2014 SBA Fact Sheet AUSTRIA. In a nutshell. About the SBA Fact Sheets 1

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1 EN Enterprise and Industry 2014 SBA Fact Sheet AUSTRIA In a nutshell Austria s SME sector has kept on growing throughout the crisis. After a small dip in 2009, the number of firms expanded by an additional to more than in The newly-created firms (together with established businesses) created almost additional jobs, a net increase of more than 5 % over the years Simultaneously, value added grew by more than 17 %. Medium-sized firms ( employees) showed the highest growth rate in terms of value added (25 %), significantly higher than the respective growth rates in micro-firms (15 %) and small companies (11 %). Medium-sized firms performed well partly because of a rise in exports in recent years. Interestingly, employment in micro firms went up by 5.4 %, and in small ones by 4.7 %, while medium-sized firms added 5.2 %. The steady expansion spread across all sectors, with services at the forefront. Austria features one of the most competitive Small Business Act (SBA) profiles in the EU. This year, it outperformed the EU average on no less than six scoreboards. These include second chance, single market, access to finance, skills and innovation, environment and internationalisation. Results for many indicators do show improvements over the past six years. Responsive administration is the only category in which Austria is below the EU average. Problematic areas are confined to some specific, narrow issues, such as high minimum paid-in capital requirements. Many of these are already being addressed. In five areas, conditions have been improving consistently since 2008, with no backsliding in any category. However, a lack of skilled personnel in some industries, especially IT personnel, is an increasing problem for many SMEs. Given that federal elections took place in 2013, there has been a pause in SME policy making, so there has been only slight progress in launching new measures over the reference period. Altogether, Austria implemented 12 new measures addressing six out of the 10 SBA policy areas in Preliminary forecasts for see the number of SMEs in Austria rising by further (+2.1 %), with an estimated net increase in jobs of (+1 %). About the SBA Fact Sheets 1 The Small Business Act for Europe (SBA) is the EU s flagship policy initiative to support small and medium-sized enterprises (SMEs). It comprises a set of policy measures organised around 10 principles ranging from entrepreneurship and responsive administration to internationalisation. To improve SBA governance, the 2011 review of the Act called for better monitoring. The SBA Fact Sheets are published annually and aim to improve understanding of recent trends and national policies affecting SMEs. Enterprise and Industry

2 1. SMEs in Austria basic figures Number of enterprises Number of employees Value added Austria EU 28 Austria EU 28 Austria EU 28 Number Proportion Proportion Number Proportion Proportion Billion Proportion Proportion Micro % 92.4% % 29.1% % 21.6% Small % 6.4% % 20.6% % 18.2% Medium-sized % 1.0% % 17.2% % 18.3% SMEs % 99.8% % 66.9% % 58.1% Large % 0.2% % 33.1% % 41.9% Total % 100.0% % 100.0% % 100.0% These are estimates for 2013 produced by DIW Econ, based on figures from the Structural Business Statistics Database (Eurostat). The data cover the 'business economy', which includes industry, construction, trade, and services (NACE Rev. 2 sections B to J, L, M and N), but not enterprises in agriculture, forestry and fisheries and the largely non-market service sectors such as education and health. The advantage of using Eurostat data is that the statistics are harmonised and comparable across countries. The disadvantage is that for some countries the data may be different from those published by national authorities. Austrian SMEs account for more than two-thirds of all employees and 61 % of value added. These shares are slightly higher than the EU average. But the employment share of micro-firms is 4 percentage points lower than the EU average, implying that microfirms are of relatively lower importance for the Austrian economy in terms of employment. Small- and medium-sized enterprises are of greater relevance in Austria. As in the EU as a whole, most Austrian SMEs are in the wholesale and retail trade sectors (25 %), accounting for 23 % of SME employment and 20 % of the value added of all SMEs. Manufacturing also has a remarkably high share of value added produced by SMEs (20 %). The accommodation and food services sector, part of the country s well-developed tourism industry, play a more significant role than in the EU on average: 15 % (EU: 8 %) of all Austrian SMEs are active in this sector, accounting for 15 % (EU: 9 %) of all jobs and generating 7 % (EU: 4.5 %) of SME value added. Austria s SME sector has kept on growing throughout the crisis. After a slight dip in 2009, the SME sector expanded by an additional firms to more than businesses in The newly-created firms, together with existing firms, created almost additional jobs, a net increase of more than 5 % over the period Simultaneously, value added grew by more than 17 %. The sub-group of mediumsized firms ( employees) showed the highest growth rate in terms of value added (25 %), significantly higher than the respective growth rates in micro-firms (15 %) and small companies (11 %). Medium-sized firms performed well partly due to a rise in exports. Interestingly, micro firms increased employment by 5.4 % and small ones by 4.7 %, while medium-sized firms added 5.2 %. The steady expansion was spread across all sectors, with services at the forefront. In the real estate sector, SME value added grew by 23 %, in the wholesale and retail trade sector by 20 % and in the information and communication sector by 18 %. There are various reasons for this: GDP growth and low unemployment rates for the period 2009 to 2011 positively affected real estate activities. Moreover, risk aversion has become more prevalent among professional investors as well as private individuals, leading them to develop a real estate portfolio. SMEs in the wholesale and retail trade sector are benefiting from export growth. SMEs in the cross-sectorial industry Information and communication are benefiting from favourable trends in other sectors of the business economy. The performance of SMEs in the professional activities sector was outstanding compared to that of large enterprises (LEs). SME value added rose by 16 % between 2009 and 2013, adding more jobs to this key sector (up 14 % since 2008) whereas it decreased by 11 % in LEs. The excellent performance of SMEs in this sector is also attributed to policy developments, most notably in the RTI strategy of the federal Government (RTI: research, technology, and innovation). According to preliminary data for 2013, the number of business start-ups was about , a rise of SBA Fact Sheet Austria 2

