Industrial and Innovation Policy in Austria By Daniel Föger Hong Hai Luong

Industrial and Innovation Policy in Austria General Country Information Economy Industry and Innovation The new EU members

General Country Information Size: 83,858 km² Population: 8,1 million Language: German Capital: Vienna (1,54mio.)

General Country Information Political System: Federal State with 9 Federal Provinces (Bundesländer)

Industrial and Innovation Policy in Austria General Country Information  Economy Industry and Innovation The new EU members

Austria’s Economy GDP / per Head 265 billion / € Exports: 142 billion € Growth rate: 1.0 % Unemployment: 4.1% Industries: –Food industry, Luxury commodities –Mechanical engineering –Steel construction, Chemicals –Technologically adv. automotive systems

Major trading partners

Economic growth international

Inflationrate: Austria and EU

Unemployment: Austria and EU

Economic slow down Low economic growth High bureaucracy Many industries are still overregulated –Attempts to liberalise industries Powerful trade unions Budget deficit –1,5% of the GDP 2003

Industrial and Innovation Policy in Austria General Country Information Economy  Industry and Innovation The new EU members

Industrial and Innovation Policy Responsibilities: Ministry of Education, Science and Culture Ministry of Transport, Innovation and Technology Ministry for Economic Affairs and Labour  Austrian Council for RTD was established in July 2000

Austrian Council for R&D advices the federal government defines long-term national RTD strategy monitors implementation of this strategy Propose national RTD programmes in the international framework Improve co-operation between science and industry Strength Austria`s Position international

Vision and Strategy National Research and Innovation Plan (NRIP) Increase the RTD quota: 1,8% of GDP in 2000  2,5% in ,63 bill. € to 6,1 bill € (at present:1,95%)

Activities of Austrian Council for R&D Distribution of 509 mil. € special funds for RTD Campaign to raise public awareness for science, technology and innovation Human resources: –quality manpower –International mobility of researcher –Employment of foreigners in Austria

Activities of Austrian Council for R&D Initiative to promote emerging technology fields Initiatives on promoting innovative starts- up Universities: recommended to finance university research infrastructure

Future Activities of Austrian Council for R&D The council will further call for –Increase in RTD funding –Realisation of additional long-term non budgetary RTD funding (also private investors) –Exploitation of external sources, e.g. dividend distributed by the Austrian National Bank or through privatisation revenues from national and „Länder“ governments.

Furthermore: Optimize structural reforms of the Austrian Innovation System Allocation of special funds for RTD (600 mil. € for ) in close cooperation with experts and stakeholders

Industrial and Innovation Policy in Austria General Country Information Economy Industry and Innovation  Austrias Neighbours: The new EU members

On the EU will have 10 new members

Austria – Gateway to Eastern Europe Already in 1994 Austrian Federal Economic Chamber published: ”Austria – Gateway to Eastern Europe” –active establishment of Austrian companies in EE Initiative: ”Export 1 – 24” –Support for SMC to strenghten their competitiveness –encourage confindence in EU - expansion subsidiaries, represantative offices and joint ventures have been set up

Trade &Foreign direct investments of Austria Central and Eastern Europe as second largest trading partner –17% of exports flowing into the region –Export to new EU members in 2002: –9,7 Billion € (+ 5,9%) FDI in East Europe 2002: 2,6 Billion € –In total: 12,2 Billion € –FDI Market share in Eastern Europe: 10,2%

Austria’s FDI Focus in 2002 FDI Focus on Czech Republic and Slovenia –In 2002: 40% of all FDI went to Czech Republic Trade with Slovenia in 2002: –Export: 1,4 billion € (+ 9%) –Import: 784 million € (+1,9%) –Austria as biggest FDI with 32,3%

Why this boom? ”First mover advantage” –Even for small and medium sized enterprises ”Unique competitive advantages for companies” –Geographical location, –Common cultural heritage & History –Understanding of CEE language & business –Extensive network of financial institutions

Thank you for your attention! Questions and Comments?