Fact Sheet
Research Location Austria
Dynamic innovative strength in the center of Europe
January 2012 –Austria is increasingly establishing itself within Europe as a sought-after research location for future industries such as life sciences, environment and energy, information and communication technologies (ICT) or mobility and traffic. In 2011, the Alpine Republic boasted an R&D/GDP ratio of 2.79 percent[1]which is significantly higher than the EU average. For the first time, total R&D expenditures will surpass the threshold of EUR 8 billion. Foreign-controlled companies account for more than half of total corporate research and development expenditures, corresponding to a volume of EUR 2.646 billion[2]. What exactly do these firms benefit from? They take advantage of attractive funding and a research premium of ten percent for companies based in Austria, as well as a business-friendly tax system, the bundled know-how of international experts as well as the strong links of the business and scientific communities.
Eight good reasons for selecting Austria as a research location
- High R&D/GDP ratio
For more than ten years Austria has continually increased its ratio of research and development expenditures to GDP (R&D/GDP ratio), from a level of 1.8 percent in the year 1998 to 2.79 percent in 2011. This spending exceeds the comparable average for the EU-27, the OECD member countries, and since 2009 also theUSA[3].The dynamic impetus of innovative strength is also shown in the clearly-defined goal for 2020: a further increase in the R&D/GDP ratio to 3.76 percent[4] – considerably above the R&D investment volume of three percent of GDP which has been defined by the EU in its growth strategy Europe 2020. Austria is highly motivated for one clear-cut reason: only those who already work today on the innovative solutions required to master the challenges of tomorrow will be able to succeed in the face of international competition – in spite of or precisely because of the economic situation which is expected to remain tense.
- Full speed ahead with innovations
In R&D the country located along the Danube is focusing on core strengths such as life sciences, environment and energy, ICT, traffic and mobility. This has been a success, as confirmed by international rankings. The Innovation Union Scoreboard (2011), the annual survey of the innovative performance of the EU-27, rates Austriaas eighth in the top ranks of innovation followers. Furthermore, Austria has set itself the ambitious target of moving ahead to become one of the most innovative countries in Europe by the year 2020.
- Dynamic growth
Austria has laid the groundwork for the future. In 2011 R&D expenditures will surpass EUR 8 billion for the first time[5]. Private industry accounts for the lion‘s share of EUR 3.7 billion (44.6 percent), followed by the public sector with EUR 3.21 billion (38.7 percent). A total of EUR 1.34 billion in R&D expenditures were transferred directly to Austria from abroad (16.2 percent) – mainly via subsidiaries of foreign firms.
The business environment in Austria has been favorable to R&D investments for a long time. In 2009 some 500 foreign controlled companies based in Austria accounted for half of all corporate R&D expenditures amounting to EUR 2.646 billion[6]). Moreover, in November 2011 22 top international companies based in Austria such Baxter, NXP Semiconductors Austria, Voestalpine, Infineon, Magna and AT&S committed themselves to increasing their research and development expenditures by 20 percent up until 2015[7]. Accordingly they will finance one-fifth of the total corporate research in the future.
- Attractive research premium
Companies carrying out research in Austria pay lower taxes. At the beginning of 2011 the underlying conditions conducive to entrepreneurial innovation were further improved when the research premium for expenditures relating to a company’s own research and development as well as contract research was increased from eight to ten percent. The research premium is paid out in cash.
- Research promotion country Austria
The central funding agency for research-intensive companies is the Austrian Research Promotion Agency (FFG), which facilitates quick access to funding services for companies operating in all business sectors which are based in Austria, including subsidiaries of foreign industrial groups. This is achieved via headquarter programs, standard and start-up funding as well as 30 other special initiatives. Other funding organizations include Austria Wirtschaftsservice GmbH (aws) and the Austrian Science Fund (FWF), which provides support to basic research as the counterpart to industrial or commercial research.
- Strong partners: the business and scientific communities
“A knot cannot be tied with one hand only” is an old Mongolian jewel of wisdom which is becoming increasingly important in innovation competition. For this reason, companies and research facilities in Austria have been involved in strategic partnerships for many years in the form of competence centers and specific industry clusters. These are designed to exploit synergies and future potential, and create strong networks to work on developing trend-setting, future-oriented and profitable solutions.
More than 40 competence centers
One of the most successful Austrian funding initiatives is COMET (Competence Centers for Excellent Technologies). For many years COMET has succeeded in promoting the targeted and sustainable cooperation between industry and science with respect to the top technologies in the country by creating suitable framework conditions. Today 46 such competence centers bundle their internationally sought-after R&D know-how, thus ensuring attractive competitive advantages, also for foreign investors. During the entire duration of the COMET funding initiative (2006-2019), a total of EUR 1.5 billion will be invested in industry-related research by the Federal Ministry for Transport, Innovation and Technology and the Federal Ministry of Economy, Family and Youth as well as the federal provinces, companies and research institutions.[8]
Excellent examples are the “Research Center Pharmaceutical Engineering“ (RCPE)in Graz for pharmaceutical process and product development, or “ONCOTYROL”, the competence center for cancer therapy located in Innsbruck, which aims to translate its research results in the fields of genomics, proteomics and metabolomics to clinical cancer medicine.