3 start-ups compared to the previous year, though matching the total for The share of women among founders reached an all-time high (58 %) assisted by legal framework measures, such as improving child care allowance regulations for entrepreneurs. In addition, a new form of limited liability company (GmbH) was introduced in 2013, the GmbH light. This is a significant development in helping to counter the decreasing share of this type of enterprise in total start-ups, which recently amounted to only about 10 %. The GmbH light regime supports young and small companies, as it enables them to provide just charter capital instead of the former After the formation of the new Austrian Government, however, the GmbH light was adjusted, as existing and/or bigger companies were switching to this form by re-establishing as GmbHlight, potentially leading to tax losses. Amendments to the law were put in place to deal with this. As regards survival rates of start-ups, after the first year, 95 %, of companies are still active on the market, 80 % after three years, 68 % after five years, and 60 % after seven years. The majority of business start-ups in 2013 were in the crafts and trade sector, as well as in information and consulting. At the same time, liquidations declined by 10 %, with 13 % less obligations than in This is calculated without the liquidation of the ALPINE Bau GmbH, the biggest liquidation in Austria since WWII, which could possibly double total liabilities. Disregarding this single event, there were fewer, smaller liquidations among single cases. The absolute number of insolvencies in 2013 is below the mean for the last 14 years. The outlook for 2014 is a moderate but consistent recovery for Austria. According to the most recent prognoses, Austria will develop along with the German economy, and GDP should increase by 1.8 %. After a period of low investment, a stronger investment dynamic is expected which might then support economic growth. This trend is expected for two reasons: the improved financing situation and the urgent need for replacement investments. The positive outlook is supported by recent surveys. Most indicators tested by the Austrian Economic Barometer show an optimistic outlook for the next 12 months, which has not been the case since Although the status quo is assessed as being below that for the previous six months, the outlook for next year is more positive. SMEs assess their individual situation more optimistically than they do the general economic climate. While expectations on investment and employment are subdued, trends for exports and total turnover are positive. Against this backdrop, preliminary forecasts see the number of SMEs in Austria rising by another (+2.1 %), with a net increase in employment by some jobs (+1 %) over 2014 and Hence, expansion is continuing, albeit at a slower pace. This is, however, not surprising, as the unemployment rate in Austria is already comparatively low SBA Fact Sheet Austria 3

