Restructuring in SMEs: Austria

Transcription

1 Restructurig i SMEs: Austria Click for cotets Wyattville Road, Loughlistow, Dubli 18, Irelad. - Tel: (+353 1) Fax: / [email protected] - website:

2 Cotets Itroductio Relevace of differet types of restructurig for SMEs Drivers of restructurig Distictive characteristics of restructurig i SMEs Mai challeges ad costraits facig SMEs i restructurig Busiess support from public ad private sources Outcome of restructurig evets Coclusios ad policy issues Bibliography

3 Itroductio About the project I 2011/2012, the Europea Foudatio for the Improvemet of Livig ad Workig Coditios (Eurofoud) coducted a research project o Restructurig i Small ad Medium-Sized Eterprises (SMEs). The aim of this project was to lear more about: the relevace of various restructurig types for SMEs; the drivers of SME restructurig; how restructurig is aticipated ad maaged i SMEs; the orgaisatioal ad employmet effects; factors that favour or hider a successful restructurig. The amout of exteral support available (or required) for employers ad employees i SME restructurigs was also ivestigated to idetify potetial ways of improvig policy. This research project was coducted i all the EU 27 Member States. This, the atioal backgroud report for Austria, aims to summarise the available relevat research. The literature ad data review show that there are hardly ay stadardised structural busiess statistics i Austria that allow for aalysig SMEs restructurig activities. Similarly, regularly coducted surveys that cover restructurig topics could oly be partly used here, as they seldom differetiate their fidigs by compay size classes, ad sometimes provide oly aggregated, macroecoomic aalyses. There are several mauals for SMEs, published by public actors, employers orgaisatios or private cosultats. However, while they give guidelies ad recommedatios o restructurig, they do ot provide iformatio about how it is actually doe. Research coverig this topic also seldom specifically focuses o SMEs, istead providig fidigs at microecoomic level without differetiatig by size, or at macroecoomic level. Furthermore, some of the research related to microecoomic restructurig uses specific isolated research questios or covers oly limited idustries, makig it difficult to draw more geeral coclusios. Cosequetly, the iformatio that ca be preseted i this report, based o this data, is rather limited. This is particularly true for idividual restructurig types, such as relocatio or mergers/acquisitios, as well as how SME restructurig is doe, i terms of processes ad procedures, ad motivatio ad achievemet. Apart from the literature review here, there are also three Austria compay case studies available i Eurofoud s database: Boutiquehotel Stadthalle Wie, M-TEC Egergie.Iovativ ad Paltetaler Mierals. SMEs i Austria I Austria, SMEs have bee see as cotributig cosiderably to makig the ecoomy robust i times of crisis. 1 Ideed, it is thought that it is due to SMEs that, for more tha a decade, the Austria ecoomy has bee icreasig faster tha the rest of the Eurozoe. 1 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

4 Restructurig i SMEs: Austria I 2010, there were 307,700 Austria busiesses, ad 99.7% of them were SMEs. They are resposible for: about 66%of employmet; 70% of appreticeship traiig; about 63% of the et turover; 58% of gross value-added of the Austria ecoomy. Table 1: Key idicators of Austria SMEs of the market-orieted ecoomy 2010* * sectios B-N, S95 of ÖNACE 2008 Source: Statistik Austria (BMWFJ, 2012) Number Share of SMEs i % Compaies 307, Employees 1,795, Net turover i millios 397, Gross value-added at factor costs, i millios 98, About 87% of Austria firms are micro eterprises with fewer tha ie employees, 10% are small firms (10 49 workers) ad about 2% are medium-sized compaies employig staff. Compared with the EU average, there is a lower share of micro eterprises ad a higher share of small ad medium-sized firms i Austria. Figure 1: Size class distributio (by umber of employees) of the eterprises of the market-orieted ecoomy, 2010 % Austria EU27 Source: Statistik Austria, Eurostat (BMWFJ, 2012) Betwee 2005 ad 2012, the umber of SMEs icreased by 5%, the umber of employees workig i SMEs by almost 10%, ad the value-added created by SMEs by more tha 20% (Europea Commissio, 2012). The outlook is also positive as Austria is oe of the few EU Member States where the SME sector has so far weathered the global ecoomic ad fiacial crisis without ay lastig dowtur (Europea Commissio, 2012). 2 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

5 Restructurig i SMEs: Austria About 25% of Austria SMEs of the market-orieted ecoomy are active i the trade sector ad aother 20% i freelace services. Some 14% are tourism compaies with about 10% i costructio ad a further 10% i maufacturig. The iformatio ad commuicatio, freelace services ad real estate sectors are characteristed by a particularly high share of micro eterprises (more tha 90%) while small ad medium-sized firms have a 20% 30% share i maufacturig, costructio ad trasport. Figure 2: Size class distributio (by umber of employees) of the Austria market-orieted ecoomy by sector, 2010 Freelace services Real estate Fiacial ad isurace services Iformatio ad commuicatio Tourism Trasport Trade Costructio Water provisio ad waste disposal Maufacturig % Source: Statistik Austria (BMWFJ, 2012) Restructurig i SMEs as a public ad policy issue Give that over 99% of Austria busiesses are SMEs, SME policy is cosidered cetral to the coutry s ecoomic policy. 2 Sector ad size-class specific measures have bee established to take accout of the fact that the SME sector is very heterogeeous. Durig the last decade, restructurig i Austria compaies has become faster ad more frequet. (Voss, 2008). At macroecoomic level, job losses i maufacturig ad agriculture have bee compesated for by icreasig employmet i the service sector. SMEs share i total employmet has bee icreasig, also implyig that these busiesses are restructurig to improve their sustaiability ad competitiveess. I spite of that, public debate about restructurig i Austria maily focuses o big job losses i large firms or more geeral issues which are ot about size. Policy ad public discussios, icludig those i the media, rarely explicitly address the characteristics of restructurig i SMEs ad the related challeges for compaies ad workers. 2 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

6 Restructurig i SMEs: Austria However, some of the mai elemets of the Austria SME policy are related to restructurig (maily iteral restructurig ad busiess expasio), eve if ot explicitly sigposted. These iclude measures o: access to fiace; access to public procuremet; fosterig iovatio ad iteratioalisatio; creatio of SME etworks; establishmet of a positive image of craft eterprises. 3 Obviously, the measures are itroduced i order to ecourage SMEs competitiveess, growth, iteratioalisatio or iovatio potetial. However, despite the fact that there is o overall policy dealig with SME restructurig, it ca be assumed that this issue has bee cotiuously cosidered at policy level, at least implicitly, eve before the global ecoomic ad fiacial crisis (ad certaily with more emphasis sice the) Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