The“Austrian Center for Medical Innovation and Technology (Acmit)“, a competence center in Wiener Neustadt in the field of medical robotics, is opening new perspectives for buttonhole surgery (minimally invasive surgery), whereas “Bioenergy 2020+“boasts several research facilities in Austria and successful innovations in environmentally-friendly energy production from biomass.
Cluster landscape in Austria
52 industry clusters in 9 federal provinces
Source: Cluster platform
More than 50 industry clusters
More than 50 industry clusters located in all nine federal provinces, featuring some 3,500 companies and 420,000 employees, work to strengthen Austria‘s innovative capabilities[9]. Synergies are exploited and strategic partnerships with renowned research institutes and excellent researchers are pursued within the framework of closely-knit networks of specialized firms – from international R&D headquarters to SMEs and innovative spin-offs.
There has already been recognition for this partnership-drive approach to innovation from the USA. In 2010 the Styrian-based “Eco World Styria” was named the global number one environmental technology cluster by the Cleantech Group. Best practiceexamples also include the “Mechatronics Cluster (MC) Upper Austria” which now encompasses 334 partners in the fields of plant construction, mechanical and apparatus engineering as well as technology and component production[10]. The Styrian cluster pioneer “AC Styria”continues to enjoy an international reputation for innovative vehicle development thanks to the tried and tested cooperation between multinational companies such as MAGNA, Steyr Daimler Puch and AVL List with innovative SMEs such as Virtual Vehicles and Ventrex.
- Highly-qualified researchers and specialized personnel
In order to bring innovations to market, one does not only need good ideas derived from research and development work but also highly qualified specialized personnel to practically translate these ideas into reality. Austria offers both. This is due to the long tradition of application-oriented education and training, whether in educational institutions such as the numerous technical colleges, 22 public universities and thirteen private ones as well as 21 universities of applied sciences[11]. Moreover, Austria’s economy is very well positioned in European comparison when it comes to further education and lifelong learning. After all, 81 percent of the companies offer active continuing education and qualification programs for their employees, as confirmed by the Third European Continuing Vocational Training Survey(2005)[12].
- Proximity to Eastern Europe
Austria has established itself as the business interface to the growth markets of Central and Eastern Europe thanks to its geographical location in the heart of Europe. The Alpine Republic boasts 300 regional corporate headquarters, significantly ahead of competitive CEE business locations suchPoland, Slovakia, Czech Republic and Hungary[13]. Approximately 1,000 international companies coordinate their Eastern European business operations from Austria.
Research-intensive companies such as Boehringer Ingelheim, one of the 15 biggest pharmaceutical companies worldwide, rely on the small but excellent research location of Austria for its R&D activities.The pharmaceutical giants invests EUR 145 million annually in Austria[14], coordinating the entire clinical research in Central and Eastern Europe as well as in the Asian and African markets from its Regional Center Vienna.
Austria has also long proven its value to Siemens as a bridgehead to the East, for example as the R&D headquarters for application-specific chips (ASICs) and constraint-based configurations (complex configurations) in Vienna. In addition, the worldwide technology strategy of the Group is also significantly impacted by the more than 1,300 researchers and developers of Siemens Austria focusing on future-oriented fields such as smart grids or rail-bound public transport, as demonstrated by an investment volume of EUR 331 million in the year 2011[15].
ABA-Invest in Austriaisthe national investment promotion company of the Republic of Austria. It has established itself as the initial point of contact for international investors and companies interested in setting up business operations in Austria. ABA-Invest in Austria offers consulting services free of charge in selecting a suitable site, or provides support in dealing with public authorities and funding agencies, with labor and tax issues and identifying cooperation partners.
In 2010 ABA-Invest in Austria consulted 198 companies setting up business in Austria which invested a total of EUR 221.1 million. Since its founding in the year 1982, the national investment promotion company has enabled investments of EUR 5.95 billion in Austria, creating a total of 41,472 new jobs.
In 2009 ABA-Invest in Austriawas ranked by Global Investment Promotion Benchmarking of the World Bank Group as the best national investment promotion consultancy in the world. Today it operates consulting offices in New York and Tokyo as well as at its headquarters in Vienna.
Contact:
Hanni Grassauer
International Media Relations
ABA-Invest in Austria (Austrian Business Agency)
Opernring 3, A-1010 Vienna
Tel. 0043 1 588 58 57; Fax: 0043 1 586 86 59
E-Mail:
Internet:
[1] Statistics Austria, press release dated April 19, 2011
[2] Statistics Austria, Statistics on Foreign Business Entities, compiled on Sept,. 30, 2011
[3]
[4]Austrian Research and Technology Report 2011
[5] Statistics Austria, press release dated April 19, 2011
[6] This includes the monetary share of R&D funding which was transferred directly to Austria from abroad, and accounted for about one fifth of total Austrian R&D expenditures. In 2011 this direct R&D financing from abroad totaled EUR 1.340 billion or a share of 16.2 percent.
[7]
[8]
[9]
[10]
[11]Brochure “Knowledge Creates a Future“, published by the Federal Ministry of Economy, Family and Youth, May 2011
[12] IBW, Institute for Research on Qualifications and Training of the Austrian Economy and the Format/trend supplement “ TOP Location Austria“, April 2011
[13]ABA-Invest in Austria
[14] Boehringer Ingelheim January 2012 as well as the Format/trend supplement “TOP Location Austria”, April 2011
[15]Annual Report of Siemens Aktiengesellschaft Austria 2011