Austria: An “Innovation-Driven” Nation

Bridges vol. 42, December 2014 / Startup Corner

By Robin Tim Weis

Start-ups may be something people rave about, however, the question is where to start one outside the epicenters of innovation such as Silicon Valley, New York City, Berlin, or Tel Aviv?

The recent 2015 Global Entrepreneurship Index published by the Global Entrepreneurship and Development Institute (GEDI Institute) looked into 34 variables that affect the start-up ecosystems in over 130 countries: factors such as the growth potential of start-ups, depth of capital markets, globalization and spending on research and development, the abilities of founders, and the general entrepreneurial attitudes prevalent in the various countries.

Entrepreneurship-wise, Austria continues to provide fertile ground for entrepreneurs. The index positioned Austria in 18th place worldwide when it comes to efficiency of its national start-up ecosystem. Austria, in effect, was placed ahead of economic powerhouses such as South Korea, digital innovators such as Estonia, start-up curators such as Israel, or research-intensive countries like Japan. The study particularly highlighted the avid technology absorption in Austria, as well as the great internationalization aspect of its industries. In sum, the study highlighted Austria as being “innovation-driven.”

130 2015 GEI Index. Source.

Overall, the United States tops the index, followed by Canada, Australia, and the United Kingdom. 15 Pillars have defined the success of these nations that the GEI measures, including product innovation, the ability for entrepreneurs to network, internationalization of their ideas and products, and the availability of risk capital. The nations with the highest scores were those that performed best in each pillar. 

12 2015 GEI Index. Source.

The Global Entrepreneurship Index measures current entrepreneurship at 52 percent of global capacity. So although entrepreneurship is generally embraced worldwide, the room for growth still remains expansive. This margin for improvement in entrepreneurship will become key, as wealthy nations are continually challenged to increase their economic productivity to sustain current standards of living with aging populations, while low-income economies must find more than two billion jobs for young workers entering the world economy by 2050. The key to this, the report states, is a massive addition of new jobs to the market. And it is the innovation and entrepreneurship sectors that have the ability to create the billions of jobs required. GEI’s research over the last 30 years has found that rapid job creation comes from rapidly growing companies.

Now, both developed and developing countries are being encouraged to find incentives for entrepreneurs to continue to push innovation. The ecosystem of start-ups varies from nation to nation and can depend on the perceived opportunities start-ups find, the skill sets of the entrepreneurs, and a culture of risk acceptance. In the end, both Austria and other nations will need to increase their entrepreneurial capacity in order to meet the demands of a quickly developing world.

Robin Tim Weis serves as a project manager in OSTA in Washington, DC. Previously, he served as a policy analyst at the International Narcotics Control Board in the United Nations. As a former Europe correspondent for FrumForum.com and foreign commercial assistant for the US Embassy in Brussels, he has been a strong proponent of bolstering transatlantic relations. You can follow Robin on Twitter @RobinTimWeis.