Innovation Europe > News > Innovation EU Vol1-1 > Austrian Federal Ministry of Economy, Family and Youth

These features turn out to be even more crucial during an economic crisis.

Austria is unique as a business location, as it is the only European nation which has doubled its expenditures on research and development over the last decade, from E3.4 billion in 1998 (1.77 % of GDP) to E7.5 billion in 2008. Thus Austria ranks among the top European countries for R&D with an R&D quota of 2.63 % of GDP in 2008.

This exceptional performance is only possible due to the ongoing strong commitment of the Austrian government to RTDI-related issues. Extensive public-sector funding and innovative programmes have helped stimulate private R&D spending. Austria is ranked third in Europe for private R&D expenditures. The European Innovation Scorecard 2009 even ranks Austria second when it comes to the share of innovative enterprises and patent applications. Austria has emerged as a top location for both R&D-intensive multinationals and highly innovative, creative SMEs, thanks to its research-conducive environment and highly developed RTDI promotion instruments.

Competence Centers

One such BMWFJ-supported initiative is the competence center programme launched in 1998, one of the most successful technology policy initiatives in Austria which is internationally recognised as best practice. Today, some 1,500 researchers with scientific and industrial backgrounds work on jointly defined research programmes at more than 40 research hubs.

A new programme launched in 2006 builds on this experience. “COMET” stands for Competence Centers for Excellent Technologies, and is designed to initiate and support long-term, top-level research cooperation between science and industry. Special assistance is provided to cutting-edge projects with the potential to achieve a high international profile and contribute to developing human resources in the research sector.

COMET targets competence centers and networks as well as newly established consortia of participants from science and industry. It offers three types of programmes without pre-defined areas of focus with different aims, levels of public financing and duration.

The first call provided federal funding totaling E125 million for 3 K2 centers (the biggest category), 11 K1 centers and 6 K projects. The second call involved additional funding of about E100 million.

COMET is sponsored by the federal (BMWFJ and Federal Ministry for Transport, Innovation and Technology – bmvit) and regional governments in Austria, and managed by the Austrian Research Promotion Agency.

COMET case studies

The K2 centre Mobility focuses on sustainable vehicle technologies. Located in Graz, its research programme aims at optimizing all areas of vehicle development, based on a multi-disciplinary approach and new solutions arising from integrated engineering. Several technical universities collaborate with corporate partners such as Audi, BMW, Daimler, Magna, MAN, Infineon, Porsche, Siemens, AVL and Mecanica. The initial budget for the 200 researchers at the center exceeds E60 million.

The Linz-based K1 Center for Wood Composites and Wood Chemistry, with an initial budget exceeding E15 million and more than 50 researchers, specialises in wood composite and chemistry research and surface technologies. Several Austrian universities co-operate with around a dozen innovative enterprises and research institutes from France, Germany and Spain.

Christian Doppler Laboratories

Another prominent partnership between the scientific and business communities under the auspices of BMWFJ is the Christian Doppler Research Association (CDG), which promotes application-oriented basic research and thus enables its member companies to have direct access to the findings of modern science. Fundamental research and industrial applications are bridged at the Christian Doppler Laboratories (CD labs), supported by universities and other research institutes. Partner companies propose the specific research topic for each CD lab. Research teams of five to 15 people focus on these topics for a period of seven years. To enable researchers to keep track of the latest scientific developments, 30% of their work is dedicated to “free research”. Currently there are more than 60 CD labs with annual budgets of up to €600,000 funded by public-private partnerships.

Christian Doppler case studies For a small and medium-sized enterprise such as Biomay AG, special public funding of up to 70% of research costs is an extremely attractive proposition, enabling the company to participate in four CD labs focusing on allergy research. Biomay considers its involvement in these laboratories as a strategic investment in its long-term business development. Voestalpine Stahl GmbH, a founding member of CDG, has been an industrial partner in more than 20 CD labs over the last 20 years. Its long-lasting commitment arises from the considerable importance of basic research for breakthrough innovation and international competitiveness. International CD labs featuring an industrial or scientific partner located abroad are of special interest due to their promotion of cross-border co-operation.

Christian Doppler case studies

For a small and medium-sized enterprise such as Biomay AG, special public funding of up to 70% of research costs is an extremely attractive proposition, enabling the company to participate in four CD labs focusing on allergy research. Biomay considers its involvement in these laboratories as a strategic investment in its long-term business development.

Voestalpine Stahl GmbH, a founding member of CDG, has been an industrial partner in more than 20 CD labs over the last 20 years. Its long-lasting commitment arises from the considerable importance of basic research for breakthrough innovation and international competitiveness. International CD labs featuring an industrial or scientific partner located abroad are of special interest due to their promotion of cross-border co-operation.

Tax incentives

Beyond direct grants, the Austrian research promotion system also comprises tax advantages and other measures enabling companies to generate profits by exploiting promising ideas. All companies operating in Austria are entitled to take advantage of a tax-exempt research allowance of 25% for all R&D expenditures, including contract research. A tax-exempt research allowance of 35% may be possible if the research expenditures exceed the average during the preceding three-year period.

Alternatively, companies can benefit from a research premium of 8% which is refunded in cash. The moderate corporate tax rate of 25% and the group taxation scheme for subsidiaries in Austria are also favorable prerequisites for conducting R&D in Austria.

FFG and AWS – two major promotion agencies

Generally, companies carrying out R&D in Austria are assisted by two institutions, the Austrian Research Promotion Agency (FFG) and Austria Wirtschaftsservice (AWS), both co-owned by BMWFJ and bmvit.

For its part, FFG is the focal point for supporting applicationoriented R&D, and thus a major promoter of innovation in Austria. Accordingly, it has a broad spectrum of responsibilities in Austria´s innovation promotion landscape, offering a comprehensive portfolio of incentive programmes.

In turn, aws is the counterpart of FFG in the field of business promotion. It also features a wide range of modern funding instruments fostering innovation and technologies on a company and project level, including start-up financing.

Clusters in Austria

The Austrian cluster landscape ranks among the most highly advanced in Europe. More than 40 clusters operated in 2008, serving as a platform for companies, research facilities, universities, suppliers and service providers in a particular sector to work closely together. In most cases, clusters are rooted regionally, with regional governments considering them to be a top priority. In 2008, the National Cluster Platform was established by a BMWFJ initiative as a facilitator towards Austrian and European RTDI and cluster policies and activities.