How Austria is making its AI ecosystem grow

Cutting-edge AI research activities, a well-developed startup ecosystem, public funding available for technological innovation: building on these three pillars, Austria is positioning itself as a development hub for innovative businesses looking to expand in Europe. Focusing today on AI, for obvious market reasons and thanks to Austrian research centers' expertise, but going well beyond that.

However, the AI sector is a good example of what Austria has to offer: approximately 270 companies and startups/scaleups actively working in the field, over 50 specialized universities and research institutes, and three Ellis centers (European Laboratory for Learning and Intelligent Systems) — a significant number for a country that for sure is not among the most populous in Europe.

One of the most positive aspects of this scenario is that Austria has effectively created a synergistic innovation system bringing together local startups and companies as well as innovative enterprises and major IT players from abroad. Several of them have established a presence in Austria not just for commercial reasons but also to pursue research and development projects, closely collaborating with local universities and research institutions that act as ecosystem catalysts.

“Thanks to a close collaboration between universities and companies,” explains Susanne Mayr, Director for Italy and Slovenia at Invest in Austria, Austrian Business Agency, “students can work on practical projects and join interdisciplinary collaborations, indirectly strengthening Austria’s position as a leading European center for AI training.” Public-private co-innovation has brought, and continues to bring, benefits to both pure and applied research in various fields, such as industry, biomedicine, Smart City initiatives.

Austria can also rely on a very effective public funding system for innovation. As an example, the Austrian Research Promotion Agency (FFG) offers grants and incentives for companies investing in research and development in projects up to three million euros, which can be combined with targeted tax relief. The Austria Wirtschaftsservice is a state-owned bank that offers incentives, especially for the adoption of AI solutions, in projects up to 180,000 euros, and has additional investment programs for deep tech startups. The Vienna Business Agency provides contributions for targeted projects up to 450,000 euros.

Complementing these and similar initiatives, the Austrian Business Agency broadly supports foreign entrepreneurs entering the Austrian market with a range of pre- and post-establishment services. “In an initial exploratory phase,” Mayr explains, “we provide all the information and data needed to understand the local market and define the right market entry strategy. We assist companies during the operational phase of setting up their local presence and, in the following phase, with building and developing a network of useful local contacts.”

In making itself so “attractive” to companies and individuals (students, researchers, and professionals), Austria keeps a distinctly European perspective. “What we aim for,” says Susanne Mayr, “is a sort of mutual exchange, where students move to the country of excellence for training in a given field and then come back to bring these skills to their home country... In Austria, we have very interesting cases of international tech startups where the founders come from different nations and each contributes their own expertise.”

In short, Austria does not intend to “poach” startups and innovative companies from other nations, although it is obviously keen to grow its own startup and scaleup ecosystem. However, it aims to position itself — in AI, but not exclusively — as a first step for the internationalization of innovative businesses. “Europe needs to grow together,” Mayr explains, “and this is why we always welcome entrepreneurs who are already established elsewhere and now want to internationalize their activities, a step that is crucial today for the growth of any business.” In these times of macroeconomic uncertainty, the possibility of a “soft” internationalization should not be underestimated.