Austria thrives on exports. More than two thirds of domestic GDP (taking into account imported intermediate goods) is generated abroad. But what about export-oriented companies in the country? How important are they for productivity, innovation, employment and value creation? A study by the Vienna Institute for International Economic Comparisons (wiiw) in collaboration with the Austrian Institute of Technology (AIT) examined these questions.
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The conclusion of the export study is summarized by Robert Stehrer, scientific director of the wow and co-author of the study, together: “Companies that export are significantly larger, more innovative, more productive and even more profitable, pay higher wages, invest more and do even more to protect the environment.” Together with Bernhard Dachs from AIT Stehrer analyzed 5,000 companies in the production of material goods. Two thirds of them (3,500) also export their products abroad.
The largest of them are responsible for the lion’s share of exports. In 2019, the largest 5% of companies in the country accounted for 65% of exports by value. The fourth largest of the national companies even made 90% of all exports. Likewise, the importance of exports for commercial activities increases with the size of the company. While companies with up to 49 employees generate less than 20% of their sales abroad on average, companies with more than 1,500 employees are almost exclusively exporters (97% share of sales). “The world champion exporters are therefore mainly the large leading companies in the sector,” says study co-author Bernhard Dachs of AIT.
Export champion of the world large industry
Export-oriented companies also have significantly higher labor productivity. For them it is 1.2 to 1.6 times higher per hour than for companies that do not export. Although two thirds of the national companies are exporters, they represent no less than 90 percent of the expenses for employment, turnover, investments and environmental protection. “The downside to this, however, is also a high economic susceptibility to supply chain problems, such as the war in Ukraine – for example in the auto industry – is showing us again,” says Stehrer.
Research and development as the key
Export companies also invest significantly more money in research and development, as well as in digitization. This is particularly evident in the high-tech sector. At around 80 percent, high-tech companies have the highest R&D activities and, with 70 percent, also the largest export share of sales. One requires the other. “Profitable export opportunities create incentives for the development of innovative products. However, research and development are the fundamental prerequisites for being internationally competitive, “says Bernhard Dachs.
According to the authors, politicians should therefore do everything possible to strengthen companies’ research and development, productivity and export opportunities. From their point of view, more innovation plays a key role. “Greater efforts in research and development and a science and education policy that creates an environment in which research can flourish would be essential,” says Dachs. This is the only way to interest more people in the relevant professions and thus alleviate the severe shortage of skilled workers, especially in the natural sciences.
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