7 Relevace of differet types of restructurig for SMEs Overview Here, the classificatio of the Europea Restructurig Moitor (ERM) 4 is applied to aalyse the occurrece of idividual forms of restructurig i SMEs. However, o secodary data or literature relevat to SMEs for the ERM categories of relocatio ad merger/acquisitio could be foud for Austria. Outsourcig: Whe a busiess s activity is subcotracted to aother compay withi the same coutry. This study focuses o SMEs givig work to other compaies, ot those who act as suppliers. Offshorig/delocalisatio: Whe a busiess s activity is relocated or outsourced abroad. (Avoidig) Bakruptcy/closure: Whe a busiess goes bakrupt or is closed for ecoomic reasos, or whe tryig to prevet bakruptcy or closure. Iteral restructurig: ay reorgaisatio ot covered by aother defiitio here, for example a busiess trasfer/successio, diversificatio, or chage of orgaisatioal structures. Busiess expasio: Where a compay exteds its busiess activities (for example, isourcig, developmet of ew products or services, addressig ew markets or cliet groups, icludig iteratioalisatio). Expasio eeds to be liked to a specific evet (for example, establishmet of ew premises, itroductio of ew products, eterig ew markets). Cotiuous growth is ot cosidered as restructurig i this study. Outsourcig ad offshorig/delocalisatio Horug et al. (2005) fid that fewer tha 10% of Austria compaies with up to 300 employees outsourced productio i the year before the survey (compared with about 20% of firms with more tha 1,000 workers). Slightly more tha 10% did so i the previous three ad te years, respectively. Overall, about 70% did ot outsource productio. I a survey of sprig 2005, 8.4% of Austria SMEs reported that they plaed to delocate (parts of) their productio to Easter Europe (Voss, 2008). Similarly, accordig to a report by the Iteratioal Cetral Europea Istitute (icei) i 2007, 14% of Austria busiesses that were iteratioally active had offshored parts of their value chai i Some 66% of these offshorig activities related to productio. Iterestigly, small firms (10 49 employees) show a similar level of offshorig productio as large eterprises (about 25%), while the share amog micro ad medium-sized firms is about half as high. Offshorig of research ad developmet is far less commo, ad particularly so i small ad medium-sized firms (fewer tha 3%, compared with about 8% amog micro ad about 14% i large firms). 4 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

8 Restructurig i SMEs: Austria Figure 3: Share of offshorig compaies by size class ad type of offshorig, % productio research ad developmet Source: icei, 2007 Bakruptcy/closure Statistics o compaies survival rates show that there is a positive relatioship betwee firm size ad closure. While differeces are small i the start-up year with survival rates aroud 90% 96% across all size classes, micro eterprises have a cosiderably lower chace of survival later o tha larger compaies. For example, after six years 70% of firms with 10 or more workers are still active o the market, while this is the case for oly 54% of firms with oe to four employees. Table 2: Survival rates of compaies of the market-orieted ecoomy* fouded i 2004 by employmet size class No. of employees After 1 year After 2 years After 3 years After 4 years After 5 years After 6 years * Sectios B-N of ÖNACE 2008 Source: Statistik Austria (BMWFJ, 2012) I 2010, about 24,100 Austria compaies were closed. Some 64% of them did ot employ ay workers ad aother 33% had fewer tha five employees. Betwee 2008 ad 2010 the umber of compay closures decreased i all size classes; however, the larger the firm, the higher the rate. As a cosequece, the relative importace of closures amog oe-perso eterprises was icreasig. The share of micro eterprises which are closig is particularly high i the trade, freelace/techical services ad arts/etertaimet/leisure sectors. 6 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

9 Restructurig i SMEs: Austria Figure 4: Compay closures by employmet size class, % Source: Statistik Austria Oly a small umber of closures are caused by isolvecy. There were about 5,900 compay isolvecies i Austria i This is the lowest level sice 2003, ad is particularly strikig whe compared with the peak i 2009 caused by the global ecoomic crisis. Each year, about 35% of isolvet compaies succeed i restructurig their firm ad cotiue activities through a restructurig pla (KSV1870, 2012). Table 3: Compay isolvecies, Year Number of compay isolvecies , , , , , , , , , , , ,869 Source: KSV1870 The total umber of workers affected by compay isolvecies (20,600 i 2011 ad 24,000 i 2010) pipoits that the vast majority of compaies becomig isolvet are SMEs. This ca also be show by the ivolved liabilities. More tha 90% of isolvecy proceedigs relate to debts of up to 2 millio, while fewer tha 2% relate to debts of more tha 7 millio. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

10 Restructurig i SMEs: Austria Figure 5: Distributio of isolvecies (proceedigs opeed) by liability size class, up to 2 millio 2 millio- 7 millio more tha 7 millio 91.5 Source: KSV1870, 2012 Iteral restructurig Horug et al. (2005) fid i their survey that more tha 70% of Austria compaies with up to 300 workers coducted iteral restructurig. Almost 30% have doe so i the year of the survey, with a further 30% carryig out restructurig durig the three years before the survey. About 10% had doe so withi the previous 10 years. Amog firms with 301 1,000 employees, the share is about 85%, ad i compaies employig more tha 1,000 staff it amouts to 90%. Iteral restructurig, however, is a very heterogeeous category. Poholzer (2004), for example, differetiates betwee: fiacial restructurig (such as chages i owership, restructurig of credits, itroductio of ew fiacig forms); orgaisatioal restructurig (optimisatio of processes, logistics); stakeholder-orieted restructurig (HR, purchases). Due to the broad uderstadig of this type of restructurig, it is very difficult to provide comprehesive data o the idividual forms, particularly as data geerally is so scarce o restructurig i SMEs. Here is some illustratio of what data there are o idividual forms of SMEs iteral restructurig. I 2005, the Global Etrepreeurship Moitor (GEM) foud that 44% 5 of Austria compay fouders or youg etrepreeurs (up to 3.5 years of busiess activity) ad 26% of the established etrepreeurs assessed their products/services as ew to their cliets or that they were ukow o the market (Sammer ad Scheider, 2005). I a iteratioal compariso, Austria raks i the top 33% regardig iovative youg eterprises, but oly i the lower middle group of established etrepreeurs. 5 45% i 2007 (Apfelthaler et al., 2007) 8 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

11 Restructurig i SMEs: Austria Table 4: Iovatio of Austria eterprises, 2005 Seeig products/services as ew Nascet etrepreeurs (up to 3.5 years) [] refer to shares for 2007 (Apfelthaler et al, 2007) Source: Sammer ad Scheider, 2005 Established etrepreeurs All cliets 10% [17%] 11% Some cliets 34% [28%] 15% No cliets 56% [55%] 74% Similar results are foud i the Commuity Iovatio Survey (2010) for Austria. I , 56.5% of Austria compaies carried out iovatios, with the share icreasig with compay size (from 51% i small to 71% amog medium-sized ad almost 90% i large firms). While amog SMEs the highest share of compaies idicated orgaisatioal iovatios, amog large firms product iovatios were more prevalet. Figure 6: Iovatio activities of Austria compaies , share of compaies by employmet size class % Total employees employees 250+ employees compaies with iovatio product iovatio product iovatio ew to the market process iovatio orgaisatioal iovatio marketig iovatio Source: Statistik Austria, CIS 2010 As has bee metioed, chages i owership ad maagemet structure ca also be cosidered as iteral restructurig, ad this is particularly relevat for SMEs i which a sigle perso is ower ad maager. Cosequetly, busiess trasfers ad successios may have a cosiderable ifluece o a firm s busiess orietatio ad developmet. Betwee 1998 ad 2011, about 5,900 Austria busiesses were trasferred aually to a ew ower, which correspods to about 1.6% 1.9% of active members of the Austria Ecoomic Chambers. Most trasfers were carried out i the tourism (32%), craft (26%) ad trade (21%) sectors. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

