Austria's Innovation System in an International Comparison

As a highly developed, high-wage country, Austria faces new challenges in a globalizing economy. Austria will only be able to maintain its position in the club of high-income countries if it is able to achieve a high productivity level through the use of new technologies and by taking advantage of specialization in human-capital intensive and technologically sophisticated products. Technological change is the most important driving force behind long-term economic growth. In this context, private and public investment in research and development (R&D) plays a key role. At 1.5 percent, Austria's ratio of gross expenditure on R&D to GDP remains low for a country of its per-capita income level. Of equal significance, however, is the structure of R&D expenditure. Among the structural features of the Austrian R&D system we find a relatively small share of the business enterprise sector in overall R&D, a comparatively large higher education sector receiving a share of government R&D funds far above the international average, and weak links between the components of the innovation system (universities – business enterprises – research institutes). The internationalization of Austria's research is still at a relatively low level. The intensity and quality of the synergy among the various elements of this system is a pivotal point of technology policy.