Vorarlberg – export champion and great innovator

Austria’s westernmost province has a high industrial ratio and is among Europe’s top 20 business locations.

Today, Vorarlberg ranks as one of the strongest economic regions in Europe. Its extremely high economic strength is based on a rate of industrialisation above average combined with competitive trade, numerous innovative craft businesses and an effective tourist industry (e.g. Lech am Arlberg as the number one Alpine destination).

Vorarlberg’s annual export volume of 43,000 euros per employed person places the region far above such strong export countries as Switzerland or Germany, according to the ABA - Invest in Austria, the national investment promotion agency of the Austrian Business Agency (ABA).

This high export ratio is the result of the regional economy’s clear focus on new products, processes and services, which makes it possible to gain market shares even in saturated markets. Such power in innovation is also exemplified by patent statistics: Vorarlberg regularly ranks among Europe’s top five regions in terms of the number of patent applications filed with the European Patent Office per million inhabitants.

Vorarlberg in numbers

“Vorarlberg is a successful business location and counts as one of the Top 20 locations in Europe. One of the reasons for this is the high grade of industrialisation in the region. Industry is responsible for around 30 percent of the regional added value,” says Jimmy Heinzl, Managing Director of the business agency Wirtschafts-Standort Vorarlberg GmbH. This makes us curious so we asked a few questions …

Business location Vorarlberg – what is the current focus and what is the focus in the long run? Despite of the crisis, we expect that the economy will remain focused on specialisations and everyone will concentrate on what they do best. In our case, the highly automated production of goods and their sale on international markets. Alongside the highest industry ratio, Vorarlberg also has the highest export ratio in Austria. That is the current focus in Vorarlberg and will remain so in the future. Of course, it is true that the production industry is undergoing drastic change and becoming increasingly digitised. Here I would like to mention Industrie 4.0, the digitisation and integration of whole value-added chains, or the increasingly higher automation. I see this as a big opportunity. Digitisation can bring us a benefit in securing the production location as well as its added value. This is also our outlook in the long run. Alongside digital business models, of which there are increasing numbers, we make sure that the existing industries remain competitive. For this, you need research, in-

Photo: Studio Wälder

Measuring electromagnetic radiation at Bachmann Monitoring, a leading supplier of surveillance systems for wind energy plants

Vorarlberg’s advantages

c Strategically beneficial location in the midst of Europe’s strongest economic regions c Advanced infrastructure, also for the transport of goods and individuals c Business sites as professional technology and impulse centres c High availability of skilled and motivated staff c Above-average productivity c Relatively low energy prices (e.g. electricity) c Great range of funding opportunities due to a healthy regional banking sector c Professional local supply industry c Attractive economic promotions for innovation and investment projects c Efficient administration with short distances and no red tape c Business-friendly environment c High quality of life, numerous sports and leisure opportunities

Job market and economic structure

c Total number of jobs (Statistical Yearbook 2019 194,064 c Jobseekers (annual average 2018) 9,492 c Unemployment rate (2018) 5.4% c Members at the Economic Chamber1 26,328 c Gross value added at manufacturer’s prices in mln euros (2017) 15,638 c Gross regional product in mln euros (2017) 17,532 c Gross regional product per capita in euros2 (2017) 44,900 c Material goods production in mln euros (2018) 13,869 c Material goods production per capita in mln euros2 (2018) 32,151 c Industrial production in mln euros (2018) 8,264 c Building production in mln euros (2018); structural engineering 942 c Trade production in mln euros (2018) 3,072 c Overnight stays (summer 2018 + winter 2018/19) 9,054,026 c Exports in mln euros (2018) 10,491

1 as of 31 December 2018 ,

2 per Inhabitants Source: Statistics Austria, Association of Social Security Institutions, Austrian Economic Chamber, Province of Vorarlberg, AMS

novation, innovative as well as more and more digital products in order to remain competitive on the international market.