4 SME trends in Austria SBA Fact Sheet Austria 4

5 2. Austria s SBA profile 3 Austria features one of the most competitive SBA profiles in the EU. This year, it outperforms the EU average in no less than six areas. These include second chance, single market, access to finance, skills and innovation, environment and internationalisation. As last year, responsive administration is the only category in which Austria is below the EU average. However, even in this area, there have been improvements over the past six years. Hence, the problematic areas are confined to some specific, narrow issues. Some of these are already being addressed. Austria s profile is further strengthened by the fact that in five areas, conditions have been improving steadily since 2008, without any backsliding elsewhere. Given that there were federal elections in 2013, it was not surprising that there was a pause in policy-making.. Hence, progress on the SBA was moderate over the reference period in terms of the number of new measures launched. Overall, Austria implemented 12 new measures addressing six out of 10 areas. It is worth noting that the previous period had seen a surge in SME policy-making activity. Apart from new measures, 2013 also saw a large number of pre-2013 measures being implemented. Against this backdrop, access to finance saw most progress in terms of new measures launched over the period Examples of measures introduced over the reference period include: the European Angels Fund Austria initiative, the KMU- Bonitätsrechner (a free online calculation tool that enables firms to determine credit worthiness), the rise in the listing prospectus threshold from to , which opens projects and start-ups for equity-based crowd funding with investment volumes up to , and the Exportförderungskredite (favourable loans for tourism companies with export receivables). Regarding skills and innovation and entrepreneurship, the new measures launched initiatives to boost entrepreneurial spirit as well as hands-on support for SMEs. As a further sign of Austria s commitment to SME policy, it kept up its good implementation record. All measures announced in 2012 and at the start of 2013 have been adopted and implemented (e.g. the Gewerbeordnung 1994 GewO 1994 (Trade Act 1994)/ Geplante Änderungen (Trade Act 1994 Amendments), the SME Test, the Gewerberegister NEU (New Trade Register), changes to the Gewerbeordnung (Trade Regulation Amendments), amendments to the Delay of Payment Law (Zahlungsverzugsgesetz) and changes to the law to adopt the current Labour contract (Arbeitsvertragsrecht- Anpassungsetz). The coordinating body for implementation of the SBA remains the Federal Ministry of Science, Research and Economy. However, implementation involves other federal ministries, such as the Ministry of Finance or the Ministry of Justice. Also, the Austrian Economic Chambers are important drivers. The Federal Ministry of Science, Research and Economy developed, together with the Economic Chambers the latest common actionprogramme, introduced in , which is the de facto SBA implementation programme. It especially affects the policy areas entrepreneurship, second chance, public procurement and state aid, access to finance and skills and innovation. There is a particular focus on active entrepreneurship and intelligent growth. Furthermore, the implementation of the action plan Entrepreneurship 2020 was pursued further with the support of a newlyintroduced multi-ministry taskforce. Know-how, information exchange and networking are the main topics. This task force is coordinating upcoming activities and use of synergy potential. An SME Envoy is in place, and coordinates the work between political stakeholders (ministries, economic chambers) at political level SBA Fact Sheet Austria 5

6 Austria s SBA performance: status quo and development between 2008 and Think small first principle The think small first principle is one of the fields in which Austria made substantial progress in Measures such as the SME test, the reform of the limited liability company (Ltd Company, GmbH ) and the feasibility study programme support start-ups and small SMEs in general and fit in with other measures in state aid and public procurement, access to finance and skills and innovation. The SME test, required by Austrian legislation from 2013 onwards, targets the impact of laws and regulations on SMEs. Thus, the Federal Ministry of Science, Research and Economy developed a questionnaire that tests the implications of laws and regulations for SMEs in the federal decision-making process. Reform of the limited liability company was implemented within the reporting period. The new GmbH light regime helps young and small companies in particular, as it enables them to provide only charter capital (during the first 10 years of existence) instead of the previous After the new government was formed, the GmbH light regime was reviewed. The minimum share capital of a limited liability company, which had been reduced to in 2013, reverted to the previous level of Out of the share capital to be contributed in cash, at least has to be paid in when founding the GmbH, instead of the to which the payment had been reduced. To keep the legal form of a GmbH attractive for entrepreneurs with more limited financial resources, the newly-introduced provision provides for a foundation privilege. This means a GmbH can be founded with a privileged cash contribution of only , whereby must be paid in. Contributions in kind are not possible in such cases. The feasibility study programme funds feasibility studies and proof of concept studies (up to per feasibility study) to start new innovation and R&D activities in SMEs/start-ups SBA Fact Sheet Austria 6

