Austria's Business Climate: Internationally Friendly?

Austria is a wealthy, mid-sized, export-oriented EU market with a population of 9.1 million and a GDP per capita of $52,131. Its central location in Europe has traditionally made it a hub of East/West relations, and it borders Germany, the Czech Republic, Switzerland, Liechtenstein, Italy, Slovenia, Hungary, and Slovakia. Austria's stable political and economic environment, combined with its highly educated workforce, make it an attractive location for international businesses. The country offers a range of funding opportunities and favourable tax conditions for companies looking to expand or establish themselves in Europe. Additionally, Austria's well-developed transport infrastructure and strong respect for intellectual property rights further enhance its appeal for international businesses.

Austria's business culture

Austria is a small but rich and stable country in the heart of Europe, with a population of around 9.1 million, a GDP per capita of €46.356, and a consistently high quality of life. Austria's central location and strong ties with Germany and other EU nations make it an attractive location for international business. The country boasts a robust service, tourism, and agricultural sector, and foreign trade is a growing area.

The business structure in Austria remains traditional, with a clear hierarchy. Senior management makes decisions with little input from lower tiers, and meetings follow precise and detailed agendas. Business relationships are often kept formal, and Austrians generally strive for perfection in all areas of business, focusing on the task at hand.

When communicating in business, Austrians tend to be highly formal and political, being careful about what they say. English is common across Austria, but Austrians will appreciate any effort to communicate in German. Business cards are usually exchanged, and it is a nice touch to have one side of the card written in German.

Business attire in Austria is conservative. Men typically wear dark-coloured, conservative business suits with solid ties and white shirts, while women wear fashionable business suits or conservative dresses with elegant accessories. Casual or sloppy attire is frowned upon.

Gift-giving is not common in Austrian business culture, although gifts may sometimes be exchanged between close business colleagues during holiday times or to celebrate a successful deal. If invited to an Austrian colleague's home, it is customary to bring gifts for the host, their spouse, and their children.

Austria has a strong stance against corruption and bribery, ranking 17th out of 176 countries on the Corruption Perception Index in 2016. The country also has strict environmental regulations, with numerous companies oriented towards sustainability and social engagement.

Overall, Austria's business culture values punctuality, professionalism, and a clear hierarchy. Formality and respect are important, and business relationships are often kept separate from personal ones.

Austria's economic role

Austria has a strong industrial sector, with important industries including food and luxury commodities, mechanical engineering, steel construction, chemicals, and vehicle manufacturing. The country also has a well-developed agricultural sector, with a strong trend towards organic farming. Austrian farms, like those in other Western European mountainous countries, are small and fragmented, and production is relatively expensive.

Austria's economy is closely integrated with other European Union member countries, particularly Germany. Austria's membership in the EU has attracted foreign investors and reduced its economic dependence on Germany.

The country has a stable and prosperous economy, offering ideal conditions for investors. It has a free-market economy with a strong social focus, taking into account the needs of weaker members of society. Austria also has a system of economic and social partnership, which plays a reconciliatory role in wage and price policies.

Austria is known for its arts and crafts, including fine handcrafted items, customised jewellery, ceramics, and glassware. Additionally, tourism is an essential pillar of the Austrian economy, with the country's mountainous landscape and natural land reserves attracting visitors.

Overall, Austria's economic role is that of a stable, prosperous, and highly developed country, with a strong focus on social welfare and a diverse range of industries contributing to its economy.

Austria's education system

Primary school is for children between the ages of six and ten. After that, there is a choice of two pathways. Some pupils will attend a general secondary school for four more years, while others go to an upper-level secondary school until they are eighteen.

After secondary school, students can choose to go to a university or vocational college to pursue a specific career. All universities in Austria are free. Twelve universities and six academies of music and art enjoy a high degree of autonomy and offer a full spectrum of degree programs.

The Austrian education system has exceptionally close links with industry. All the higher technical and commercial colleges provide specialised training. For instance, higher technical colleges for mechanical engineering offer more than ten different forms of training. Almost three-quarters of all Austrians take advantage of this wide choice and complete a higher general secondary, or higher technical or vocational college education.

