Why is Austria the next destination for Tech Companies?

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First point: the country boasts one of the highest expenditures on Research and Development in Europe in relation to GDP (3.26%, against the EU average of 2.27%), an industrial sector worth 29% (when, for example for example, tourism is only worth 15%) and Research Centers which constitute true excellence.
Second point: it is the third country in Europe for direct and indirect incentives for companies that carry out R&D. By establishing your innovative business in Austria, you gain access to a range of attractive subsidies, such as, in the case of R&D investments, the Tax research awardequal to 14% of the research expenses incurred by companies, as well as direct incentives of up to 50%.
Third point: although Austria may not immediately spring to mind as one of the top business locations for international companies, the reality is different. The country has quickly positioned itself as an ideal ecosystem for tech companies, especially for AI, microelectronics and ICT.
Many companies, including global ones, have noticed this: 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 design of RF circuits.
And there are strong investments in R&D also in application sectors: the Italian-Japanese Nidec Global Appliance, active in the sector of compressors for household appliances, has announced an investment plan of over 50 million euros in five years, completely dedicated to the production plant and R&D center in Fürstenfeld, Styria.

Excellent AI
Austria has a long history of innovation in the field of AI. Starting from the research conducted in the 1990s by Professor Sepp Hochreiter on the basis of speech recognition. A forerunner, among the world’s leading AI experts, at the head of the LIT Artificial Intelligence Lab of Linz, whose discoveries are still used by global companies including Google, Amazon, Audi and Janssen. But the key to everything is the close collaboration between academia, research institutes and companies, which makes Austria the ideal environment to fully exploit innovation and, in particular, the potential of AI, allowing students to try their hand at in practical and interdisciplinary projects from a very young age.

EBS systems, sector of “hidden champions”
Many everyday objects, from cars to smartphones to electronic passports, integrate microelectronic components developed in Austria. The electronic systems (EBS) sector generates a turnover of more than €76 billion in Austria, with 188 active companies and 93 R&D institutes. Among the main ones stand out the Joanneum Researchengaged in the study of robots, and the Silicon Austria Labs in Villach, founded in 2018 to support technology entrepreneurs.

Heimo MuellerHead of Business Development at 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 encourages the development of innovation and financially supports companies and research.”
In 2021 Infineon opened a high-tech chip factory for power electronics and the Dutch semiconductor manufacturer in Carinthia NXP Semiconductors is expanding its headquarters in Styria, creating space for 300 new employees.
Marion Biber, Director for Italy Of Austrian Business Agency (ABA) , the agency of the Austrian Federal Ministry for Economy and Labour, which provides free consultancy to foreign companies intending to set up in Austria, states that the semiconductor market includes some of the “hidden champions” of the Austrian economy: “In Austria, many cutting-edge B2B companies are positioned at the top of the application chain as true global leaders. However, their successes often remain in the shadows due to the highly specialized nature of their industrial solutions. In Austria there are hundreds of these true ‘hidden excellences’.”

Research incentives
A further success factor for the Austrian innovation system is the extent of public support. With the funding for research, the Austrian government creates the right conditions to support research performance innovation and business investments in R&D. An extremely advanced system of direct and indirect incentives, both for SMEs and large industries. You can access the Tax research awardfor an amount equal to 14% of the expenses incurred by companies, which applies 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 contributions for R&D projects of up to 50% of the costs, non-repayable and through subsidized credit.
But incentives alone are not enough. What really makes the difference is the innovative ecosystem which in Austria is tangible and can be felt everywhere. It is no coincidence that this year too in the ranking European Innovation Scoreboard 2023Austria is present among the “Strong Innovators”, with performances above the European average and leading the category, followed by Germany, Luxembourg, Ireland, Cyprus and France.



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