7 Entrepreneurship Early stage entrepreneurial activity (%); 2012; Austria: 9.6; EU avg: 8 Early stage entrepreneurial activity for female population (%); 2012; Austria: 8.1; EU avg: 6 Established business ownership rate (%); 2012; Austria: 7.6; EU avg: 6.4 Opportunity-driven entrepreneurial activity (%); 2012; Austria: 38; EU avg: 47 Entrepreneurial intentions (percentage of adults who intend to start a business within 3 years); 2012; Austria: 8.6; EU avg: 13.5 Degree to which school education helped develop an entrepreneurial attitude; 2012; Austria: 53; EU avg: 50 Entrepreneurship as a desirable career choice (%); 2012; Austria: 46; EU avg: 56.9 High status given to successful entrepreneurship (%); 2012; Austria: 76; EU avg: 65.5 Media attention given to entrepreneurship (%); 2007; Austria: 57; EU avg: 49 As always, Austria scores in line with the EU average in entrepreneurship. Austria has a high level of entrepreneurial activity, as shown in the figures reported in the section above. Its rate of established business owners in the overall population as well as its early-stage entrepreneurial activity indicators, including female participation, are well above the EU average. They have also improved since the beginning of the crisis. The indicators describing the societal environment in which Austrian SMEs operate also score above average. This also holds true for those describing the status enjoyed by successful entrepreneurs, the media attention they get and the extent to which school education has promoted an entrepreneurial attitude. At first sight, it seems puzzling that Austria is below average when it comes to future entrepreneurs, i.e. the share of the population intending to start up their own venture and those that see entrepreneurship as a desirable career choice (46 % versus 57 % for the EU). 5 However, the healthy state of the Austrian labour market, especially for highly-skilled experts, makes it more tempting for would-be entrepreneurs to join an existing firm for a safe job and excellent salary packages, even more so than in preceding years. Progress on policy was moderate in 2013 and the first quarter of 2014, following a period of substantial activity, especially in The most important measure in the reporting period was an extension of the JUNIOR programme, founded in 1995, to boost an entrepreneurial mind-set by enabling students (15 to 19 years of age) to found real start-ups (for the duration of a school year) and offer their products and services in the real market SBA Fact Sheet Austria 7

8 Second chance Time to resolve insolvency (in years); 2014; Austria: 1.1; EU avg: 2 Cost of resolving insolvency (cost of recovering debt as percentage of the debtor's estate); 2014; Austria: 10; EU avg: Degree of support for a second chance (%); 2012; Austria: 77; EU avg: 82 Fear of failure rate (%); 2012; Austria: 36; EU avg: 39.8 Austria scores above the EU average in second chance. The relatively favourable legal and regulatory framework is the main reason for this. It takes on average just over a year to resolve insolvency, as compared to two years elsewhere in the EU. Though the policy creates comparatively conducive conditions for second starters, general support in society for people starting anew after failure is relatively low, (77 % versus 82 % in the EU). Progress in this area in 2013 and the first three months of 2014 was seen as limited, as no significant measures were introduced. In addition, the adoption of the new insolvency law (Insolvenzrecht), implementing the SBA Action Plan recommendations on further reducing post-bankruptcy discharge and settlement times for honest entrepreneurs, is still pending since SBA Fact Sheet Austria 8

9 Responsive administration Time to start a business (in calendar days); 2013; Austria: 10; EU avg: 4.2 Cost of starting a business (in euros); 2013; Austria: 305; EU avg: 318 Paid-in minimum capital (percentage of income per capita); 2014; Austria: 47.8; EU avg: Time required to transfer property (in calendar days); 2014; Austria: 20.5; EU avg: 27.7 Cost required to transfer property (percentage of property value); 2014; Austria: 4.6; EU avg: 4.7 Number of tax payments per year; 2014; Austria: 12; EU avg: Time it takes to pay taxes (hours per year); 2014; Austria: 166; EU avg: Cost of enforcing contracts (percentage of claim); 2014; Austria: 18; EU avg: Fast-changing legislation and policies are a problem for doing business (percentage of respondents who agree); 2013; Austria: 54; EU avg: 70 The complexity of administrative procedures is a problem for doing business (percentage of respondents who agree); 2013; Austria: 51; EU avg: 63 SMEs interacting online with public authorities (%); 2013; Austria: 92.07; EU avg: Licenses and permit systems (1=lowest level of complexity, 26=highest level of complexity); 2011; Austria: 22; EU avg: Burden of government regulations (1=burdensome, 7=not burdensome); 2013; Austria: 3.4; EU avg: 3.2 As in the last two years, Austria scores below average on responsive administration. However, this overall score is skewed by the very low scores on three indicators. In general, the administrative environment is rather competitive. For instance, far fewer Austrian SMEs complain about problems due to fast changing legislation and policies (54 % versus 70 % for the EU), or the complexity of administrative procedures (51 % versus 63 %). The indicators dragging the overall score down have not changed since last year. They are: the start-up time (for limited companies), 6 the amount of paid-in minimum capital, and the licensing system. These factors need to be seen in perspective. First, start-up times are only relatively lengthy for this specific form of corporation. For other types, start-up time is shorter. Single-person companies can be set up in a day. As for the paid-in minimum capital, under the reform of the Law on Limited Companies (GmbH Neu), the minimum required paid-in capital was reduced from to as of 1 July Also, licensing procedures may vary widely depending on the sector. In sum, the three cited indicators are the exception rather than the rule. All other indicators score above the EU average. The time required to comply with tax obligations is under the EU average (166 as against 193 days), and Austrian SMEs face slightly- fewer tax payments too. Also, costs related to the enforcement of contracts are lower for SMEs in Austria than for EU SMEs on average. Recent years have confirmed the government s commitment to improving the regulatory environment. A host of new measures have been adopted, especially in Against this backdrop, progress achieved over the 12 months to end-march 2014 was considered limited in terms of the launch of new measures. A number of measures launched previously are ongoing, in line with the original plans. For example, the new trade register (measure announced last year), which combines data from 14 predecessor data bases and which will facilitate research and statistic output, is making progress and will be finalised by The same applies to the business service portal, an initiative that combines 2014 SBA Fact Sheet Austria 9