12 Restructurig i SMEs: Austria Figure 7: Achieved busiess trasfers, ,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Source: WKO, 2012b I a estimated 52,500 Austria SMEs (excludig oe-perso eterprises) will be faced with a busiess trasfer. This correspods to about 33% of all SMEs. Most trasfers will take place i the craft, trade ad tourism sectors. Figure 8: Potetial busiess trasfers of SMEs (excludig oe-perso eterprises) craft 4,900 idustry 10,500 17,000 trade trasport 3,100 16,000 1,000 tourism iformatio ad cosultig Source: Austria Istitute for SME Research (BMWFJ, 2012) Busiess expasio The survey coducted i the framework of the Global Etrepreeurship Moitor (GEM) i 2007 showed that Austria ascet etrepreeurs (those with busiesses up to 3.5 years old) had good growth expectatios. The share of those ot employig ay staff was plaed to decrease from 37% to 22%, while the share of those havig more tha 19 employees was plaed to icrease from 0% to 16%. More established etrepreeurs had hopes for growth too, but these were more modest. 10 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

13 Restructurig i SMEs: Austria Table 5: Plaed employmet developmet, share of etrepreeurs i %, No. of employees Source: Apfelthaler et al., 2007 Nascet etrepreeurs (up to 3.5 years i busiess) Established etrepreeurs (> 3.5 years i busiess) (plas) (plas) > Busiess expasio ca be carried out domestically or by eterig ew foreig markets. As regards iteratioalisatio, EIM Busiess & Policy Research (2010) foud that i about 33% of Austria SMEs were active i iteratioal activities (exports, imports, ivestig abroad, cooperatig iteratioally, ad havig iteratioal subcotractor relatioships). This level is cosiderably below EU average (44%). This also holds true whe focusig solely o exports. While about 25% of SMEs i the EU, o average, are egaged i direct exports, the share is less tha 20% for Austria SMEs. Furthermore, atioal VAT statistics show huge differeces amog Austria compaies. While fewer tha 5% of compaies with a turover of up to 100,000 have export turover, the share rises to about 33% amog firms with a export turover of 3 millio 10 millio, ad to a share of about 66% for the largest firms. Pöschl et al. (2009) show that Austria exporters active i maufacturig o average employ 183 workers ad are, hece, about four times larger tha domestically orieted compaies i their sample (with the exceptio of the chemical idustry). Figure 9: Share of compaies with export turover accordig to VAT statistics, % Source: Statistik Austria Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

14 Restructurig i SMEs: Austria However, the share of Austria SMEs ivestig abroad is much higher tha o EU average (11% compared with 4% i ) (BMWFJ, 2010). While i geeral, the share of compaies with at least oe foreig subsidiary icreases with size class (as does the umber of foreig subsidiaries), it is iterestig to ote the comparatively high level of micro eterprises, particularly i o-maufacturig sectors, that ca be cosidered multiatioal compaies. Table 6: Share of compaies with at least oe foreig subsidiary by size class, 2009 No. of employees Total Maufacturig No-maufacturig Source: Falk et al., Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

15 Drivers of restructurig Due to the lack of research specifically dealig with the issue of restructurig i SMEs i Austria, little ca be said about drivers of restructurig. I the followig sectio, very fragmeted fidigs o the motivatios for outsourcig, iteratioalisatio ad the reasos for isolvecies ad SME crisis are summarised. I their survey amog works coucils, Horug et al. (2005) foud that the improvemet of competitiveess was the motive most metioed for restructurig by the owers of compaies with up to 300 workers (about 45%). Almost 40% cited a desire to reduce costs, with aother 40% watig to cut duplicatio. I about 30% of cases, the icrease of core competeces was the driver, with cuts i staff costs idicated by almost 20% of the owers, (but aother 25% of the works coucils assume that this was a motive but has ot bee officially metioed). Globalisatio, ad the trasformatio of cetral ad easter Europea ecoomies, icludig their access to the EU, had a strog (ad positive) ifluece o Austria busiess sectors, icludig SMEs (Voss, 2008). Exports have bee icreasig, resultig i a improved trade balace ad global market share. Furthermore, foreig direct ivestmet ito cetral ad easter Europe was expaded, givig Austria compaies a pioeerig role i ivestmet i the New Member States. The mai reaso for Austria compaies (with 46% employig fewer tha 50 employees ad aother 41% havig workers) to outsource IT services is to reduce costs (30%) ad get access to qualified IT specialists ad resources (24%) (IT Sourcig Europe, 2010). Aother study o IT outsourcig metioed that for 25% of large eterprises ad 8% of SMEs the global ecoomic crisis was a reaso to cosider outsourcig as a meas to reduce costs (ivestmet ad ruig costs), focus o the core busiess ad save time. 6 The mai reasos for Austria compaies, particularly smaller oes, to offshore productio are the establishmet of sales ad customer services abroad, as well as the potetial to save costs (icei, 2007). Other importat reasos are resource shortages as well as flexibility ad delivery capacity. A 2008 study o busiess trasfers shows that the reaso for 50% of Austria successios is the age of the iitial etrepreeur, followed by his/her wish to coduct aother self-employed activity (15%). Some 14% of trasfers are caused by accidets/health problems/death of the etrepreeur ad 8% by his/her wish to switch ito depedet employmet. (Madl et al., 2008) The mai reaso for compay isolvecies i Austria the majority of which are SMEs are compay iteral features (more tha 40% of isolvecies), related to lackig busiess kow-how. This is maily related to: ufavourable orgaisatioal structures; lack of strategic plaig ad fiacial moitorig; acceptace of paymet delays by customers; marketig deficiecies; coflicts amog owers. 6 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

16 Restructurig i SMEs: Austria About 20% of the isolvecies are caused by exteral factors, such as the ecoomic crisis. Both iteral ad exteral reasos show a icreasig importace over time. Persoal default, such as fraud, speculatio or withdrawal of assets/equity for private use is ot oly the least importat reaso, but also characterised by decreasig importace over time, as is egligece. Figure 10: Reasos for compay isolvecy, % persoal default egligece compay iteral reasos lack of capital compay exteral reasos others Source: KSV1870 (2011) Poholzer (2004) metios that a compay crisis is ot caused by a sigle evet or factor, but by a combiatio of iteral ad exteral issues. He differetiates betwee emotioal ad busiess admiistratio ad ecoomic-related drivers for SME isolvecies. Emotioal causes iclude: low iterest i fiacial plaig; the moitorig ad iterpretig of data too optimistically; over-optimistic perspectives for the future; a higher emphasis o prestige rather tha o ecoomically soud decisios; blamig employees for ufavourable busiess developmet rather tha admittig oe s ow faults, resultig i demotivatio ad decreased performace of staff; rejectio of ay recommedatios by others. 14 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

17 Restructurig i SMEs: Austria Busiess admiistratio ad ecoomic reasos iclude: sectoral dowturs; issues related to previous compay developmet (for example, low equity due to capital eeds i/after busiess trasfer, ufavourable previous ivestmets); delays by cliets i payig (or ot payig at all); lack of marketig strategy or fiacial cotrol; iefficiet productio processes; lack of ivolvemet of employees i compay strategies, resultig i reluctace to chage ad lower motivatio ad commitmet. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

