Innovation and Investment Activities of Austrian Companies in Times of Crisis

The study examines the innovation activities of Austrian companies in the crisis years 2020-2022, caused by the COVID-19 crisis and the Russian attack on Ukraine. The basis is a literature review on entrepreneurial investment and innovation activities in crisis phases, as well as an empirical investigation of linked data from the WIFO-Konjunkturtest (business cycle survey) on investments and product launches with FFG funding data. The results suggest that investment in intangible, knowledge-intensive assets such as research and development (R&D) expenditures is procyclical and declines with the economic downturn. The lack of innovation activity can thus prolong periods of crisis. Public R&D funding can help slow the decline during crises and stabilise innovation activity. The analysis revealed a negative correlation between crisis years and the expected economic situation of companies. However, companies that introduced new products and services, increased their spending on them and/or received FFG funding were more confident about the future.