10 several e-government services for companies, such as tax forms and permits on a single portal. Both measures kicked off in Austria has established nine points of single contact in transposition of the Services Directive 2006/123/EC ( All are gradually being developed in terms of user friendliness (translation of information and procedures in English, more information, user guidance). State aid and public procurement Percentage SMEs account for in the total value of public contracts awarded (%); 2013; Austria: 30; EU avg: 29 Percentage of businesses participating in public tenders (%); 2013; Austria: 37; EU avg: 37 Average delay in payments from public authorities (in days); 2013; Austria: 13; EU avg: Percentage of businesses submitting proposals in a public electronic tender system (e-procurement) (%); 2013; Austria: 14.73; EU avg: As last year, Austria ranks above the EU average in this area. This is mainly because public authorities pay SME suppliers very promptly. In the rest of the EU, payments take two weeks longer on average. Overall, the participation of Austrian SMEs in public tenders matches the EU average. However, a slightly higher percentage does so via electronic means (approx. 15 % versus 13 %), so Austria continues to score above the EU average in this area. Cheque Programme will support initial contact between research facilities and SMEs. In the reporting period, the measure was developed by adding the Innovation Cheque Plus to the existing Small Innovation Cheque. The Strategic Guiding Concept for innovation supporting tenders in Austria, mentioned in last year s report formally started in September 2012, and was implemented in As in the previous year, progress in 2013 and the first three months of 2014 was moderate. The Innovation 2014 SBA Fact Sheet Austria 10

11 Access to finance Rejected loan applications and unacceptable loan offers (percentage of loan applications by SMEs); 2013; Austria: 3.7; EU avg: 14.4 Access to public financial support including guarantees (percentage of respondents that indicated a deterioration); 2013; Austria: 10.1; EU avg: 17.3 Willingness of banks to provide a loan (percentage of respondents that indicated a deterioration); 2013; Austria: 17; EU avg: 24.6 Cost of borrowing for small loans relative to large loans (%); 2013; Austria: 23.77; EU avg: Total amount of time it takes to get paid (days); 2013; Austria: 34.67; EU avg: Bad debt loss (percentage of total turnover); 2013; Austria: 2.1; EU avg: 3.83 Venture capital investments (percentage of GDP); 2012; Austria: 0.008; EU avg: 0.04 Strength of legal rights index (0-10); 2014; Austria: 7; EU avg: 6.82 Austria s overall score on access to finance has been above the EU average for the past four years. Very few SME loan requests are rejected. In 2013, only 3.7% of Austrian SMEs reported rejection. The share of SMEs reporting deterioration is also receding (17 % in 2013 down from 31 % in 2009). Access to public financial support appears to be easier in Austria than in the EU on average, as only 10 % of the businesses reported a deterioration in the situation in 2013 (EU:17 %). One aspect that may require further monitoring is the slight rise in costs of loan financing. At the moment, the interest mark-up to be paid on small loans of up to is almost identical to that at EU level. In both cases, small borrowers have to accept interest rates 25% higher than those who take larger loans. This mark-up has tripled in Austria from only 8 % in 2008, and is set for further increases. The cash flow position of Austrian SMEs also seems to be better than that of their EU peers. Payments are made in 16 days (down from 42 days in 2008), whereas they take two weeks longer elsewhere in the EU and the bad debt loss rate is also lower in Austria than the EU on average. Regarding alternative forms of finance, most notably equity finance, the situation is no better than elsewhere in the EU. Venture capital is scarce, so there is a bottleneck, especially for young, technologyintensive firms in need of long-term financing. The share of venture capital to GDP remains much lower in Austria than the EU average, despite recent government initiatives. There was substantial progress in 2013, building on a high level of policy activity in previous years, especially in 2012 (with e.g. the introduction of the European Angels fund Austria). Several measures have been launched: - The funding of the listing prospectus and the increase of the threshold from to This slightly extends the range of projects and startups that can use equity-based crowd-funding as an alternative means of finance. - The KMU-Bonitätsrechner, a free online calculation tool that enables SMEs to determine their credit worthiness. The online tool for SME credit rating enables SMEs to evaluate their credit rating for the first time. - The Exportförderungskredite, which consists of favourable loans for tourism companies with export receivables (e.g. overnight stays of foreign tourists) and a possible refinancing volume of 5.75 % of foreign sales SBA Fact Sheet Austria 11

