With our paper “Visions for Startups in Austria”, we are suggesting five main key aspects we see as necessary to turn Austria into an innovation-driven economy of the 21st century by leveraging todays main catalyst of innovation and growth: startups. If we do not develop the right ecosystem in Austria to be a “magnet” for (very mobile) talents and startups, the consequence is that the existing ones leave to countries with better suited conditions or their ambitions.
Following a summary in English
There are 3 inevitable trends of the 21st century so far that are shaping the global economy with the potential to shake things up: A digitalization of the global economy, faster innovation cycles, and the global rise of young, ambitious talent. Startups are both a consequence and an accelerating catalyst of these trends. For Austria, it is therefore absolutely vital to have a flourishing startup ecosystem. The following 5 key facts need to be addressed to build a better foundation for that ecosystem:
Education is the basis for a societal change in terms of knowledge-based evolution and development. We therefore think that making education future-ortiented is a vital factor for becoming a nation of entrepreneurs and knowledge-society. By modernizing our education system, we can support the most important factor of startups: talended, ambistious young people. We suggest introducing IT education starting from primary school; practical entrepreneurship education starting from secondary school; and introducing a founder initiative and “founders garages” at higher education instutions.
Improvement of the overall Environment for Founders
Various laws and institutional aspects in Austria are based on firms as they existed decades ago. Modern companies and startups have other requirements. Our aim is to make it simpler and easier for entrepreneurs to found, grow and move their startups in/to Austria. We suggest the introduction of a simple employee participation model for private limited companies; the adaptation of the new foundation promotion (Neugründungsförderung) and business start program (Unternehmensgründungsprogramm); extension of structural subsidies for startup ecosystem; modernization of the commercial code (Gewerbeordnung); support of flagship tech & entrepreneurship events; adaptation of the red-white-red card (immigration card for skilled employees) for startups.
Mobilization of Capital from Private Investors
Austria has an enormous demand (and unfortunately currently a big lack) when it comes to private venture and business angel capital. We missed the opportunity in the past few decades to encourage and properly incentivize private invstors to invest into local companies and startups. We therefore think that the following measures can effectively adress this problem: creation of tax incentives for Austrian private investors; creation of a fund-of-fund model with state Cornerstone Investment in privately managed funds; “unleashing” crowdfunding and cowdinvesting through suitable regulation; Creating incentives for (Austrian) institutional investors to invest in startups; provision of resources for networking and fundraising activities with international investors
Future-oriented Public Grants
We do have a wide-spread variety of public grants and government support schemes and various of these programmes were established within the past few years. Its good to have them and important for startups. Their current “modus operandi”, however, is not well suited for startups. Therefore we suggest: reallocation of funding to innovative start-ups and R & D; expansion of smaller, faster public grants that are easier to apply; gradual harmonization of the funding application structure; no longer prefering projects which have cooperations with scientific institutions; more tolerance for adapting the project focus during the project period; make the funding and financing chain more predictable
Political Awareness for Entrepreneurship
The topics of startups and hi-tech companies get much higher attention from politics in other countries. We need a stronger anchoring of the topics within the Austrian political system to improve changes in the ecosystem. Therefore we suggest: introducing a “Founder and Startup Commisioner” within the government; the topics Innovative young companies and startups should be high on the agenda of top politicians
WE ALL ARE AUSTRIANSTARTUPS!