Swiss Specialization: Adapting To Austria's Economy

Switzerland's economy has been able to maintain or regain international competitiveness in several manufacturing and services industries throughout the 20th century. The country's strength has been traditionally linked with the capacity of Swiss firms to export goods and services and to invest in foreign countries. In comparison with other European countries, Switzerland's economy adapted more slowly to major changes in the global economy. Austria has also been able to adapt its economy to the global economy, with a high level of specialisation in handguns, railway maintenance vehicles, and unprocessed artificial staple fibres. In this paragraph, we will explore how Swiss specialisation has been adapted to the Austrian economy.

Austria's economic specialisation by region

Austria has successfully implemented policies for the economic specialisation of each region. Upper Austria, for example, specialises in iron, steel, chemical and mechanical engineering, while Salzburg focuses on electrics, wood and paper. Vorarlberg is known for its textile and clothing industries, and Carinthia excels in the wood, pulp and paper industry. Styria is a hub for automobiles and manufacturing, and Vienna offers a range of financial services.

The industrial sector, which is comprised of SMEs connected to the Central European markets, represents 25.2% of Austria's GDP and employs a quarter of the active population. The manufacturing sector alone accounts for 16% of GDP.

Austria has a very high level of specialisation in handguns, railway maintenance vehicles, and unprocessed artificial staple fibres such as rayon and lyocell. In 2020, the country was the world's largest exporter in each of these fields. This specialised economic activity is largely attributed to the company GLOCK GmbH, which was founded in 1963 and originally produced curtain rods and injection moulding parts before developing the Glock handgun in the early 1980s.

Switzerland's competitive advantage in the global economy

Switzerland's economy has been able to maintain or regain international competitiveness in several manufacturing and services industries throughout the 20th century. Its strength has traditionally been linked to the capacity of Swiss firms to export goods and services and invest in foreign countries. Switzerland's competitive advantage as a business location gradually shifted from lower to higher stages in the production chain and from low-value to high-value, high-technology segments of the world economy.

Switzerland's economy adapted more slowly to major changes in the global economy compared to other European countries, perhaps because it had been less regulated. However, Switzerland also benefited from the post-war boom and close relations with Austria, which was proclaimed a neutral state in 1955, modelled on Switzerland.

Switzerland's success in the global economy is also due to its ability to internationalise. Throughout the 20th century, Switzerland's competitive advantage as a business location gradually shifted from lower to higher stages in the production chain and from low-value to high-value, high-technology segments of the world economy.

Switzerland's competitive advantage is also linked to its ability to export goods and services and invest in foreign countries. The contributions of imports or foreign direct investment in Switzerland have received much less attention. However, these different forms of internationalisation – exports and imports, outward and inward-oriented FDI – are highly interdependent.

Austria's specialisation in handguns, railway maintenance vehicles and fibres

Austria has a high level of specialisation in handguns, railway maintenance vehicles and fibres. In 2020, Austria was the world's largest exporter in each of these fields.

In terms of handguns, Austria exported $354 million in goods in 2020, $304 million of which were to the USA. By comparison, the US exported $193 million worth of handguns worldwide. This specialisation is largely down to one company: GLOCK GmbH. GLOCK was founded and is headquartered in Deutsch-Wagram, Austria, by Austrian engineer Gaston Glock in 1963. The company originally made curtain rods and various injection moulding parts before developing the Glock handgun in consultation with Austrian gun experts. They began selling the Glock to the Austrian military in the early 1980s.

Austria's specialisation in railway maintenance vehicles is also notable. The country has successfully implemented policies for the economic specialisation of each region. For example, Upper Austria specialises in iron, steel, chemical and mechanical engineering, while Styria specialises in automobiles and manufacturing. Vienna, meanwhile, is a hub for financial services.

Austria's specialisation in fibres is another key area. The country has a strong focus on unprocessed artificial staple fibres, such as rayon and lyocell. This specialisation has contributed to Austria's booming renewable energies sector, especially hydroelectric power.

Switzerland's economy, meanwhile, has traditionally been linked to the capacity of Swiss firms to export goods and services and invest in foreign countries. Throughout the 20th century, Switzerland's competitive advantage shifted from lower to higher stages in the production chain and from low-value to high-value, high-technology segments of the world economy. Switzerland's economy has been able to maintain or regain international competitiveness in several manufacturing and services industries throughout the 20th century.

Switzerland's ability to export goods and services

Switzerland's success in exporting goods and services is closely linked to its ability to invest in foreign countries. The interdependence between exports, imports, and foreign direct investment has been crucial to Switzerland's economic growth.

In comparison to other European countries, Switzerland's economy adapted more slowly to major changes in the global economy, possibly due to less regulation. However, this slower adaptation did not hinder its ability to remain competitive in the international market.

Austria, on the other hand, has a highly specialised economy with a focus on specific industries and regions. For example, Upper Austria specialises in iron, steel, chemical, and mechanical engineering, while Salzburg focuses on electrics, wood, and paper. Austria has successfully implemented policies for the economic specialisation of each region, contributing to its strong export capabilities.

Austria has a very high level of specialisation in certain sectors, such as handguns, railway maintenance vehicles, and unprocessed artificial staple fibres. In 2020, Austria was the world's largest exporter in each of these fields, with exports totalling $354 million in handguns alone. The success of Austrian companies, such as GLOCK GmbH, has contributed significantly to the country's export capabilities.

Both Switzerland and Austria have benefited from close economic relations, with Switzerland providing aid to Austria during its transition to a neutral state after World War II. Austria's integration into the European economy also positively impacted Switzerland, which profited from the post-war boom.

Austria's industrial and manufacturing sectors

The main industrial sectors are the metal industry, electrochemistry, and engineering. Over the past 15 years, Austria has successfully implemented policies for the economic specialisation of each region. For example, Upper Austria specialises in iron, steel, chemical and mechanical engineering, while Salzburg focuses on electrics, wood and paper. Vorarlberg is known for its textile and clothing industries, and Carinthia specialises in wood, pulp and paper. Styria is a hub for automobiles and manufacturing, and Vienna is the centre for financial services.

The renewable energies sector, especially hydroelectric power, is booming in Austria. The mechanical engineering sector has also grown at a pace higher than the euro-area average over the last two decades. This growth and specialisation in various sectors have contributed to Austria's strong economic performance and international competitiveness.

One notable example of a specialised Austrian company is GLOCK GmbH, which is headquartered in Deutsch-Wagram. The company, founded by Austrian engineer Gaston Glock in 1963, originally produced curtain rods and injection moulding parts. However, after developing the Glock handgun in consultation with Austrian gun experts, the company shifted its focus to the firearms industry. Today, GLOCK GmbH dominates the global handgun market, with exports totalling $354 million in 2020, $304 million of which were to the USA.

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