12 In addition, an improved crowd-funding regime has been announced under the new government programme, though the measure is still under discussion. Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (Zahlungsverzugs-Richtlinie) has been implemented. Single market SMEs with intra-eu exports of goods (percentage of SMEs in industry); 2011; Austria: 27.2; EU avg: SMEs with intra-eu imports of goods (percentage of SMEs in industry); 2011; Austria: 58.77; EU avg: Public contracts secured abroad by SMEs (percentage of total value of public contracts); 2013; Austria: 11.8; EU avg: 2.6 Number of single market directives not yet transposed; 2013; Austria: 8; EU avg: 8.69 Average transposition delay for overdue directives (in months); 2013; Austria: 8.9; EU avg: 8 Number of pending infringement proceedings; 2013; Austria: 23; EU avg: 30 Austria s score in this area is above the EU average this year. This is mainly due to the outstanding performance of SMEs selling to and purchasing from business partners in the EU. For instance, more than a quarter of Austria s manufacturing SMEs export to clients in the single market. This is almost twice the EU average (27 %, EU: 14 %). The difference is even bigger on the import side, with almost three out of five SMEs importing directly from a partner in the EU (59 % versus 17.5 %). Alongside SMEs from BENELUX, no other SME sector is more integrated into the single market. While there are no comparable figures for service industries, results are likely to be similar, given Austria s well-developed tourism industry, among other factors. This good performance is rounded out by the fact that Austrian SMEs have managed to secure a 12% share of public contracts abroad, versus 3 % for their EU peers. In sum, Austrian SMEs are more active in exploiting the potential of the single market than most of their EU counterparts. On the policy side, the picture looks better than in preceding years. Austria has taken steps towards implementing single market legislation into national law. For example, the number of infringement proceedings has come down from 58 in 2008 to only 23 in Overall, Austria is broadly in line with EU peers when it comes to transposition of single market legislation into national law. Given this rather favourable situation and the very high degree to which Austrian SMEs are integrated into the internal market, it is not surprising that the levels of policy activity have been rather low over recent years. In 2012, there were only minor changes to the Trade Regulations Act, easing recognition of foreign professional qualifications. In 2013 and the first three months of 2014, no new measures of note were registered SBA Fact Sheet Austria 12

13 Skills and innovation Percentage of SMEs introducing product or process innovations; 2010; Austria: 42.2; EU avg: Percentage of SMEs introducing marketing or organisational innovations ; 2010; Austria: 42.33; EU avg: 40.3 Percentage of SMEs innovating in-house; 2010; Austria: 36.35; EU avg: Percentage of innovative SMEs collaborating with others; 2010; Austria: 20.52; EU avg: Sales of new-to-market and new-to-firm innovations (percentage of turnover); 2010; Austria: 11.92; EU avg: Percentage of SMEs selling online; 2013; Austria: 11.88; EU avg: Percentage of SMEs purchasing online; 2011; Austria: 40.46; EU avg: Turnover from e-commerce; 2013; Austria: 11.53; EU avg: Percentage of all enterprises that train their employees; 2010; Austria: 87; EU avg: 66 As in previous years, Austria scores well above the EU average in skills and innovation. Almost all individual indicators measuring innovation and skills levels are positive. On the innovation side, the most outstanding result is the high share of SME involved in innovation cooperation with other partners. One in five Austrian SMEs is involved in such cooperation while for the EU on average, it is little more than one in 10. In addition, the performance of Austrian SMEs in training employees is remarkable, with close to nine out of 10 businesses actively training their employees (EU average: only two-thirds). However, the internet competence of Austrian SMEs could do with some upgrading. The share of SMEs purchasing online is rather large -- two in five Austrian SMEs do so (EU average: only one in four). But in terms of actively using the internet as a sales channel to increase turnover from e-commerce, Austrian SMEs still have to catch up with their EU peers, as they trail behind the EU average on both indicators. Moreover, the results on both indicators have stagnated over the past six years. The shortage of qualified IT personal on the domestic labour market may be a reason for this stagnating performance. On the policy front, there was progress in 2013 and the first three months of 2014, but it focused on a small number of measures, of which the most important is the Market.chances.cheque, a consulting measure introduced in 2013 by Austria Wirtschaftsservice GmbH (AWS) which offers consulting and analysis of new opportunities for SMEs and their product portfolio. It should be noted that 2013 was preceded by a year during which policy activity was very high SBA Fact Sheet Austria 13