The dual education system is a special feature of Austrian education. Vocational training (apprenticeship) is based on this principle, with training concentrated within the firm, but also taking place in parallel to a course in a vocational college. This ensures that two important objectives are met: guaranteed high qualification standards for skilled workers, and youth employment.

The history of the Austrian education system after World War II has been characterised by an attempt to transform higher education from a traditional entitlement of the upper social classes to more equal access for all social classes. Before the School Act of 1962, Austria had a "two-track" education system. After four years of compulsory primary education from the ages of six to ten, children had to choose between a middle school or a university preparatory track. This early selection process meant that children of the largest segment of the population, farmers and workers, were grossly underrepresented at higher schools and universities.

The Act of 1962 and subsequent amendments require that all state-funded schools be open to children regardless of birth, gender, race, status, class, language, or religion. The law also attempts to introduce more flexibility into the traditional two-track system and provide students with a greater degree of latitude within it. Educational (and hence career) decisions can be made at an older age.

In some areas, the number of children of foreign workers in compulsory schools has strengthened this trend. In 1991, for example, almost 30% of all school-age children in Vienna were children of foreign-born workers, whose mother tongue was not German. In some districts of the city, these children exceeded 70%. Although the children of long-term foreign workers frequently speak German well, the numbers of classes in which students with inadequate mastery of German are overrepresented has overburdened the Hauptschule system and made it a less desirable alternative than it used to be. Therefore, special remedial and intercultural programs are being developed so that the compulsory school system in Austria can continue to fulfill its educational and social roles.

Austria's transport infrastructure

Austria is located in the heart of Europe and is a crucial transport hub for north-south and east-west routes. The country has a well-developed transport infrastructure, which includes railways, roads, waterways, and aviation.

Railways

Austria has a good rail network, with the Austrian Federal Railways (Die Österreichischen Bundesbahnen AG) being the largest rail transport service. Around 30% of all goods are transported by rail. The rail industry is also an important factor in Austrian foreign trade, with two-thirds of the revenue generated by the Austrian rail industry coming from abroad.

Roads

Austria has a well-developed road network with motorways and highways. A toll is levied on vehicles exceeding 3.5 tonnes in weight, based on the number of kilometres travelled.

Waterways

The Danube River is Austria's only navigable waterway, flowing from southeastern Germany across northern Austria. The Rhine-Main-Danube Canal enables goods to be transported by ship from the North Sea to the Black Sea.

Aviation

Austria has several important airports, including Vienna, Graz, Linz, Salzburg, Klagenfurt, and Innsbruck. The largest Austrian airline is Austrian, a conglomerate of Austrian, Lauda Air, and Austrian Arrows.

Innovation in Transport

Austria plays a crucial role in driving innovative mobility concepts, particularly in the automotive, rail, and aviation industries. The country is a manufacturer and supplier of advanced vehicle technologies, with companies actively involved in pioneering developments such as innovative drive systems, electromobility, and autonomous driving.

The rail industry is also a key element, with Austrian companies ranking among the most innovative in the world. Austria is sixth globally in the number of registered rail-related patents and inventors. The rail transport portfolio includes a range of products, from railway carriages and tracks to safety technology and high-speed trains.

The aviation industry in Austria contributes to technological innovation, particularly in areas such as material science, engine technology, environmental friendliness, and flight safety.

Austria's business sectors

Austria is a highly developed industrialised country with a strong service sector. The Austrian economy is dominated by small and medium-sized enterprises (SMEs), which make up 99.6% of all companies in the country. The most important industrial sectors in Austria include:

• Food and drink industry
• Mechanical and steel engineering
• Chemical and automotive industry
• Electrics and electronics industry
• Wood, pulp, and paper industry

The country also has a strong focus on manufacturing, with basic goods and labour-intensive production of highly processed products. The electronics sector is particularly important, including the production of integrated circuits.

Austria is also known for its arts and crafts, including fine hand-crafted items, customised jewellery, ceramics, and glassware.

Tourism is another vital pillar of the Austrian economy, with the country attracting around 30.9 million foreign visitors in 2023. The country's position in Central Europe, its natural landscape, and its role as an international meeting point for summits and conferences all contribute to its appeal as a tourist destination.

The largest service sector employers in Austria are in sales, hotel and restaurant services, as well as health and education.

Frequently asked questions