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Is the Austrian Industry still competitive?

Published: November 26, 2010; 14:11 · (Vindobona)

The chief economist of the Industriellenvereinigung (IV), Christian Helmenstein, draws a sobering picture on the future of the domestic industry.

Is the Austrian Industry still competitive? / Picture: © Vindobona.org

On the occasion of the meeting of the Carynthian IV (Industrialists Association), Helmenstein analyzed the course of economic crisis. This has not been a crisis of the financial markets, but rather it has been caused by over-investment and differing competitive abilities.

Since Austria was with 1,735 working hours second to last place in the OECD comparison, he criticized the unions’ demands for shorter working hours.

In addition, the labor force participation rate is much too low. Alone in Carinthia, only 57.7% of people aged 15 to 64 years work. Productivity crashed dramatically during the crisis, and unit labor costs have increased. For this reason, Helmenstein sees no traces of the crisis in Europe ending.

Finally, the economist also criticized the education policy. China produces 300,000 graduates in mathematics, engineering, computer sciences and natural sciences. In Germany, there are 70,000, but in Austria only 6,500. It is questionable how long Austria will be able to sustain its technological niche.

The lack of direct investment abroad and locally is as fatal as the lack of interest in the emerging markets. To continue the successful niche policy, following the example of Switzerland, engagement in the large innovative regions of the future in Asia should be maintained, with a system of technology scouts to always keep the ball.