How big is the ICT industry in Austria? Analytical data and predictions

1. Overview
The information and communication
technology (ICT) industry is having
more and more impact in the total
economy of any country and plays a
key role in the modern life in terms of
social and private as well. The
infrastructure is the cornerstone of
evolution and innovation in new
technological and scientific progress
in almost every area and sector.
It couldn’t be no different in the case of the Austrian IT sector as the country has
experienced significant growth in the past 20 years in this field, despite the global
economic downturns from time to time. The local sector is combined from a variation of
professional, from specialists to IT consultants, and from hardware products with
computer-controlled plants for manufacturing up to global software powerhouses.
One of the largest hub in the country is Vienna, which is considered to be one of the
biggest in Europe and the capital of information technology in the central and east
European region. There around 9,000 IT companies in the region with a combined
annual turnover of €20 billion, that accounts for 75% of total Austrian IT revenues.
Apart from Vienna, there are also other startup centers, technology centers and parts for
the ICT sector in other regions of the country. This guarantees that all IT companies in
the local market get high level of services. To boost the development of networking and
sharing experiences between the companies in the sector, the Federal Economic Chamber
holds and annual E-Day.
Software sector
Austria has a wide range of companies creating software products for every industry
ranging from hospital software products up to managing water treatment plants and they
have a global distribution.
Some examples of domestic companies that create global products is celum GmbH that
develops document management system products for efficient administration of data and
its exports account for over 80% of the company’s total revenues, with customers in
North America, South Africa, Eastern Europe and further beyond.
RF-iT solutions which operates in the Radio Frequency Identification software and
services sector is a market leader and BEKO Holding that focuses on Product Lifecycle

2. Management is also a well-known vendor in its category. One of the biggest companies
with a global footprint is Software AG that develops high-performance databases,
application development tools and other solutions for the banking, insurance and trade
sectors.
Other examples of the thriving domestic market are the Novomatic Group in the gaming
industry with more than 6 million fans and eworx a pioneer in email marketing solutions.
Hardware sector
As in software, in hardware sector as well there is a wide range of products offered by
local companies that are mostly export-oriented. The Austrian creators are building
products that include fire alarms, communication and security systems, gauging stations,
high quality semiconductors for medical technology and the automotive industry etc.
The hardware producers are competing in the global marketplace successfully and apart
from the products itself they are also service focused. Schrack Seconet AG for example is
a leader in international level in providing communication and security systems.
ICT as an Economic Factor in Austria
Comparing to other countries, Austria ranks in the upper middle range in the field of ICT
applications, research and development. The Federal Consultancy & IT Section of the
Austrian Economic Chamber has tens of thousands active IT companies as members. The
Austrian exports account to more than 12 billion euros in goods and services and 80% of
the local companies have an online presence with about one sixth of them doing business
via the internet in a regular basis.
Research and Development
The IT sector is one of the most important drivers in the field of research, development
and innovation and within the European Union is the largest and most intensive areas in
research account for one fifth of all sending in R&D. In the domestic market the corporate
spending in R&D is above the EU average with around 1.5 billion euros in total. More
than 80% of this amount came from local companies and a great portion of that from
foreign investment.
Although it’s one of smallest countries in Europe in terms of population, Austria has one
of the most advanced ICT sectors. The steady growth that the IT sector has experienced

3. over the past years has resulted in creating around 200,000 jobs in the industry and put
the country among the top three European research locations.
The infrastructure is well expanded and almost all companies have online access and
more than 90% of the companies have a broadband connection. More than half of the
broadband connections took place via mobile technology that has enabled services like
mobile payments to be feasible. Mobile network operators have introduced NFC
technology and sophisticated web applications are used broadly for job related purposes.
From a private standpoint, Austrian citizens are very keen in using web technologies and
the penetration of social networks like Facebook, YouTube, Xing (a social network similar
to Linkedin) and Twitter is well established.
The network of universities, colleges and research institutions has boosted the
information technology sector R&D and the cross section collaboration has a great impact
in innovation. This synergy of institutions like Vienna University of Technology, Graz
University of Technology, Technikum Wien, FH Hagenberg, FH St.Pölten, or FH Kufstein
along with private companies has resulted in a variety of potential innovations.
The most impressive feature of the local government is the offering of its e-government
services and has been ranked in first position in the EU that reaches 100% for “full online
availability” and “service sophistication”. About 70% of the citizens use these e-
government services in regular basis for their needs.
In the health IT sector there is a significant amount of research and development
conducted with the implementation of the e-card, a national electronic card to access
public health care and the electronic health file for patients is in the works, to be fully
operational by early 2017.
Market and Sector Challenges (Strengths and
Weaknesses)
The structure of the local companies is made out of 99.7% that are small and medium
sized with less than 250 employees and what is more impressive is that over 92% of these
companies are very small with less than 10 employees. These companies have a
significant advantage being well positioned and in close contact with their clients.
Due to its location, well established infrastructure and its cultural and linguistic ties to
the region, Austria is a unique gateway for products and services in the Central and
Eastern Europe. There is a great number of organizations in the local market that offer
expertise on trading and investing in this region. In the past years, a close tie between

4. Austrian and Canadian firms has been established the offer the latter many advantages in
penetrating EU markets and providing high quality production facilities.
Some of the trends that offer opportunities for foreign vendors include health IT
infrastructure, smart grid cloud, mobile, big data and connected vehicles.
Market Analysis
Based on a survey performed online and further analysis based on statistical data, the
main key points of the Austrian IT market are portrayed below:
 The vast majority of the companies consider themselves as IT companies, 75%. Customer
specific solutions is the main source of revenues but the sale of own or third party software and
implementation services also play a significant role.
 They expect an 8% on average growth of their revenues and an additional 11% in the number
of employees.
 Three quarters of the total companies have revenues that flow from international activities with
35% of these revenues occurring in regular basis. Although the focus is on other German
speaking territories, the activities on other regions such as East and Central Europe are also
significant.
 The cloud and mobile trends are very important and most likely for domestic companies to
enter in these types of activities.
 Around 75% of the companies have responded positive whether they have introduced a
product or service innovation in the recent years.
The past financial crisis that ended in 2009 didn’t have a deep impact in the Austrian IT
industry and the positive expectations have proved to be true and the sector has
experienced a good growth over the last years. The structure of the market, the
vast majority of the companies that are very small and close to their clients, made them
more resilient in addition to the fact of the innovative character of the local market to
introduce new products and services are among the factors that helped the IT industry to
surpass the crisis.
Sources:
http://www.advantageaustria.org/international/zentral/business-guide-oesterreich/importieren-aus-
oesterreich/branchen/informations-und-kommunikationstechnologien/ueberblick1.en.html
https://www.ffg.at/en/content/information-technology-overview
http://www.enterprisecanadanetwork.ca/_uploads/resources/Information-and-Communications-
Technology-Sector-Profile-Austria.pdf

5. http://www.innovationaustria.at/structure.html
http://www.investineu.com/content/information-and-communication-technologies-ict-eu
http://www.softwareindustrysurvey.fi/node/62.html
Author
Elioplus Team
Elioplus: a B2B business development platform that connects Software and SaaS vendors
with resellers using over 15 partnership criteria from their partner program structure.
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