18 Distictive characteristics of restructurig i SMEs The scarcity of available research studies o restructurig i SMEs i Austria meas that a comprehesive picture caot be preseted o the processes ad proceedigs SMEs apply i aticipatig ad maagig chage. The very fragmeted iformatio which ca be give is limited to specific restructurig types for which research is available, ad to a descriptio of the restructurig forms rather tha of processes applied. The three compay case studies carried out i this project ( ca supplemet the fidigs below. Aticipatio, plaig ad preparatio of restructurig evets Poholzer (2004) metios that most eterprises do ot use suitable ways of idetifyig compay crises at a early stage, ad that risks if idetified at all are ofte wrogly assessed. Crisis is ofte cosidered as a temporary problem, caused by exteral reasos (such as low demad or low ecoomic developmet). Furthermore, SMEs maily use traditioal accoutig systems. These are based o past data which are ot sufficiet for the early detectio of a potetial crisis. The available, fragmeted research shows that Austria SMEs ted to be weak i forecastig. A IT outsourcig study (IT Sourcig Europe, 2010) shows that oly 31% of Austria compaies (46% of these employed fewer tha 50 employees ad aother 41% had workers) coduct i-house assessmets of work to be outsourced before sigig a outsourcig cotract, while 19% ask others for refereces ad 18% hire a cosultat. I 39% of the busiess trasfers carried out i 2006 there was a cocrete pla for the successio, compared with 18% i 2001 (Madl et al., 2008). There is a higher share of plas i: larger firms (49% i firms with more tha four employees); family busiesses (50%); trasfers due to age (47%). I geeral, it ca be assumed that etrepreeurs uderestimate the importace of the log-term plaig of busiess trasfers ad take comparatively little cosideratio of upredictable evets that might affect their compay. Almost 75% of trasfer plas iclude a cocrete time pla for realisig the successio ad, o average, the etrepreeur starts preparig the trasfer about two years before the plaed official hadover date. About 50% of trasfer plas are writte dow, ad i about 80% of the cases the successor is ivolved i the trasfer plaig. Maagig restructurig characteristics of restructurig evets Horug et al. (2005) show that almost 40% of the firms with up to 300 employees outsourced typical white-collar work, maily withi the last 10 years. Accordigly, the smallest compay category lies i betwee the firms with 301 1,000 workers (about 30% outsourced white-collar work) ad those with more tha 1,000 staff (about 50%). Auxiliary activities were outsourced by about 50% of the compaies with up to 300 employees, by about 70% of those with 301 1,000 workers ad almost 90% of the largest compaies (Horug et al., 2005). 16 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

19 Restructurig i SMEs: Austria A 2010 survey (IT Sourcig Europe, 2010) showed that: 32% of the Austria compaies (46% employig fewer tha 50 employees ad aother 41% havig workers) outsourced their software/web developmet earshore (maximum of two time zoes away); 17% outsourced earshore ad withi Austria; 16% offshored (more tha two time zoes away); 13% both offshored ad earshored; 11% offshored ad outsourced withi Austria; 5% outsourced withi Austria oly; 6% combied all three methods. Destiatios are maily chose o the basis of geographical/cultural proximity (25%), available resource pools (19%) ad low costs (18%). As for outsourcig experiece ad choice of parters: 12% of the compaies had outsourced software developmet for more tha three years; 37% had oe to three years of outsourcig experiece; 51% had started outsourcig withi the last year; 87% outsourced their IT services to a sigle provider; 57% partered with a provider employig workers; 31% partered with small providers (fewer tha 50 employees); 12% partered with larger firms. Parters are maily selected o the basis of refereces ad reputatio (26%), low rates (17%) ad the availability of iovative busiess models (13%). As regards the iteratioalisatio strategy of Vieese service compaies, Nowoty et al. (2009) fid that smaller compaies are more likely to export tha larger oes (43% of micro eterprises compared with 25% of large firms) ad post workers (74.5% of micro firms vs. 58% of large compaies) while cooperatio ad, particularly, the establishmet of foreig subsidiaries icreases with firm size. Table 7: Forms of iteratioal activities of Vieese service compaies, share of eterprises by size class i % Postig workers Cooperatio Subsidiary Export Micro Small Medium-sized Large Total Source: Nowoty et al., 2009 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

20 Restructurig i SMEs: Austria Falk et al. (2010) observe that small Austria multiatioal compaies (that is, firms with at least oe foreig subsidiary) prefer foreig locatios that are close to their headquarters (withi Europe) while larger multiatioals have a higher share i more distat locatios. Table 8: Share of compaies with at least oe foreig subsidiary by employmet size class ad locatio, 2009 No. of employees Wester Europe Easter Europe North America Asia South America Source: Falk et al., 2010 Amog the Austria compaies with process iovatio, improvig support for these procedures are most commo (about 18% of small ad about 32% of medium-sized eterprises), followed by ew/improved methods for producig goods or services (14% ad 26%). Least importat was the developmet of iovatios related to logistics or sales methods. Table 9: Share of compaies with process iovatio i , by employmet size ad type of iovatio Source: Statistik Austria (CIS, 2010) New/improved logistics procedures, delivery or sales methods New/improved supportig activities for processes ad procedures New/improved methods for No. of employees producig goods or services Total Available data show that the share of compaies cooperatig i the field of the developmet or marketig of iovatio icreases with compay size class. While about 45% of small firms have established cooperatio to achieve iovatio, the share is as high as 77% amog large firms. 18 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

21 Restructurig i SMEs: Austria Figure 11: Share of compaies that have established iovatio cooperatios, % employees employees 250+ employees Source: Statistik Austria (CIS 2010) As regards busiess trasfers, a decreasig tedecy of family iteral successios is observed i Austria (Madl et al., 2008). While, i 1996, 75% of all trasfers were carried out withi the family, the share reached oly 50% i I 2006, about 20% of family iteral trasfers were carried out through gift ad about 10% through iheritace. While this form of successio is of decreasig importace, fiacial compesatio is gaiig importace. I family exteral trasfers, sale ad leasig are the most promiet forms, followed by maagemet buy-outs. About 57% of the successors used their ow fuds to fiace the busiess trasfer, 51% took o bak credits, ad about 14% received public fiacial support, with aother 14% havig private loas. Figure 12: Forms of busiess trasfers, % family iteral trasfers family exteral trasfers Source: Madl et al., 2008 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

