Austria
Country Analysis
INT 113, Final Project
Introduction: Austria
Rationale
In Austria, the scenery is breathtaking. Words can’t describe how magical the lakes look against the backdrop
of snow capped mountains in the distances. If you like sightseeing, to see, ranging from the hidden gems that
only locals will tell you about. The country is brimming with important landmarks that are worth adding to
your bucket list.
Austria located at the heart of Europe has traditionally made it a hub for East/West relations.
Location and Geography (World Atlas, 2018)
Regional Location: South-Central Europe, North of Italy and Slovenia
Border countries: Czech Republic 402 km, Germany 801 km, Hungary 321 km, Italy 404 km, Liechtenstein
34 km, Slovakia 105 km, Slovenia 299 km, Switzerland 158 km
Climate: temperate: continental, cloudy; cold winters with frequent rain and some snow in lowlands and
snow in mountains; moderate summers with occasional showers
Socio Cultural Environment
Country Composition: Business communication business etiquette, business meeting etiquette,
internship and student placements, cost of living, work-life balance and social media guide
Literacy rate: Austria literacy rate for 2018 was 99.00%, 0% increase from 2015
Urbanization rate: 2019-58.52%, 2018-58.3%, 2017-58.09%, 2016-57.91%, 2015-57.72%,
2014-57.53%, 2013-57.34%, 2012-57.15%, 2011-57.12%, 2010-57.4%, 2009-57.68%
Heavily populated cities: Vienna, Vienna-1,691,468, Graz, Styria-222,326, Linz, Upper
Austria-204,846, Salzburg, Salzburg-153,377, Innsbruck, Tyrol-132,493, Klagenfurt,
Carinthia-90,610, Villach, Corinthia-58,882, Dornbirn, Vorarlberg-49,278, Wiener Neustadt, Lower
Austria-44,820, Steyr, Upper Austria-38,331, Feldkirch, Vorarlberg-33,420, Bregenz,
Vorarlberg-29,471
Socio Cultural Environment cont..
Age Structure
0-14 years 15-64 years 65 years and over
2019 14.36% 66.56% 19.08%
2018 14.3% 66.7% 19%
2017 14.23% 66.81% 18.96%
2016 14.17% 66.92% 18.91%
2015 14.12% 67.04% 18.84%
Socio Cultural Environment cont...
Age Structure
0-14 years 15-64 years 65 years and over
2014 14.17% 67.17% 18.66%
2013 14.25% 67.27% 18.47%
2012 14.37% 67.36% 18.27%
2011 14.52% 67.42% 18.05%
2010 14.72% 67.48% 17.8%
2009 14.93% 67.56% 17.51%
Socio Cultural Environment cont...
Major Religions: Roman Catholic 57%, Eastern Orthodox 8.7%, Muslim 7.9%,
Evangelical Christian 3.3%, other/none/unspecificified 23.1%
Educational Data: In 2019, 42% of 25-34 years old had a tertiary degree in Austria. In
2018, 25-64 years old had a tertiary degree with income from full-time, full year
employment earned 48% more than full-time, full year workers. In 2017, Austria invested
a total of USD 16 319 per student on primary to tertiary institution. In 2018, 90% of 3-5
years old were enrolled in early childhood education and care programmes and primary
education
Socio Cultural Environment
Values
Being Independent
Hierarchy for convenience only
Equal rights
Superiors accessible
Coaching leader
Management facilitates and empowers
Individualist society
Guilt and a loss of self-esteem
Employer?Employee relationship is contrast based
Socio Cultural Environment
Values cont..
More masculine society
Highly success oriented driven
Equity
Competition
Performance
Emotional need for rules
Time is money
Innovation may be resisted
Pragmatic culture
Socio Cultural Environment
Communication
Verbal
Communication style
Direct communication
Attention
Formality
Humor
Socio Cultural Environment
Communication
Nonverbal
Physical Contact
Personal Space
Eye Contact
Gestures
Socio Cultural Environment
Business Etiquette
●Punctuality is taken extremely seriously
●First impressions are important, you will be judged on your clothing and demeanor
●Meeting adhere to strict agendas, including starting and ending times
●Presentations should be accurate and precise
●Austrians show deference to people in authority
●Business is conducted slowly
●It is extremely rude to cancel a meeting at the last minute and it could ruin your business
relationship
Socio Cultural Environment
Business Observation
●The richest and most stable in the European Union
●Located at the heart of Europe has made it a hub for East/West relations
●Economic growth strengthens in 2017, with a 2.9% increase in GDP. Austrian exports,
accounting for around 60% of the GDP, were up 8.2% in 2017
Political-Legal Environment
Government and Ideologies
President Alexander Van der Bellen Party: The Greens
Chancellor Sebastian Kurz Party: OVP
Vice Chancellor Werner Kogler Party: The Greens
●Lengthy negotiations led to a renowned “grand coalition” consisting of the social Democrats
and the People’s Party. The Austrian People’s Party and The Greens-The Greens Alternative
formed a coalition government on 1 January 2020, marking the first time the Greens have
gained power. In 1986, the Greens failed to pass the threshold of 4% in the 2017 legislative
elections, however; in 2019, they performed relatively well in the European elections as well
as in two subsequent regional elections.
