Are we squandering our reputation as a sustainability frontrunner?

In the summer of 2026, Europe is breaking records: weeks-long heatwaves, persistent droughts, and large-scale wildfires of unprecedented proportions dominate the headlines. Other regions of the world are faring no better. Climate change and its economic and social impacts are no longer a distant forecast but a new—if expected—reality that demands concrete solutions and presents opportunities.

These are opportunities Austria should not squander, especially as it is—compared to many other countries—actually well-equipped to seize them. Over the past decades, Austria, which has long seen itself as a pioneer in environmental matters, has earned a global reputation as a green technology leader. It has successfully exported its innovative energy and environmental technologies worldwide, making a significant contribution to competitiveness and prosperity.

We are neglecting our proven strengths

Austria holds an excellent position in a market that, despite scepticism from the US and others, is growing rapidly worldwide. Economic projections estimate that the green technology market—depending on the definition—will grow from approximately USD 33 billion today to USD 211 billion by 2034. For clean energy, analysts expect growth from the current USD 1.3 trillion to USD 3.3 trillion over the same period. This comes as no surprise: every country is affected by the impacts of climate change, and each is striving to adapt to rapid changes by developing or procuring climate-resilient infrastructure and technologies.

Yet it is precisely in this field that Austria is neglecting its proven strengths: as the STI Monitor 2026 starkly illustrates, R&D spending on environmental and climate initiatives has declined significantly, both in relative and absolute terms—from an average of 75.6% of the spending by Innovation Leaders between 2015 and 2024 to just 50% today. For comparison: leading nations such as Japan, Finland, and South Korea spend more than double what the Innovation Leaders invest in environmental and climate R&D. This has several adverse consequences for Austria.

1. We are squandering our strengths.

Austria starts from a strong position: It is globally recognised as a green technology leader, with domestic environmental and energy technologies having been top exports for decades. Austria enjoys a strong reputation as a partner, particularly in manufacturing such systems. However, maintaining this status is not a given—it requires continuously offering new solutions and innovative technologies. A necessary transformation of existing business models is also on the horizon, with digitalisation, automation, and AI playing key roles. Incremental improvements are no longer enough.

2. We are neglecting global trends.

Climate change and geopolitics are driving global demand for smart, clean, and climate-compatible technologies—primarily in energy, but also in wastewater and exhaust gas treatment, urban technologies and systems, and the automotive sector. Austria should not leave this rapidly growing market to others. This is not just about climate protection but also about improving efficiency, reducing costs, and modernising—all of which benefit domestic industry.

3. We are neglecting our own energy security.

In energy supply, Austria lurches from one costly crisis to the next. We must become less dependent on energy imports—not for moral reasons, but out of pure self-interest. The scientific expertise and the companies are still here—for now. New challenges keep arising. Yet Austria is a pioneer in systemic solutions, and it should leverage this to gain greater sovereignty.

4. We are ignoring existing knowledge.

Despite increasingly long summer heatwaves, we are neglecting or even denying the need for rapid climate adaptation. This means developing solutions in collaboration with others and building partnerships with countries from which we can learn. It also means adapting our own infrastructure and settlements to new temperature regimes, prioritising water management, and developing climate-resilient technologies. The uncomfortable truth is that these transformations require long lead times, as they involve profound changes across many areas of life and the economy. This makes swift action all the more urgent.

5. We are not procuring with enough focus on innovation.

With an annual procurement volume of around €70 billion, the public sector is Austria’s largest buyer. This market power has the potential to drive innovation, translate research into market-ready solutions, and serve as an anchor customer to enable scaling at domestic sites—a key lever for overcoming Austria’s innovation paradox. However, as noted in the European Commission’s report on public procurement in Austria, insufficient attention is being paid to innovation-driven procurement in this country.

On a positive note, the federal government has identified environmental and energy technologies as one of nine key technology fields in its Austria 2035 Industrial Strategy and plans to address these areas in the announced Action Plan on Strategic Public Procurement. This suggests that research and development in environmental and energy technologies will be intensified in the future, strengthening Austria’s competitive edge. As previously mentioned: the sooner we begin this innovation-driven transformation, the lower the expected damage will be.

Leveraging Austria’s reputation as a sustainability frontrunner

The adverse effects outlined above are not inevitable. Above all, it is in Austria’s own hands to take action and make targeted investments. We have the knowledge, the companies, and the infrastructure to assume a leading role in energy and environmental technologies. What must not be overlooked is that innovative pilot projects and procurement deliver multiple benefits: they strengthen and showcase domestic innovation, benefit new and existing businesses, and ultimately help mitigate the impacts of climate change.

Austria alone cannot stop further climate change. However, by increasingly leveraging our technological expertise to prepare Austria as best as possible for the impacts of this new reality, we not only set an example but also capitalise on our reputation as a green technology leader to sell our environmental and energy innovations on the global market. In doing so, we also contribute to the global climate transformation beyond our borders.