22 Restructurig i SMEs: Austria I both family iteral ad exteral trasfers a step-by-step withdrawal of the iitial etrepreeur from the compay s maagemet while the successor is icreasigly ivolved i compay decisios is deemed advatageous i order to avoid a break for iteral ad exteral stakeholders. As a cosequece, 62% of etrepreeurs takig over a busiess i 2006 had bee workig i the compay before the official trasfer, for a average of 12 years. As the share is as high as 80% i family iteral trasfers, this idicates that family busiess trasfers are a log-term process, icludig a early ivolvemet of the successor. At the same time, i about 33% of the trasfers, the iitial etrepreeur is still active i the compay after the successio, maily by doig operative work or providig advice to the successor. Ivolved actors Social partership i Austria ca be cosidered as istitutioal cooperatio betwee employees orgaisatios, employers represetatives ad the govermet, coverig all importat aspects of ecoomic ad social policy (Voss, 2008). At compay level, a dual model of works coucil ad trade uio represetatio is i place. If there are at least five employees at a workplace they ca decide to elect a works coucil. This represets the employees iterests i social, staff ad ecoomic matters ad is therefore also ivolved i restructurig (such as beig give iformatio about plaed collective dismissals). However, available data show that works coucils are ot very widespread i micro (9%) ad small eterprises (19%), ad oly about 50% of medium-sized firms have a works coucil. Figure 13: Establishmets with a works coucils % Source: Europea Compay Survey 2009 (Eurofoud, 2009) Poholzer (2004) metios the followig importat stakeholders i a SME crisis. While these are recommedatios, rather tha providig iformatio about these bodies actual ivolvemet, it ca be assumed that they are the oes geerally ivolved i SME restructurig (ot ecessarily just i crises). Baks ad other fiacial istitutios: It is importat for a etrepreeur to approach these early i order to keep ope a wide rage of optios. Public authorities (such as tax or social security): They should be iformed about the mai characteristics of ay crisis, ideally by professioal restructurig maagers or tax cosultats who are ofte better accepted by the authorities. Cliets: Key customers should be iformed to couteract ay rumours about the stability ad reliability of the compay. The loger ad itese the relatioships have bee, the more detailed the iformatio should be. 20 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

23 Restructurig i SMEs: Austria Suppliers: They ofte support SMEs i crisis by gratig loger paymet periods, offerig credit, providig shorter delivery times, ad cooperatig i product developmet. Employees: The success of restructurig depeds largely o staff commitmet, uderliig the ecessity to alig their iterests with the restructurig objectives. Busiess orgaisatios: They should be iformed ad approached for advice ad assistace o matters such as commuicatio with employees ad iformatio for the geeral public. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

24 Mai challeges ad costraits facig SMEs i restructurig Agai, due to the lack of data ad literature ad the heterogeeity of both restructurig evets ad SMEs themselves, it is ot possible to give a geeral picture about the mai difficulties SMEs ad their employees face whe restructurig. The followig paragraphs summarise the fragmeted research available, givig some idicatio of challeges to be mastered i regard to crisis, outsourcig ad busiess trasfers, oly. Poholzer (2004) idicates that, i a crisis, the SME etrepreeur may experiece a psychological ad physical overload due to his/her compay s limited maagemet capacity ad the icreased requiremets caused by the situatio. Such stress might result i poor commuicatio or other ufavourable developmets edagerig the success of the restructurig. Not oly HR issues, but also fiacial resources are ofte highlighted as mai costraits for SMEs. I 2012, however, the share of SMEs reportig a deterioratio i baks willigess to provide a loa dropped to 26% from 31% i the previous year (Europea Commissio, 2012). The share of rejected loas for SMEs is oly 3% i Austria compared with a EU average of 15%. Also, the mark-up o iterest rates for small loas dropped from 20% to 13% (EU average: a drop from 24% to 19%). Cosequetly, access to credit seems to have slightly improved after the fiacial crisis, ad does ot seem to be as severe a problem for Austria SMEs as for SMEs i other Europea coutries. I a survey o IT outsourcig 7, Austria SMEs said they did ot outsource because they assumed it was expesive ad had cocers about the service quality ad data security. Furthermore, compaies feared becomig depedet o the service provider. I aother IT outsourcig study (IT Sourcig Europe, 2010), Austria compaies (46% employig fewer tha 50 employees ad aother 41% havig workers) idetified poor commuicatio with the vedor s project maagemet, delays i delivery schedules ad cultural differeces as mai challeges to outsourcig IT. The mai costraits for achievig a busiess trasfer are: fidig a suitable compay to take over; combiig the ew etrepreeur s ideas with the previous compay strategy; tax burdes; the ecoomic situatio of the compay; the eed to ivest after the takeover. Iterestigly, compared with these factors, estimatig the compay value ad fiacig the purchase price was of lower relevace for the successors Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

25 Restructurig i SMEs: Austria Figure 14: Mai costraits of a busiess trasfer, 2006 Fiacig the purchase price Establishig the compay value Fidig a suitable compay Ecoomic situatio of the compay Necessity to ivest after the trasfer Tax burde Combiig ew ideas with previous strategy % (very) importat medium low to o importace Source: Madl et al., 2008 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

26 Busiess support from public ad private sources Supply Austria has traditioally had a SME-friedly policy which has bee stregtheed eve more sice the global fiacial crisis (Europea Commissio, 2012). As already metioed, the Austria SME policy does ot explicitly address restructurig as such, but idividual forms of SME restructurig are implicitly covered by public ad policy debate as well as operatioal support measures. The followig paragraphs provide illustrative examples of what is doe to support SMEs ad their employees; a more comprehesive overview o the multitude of istrumets provided particularly if also cosiderig regioal offers would go far beyod the scope of this report. The Austria Federal Ecoomic Chamber (WKO) provides a database o support istrumets 8 which is searchable by regio, sector ad type of support (traiig, advice, busiess expasio, busiess trasfer, iovatio, iteratioalisatio, fiace ad cooperatio). There also is a specific category of restructurig (comprisig more tha 40 regioal istrumets), which maily show ivestmet guaratees as well as guaratees for measures aimed at stabilisig SMEs i fiacial difficulties. The Austria govermet supports busiesses i their iovatio, ivestmet ad iteratioalisatio activities through subsidies, favourable credits ad guaratees. 9 Followig the SME promotio law, the Austria Wirtschaftsservice GmbH (aws), a promotio bak of the federal govermet ad the Österreichische Hotel ud Tourismusbak (ÖHT), a special bak owed by the three largest credit istitutes of Austria, support SMEs i their restructurig through public credit guaratees for ivestmet ad project costs related to the growth or stabilisatio phase ad busiess trasfers. The various support istrumets are characterised by favourable coditios (such as low, or o, hadlig fees), ad SMEs ofte do ot have to provide collateral. I 2010 the Aktiosprogramm KMU (actio programme SMEs) with focus o supportig compaies sustaiability ad copig with crisis was established, ad i 2011 a coachig programme to show SMEs potetial ways of developmet was draw up ( Wachstums-Coachig ) (BMWFJ, 2012). A very SME-specific, proactive, istrumet is the qualificatio advice for compaies ( Qualifizierugsberatug für Betriebe, QBB ), established i 2000 to assist firms with up to 50 employees to develop a strategic qualificatio plaig, the lack of which ofte proved to be detrimetal to applicatios for fiacial support for qualificatio (BMASK, 2011). The istrumet ivolves a aalysis of traiig eeds, the developmet of life cycle orieted qualificatio plas ad advice i the field of HR maagemet, work orgaisatio ad related issues. Similarly, i the framework of qualificatio etworks ( Qualifizierugsverbüde ), qualificatio advice is targeted at cooperatig employers of which at least 50% have to be SMEs. Iteratioalisatio of SMEs is strogly supported through the Iteratioalisierugsoffesive (iteratioalisatio programme) of the Federal Miistry of Ecoomics Youth ad Family ad the Federal Ecoomic Chamber. This comprises a substatial package of activities related to: awareess raisig; motivatig firms to export; Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

