Carinthia – Striving to be a trailblazer in eco-economics

Timo Springer, President of the Carinthian Federation of Industries, and Jürgen Mandl, head of the Carinthian Economic Chamber, speak about their “let’s do it” mentality.

Compared to the other provinces, Carinthia’s economy got away with the smallest of bruises after the Covid pandemic thanks to an impressive foreign trade balance. Exports are still the driving force of the economic upswing, says Christoph Schneider, head of the Department for Business and Trade Policy at the Austrian Economic Chamber: “Exports are the driving force behind the economic comeback. 53 percent of Carinthian businesses surveyed by the Austrian Economic Chamber clawed their way back to the levels of the year before the pandemic; turnovers and orders are seen in a significantly more positive light. But there is still some restraint in investments despite Carinthia managing the economic crisis of the pandemic “almost the best of all”, says Schneider: “In Tyrol, the slump was almost twice as big.” The biggest challenge now is quite obvious, say the businesses: 80 percent struggle to find the right staff. Carinthia isn’t alone here – the lack of skilled staff makes life harder for all businesses across Austria.

Timo Springer, President of the Carinthian Federation of Industries, and Jürgen Mandl, head of the Carinthian Economic Chamber, offer further insights.

Mr Mandl, Mr Springer, how are the Carinthian businesses doing? Jürgen Mandl: Carinthia’s economy got out of the economic crisis quite well. With an economic slump of 5.6 percent Carinthia managed 2020 better than the Austrian average of minus 6.5 percent. The recently published export data for 2020 confirm this comparatively good result: The decrease of 7.8 percent is much better than we feared at the start of the pandemic. Still, the surplus of 630 million euros in our foreign trade balance is an impressive sign of life. Timo Springer: We are currently seeing a strong economic upturn from which almost all businesses benefit. In this regard, we are no different from other provinces. There are only slight differences among the various sectors. That was different during the crisis. Only a lack of raw materials and supply problems put a strain on businesses and sometimes actually prevent the excellent order situation from making an impact on profits.

Jürgen Mandl: „The crisis showed clearly where Carinthia has to play catch up but also were our strengths lie.“

The number of vaccinations kept rising before the summer while the number of infections fell. We seem to have overcome the worst. But have we really? Is the crisis over? What do we need to look out for now? Mandl: I hope so. We all need to do our utmost to get through autumn and winter well. Vaccinations are the only effective way to keep the virus at bay, in my opinion. We just can’t lock down everything once more. In economic terms we now need to adapt cleverly to the changes where ever it is possible. Unusual situations sometimes demand unusual measures and often also offer unusual opportunities: There is a lot of funding for investments at the moment. Those who are able to so do should now prepare for the future. At some point we will leave the Covid pandemic behind us and begin a new chapter in Carinthia’s successful economic history. Springer: The number of vaccinations and the falling number of infections is surely a silver lining. The worst seems to be behind us. The easing of Covid measures has not caused any problems so far. It is therefore the right time to return to a certain level of normality. By now, we have learned enough about the virus and its variants to know that it won’t go away. It has become part of our everyday life. Plus the „3Gs“ (N.B. the 3G rule, short for German “geimpft, getestet, genesen – vaccinated, tested, recovered”) guide us in a reasonable manner through the pandemic.

We all should always think positive – so what are the positive findings you are taking with you from the Covid crisis? Mandl: It has been impressive to see what entrepreneurs and their staff managed to achieve. Being optimistic is a pre-requisite for the self-employed. It was quite motivating to see their “let’s to do it” mentality. On top of that, the crisis showed clearly where Carinthia has to play catch up but also were our strengths lie. Springer: The Covid crisis has surely also had some positive effects. Think of the acceleration in digitisation across the economy and society. Unfortunately, Europe hasn’t benefitted here as much as the United States and China, where the big digitisation platforms are located. But it becomes apparent that many companies had to fundamentally think their business models

Visualisation of the Koralm Tunnel in Carinthia. Once finished the journey between Klagenfurt und Graz will shrink to 45 minutes.

over. And in many cases the course has been set towards green technologies.

What is the Economic Chamber going to focus on in 2022? Mandl: It will still be important to support those sectors that are still highly affected by the pandemic. We need to find new ways to host events and markets in a suitable setting with one eye on potential virus variants. But the focus is also clearly on the next developments in the new economic area that is Southern Austria. The opening of the Koralm Tunnel in 2026 will have a massive positive effect. The two provincial capitals Klagenfurt and Graz are getting closer to one another with a new travel time of only 45 minutes. Therefore, we have to plan already now for the new economic structures in Carinthia and Styria but also the Baltic-Adriatic-Axis between Trieste and Gdansk to get the best out of our region.

Another common focus in terms of business policy will be the eco-economy: A type of economy in which fossil fuels are being replaced step by step by sustainable resources. It could make Carinthia a European trailblazer in renewable energies and the appropriate know-how. In order to take this unique opportunity for our businesses and for the wealth of our population, we will need to keep young people in our province and motivate them to take up special training. Otherwise, we will have full order books but not enough staff to process them.

And what is the Carinthian Federation of Industries planning for next year? Springer: I think we will return to a certain level of normality. That means, that we can continue to work on the issues that are important to Carinthia: Having an appealing urban area with education facilities that attract more people from outside of our province. Raising our economic-technological profile and filling gaps in the value-added chain. Marketing our province as a place of industry, technology and education – and as a place to live.

As we all know, the industrial sector and its service providers contribute 55 percent of the province’s added value, tourism and leisure activities only make up 15 percent. ◆