Vienna - international business hub
Vienna is undeniably one of the most influentual cultural centres in Europe. Not quite so familiar to the general public is the fact that Vienna’s economy sector is also ranked amongst the best. The overall positive economic trend means that soon Vienna will also be seen as one of the influential economic centres in Europe. It needs to be said in advance that the 2009 crisis year is the exception to the rule. Consequences of the global economic crisis, triggered by a US banking crash, could also be felt in Vienna, though not nearly as severe as in other cities or countries. To be precise, the Viennese economic performance decreased by 2.3 percent in 2009.
2009 was left behind and the economy has again experienced an upswing. The Mercer survey confirms this positive development. It ranks Vienna first in its quality of living survey in November 2011 – and not for the first time either. The study is primarily designed to meet the needs of entrepreneurs, thus the economic environment plays a key role in the evaluation of quality of living. Not only Vienna’s diverse amenities make it an attractive city to live in, but its economic infrastructure in particular ranks it amongst Europe’s top performers.
Shift to knowledge
Both in the European and Austrian context, Vienna performs well economically as evidenced by the average per-capita gross regional product. In Vienna, it is almost twice as high as in Burgenland, Austria’s weakest ecomic region, and more than a third higher than the Austrian average. Internationally, Vienna holds an excellent third position behind Switzerland and the Netherlands. Even more impressive is another figure indicating power and achievement: Vienna’s gross national product per capita has climbed to more than 180 percent of the EU average.
Vienna is ready for the challenges of the future. Looking at the three traditional economic sectors, the primary (mining and agriculture), the secondary (industry and manufacturing) and the tertiary, the service sector, it is evident that Vienna has successfully completed the transformation towards a knowledge and service-based economy. More than 80 percent of value is created in the tertiary sector. Clearly, agriculture and mining only play a minor role in the city (0.1%). More significant is the decline of the manufacturing sector. However, the present and the future of the Viennese economy lies in the knowledge and service-based sector.
Vienna functions as a hub
One of the major factors for the positive development in the past decades lies in Vienna’s function as a hub for the emerging and future markets in Central and Eastern Europe. After the fall of the Iron Curtain in 1989, especially Austrian and particularly Viennese companies quickly recognised and used the opportunites that presented itself. This has led to Vienna-based companies generating an average of about 40 percent of their revenues in Eastern and Central European countries, thus holding a key position in these regions. Besides the geographical proximity, the historical ties to these countries are key to these successful business ventures. Not because old relations were renewed, but because of a deep understanding of the Eastern and Central European cultural traditions. This understandig is rooted not simply in the shared past, but also in the generational evolvement of the Viennese population. Another asset for Vienna, which in parallel strengthens the commitment of Eastern European companies in Vienna. So far, more than 300 international enterprises opted for Vienna.
The strong economic ties of the local businesses with these, according to experts, future markets make Vienna less vulnerable for international crisis. The relatively small impact of the 2009 crisis confirms this.
The port: logistics hub for Central Europe
The Viennese port is also of increasing economic importance, and its business on the Danube is booming. The dockyard business is flourishing, even in times of slower economic growth. The Port of Vienna Group was able to significantly increase its turnover and profits in recent years. Compared to last year, turnover went up by 6.7 percent to 50.8 million euros. The logistics centre of the Port of Vienna handles no less than twelve million tonnes of cargo per year. Daily, 1,800 containers are handled in the container terminal alone. Although eleven million euros were re-invested in the company, profits still amounted to eight million euros.
Business start-ups: new dynamics
The number of business start-ups also reflect this dynamic spirit. Apart from the crisis year 2009, on average about 7,700 new companies are founded in Vienna each year. Restructurings, new branches of already established companies as well as companies founded by non-members of the chamber of commerce are counted separately and need to be added to these nearly 8,000 start-ups. By the way, almost half of all founders are Viennese!
It is regarded as typically Viennese and also seen as a positive criterion regarding business locations: the fact that labour disputes are generally solved peacefully, i.e. without any strike action (the Austrian social partnership model) not only ensures a high labour productivity (150% of European average), but also contributes to a high job satisfaction and good working environment. This is much appreciated by approximately 950,000 employees and 103,000 employers. What employers also appreciate are well educated (potential) employees. 26 percent hold a university degree, while another 24 percent have completed training at high school level. College education and apprenticeships account to further 35 percent. Quite a high number of intelligent and capable human capital in Vienna.
Tourism: convivial Vienna
Vienna is a beautiful city and a popular tourist attraction – this is not only a pleasant fact but also a considerable economic factor. More than eleven million overnight stays in 2011 are impressive evidence. These eleven million people most likely enjoy visiting Vienna, but not only for their holidays. Because Vienna is the globally leading congress city! 181 international congresses in 2011 (compared to 115 in London and 92 in Rome) also meant that the Vienna International Airport was able to record 20 million passengers. Visitors and locals using the Viennese leisure facilities and attractions were so kind as to spend eight million euros altogether. Leisure and tourism account for ten percent of the local value creation. In this context, one more interesting figure needs to be mentioned: the Big Mac index. It indicates how long one has to work for the price of one McDonald's Big Mac. In Budapest one has to work almost an hour, in Madrid 27 minutes, in Paris 20 and in Vienna an average of 17 minutes of work are enough to buy this fast food product.
Having said all that: distinguished business people, esteemed congress attendees, dear tourists – welcome to Vienna!