27 Restructurig i SMEs: Austria specific idustries or topics; iteratioal techology etworkig; improvig competitiveess through educatio ad traiig; service exports ad iteratioal projects; positioig the Austria ecoomy abroad (BMWFJ, 2010). Furthermore, there are SME-specific iovatio support programmes. The scope of the Österreichische Forschugsförderugsgesellschaft (FFG) has bee cotiuously expaded durig the last few years, followig the govermet s objective to foster the research ad iovatio performace of SMEs (BMWFJ, 2012). For example, i 2011, the offers of FFG for SMEs were budled ito a SME package cosistig of: fiacial support for establishig iovatio cocepts ad prototypes; feasibility studies; research ad developmet projects; peetratio of markets; ew target groups. Furthermore, i 2012, a iovatio ehacig public procuremet strategy has bee lauched. 10 This icludes, amog others, the stipulatio that iovatio is to be explicitly cosidered i the law regulatig public procuremet, ad public procuremet cetres will be traied to facilitate the implemetatio of iovatig ehacig public procuremet. Also, i 2011, a icrease of the upper limit for favourable tax treatmet for cotracted research is particularly targeted at SMEs that do ot have their ow research ad developmet departmet, ad the 2011 icrease i the research ad developmet tax premium is importat for small firms (Europea Commissio, 2012) i their iovatio ad expasio efforts. Busiess trasfers ad successios are so importat to the sustaiability of compaies, ot least because of the ehaced dyamism caused by the itroductio of ew cocepts ad ideas, that advice dealig with, for example, the tax treatmet ad modalities of trasfers is offered by the Austria Federal Ecoomic Chamber, the Chamber of Chartered Public Accoutats ad Tax Cosultats ad the Associatio for the Protectio of Creditors 11. I 2008 the iheritace ad gift tax o busiess trasfers was abolished ad the services of the successor s bourse of the Federal Ecoomic Chamber were expaded Beschaffug.aspx 11 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

28 Restructurig i SMEs: Austria The 2010 amedmet of isolvecy regulatios created a sigle isolvecy proceedig ad focused o makig reorgaisatio easier ad faster, for example through: adaptig the termiology (differetiatig betwee restructurig, forced settlemet ad isolvecy/bakruptcy ); lowerig the miimum required quotas for admiisterig the restructurig uder supervisio of a admiistrator from 40% to 30%; icreasig the icetives to eter proceedigs earlier (Europea Commissio, 2011; BMWFJ, 2010). While it takes less time i Austria tha the EU average to close a busiess (1.1 vs years), the costs ivolved i widig up are much higher (18% vs. 10.6% of the debtor s estate). I 2012, the federal govermet plas to amed the private bakruptcy legislatio to limit further the discharge time of hoest etrepreeurs after bakruptcy (Europea Commissio, 2012). To cushio the effects of the global ecoomic crisis ad to keep the icrease i uemploymet as low as possible, the Austria govermet itroduced several packages (BMASK, 2011). The first package (Kojukturpaket I) icluded specific measures related to access to fiace for Austria compaies, with a focus o SMEs (cotiuig the iteratioalisatio support, establishig a fud to help SMEs). The secod (Kojukturpaket II) focused o ivestmet ad icluded ivestmet icetives ad brigig public ivestmet forward. The third pillar was a tax reform i 2009 aimig at improvig Austria s ecoomic structure. Various assessmets agree that these measures have had a positive effect o the labour market ad Austria s GDP. However, o results specific to compay size have bee published. At the same time, three labour market packages ( Arbeitsmarktpakete I, II ad III ) were iitiated by the govermet ad social parters to support the labour market (for example, reformig the short-time workig regulatio, facilitatig the establishmet of work foudatios, ad brigig i measures o qualificatios). These refer to both the employed ad uemployed ad have o specific regulatios for SMEs. Apart from public support, there is a wide rage of private busiess cosultats ad lawyers specialised i restructurig. The restructurig ad turaroud forum retur ( ad the website (etrepreeur i difficulties), for example, both provide a list of experts as well as publicatios (such as maagemet literature, mauals) ad host evets to assist etrepreeurs. Demad I 2011, i the framework of offerig guaratees, credits ad subsidies, the Austria Wirtschaftsservice (aws) i 2011 supported 5,251 projects (more tha 97% of these were i SMEs) with a total of 834 millio guaratees, credits ad subsidies (SMEs accoutig for more tha 75% of this). This eabled ivestmet of 2.37 billio, the retetio of 68,000 jobs ad creatio of 7,400 more. About 75% of ew jobs were created i micro eterprises. After the icreased demad for SME fiace (maily from micro ad small firms) caused by the global ecoomic ad fiacial crisis, the demad for public support has retured to pre-crisis levels i (BMWFJ, 2012) A evaluatio of the guaratees offered by the aws i the framework of the SME promotio law shows that the requiremets of almost all of the surveyed SMEs could be satisfied by the services offered (Mayer et al., 2011). At the same time, for more tha 33% of the SMEs the differeces betwee the idividual programmes are ot clear ad may beeficiaries actually do ot kow from which particular support they have beefited. The evaluatio pipoits that, i geeral, SMEs approach their baks for credits without kowig about the possibility of public credit guaratees ad lear about them oly i their meetigs with the bak represetatives. Cosequetly, almost 60% of the beeficiaries applied for public support o the recommedatio of their bak. 26 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

29 Restructurig i SMEs: Austria A evaluatio of the qualificatio advice for compaies (Qualifizierugsberatug für Betriebe, QBB) to assist firms with up to 50 employees i the establishmet of a strategic qualificatio plaig i Lower Austria, showed that about 1% of micro ad small firms were reached with the measure (BMASK, 2011). Oly about 10% 15% of the cotacted firms were willig to participate i a first meetig ad, of those, oly 15% cotiued with the cosultatio. The effects i terms of established qualificatio plas ad icreased traiig activities are assessed to be limited. Some 78% of eterprises that applied for iovatio support with the FFG i 2011 were SMEs. This correspods to more tha 1,500 projects ad is a icrease by ie percetage poits compared with This is attributable to the recet programmes that have targeted this group. If oly basic programmes are cosidered (these support research projects of compaies, research istitutes ad idividuals resultig i market-orieted outcomes) the share of supported projects of SMEs is almost 87% (or almost 44% for micro eterprises). (BMWFJ, 2012) I the field of iteratioalisatio, EIM Busiess & Policy Research (2010) observe that 47% of Austria SMEs use fiacial public support, thereby beig top i the Europea coutry rakig. I cotrast to this, oly 3% use ofiacial support for iteratioalisatio. A study by Madl et al (2008) shows that, i relatio to busiess trasfers: 90% of successors i 2006 approached their tax cosultat for advice related to the busiess trasfer; 75% cosulted the Ecoomic Chambers; about 66% got advice from family or frieds; 58% received advice from baks; 43% approached lawyers or otaries; 31% of etrepreeurs takig over a busiess i 2006 said it was a challege to fidig public support durig the trasfer process; 18% had difficulties i implemetig received advice; 16% foud it hard to pay for the cost of advice. I spite of these challeges, the successors were geerally satisfied with the support received (84% as regards tax cosultats, 79% as regards family ad frieds, 63% as regards the Ecoomic Chambers, 60% as regards lawyers ad baks). Additioal demad for support was metioed i the fields of legal ad tax issues (about 60%), admiistrative questios (about 50%), cotractural ad marketig issues, the assessmet of the compay value (about 30% 40% each) ad how to deal with the employees (about 25%). (Madl et al, 2008) Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

