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This country report is part of a series prepared for a study on systemic innovation in vocational education and training (VET) being conducted by CERI/OECD during 2007-08. The definition of systemic innovation adopted here is: any kind of dynamic, system-wide change that is intended to add value to the educational processes and outcomes. The aim is to analyse innovation systems and strategies in VET by bringing together evidence of the drivers for systemic innovation in six different countries (Australia, Denmark, Germany, Hungary, Mexico and Switzerland). All countries participating in the study have selected two or three case studies of recent innovations in VET for in-depth analysis by the expert team. The following is a list of issues that the study focuses on in particular: (a) how countries go about innovation; (b) the processes involved, leadership and the relationships between the main actors; (c) the knowledge base that is drawn on; and (d) the procedures and criteria for assessing progress and outcomes. The two Hungarian case studies are: (1) new National Vocational Qualifications Register (NVQR) with innovative features, such as modularised and competence-based qualifications, and broad, system-wide coverage; and (2) ‘Step one forward’, a project aimed at giving individuals most at risk of social exclusion the chance to progress in either their educational or professional qualifications.