14 Environment Percentage of SMEs that have taken resource-efficiency measures; 2013; Austria: 97; EU avg: 95 Percentage of SMEs that have benefited from public support measures for their resource-efficiency actions; 2013; Austria: 45; EU avg: 35 Percentage of SMEs that offer green products or services; 2013; Austria: 43; EU avg: 26 Percentage of SMEs with a turnover share of more than 50% generated by green products or services; 2013; Austria: 32; EU avg: 22 Percentage of SMEs that have benefited from public support measures for their production of green products; 2013; Austria: 28; EU avg: 26 Austria remains ahead of its EU peers on environment. All indicators put Austrian SMEs ahead of the EU average when it comes to investment in resource-efficiency measures and the provision of green products and services. The best score is, as in previous years, on the proportion of SMEs offering green products and services: 43 % of Austrian SMEs offer them, as opposed to only 26 % for the EU in general. The indicators also suggest that the relatively strong policy support given to SMEs for resourceefficiency investments as well as for development of green products and services may play a role. In 2013 and the first three months of 2014, progress on the policy side, was only moderate. The most important measure was Domestic Environmental Funding. It offers project funding for energy-saving measures that use sustainable energy sources and increase energy efficiency. Internationalisation SMEs with extra-eu exports of goods (percentage of SMEs in industry); 2011; Austria: 15.06; EU avg: 9.68 SMEs with extra-eu imports of goods (percentage of SMEs in industry); 2011; Austria: 15.72; EU avg: 8.18 Cost required to import (in USD); 2014; Austria: 1155; EU avg: Time required to import (in days); 2014; Austria: 8; EU avg: Number of documents required to import; 2014; Austria: 4; EU avg: 4.68 Cost required to export (in USD); 2014; Austria: 1090; EU avg: Time required to export (in days); 2014; Austria: 9; EU avg: Number of documents required to export; 2014; Austria: 3; EU avg: 4.25 In terms of internationalisation, Austria scores above the EU average this year. With one exception, all indicators put Austria above the EU average. As Austria is a small, open market, the export sector is very important. The international trade sector is highly diversified and well developed, and SMEs play a prominent role in this. The Austrian export ratio (total exports of goods and services in relation to the GDP) developed from 34.8 % (1995) to 57.2 % (2012) and is significantly above the European mean (EU-27: 44.7 %). The Import ratio increased from 35.8 % to 2014 SBA Fact Sheet Austria 14

15 54.0 % (EU-27: 42.7 %) over the same period. In 2012, traditional export markets tended to stagnate and in some cases even declined. Exports to Italy declined by -9 %, exports to Spain by -5 %, and to UK by -3 %. Meanwhile, exports to third country markets such as the United States (+15 %) as well as Asian (+4 %) and African countries (+12 %) expanded. Austrian SMEs are more active than their EU peers in trading with third-country partners. Although the difference is less obvious than with intra-eu trading (see section on the single market), there is a significantly bigger proportion of Austrian SMEs exporting to and importing from outside the EU. Both of these shares have remained stable, both at around 15 % since 2008, at least for the manufacturing sector. Regarding single market trade, there are no comparable figures available for the services sector. required both rate well, though the costs of exporting to and importing from Austria are not so advantageous. In previous years and up to 2012, a host of new initiatives were launched, including the Internationalisation Initiative of the Federal Ministry of Science, Research and Economy to overcome persistent challenges to Austrian exports (such as too strong a focus on EU countries, and too few hi-tech know-how intensive products). But in 2013, policy progress was more limited. It was more characterised by the consolidation of and slight modification to already existing measures. For example, the Internationalisation Initiative remains part of the government s official work programme, with an additional 31 million in funding for ). Austrian SMEs benefit from well-developed enabling conditions for international trade. All relevant indicators see Austria scoring well above the EU average. For instance, the length of time required to import and export, and the number of documents 2014 SBA Fact Sheet Austria 15

