Austria - Information and Communication TechnologyAUT-ICT

Overview
In 2017, the ICT sector made up 3.9% of Austria’s GDP and 7.0% of Austria’s total trade in goods. Foreign companies supply the majority of ICT products in Austria, with ICT goods imports totaling $13.4 billion in 2017. Top ICT imports included $5.4 billion in cellular devices, $967 million in laptop computers, and $683 million in internet routers and switches. Over the period 2015-2017, imports of these goods increased at an average annual rate of 9%. U.S. companies also find major opportunities selling products and services related to cybersecurity, health IT, and mobile telecommunications. Many of Austria’s ICT suppliers have reached top market positions globally with their innovative products. The presence of international corporate groups such as Infineon, Siemens, Philips. General Electric and Microsoft strengthens Austria as a location for ICT business. The ICT market in Austria is driven in large part by substantial investments in research and development (R&D), often supported by targeted public-sector funding programs. Successive Austrian governments have made digitalization a priority for public funding. Since 2014, the Austrian Ministry for Transport, Innovation and Technology has allocated over $385 million for broadband extension projects alone. Austrian localities are eager to partner with high-tech foreign firms that can increase their connectivity at competitive prices.

In July 2018, Chancellor Sebastian Kurz represented Austria at a technology conference in the United States with representatives from other governments, major tech companies such as Facebook and Apple, and successful tech start-ups. Austria is an active player in EU discussions related to Smart Cities, eGovernment, and eCommerce – all subsectors that present opportunities for U.S. companies, as outlined below.  U.S. companies may face challenges in the Austrian market, where necessary frameworks in terms of law, non-discrimination (net neutrality) and standardization are still insufficiently developed. The Austrian government has called for measures to address and offset those shortcomings.

(total market size = (total local production + imports) - exports)
Units: $ millions
Source: Global Trade Atlas (2015-2017) Note: these figures likely undercount Austrian imports from the U.S. because delivery records end with the first point of entry into the EU (“the Rotterdam effect”). 

Leading Sub-Sectors
Smart Cities: As of 2017, 68% of Austria’s population lives in cities or urban regions. The need to accommodate increasing urbanization together with the desire to pursue energy conservation and environmental objectives drive this priority. Accordingly, public funds are allocated towards supporting research and technologies that focus on “smart cities.” The Climate and Energy Fund and the Federal Ministry of Transport, Innovation and Technology have been financing Austrian Smart City Projects since 2010. The Climate and Energy Fund was established in July 2007 to support the Federal Government in its efforts to implement sustainable energy supply, reduce greenhouse gas emissions and implement the climate strategy. It has evolved into a driving force behind Austria's climate policy. Every year the fund provides up to $170 million for investments in environmental programs.
The Federal Ministry of Transport, Innovation and Technology co-sponsors activities in six smart grid model regions, seven e-mobility model regions, 32 Smart Cities/Smart Urban Regions, and 99 climate and energy model regions. Most Austrian cities are interested in developing new projects and expanding their cooperation with international partners in this sector. The global market for smart-city initiatives is expected to grow at an annual rate of 20%, reaching a total value of $1 trillion by 2020.

Smart Energy: The country's transmission service, Austrian Power Grid AG, is implementing substantial grid reinforcement and expansion measures to continue to provide a secure reliable and economically feasible electricity supply. In 2017, new Austrian legislation mandated that 95% of all private and commercial electricity customers be equipped with smart meters by 2022. Over 600,000 smart meters have already been installed in Austria, which corresponds to about 10% coverage. 
Smart Buildings: The “Haus der Zukunft” (Building of Tomorrow) initiative in Austria promotes the development of energy conserving building designs and showcases technologies reducing the carbon footprint of residential buildings. Zero-energy or even PlusEnergy houses are the gold standard for smart buildings in Austria. The Austrian government provides public funding for the installation of PV plants, especially in agricultural and horticultural enterprises.

Smart Transportation: The transportation sector accounted for 45% of Austria’s greenhouse gas emissions in 2015, according to the European Environment Agency (EEA). In response, the Austrian government is undertaking incentives to meet European goals such as reducing the CO² emissions by 50% and phasing out fossil-fuel based transportation entirely by 2050. Sub-sectors such as electric mobility, car-sharing, and smart urban logistics are expected to receive large financial incentives to achieve these goals.
Digitalization: In 2014, the Austrian government allocated approximately $1.4 billion for its “Broadband Strategy 2020,” which aimed to provide 70% of private households in metropolitan areas with ultrafast broadband internet access (download rate of at least 100 Mbit/s) by 2018, followed by nationwide coverage by 2020. The initiative successfully accomplished its first objective, with Austria’s statistical agency reporting 71% coverage in 2017. In order to accomplish the 2020 goal, the Austrian government is allocating special funds to enable broadband expansion to schools and small businesses in areas where it would otherwise be considered uneconomic.  To date, the Austrian Ministry for Transport, Innovation and Technology has allocated approximately $385 million for these projects. In addition, the government is developing a strategy to introduce the fifth generation of mobile telecommunication (5G) to support increased digitalization in Austria. The 5G strategy will also facilitate the creation of a legal framework to enable availability of this infrastructure (e.g., shared use, frequencies, etc.).

Austria’s focus on wired broadband and wireless 5G has left it trailing the rest of Europe in fiber-optic connectivity, with only 1.1% of Austrian households connected via fiber-optic cable compared to the EU average of 13.9%.  Austrian fiber-optic cables connect only the high-traffic metropolitan areas, serving as “fiber-optic highways” that give way to slower broadband connections to reach nodes throughout Austria’s Alpine valleys. In 2017, the Austrian Ministry for Transport, Innovation and Technology allocated approximately $34 million to expand fiber-optic networks to schools and SMEs.

eGovernment: The Austrian government has announced its goal of making Austria a pioneer in the field of innovation and digitalization through innovation-oriented public procurement, simplified access to information, and digitalized administrative channels. For 2018, the Austrian government has allocated EUR 44 million and EUR 48 million in 2019 to achieve its goal and improve digitalization in the public sector.

eCommerce: Almost 90% of the Austrian population (7.75 million) use the internet. Of those internet users, 84% accessed the internet outside of their household or workplace. Primarily, those aged under 35 use the Internet on smartphones, tablets, and laptops while on the go. Of all Austrians aged 16 to 74, 62% purchased goods or services online in 2017. In 2017, Austrians spent $7.9 billion when shopping from domestic and foreign online retailers. The average revenue per user currently amounts to $1,290 per year. The legal framework for eCommerce and online services in Austria follows the European Union “Electronic Commerce Directive (2000/31/EC).” This directive requires providers to abide by rules in the country where they are established (country of origin). As of May 25, 2018, online providers must also adhere to the European Union's General Data Protection Regulation (GDPR). The GDPR is the European Union’s new data privacy law which impacts how companies collect and handle personal data about their European customers. It imposes new obligations and responsibilities on controllers and processors of data.  For more details, please see the Data Protection and Privacy section of this guide or visit the European Commission website.

Opportunities

• Smart buildings, smart energy, smart meters
• IT Security
• Mobile telecommunications
• Computer, chip and software components
• Health IT
• ​Big Data

Web Resources
https://www.bmvit.gv.at/en/
www.smartcities.at
https://www.digitalroadmap.gv.at/en/
http://www.austrian-mobile-power.at/
https://www.idc.com/
https://investinaustria.at/en/