30 Outcome of the restructurig evets Research o the effects of restructurig maily deals with the macroecoomic level, such as the outcome of iteratioal trade o the Austria ecoomy. Microecoomic perspectives cosiderig the effects o the orgaisatioal level of idividual firms or their employees are scarce ad eve more limited whe focusig o SMEs. Cosequetly, agai, oly fragmeted iformatio ca be preseted, dealig maily with the employmet effects of outsourcig, offshorig, iovatio ad busiess trasfers i SMEs. I their survey amog Austria works coucils, Horug et al. (2005) fid that i 55% 60% of compaies with up to 300 employees which restructured, staff umbers were reduced ad departmets closed or dowsized (compared with about 80% i firms with more tha 1,000 staff). I the vast majority of cases, this took place withi the first year after restructurig. About 75% of the works coucils of the smallest compay size class report icreased work pressure, compared with more tha 80% i larger firms. About 45% of works coucils of firms with up to 300 employees idicate that jobs are isecure after restructurig, while this share is as high as 65% 70% i larger compaies. About 55% of the works coucils of firms with up to 300 workers assess that the workers represetatives have a more limited ifluece after the restructurig (aroud 70% i larger firms). I a 2010 IT outsourcig study (IT Sourcig Europe, 2010), Austria compaies (46% employed fewer tha 50 employees ad aother 41% had workers) report savig 10% 24% of operatig costs by outsourcig. I , for each job offshored by Austria compaies abroad, 2.4 jobs were created i Austria (icei, 2007). The highest growth is achieved by the smallest compaies: for each job lost through the iteratioalisatio of compaies with up to ie workers, 3.5 ew jobs were created i Austria. By offshorig, these compaies succeed i improvig their cost structure so much that they ca achieve a growth related to additioal employmet that could ot have bee doe without iteratioalisatio. I small ad medium-sized firms, three ew jobs o average are created i Austria for each offshored workplace. O average, i 2010, Austria compaies achieved 11.9% of their turover with iovatios, with this share ragig from 8.4% i small compaies to 13.4% i large oes. Slightly more tha half of this turover is attributed to products that are ew oly to the compay, but ot to the market. Small, ad particularly medium-sized, compaies achieve a cosiderably lower level of their turover o iovatio with products ew to the market. Table 10: Turover achieved by product iovatio by employmet size class, 2010 % of total turover % of total turover achieved % of total turover achieved achieved with product with product iovatio ew to with product iovatio ew to No. of employees iovatio the market the market Total Source: Statistik Austria (CIS 2010) A study i 2008 (Madl et al., 2008) shows that compaies which had trasferred owership i 2006 employed, o average, 4.7 workers (icludig the etrepreeur). This costitutes a cosiderably higher employmet effect tha that of start-ups, as 80% of those are oe-perso eterprises. After the trasfer, 66% of the compaies made chages i employmet umbers. I about 20% of the cases the umber of employees was reduced while i about 33% additioal staff was employed. 28 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

31 Restructurig i SMEs: Austria More tha half of the successors of 2006 achieved a icrease i their umber of cliets ad orders after the trasfer, resultig i a icreased turover, while about 20% experieced a decrease (Madl et al., 2008). After the trasfer, about 75% of the busiesses itroduced ew products or services or improved their offer. More tha 60% applied ew marketig strategies ad improved the methods/processes of their productio. Compay closures i 2010 resulted i a loss of about 37,000 jobs of which 47% cocered depedet employees. O average, each closure made 1.9 employees jobless. Quite aturally, the closure of larger firms has greater implicatios for the labour market. As a cosequece, although compaies with te or more employees accouted for oly 12% of all closures i 2010, they were resposible for almost 25% of lost jobs. Table 11: Number of employees affected by closures of compaies of the market-orieted ecoomy by employmet size class, 2010 No. of employees Employees i closed compaies Of whom: depedet employees Employees per closure 0 12, ,067 9, ,845 3, ,327 4, Total 36,883 17, N.B. Sectios B-N of ÖNACE 2008 Source: Statistik Austria (BMWFJ, 2012) Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

32 Coclusios ad policy issues The literature ad data review o restructurig i SMEs i Austria has show that little iformatio is available o the topic, due to a lack of stadardised secodary data, surveys ad research. Stadardised data sheddig light o restructurig i Austria maily provides macroecoomic iformatio, while research teds to focus either o the whole eterprise populatio without size class differetiatio, o large busiesses or o very specific research questios coverig idividual idustries or limited research questios, makig it difficult to geeralise results. Cosequetly, further research is eeded to lear more about restructurig i SMEs. This holds particularly true for idividual forms of restructurig, such as busiess expasio, iteratioalisatio ad closure, which are deemed highly relevat for SMEs. For other restructurig types, such as relocatio or mergers/acquisitios, it caot be assessed how importat such evets are for SMEs as they have seldom bee the subject of research ad policy debate. Furthermore, ext to a quatitative assessmet o the level of differet restructurig types for SMEs, more qualitative iformatio about the motivatios for SMEs to restructure ad the actual steps ad procedures carried out i SME restructurig would be eeded to get a better uderstadig about how restructurig is coducted ad how it affects the employees ad the orgaisatio of the busiess. More kowledge about the challeges ad costraits that SMEs ad their employees face i restructurig could cotribute to better public support, ad cosequetly a outcome that beefits both the busiesses ad the labour market. This could also cotribute to couteractig the ofte egative image of restructurig, as beig widely idetified with job losses. More i-depth iformatio could help to show that ot all restructurigs result i egative employmet effects, ad that eve job losses ca result i positive labour market effects if a busiess becomes more competitive ad ready to grow. As regards public support, Austria is characterised by a strog traditio of comprehesive SME policy ad, eve if ot explicitly sigposted, there is a multitude of public ad social parter based support istrumets which foster SMEs restructurig. Nevertheless, there a few areas of potetial improvemet which have bee idetified by this project. First of all, the wide variety of available support istrumets, offered by various actors ad at differet admiistrative levels, seems to result i a certai lack of trasparecy about what is available. Compaies ad employees have difficulty i gaiig a good overview of the differet schemes, ad i idetifyig differeces betwee them, so it is hard for them to choose the most suitable oe. Iitiatives such as cetralised database as well as advice from busiess ad employees orgaisatios should be further ecouraged. The Austria govermet ad social parters have already recogised the heterogeeity of the SME sector ad targeted specific measures to idividual SME types. However support for compaies which are growig, particularly youg compaies, could be improved. Youg compaies are geerally characterised by good growth ambitios as the literature ad data review shows, but at the same time face several challeges such as the fact that they do ot have a established reputatio or accumulated profits, ad the etrepreeurs are relatively iexperieced. Next to providig a geerally beeficial busiess eviromet, youg busiesses growth could be supported by providig the ew maagers with practical busiess kow-how (for example, through coachig/metorig after the immediate start-up phase). The lack of this support was idetified as oe of the mai challeges i restructurig ad a reaso for closure. This ehaced kowhow could also cotribute to a more strategic approach i doig busiess, which, i tur, could foster the aticipatio ad preparatio of chage, which was foud to be rather weak i Austria SMEs. Next to maagemet kow-how, a geeral challege i SME restructurig is their limited huma ad fiacial resources. Public measures to couteract this have already bee implemeted (such as wage subsidies, traiig support, lowerig of social security cotributios, provisio of favourable credits ad bak guaratees) ad should be cotiued. There is, 30 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