16 3. Good practice Below is an example of an interesting policy practice from Austria to show what governments can do to support SMEs: Founder Fund (Gründerfonds) and Business Angel Fund (European Angels Fund Austria) These two measures have to be discussed jointly, as they are both part of the same initiative to support young entrepreneurs and to provide better access to finance at a (very) early stage of setting up a business, at the point when fledgling businesses in Austria are most likely to fail. Founder Fund supports young companies during the start-up phase through the provision of venture capital funds. The Business Angel Fund (European Angels Fund Austria) does not itself make direct investments, but works in partnership with business angels, acting on their decisions with co-investments. All investment and shareholder decisions are on behalf of the business angel. The scheme supports SMEs in the seed, preseed and expansion phase. Both initiatives have been developed in a process involving all relevant stakeholders, and there are provisions not to crowd out existing private venture or business angel capital. Both measures need comprehensive evaluation to assess whether they are having the intended impact. The measures go along with the creation of international best practice legal framework conditions for private equity and venture capital investment, as envisaged in the working programme of the new government, under the Mittelstandsfinanzierungsgesellschaften Gesetz (MiFiG-Law). References: Important remarks The Small Business Act (SBA) Fact Sheets are produced by DG Enterprise and Industry as part of the SME Performance Review (SPR), which is its main vehicle for economic analysis of SME issues. They combine the latest available statistical and policy information for the 28 EU Member States and nine non-eu countries which also contribute to the EU s Competitiveness and Innovation Framework Programme (CIP). Produced annually, the Fact Sheets help to organise the available information to facilitate SME policy assessments and monitor SBA implementation. They take stock and record progress. They are not an assessment of Member States policies but should be regarded as an additional source of information designed to improve evidencebased policy-making. For example, the Fact Sheets cite only those policy measures deemed relevant by local SME policy experts. They do not, and cannot, reflect all measures taken by the government over the reference period. More policy information can be found on a database accessible from the SPR website. Please also see the end notes overleaf SBA Fact Sheet Austria 16

17 For more information SME Performance Review: Small Business Act: The European Small Business Portal: 1 The 2014 SBA Fact Sheets benefited substantially from input from the European Commission s Joint Research Centre (JRC) in Ispra, Italy. The JRC made major improvements to the methodological approach, statistical work on the dataset and the visual presentation of the data. 2 The three graphs below present the trend over time for the variables. They consist of index values for 2008 to 2015, with the base year 2008 set at a value of 100. As from 2012, the graphs show estimates of the development over time, produced by DIW Econ on the basis of figures from the Structural Business Statistics Database (Eurostat). The data cover the business economy, which includes industry, construction, trade and services (NACE Rev. 2 sections B to J, L, M and N). They do not cover enterprises in the financial sector, agriculture, forestry and fisheries or largely non-market service sectors such as education and health. A detailed methodology can be consulted at: 3 The policy measures presented in this SBA Fact Sheet represent only a selection of the measures taken by the government in 2013 and the first quarter of The selection was made by the national SME policy expert contracted by CARSA Spain (DG Enterprise s lead contractor for the 2014 Fact Sheets). The experts were asked to select only those measures that, in their view, were the most important, i.e. were expected to have the highest impact in the specific SBA area. The complete range of measures that the experts compiled in producing this year s Fact Sheets will be published alongside the Fact Sheets in the form of a policy database on the DG Enterprise website. 4 The quadrant chart combines two sets of information: first, it shows the status quo performance based on data for the latest available years. This information is plotted along the x-axis measured in standard deviations of the simple, non-weighted arithmetical average for EU-28. The vertical corridor marked by the dotted lines defines the EU average. Secondly, it reveals progress over time, i.e. the average annual growth rates for The growth rates are measured against the individual indicators which make up the SBA area averages. Hence, the location of a particular SBA area average in any of the four quadrants provides information not only about where the country is located in this SBA area relative to the rest of the EU at a given point in time, but also about the extent of progress made in It should noted that the results on opportunity-driven entrepreneurship as depicted in the graph are much more favourable for Austria if limited to the sub-group of only young entrepreneurs. 6 The government proposed a legislative review in May 2013 with a view to further simplifying and speeding up the process of registering a limited company SBA Fact Sheet Austria 17