Austria Climbs the Innovation-Indicator

bridges vol. 31, October 2011 / Noteworthy Information

On October 14, the Berlin-based “Deutsche Telekom Stiftung” published its biannual Innovation-Index. The Indicator analyses strengths and weaknesses from 26 industrialized nations (including the US and the BRIC states). Despite the financial and economic crisis, which has burdened economies over the last years, enterprises and national governments didn’t stop their investments in innovation and technology.

Austria, especially, after floating around the 14th place since 2000, improved to 8th place, which puts the country ahead of the US. The Indicator notes that “Austria has, as perhaps no other country in the EU, taken the so-called Barcelona Target seriously, namely to increase the overall expenditures for research and development to three percent of GDP. Through continuously raising spending while also introducing aggressive innovation policy and measures like, e.g., a generous tax rebate for R&D promotion, the R&D rate of 1.8 percent in 1998 was increased to 2.8 percent in the year 2010. At the same time, Austrian industry was able to clearly increase its innovation output.”

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© BDI Deutsche Telekom Stiftung Innovation Indicator 2011

European countries dominate the Indicator’s Top 10: Eight countries are from the “old continent,” and 6 out of those 8 are EU Member States. This may be the result of a focused EU Innovation Policy with an eye on the region’s competitiveness. Only Singapore (ranking 2nd) and the US (ranking 9th) extend the top rankings beyond Europe.

The current analysis also shows that the US fell back into the middle field. The Indicator explains that “due to the banking and economic crisis which began in the USA and had its worst impacts there, the country has dropped down several places in the past two years. An erosion of the US-American position, however, was clearly recognizable even before 2009. For a long time they were able to defend second place behind Switzerland, but in the wake of the New Economy crisis at the millennium they were overtaken already by Sweden and Finland as well as finally Singapore and the Netherlands.” The US is still the largest R&D nation, but structural problems indicate that the country will remain in the midfield for quite a while. The Indicator notes further: “In addition, greater dynamics are presently found in other countries. A particular challenge for the USA is the enormous balance of trade deficit, especially for high-technology products.”