities and compressed them into 10 centers and five new institutions in order to ensure cost-effective operations. In compressing these facilities he has saved 500 million Forints annually. Now, he can use these funds for different projects he has planned. These programs and reforms will help increase the technological world in Hungary, which is the future in the 21st Century. As I pointed out above, the advances in technology will trickle into many markets. It may lead to a way where we can grow food more efficiently or harness the power of an alternative fuel. The possibilities are endless, and they are being fostered by the kinds of strides that Jozsef is making.
The problem that Jozsef is addressing is the issue of the lack of resources in Hungary. Hungary is not using the labor force as efficiently as possible. There are scientists that are leaving the country, let alone the 10% unemployment rate in the country currently. He addressed the issue by offering scientists about the same salary that they would receive in a western country. This makes Hungary more appealing to its scientists. Another way to address the issue is to increase its assets. Having state of the art equipment will help attract scientists to Hungary as opposed to other countries. This is exactly what Jozsef is doing as well. He has vastly updated and improved machinery. Something Jozsef has not implemented, or at least it is not known publically, is improving benefits for the scientists. Two similar job offers may differ only in benefits. The obvious choice is to pick the job offer with the better benefits. Another way to connect to scientists is to help spark their interest in science at a young age! If you support them while they are young and just learning about the discipline they may be inclined to return the favor by working for you later. Possibly starting a sister's in science program or programs of that sort would be a great way to accomplish that.
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