Speaking of which, what does Vorarlberg do specifically in the areas of research and development? Research and development is essentially the basis of the competitive ability of Vorarlberg’s economy. Research and development is spurred on strongly by the companies – 80 percent of the expenditure for research and development is carried by the companies themselves with internal research and development departments. All leading companies from Vorarlberg have them. The companies carry out applied research primarily, where an eye is always kept on the product and the market. This makes us very successful. As a region with a very efficient implementation of research investment as well as an above average number of patent applications, every euro is invested well.

And how about science? There is access to scientific research on the one hand at research facilities such as Campus V of the FH Vorarlberg College of Applied Science and the Research Institute for Textile Chemistry and Textile Physics at the University of Innsbruck in Dornbirn, and on the other hand at cross-regional research centres. Vorarlberg’s economy is cooperating intensively with cross-regional research centres, in particular in terms of digitisation. The field of data science would be a good example where we work with cross-regional centres such as the AIT Austrian Institute of Technology. The Province of Vorarlberg has developed a digital agenda which serves as a strategic work programme to support and to help shape the structural digital change. Digitalisation is a far-reaching topic that goes beyond economic issues. In my opinion, the key to digitisation is education. If we manage to impart digital

Photo: Weissengruber+Partner knowledge already in preschools and schools, digitalisation will pretty much come by itself. For this, we need a broadband infrastructure and similar basic pre-requisites, of Tasty automation at bakery Rudolf Ölz Meisterbäcker in Dornbirn course. But foremost, we need digital natives in our workforce, which we need to train in our schools. How is Vorarlberg doing when it comes to climate change? When it comes to climate targets, Vorarlberg is a trailblazer in sustainability, energy efficiency and e-mobility. It is one of Austria’s first regions to pledge itself to climate neutrality. This

“Research and development are basically the founis proven not only by the purdation of Vorarlberg’s competitiveness.” suit of energy autonomy in Vorarlberg but also the sucJimmy Heinzl cess of the local Ecofit programme. The Ecofit programme is not as successful anywhere else as it is in Vorarlberg. In terms of our economy this means that we are going to put the focus on new ecological markets and products in the future. There is a number of examples – from heat pumps to recyclable plastic bottles and cradle-to-cradle products in the textiles industry – that show how companies from Vorarlberg create marketable and resource-efficient products from sustainable ideas. Sustainable economic activities are surely something we need to expand on in the future. And Vorarlberg’s economy is going to tackle this challenge.

We saved the crucial question to last: Why should companies settle in Vorarlberg? Having been a production location for a very long time, we have all the necessary know-how here. Vorarlberg is a place that offers core expertise in developing new, modern, digital products. We have all the necessary pre-requisites for this. And we have them because our educational system is geared towards this expertise. The dual education consisting of schooling and an apprenticeship is a good example. These are the reasons why new companies find Vorarlberg interesting. Another one is the fact that thanks to this knowhow we are able to make highly automated goods that are internationally competitive.

Another incentive for settling in Austria’s westernmost province is its favourable strategic location. Vorarlberg sits in the midst of one of the world’s strongest economic regions and is directly adjacent to sales markets with a high purchasing power. This is another significant advantage. This region of four countries – Austria, Germany, Switzerland and Liechtenstein – is the reason for our economy’s internationality. We are an interesting location for companies from Switzerland in particular due to our access to the EU domestic market. Many Swiss companies use our geographic proximity to place their EU-subsidiaries here. At the same time, there are many companies that have good customer relations to Switzerland and want to be close to their customers while remaining in the EU domestic market. Vorarlberg is ideal for such companies.

Furthermore, the high labour productivity and people’s high willingness to go the extra mile is another reason to settle in Vorarlberg. ◆

Partner of Vorarlberg‘s businesses

WISTO (Wirtschafts-Standort Vorarlberg GmbH) is a service organisation that aims to promote innovations in Vorarlberg’s economy. Shareholders are the regional government, Hypo Landesbank Vorarlberg and the Economic Chamber of Vorarlberg. WISTO sees itself as partner of local companies in an unbureaucratic and flexible way. It offers orientation, sets stimuli and offers background support.

WISTO (Wirtschafts-Standort Vorarlberg GmbH) http://www.wisto.at