Many Estonian entrepreneurs are looking into relocating their company to a different country or expanding it by opening a new branch of their company abroad. A relocation can bring about various benefits. An international presence always uplifts a company’s image and revenue. Austria, and more specifically the Vienna Region, is an excellent business location with great economic opportunities. Estonian companies in Austria can benefit from a number of advantages – we will outline some of them below.
Strong business relations
Trade relations between Austria and Estonia have developed well in recent years. The strong increase in mutual goods deliveries in the first Covid year 2020 was particularly remarkable. Austrian trade volume with Estonia also increased significantly in 2021, reaching 204.8 million euros in exports and 87.4 million euros in imports, according to Statistics Austria.
The most significant Austrian export products in 2021 were coins, machinery and mechanical appliances, pharmaceuticals, electrical machinery & goods, and motor vehicles. The most important Estonian export products were wood and wood products, furniture, edible fats, motor vehicles, and machinery.
Country comparisons
With 9 million inhabitants, Austria’s population is considerably bigger than that of Estonia (1,3 million inhabitants). Austria is also almost twice as large. As a small national economy, Estonia is extremely export-oriented and export-dependent. Exports of goods and services together reached 77% of Estonia’s GDP. Transit trade and transport services take up a major part here. Therefore, the economic situation of the most important partners in the EU – Finland, Sweden, Germany, Lithuania, and Latvia – has a direct impact on Estonia’s economic development. Thus, export disruptions affect Estonia strongly – more strongly than Austria which has a larger national economy. Austria’s export of goods and services reached 55.9.% in 2021. In 2021, Russia ranked 8th as an importer of Estonian goods and 2nd as a supplier. However, that will change in 2022. The economic sanctions against Russia also affect Estonia’s companies. (Source: www.wko.at)
Estonia also had to struggle strongly with the outward migration typical of the Baltic states. The migration of skilled workers abroad and the resulting shortage of well-trained personnel have led to strong wage increases for years. In Austria, more skilled staff and reasonably priced labor are available. The gross domestic product and the gross national product as well as the average income are much higher in Austria than in Estonia.
There are many parallels between the two countries regarding political stability, civil rights, infrastructure, etc. Also, there are many shared values and a similar general mindset which create a favorable setting for Estonian companies to smoothly enter the Austrian market.
Research and Development
Productivity growth in Austria exceeds that of Estonia. Labor productivity in the most important export-oriented industries is significantly lower in Estonia than in Austria. One of the government’s goals has therefore been to further increase the R&D rate. Although it reached 1.8% of GDP in 2020, it is still below the European average of 2.3%. Austria is among the EU leaders in this area, with more than 3% of GDP being spent on research and development.
Being extremely future-oriented, the Vienna Region has set sail for high-tech evolution. Special emphasis is being put on pharma, biotech, information and communication technologies, energy, metal processing, mobility, plastics, chemicals as well as on creative industries. Research and development are valued highly, there is an ever-growing number of nationally and internationally recognized research facilities. Additionally, there are many collaboration partners for technical, clinical, and medical research which Estonian companies in Austria can benefit from. The Vienna Region is also home to a vast number of universities and colleges with more than 210.000 students. Both the institutes and the necessary human resources are available to spur research and development.The Vienna Region is quite the forerunner in digitalization, AI, and innovation. The current AI strategy of the Austrian federal government is labeled “Artificial Intelligence Mission Austria 2030 (AIM AT 2030)”. It aims at a broad use of AI-oriented services, and at positioning Austria as a major research and innovation location for AI. AI application fields range from health care, and diagnostics, to applications in industry, agriculture, or education. The increasing use of AI will ensure the competitiveness of Austrian technology. It will increase productivity and effectiveness. These developments make the Vienna Region a very important business location with a promising future.
Pole Position
The Vienna Region (Vienna, Lower Austria, and Burgenland) is situated in the very center of Europe. From here, the growing markets in Central and Eastern Europe can be accessed easily. An international airport, extensive motorways, regional and international rail travel, as well as freight transport down the Danube offer excellent connections to all of Europe and beyond. Major European capitals can be reached easily and quickly. For companies that rely on raw materials, or want to increase their markets this is a considerable advantage. In addition, the geopolitical situation in this region is quite stable and less directly affected by the consequences of the Ukraine war.
Grants and subsidie
One of the most important issues in the process of establishing a new company or founding a start-up is financing. Austria offers an extensive system of public funding and early-stage investments, that is available to foreign companies. Of course, there are also many private investors. Entrepreneurship is valued highly – start-ups are encouraged and subsidized. There are many jump-start programs, business grants, and accelerators Estonian companies in Austria can benefit from.
Relocation made easy
A growing number of companies are discovering the Vienna Region and its many advantages for their business endeavors. Ex-pats can look forward to a high quality of life, personal safety, low crime rates, excellent health care, clean air and water, childcare benefits, and a great schooling system as well as a variety of higher education and training opportunities. The Vienna Region offers various business clusters. There are flexible networks of small and large companies, as well as research, development, and qualification institutions that build cooperative relationships.
When considering a new location for your company or a new production facility, the Vienna Region is a prime choice. Positioned in the very heart of Europe, it holds all the key factors for business success. Estonian companies in Austria will enjoy many benefits and advantages – especially in the Vienna Region.
Let me give you five reasons why you should set up your headquarters in the Vienna Region:
- it is part of the 4th richest country of the European Union
- a high quality of life at affordable prices
- Excellent, highly-developed infrastructure
- highly qualified workforce
- outstanding spending capacity of customers
- home to many international companies, universities as well as research facilities
- direct access to South East and Eastern Europe
- high level of personal security, political stability and legal certainty
- an international as well as cosmopolitan region due to a population with migration background
What a founder-friendly location needs is a focus on the global market. Austria’s location in particular makes it an ideal hub for the international start-up scene in Central and Eastern Europe.