Political-Legal Environment
Corruption
●Corruption perception index 75/100
●The maximum financial sanction for a company convicted of foreign bribery is $1.3
million, which is not commensurate with the nature and size of many Austrian
companies
●The Beneficial Owners Register Act came partly into effect in 2017. It provides law
enforcement officials, the public prosecutor and judicial authorities with access to data
on ownership and control of various assets
●An anonymous whistleblower hotline, piloted from 2013 to 2015, became permanent in
2016 on the website of the office of the Public Prosecutor for Economic Crime and
Corruption
●The Austrian Federal Competition Authority also introduced a whistleblower hotline in
2018, via a dedicated website
Political-Legal Environment
Trade Regulations and Legal Considerations
Employment law
●No statutory minimum wages
●Minimum wage is determined by collective agreements
●Employee salaries must be paid no later than the last day of each month
●Female employees qualify for total duration of 16 weeks (8 weeks before and 8 weeks
after birth), section 14 Maternity Protection Act 1979
●Paternity leave of one month (28-31 days), known as the “family time bonus.” The law
applies to natural and adoptive parents
Sales Tax
●Vat (sales tax): 20%
Political-Legal Environment
Business Observation
●Dynamic European Union member country offering export opportunities for U.S.
companies of all sizes
●Austria offers attractive features as a regional headquarters location, and recent Austrian
governments have sought to increase encourage this through economic reforms and by
highlighting Austria’s historical and economic ties to the surrounding region
●Austria is a good export market for U.S. companies, with no significant trade barriers
Economic-Infrastructural Environment
Economic Measures
●Interest Rates: 4.75%
●Unemployment: 5.5%
●Inflation: 2.2%
●GDP real growth rates: 3%
●Exchange rate: euros (EUR) per US dollar-0.885
●Exchange rate regime: Floating
●GDP: $417.4 billion
●Labor Force: $4.26 million
●Major Industries: construction, machinery, vehicles and parts, food, metals, chemicals,
lumber and paper, electronics, tourisms
●FDI rates: 9032 EUR Million in the third quarter of 2018
Economic-Infrastructural Environment
Trade Elements
Major Trading Partners:
●Exports: United States, China, Switzerland, Russian Federation, Turkey
●Imports: China, United States, Russian Federation, Switzerland, Turkey
Major Imports:
●Agricultural products: 8.8
●Fuels and mining products: 19.1
●Manufactures: 67.48
Major Exports:
●Agricultural products: 8.2
Economic-Infrastructural Environment
Major Exports: cont
●Fuels and mining products: 6.3
●Manufactures: 81.8
Import/Export items:
●Machinery and equipment, motor vehicles and parts, manufactured goods, chemicals, iron
and steel, foodstuff
Economic-Infrastructural Environment
Transportation and Telecommunication
●Improving infrastructural endowments and quality decreases trade costs and increases
international trade costs but also multilateral trade costs
●Airports: IATA: Passengers:
Vienna Airport VIE 31,662,189
Salzburg Airport SZG 1,717,991
Innsbruck Airport INN 1,144,471
Graz Airport GRZ 1,036,929
Linz Airport LNZ 436,018
Klagenfurt Airport KLU 228, 372
Economic-Infrastructural Environment
Transportation and Telecommunication cont…
●Seaports
GRAZ GRZ
SALZBURG ATGRZ
INNSBRUCK ATTINN
VIENNA AT VDD
KLAGENFURT ATKLU
BEZAU ATVOR
LINZ ATLNZ
WIEN ATVIE
Economic-Infrastructural Environment
Transportation and Telecommunication cont…
●Railway Stations:
Vienna’s Stations
Salzburg Main Station
Graz Main Station
Bruck an der Mur-Graz Line
●Internet Users:
7,920,226 internet users as of December 31, 2019; 87.9% of population, according to IWS
●Mobile Providers:
Economic-Infrastructural Environment
Transportation and Telecommunication cont…
Magenta Telekom (formerly T-Mobile)
A1
3
●The Logistics Performance Index rating:
3.99
Economic-Infrastructural Environment -Observation
Business Observation
●Austria has one of the most comprehensive and efficient railway networks in the world
●The Port of Vienna providers a quarter of the country’s jobs and is responsible for a third of the
gross national product
●The Port of Linz is home to many steel and chemical plants, and one of Austria’s most important
economic centers
●Austrian exports, accounting for around 60% of the GDP, were up 8.2% in 2017
●The budget deficit stood at a low 0.7% of GDP in 2017 and public debt declined again to 78.4%
of GDP in 2017, after reaching a post-war high 84.6% in 2015
●Austrian’s fiscal position compares favorably with other eurozone countries
●Austria remains a capital exporter: its FDI outflows exceed its inflows
●To encourage foreign investment, Austria providers welcoming conditions for foreign companies
that want to invest in capital intensive industries and in research and development, for which
considerable tax breaks are available
Final Recommendations
Market Entry Strategies
Companies interested in working with government of Austria are best positioned by partnering
with a local company. A good source of information on potential is the EU TED database, that
lists the results of previous tenders by sector
Those looking for an agent or distributor should think beyond national borders. The most
qualified distributor may be in Germany if that company has a commitment to serving the
Austrian market. Alternatively, the best candidate may be an Austrian distributor with offices
throughout Central Eastern Europe
Cultural Awareness
Business etiquette is of great importance to Austrians. Austria is a nation that is strongly
individualistic and respectful and in turn it expects high standards of its business partner. Any
unethical behavior will seriously diminish all future business negotiations
Final Recommendations
Cultural Awareness cont….
Austrians would be classified as pre-planners in terms of their approach to meetings. It is
unprofessional to arrive at a meeting and to start looking through the papers as the meeting
begins. People are expected to speak when they have something to say within their area of
expertise.
References
Internet World Stats. (n.d.). Retrieved January 04, 2021, from https://www.internetworldstats.com/
(n.d.). Retrieved January 04, 2021, from https://www.portofantantwerp.com/en
Technology for Travelers. (2019, November 05). Retrieved January 04, 2021, from
https://toomanyadapter.com/
Statista-The Statistic Portal for Market Data, Market….(n.d.). Retrieved January 04, 2021, from
https://www.statista.com/
