ENTREPRENEURSHIP IN AUSTRIA
BACKGROUND
Austria is a landlocked mountainous country in the southern part of Central Europe. Its population is approximately 9 million. The official language is German, with various Bavarian dialects also spoken. The capital city of Vienna ranks as the worlds most livable city every year. Surrounded by industrially and technologically advanced countries, noticing any changes taking place in Austria is challenging. Having become part of the EU in 1995, its reliance on Germany for majority of its trade has reduced and in turn expanded with other EU countries. It’s location in Central Europe also makes it possible for one to reach any major capital city on mainland Europe within three hours and vice versa. Europe attracts tourists from across the world, and Austria with its most livable cities and picturesque alpine regions is a must see destinations for tourists, registering high single digit percentages in terms of tourist arrivals every year.
ECONOMY
Austria has maintained its old country charm and at the same time is positioning itself as one of the most attractive destinations to launch a business. Austria is the fourteenth richest country in the world in terms of GDP. Entrepreneurship, Startups are one of the important driving forces to an economy’s competitiveness and growth. Austria has created an outstanding and internationally recognized ecosystem of funding, financing and support measures that enables startups to translate their ideas into marketable services and products. Costs are typically lower than its advanced neighbours, making it cheaper for companies to run tests and learn from the mistakes in the early stages of any product or service launch. Most mobile carriers use Austria to test and roll out services. New company registrations are also increasing year on year and are more sustainable in Austria due to the lower costs compared to the other EU partners. As per the research, Austria ranks 27 on the ease of doing business report.
STARTUP STORIES
The US$240 million acquisition of the fitness app Runtastic by Adidas is the biggest startup exits in Austria in recent times. However, a true entrepreneurial success story is of the Energy drink Red Bull founded by Dietrich Mateschitz in 1987. Currently Red Bull sells its energy drinks in over 165 countries, employs more than 12000 people and is a major sponsor for most sports personalities and in most sporting events. A legendary world renown entrepreneurial success story is of Swarovski founded by Daniel Swarovski in 1895. It currently has more than 3000 stores across 170 countries, employs more than 29000 people and generates approximately Euro 2.5 billion in revenue. Other noteworthy startups in Austria are:
Newsadoo – founded in 2017, uses AI to personalise news for its users.
Cashpresso – founded in 2016, is a fintech startup that provides financial solutions to customers in Austria and Germany.
Payuca – founded in 2015, provides information on parking spaces in commercial complexes and private residences for users to rent it by the hour, day or week.
Refurbed – founded in 2017, is a marketplace for refurbished electronic goods, making it a top startup in the circular economy space.
TRENDS & CONCLUSION
A study by Vienna University of Economics and Business, social entrepreneurship is trending heavily. There are around 270 social entrepreneurs in Austria and the government is taking appropriate measures to support these entrepreneurs by providing co-working spaces, consulting, and training. Acquiring funding is a challenge for social entrepreneurs as social venture funds do not exist in Austria, yet. Private funding is arranged through crowd funding platforms or through their own earnings, and some through the federal reserves. With a small local market, most startups are launched to serve the international markets. For example, Electric Vehicles adoption has picked up in the west and is set to disrupt the conventional automakers. The next wave to disrupt the conventional engine automakers are the Autonomous Vehicles or self-driving vehicles, and although Austria does not have any major automaker brand to boast of, it is leading with research in AI for autonomous vehicles. Austrian government has undertaken various programs to develop trade relations with major countries, provide attractive investment options to companies for setting up shop in Austria.
References
Austrian Young People and Entrepreneurship
The US may have Elon Musk, but Austria is where AI research happens
Austria sees 8.6% rise in Indian Tourists in 2018
Austrian Startups to keep an eye on in 2020