33 Restructurig i SMEs: Austria however, the potetial for improvig educatio ad traiig for workers, for example through campaigs to icrease employers ad employees willigess to take part, ad to prepare o time for future chages i the ecoomy. I this cotext, the Austria Federal Ecoomic Chamber (WKO) has asked the govermet to implemet some measures ad stregthe others to foster Austria busiesses (WKO, 2012a): icreasig the supply of skilled labour, with more attractive appreticeship, icetives for iteratioal recruitmets, aligig curricula with busiess eeds; easig bureaucracy o support measures, ad that related to authorisatios for plats, ad establishig oe-stop-shops for busiess services by regioal ad local govermets; improvig access to fiace, for example through fosterig the risk capital market, ad ot restrictig the provisio of loa guaratees; providig etrepreeurs with the opportuity to make workig time more flexible, ad improvig short-time workig regulatios; offerig ivestmet ad iovatio icetives, for example through supportig cooperatios; reducig the barriers SMEs face i public procuremet; supportig iteratioalisatio. The curret literature ad data review has show that Austria SMEs ca be cosidered to be rather iovative, ad a broad spectrum of public support is available to support this. However, more tailor-made support towards product iovatio could be cosidered, as available data show that SMEs are weaker i this area compared with orgaisatioal iovatios. Oe way of doig this could be helpig the establishmet ad maagemet of iovatio cooperatios as they are more difficult for SMEs to achieve tha for larger firms. However, they are ofte a importat precoditio for gettig access to public support ad makig iovatios. To do more to help iovatio i SMEs, the Federatio of Austria Idustries (Idustriellevereiigug, IV) suggests 12 : itesifyig the etworkig betwee large firms, SMEs ad research istitutes; creatig a iteratioally competitive system of research support, with elemets of direct ad idirect fiscal istrumets; stregtheig educatio ad traiig i mathematics, iformatio techologies, atural scieces ad techiques already i school, ad icetive-orieted subsidies Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

34 Bibliography All Eurofoud publicatios are available at Apfelthaler, G., Schmalzer, T., Scheider, U. ad Wezel, R. (2007), Global Etrepreeurship Moitor: Bericht 2007 zur Lage des Uterehmertums i Österreich, FH Joaeum ad Uiversität Graz, Graz. BMASK (2011), Aktive Arbeitsmarktpolitik i Österreich, Budesmiisterium für Arbeit, Soziales ud Kosumeteschutz, Viea. BMWFJ (2010), Mittelstadsbericht Bericht über die Situatio der kleie ud mittlere Uterehmuge der gewerbliche Wirtschaft, Budesmiisterium für Wirtschaft, Familie ud Juged, Viea. BMWFJ (2012), Mittelstadsbericht Bericht über die Situatio der kleie ud mittlere Uterehme der gewerbliche Wirtschaft, Budesmiisterium für Wirtschaft, Familie ud Juged, Wie. EIM Busiess & Policy Research (2010), Iteratioalisatio of Europea SMEs, Europea Commissio Directorate Geeral for Eterprise ad Idustry, Zoetermeer, Brussels. Europea Commissio (2011), SBA Fact Sheet Austria 2010/2011, Brussels. Europea Commissio (2012), SBA Fact Sheet Austria 2012, Brussels. Eurofoud (2009), Europea Compay Survey 2009, Eurofoud, Dubli. Falk, M. ad Wolfmayr, Y. (2010), The extet, characteristics ad impacts of FDI ad multiatioal firm activities. A firm level aalysis, FIW Research Reports 2009, Vol. 10, No. 6, WIFO/WIIW/WSR, Viea. Horug, A., Leitsmüller, H. ad Samsiger, R. (2005), Die Auswirkuge vo Umstrukturieruge auf Beschäftigte ud Mitbestimmug, Kammer für Arbeiter ud Agestellte für Wie/FORBA. Iteratioales Cetral Europa Istitut wie (icei) (2002), Österreich als Ishorig-Destiatio, Wie. IT Sourcig Europe (2010), Europea IT Outsourcig Itelligece Report 2010: Austria, IT Sourcig Europe, Covetry. KSV1870 (2011), Pleite 2010: Weiger Vorsatz, mehr iteres Chaos, KSV1870, Viea. KSV1870 (2012), Starke Wirtschaft Schwache Isolvezzahle, KSV1870, Viea. Madl, I., Dörfliger, C. ad Gavac, K. (2008), Uterehmesübergabe ud ßachfolge i Kleie ud Mittlere Uterehme (KMU) der Gewerbliche Wirtschaft Österreichs, KMU Forschug Austria, Viea Mayer, S., Hölzl, K., Robubi, A., Eichlmair, C. ad Marchart, J. (2011), Evaluierug des Haftugsistrumetariums des BMWFJ auf Basis des KMU-Förderugsgesetzes, das vo der aws abgewickelt wird, Budesmiisterium für Wirtschaft, Familie ud Juged/KMU Forschug Viea. 32 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

35 Restructurig i SMEs: Austria Nowoty, K., Huber, P. ad Peerstorfer, D. (2009), Iteratioalisierugsstrategie vo Diestleistugsuterehme am Stadort Wie. Eie Idividualutersuchug, Austria Istitute of Ecoomic Research (Wifo), Viea. Poholzer, R. (2004), Saierug vo kleie ud mittelstädische Uterehme (KMU) mit dem Schwerpukt der außergerichtliche Saierug, available at Pöschl, J., Stehrer, R. ad Stölliger, R. (2009), Characteristics of exportig ad o-exportig firms i Austria, FIW Research Reports Vol. 10, No. 1, WIFO/WIIW/WSR, Viea. Sammer, M. ad Scheider, U. (2005), Global Etrepreeurship Moitor. Bericht 2005 zur Lage des Uterehmertums i Österreich, FH Joaeum ad Uiversität Graz, Graz. Statistik Austria (2010), Iovatio Ergebisse der Iovatioserhebug CIS 2010, available at Voss, E. (2008), Joit study o restructurig i the EU15, Natioal Dossier Austria, Aritake-Wild, Viea. WKO (2012a), Ageda 2013, Für ei gestärktes Uterehmertum i Österreich, WKO, Viea. WKO (2012b), Uterehmesübergabe , Viea. Iree Madl, Eurofoud EF/12/47/EN 17 Europea Foudatio for the Improvemet of Livig ad Workig Coditios,