Austria helps to booster the international growth strategy of AI-scale-ups
Agreed! Austria is normally not the first location an international company is thinking about if they are planning to establish their business in Europe. But especially for AI, Austria has so much more than just spectacular mountain views.
For fast growing US companies around new technologies and AI it’s sooner or later inevitable to discuss the expansion to the European market. And if they really want to add some fresh thoughts on that, they will learn that there are more options than the usual European suspects.
Why not turning the “I’ll be back” from a very famous Austrian actor to “I’ll go there” for AI-Scale-ups?
Companies profit from a strong, dynamic market in Austria against the backdrop of an investment-friendly environment and the perfect hub for the whole German-speaking area and the door to the CEE markets as well. Austria is the gateway to 750 million customers in the heart of Europe and one of the richest EU countries with a high purchasing power.
Another strong plus are the living standards. Both Austria and the city of Vienna regularly score highly on quality-of-life rankings, in fact Vienna was once again voted the world’s most liveable city in 2023 in by the Economist Intelligence Unit’s Global Liveability Index. Combined with relatively low costs of living, it’s an environment that makes it easy to attract top talents.
And it works both ways – the international success story of the deeptech company Dynatrace started 2005 with three founders in Linz. The pioneer among Austrian startups is a global leader today, with more than 4,200 employees worldwide. They use hypermodal AI – a combination of predictive, causal, and generative AI – in a unified platform to enable their vision of a world where software works perfectly. Sok-Kheng Taing, Dynatrace co-founder and Dynatrace ambassador for the business location Austria, sees the development as kind of a logical outcome: “Our growth—and that of our customers— did not happen by accident. To drive the digital transformation of some of the world’s largest companies, we’ve founded Dynatrace in a perfect environment in Austria and built a highly skilled, diverse, and international team. This is very well reflected in one of our core values: Innovate with Passion.”
The current digitalisation challenges of companies are taken into account by new offerings at universities, universities of applied sciences and the Austrian Institute of Technology in areas such as artificial intelligence, autonomous systems, bioinformatics, cyber security, data science or power electronics.
Besides the opportunities for talents and the strong digital skills of the local employees, Austria has quite a unique economic support scheme. The most obvious example is the corporate income tax rate of 24% that will be reduced to 23% by 2024. There are no further taxes on corporate profits. According to the BAK Taxation Index 2021, the tax burden in Austria is lower than in France, Germany, and the USA.
And as an additional plus: The Austrian Business Agency (ABA) informs, advises and supports companies and founders on their way to Austria completely free of charge.
Austria has a profound history around AI and the expertise that is needed to run such a business. Professor Sepp Hochreiter is one of the world’s leading experts in the field of artificial intelligence. He and his team conduct research in the field of deep learning at the Artificial Intelligence Lab of the Linz Institute of Technology (LIT), facilitating the industrial use of artificial intelligence.
And there is quite a comparable set-up at the Graz University of Technology (TU Graz): The institute has been conducting research on Mixed Reality for many years – as one of just a few in this field. And so, it is not surprisingly at all that Snapchat funding an endowed professorship on new technologies in this field. Daniel Wagner, Director Computer Vision Engineering by Snap Inc, explains the rational: “The cooperation with the TU Graz will push the necessary research to embed the greater interest in and the benefits of digital experiences in our daily lives.”
To bolster the research activities, Austria has developed a funding policy, directly paying an uncapped research premium of 14% of R&D expenditures to researching companies. This not only applies to in-house research but also contract research, staff costs and much more. In this way about € 1 billion in funding has been paid out in recent years.
The mixture of all these topics provides a fertile ground for local and international players like Qualcomm, Kaleido, Blackshark or Crayon. And they all rely on a surprising number of highly qualified machine learning engineers and AI practitioners.
Ultimately, there are many reasons for US-companies to join Austria’s thriving AI industry of more than 270 companies and become part of the 10% year-on-year growth rate for AI startups.
Learn more about how ABA, the Austrian Business Agency, can help you to establish your business in a country, where innovation move mountains.
