Why is Austria the next destination for technology companies?


First point: the country boasts some of the highest R&D spending in Europe in relation to GDP (3.26%, compared to the EU average of 2.27%), an industrial sector worth 29% (when for example it is only 15% ) and research centers that represent true excellence.
Second point: it is the third country in Europe for direct and indirect incentives for companies that carry out R&D. Establishing your innovative business in Austria gives you access to a number of attractive subsidies, such as in the case of investments in research and development Tax Research Awardin the amount of 14% of research costs incurred by companies, as well as direct incentives of up to 50%.
Third point: although Austria may not immediately emerge as one of the leading business locations for international companies, the reality is different. The country has quickly established itself as an ideal ecosystem for technology companies, especially for artificial intelligence, microelectronics and ICT.
Many companies have noticed, including global ones: Infineon and United Micro Technology have opened design centers for RF integrated circuits (a special type of circuit suitable for wireless transmission) in Linz, Upper Austria, now considered the Silicon Valley of RF circuit design.
And there are strong R&D investments in the application sectors as well: the Italian-Japanese company Nidec Global Appliance, active in the household appliance compressor sector, has announced an investment plan of more than 50 million euros over five years, entirely dedicated to a manufacturing plant. and an R&D center in F├╝rstenfeld, Styria.

Excellent AI
Austria has a long history of AI innovation. Starting with research done in the 1990s by Professor Sepp Hochreiter based on speech recognition. Predecessor, among the world’s leading experts in AI, head of the LIT Artificial Intelligence Lab in Linz, whose discoveries are still used by global companies including Google, Amazon, Audi and Janssen. But the key to everything is the close cooperation between academia, research institutes and companies, which makes Austria an ideal environment for the full use of innovation and especially the potential of artificial intelligence, which allows students to try out practical and interdisciplinary projects from a very young age.

EBS Systems, the “Hidden Champions” sector
Many everyday objects, from cars to smartphones to electronic passports, contain microelectronic components developed in Austria. The electronic systems sector (EBS) generates a turnover of more than EUR 76 billion in Austria with 188 active companies and 93 research and development institutes. Among the main ones, Joanneum Research, which studies robots, and Silicon Austria Labs in Villach, founded in 2018 to support technology entrepreneurs, stand out.

Heimo Muellerhead of business development in the company Silicon Austria Labsagrees that research plays a central role in Austria’s attractiveness for chip companies: “Our universities and research centers are very well-known, and the Austrian government supports the development of innovation and financially supports companies and research.”
In 2021 Infineon opened a high-tech chip factory for power electronics and a Dutch semiconductor manufacturer in Carinthia NXP Semiconductors is expanding its headquarters in Styria, creating space for 300 new employees.
Marion Biber, Director for Italy Austrian Trade Agency (ABA) An agency of the Austrian Federal Ministry of Economy and Labour, which provides free advice to foreign companies intending to set up in Austria, says that the semiconductor market includes some of the “hidden champions” of the Austrian economy: “In Austria, many top B2B companies are located at the top of the application chain as true global leaders. However, their achievements are often overshadowed by the highly specialized nature of their industrial solutions. There are hundreds of these real ‘hidden perfections’ in Austria.”

Research incentives
Another factor in the success of the Austrian innovation system is the extent of public support. Through research funding, the Austrian government creates suitable conditions for research support performance innovation and business investment in research and development. An extremely advanced system of direct and indirect incentives, both for SMEs and large industries. You can access the Tax Research Awardto an amount equal to 14% of the costs incurred by companies, which refers not only to research, but also to personnel, materials and even the construction of the necessary infrastructure.
At the same time, there is a federal body (FFG) that offers grants for research and development projects up to 50% of the cost, non-refundable and through a subsidized loan.
But incentives alone are not enough. What really makes the difference is the innovation ecosystem, which is tangible in Austria and felt everywhere. It is no coincidence that even this year in the European Innovation Scoreboard 2023, Austria is present among the “strong innovators”, with performances above the European average and leads the category, followed by Germany, Luxembourg, Ireland, Cyprus and France.

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