A panel discussion marking the publication of the STI Monitor 2026 on 26 May 2026 examined Austria’s innovation capacity in international comparison. Moderated by Martin Wagner, Alexandra Mazak-Huemer, Theresia Vogel and Georg Kopetz discussed Austria’s ability to produce and utilise knowledge.
At the time of the discussion, Austria ranked 8th in the European Innovation Scoreboard (in the Strong Innovators group) and, through its RTI Strategy, aims to become an Innovation Leader by 2030. While the country performs well in R&D investment, scientific quality, and cooperation structures between science, business, and the public sector, it shows clear deficits in transferring knowledge into marketable innovations.
Mazak-Huemer: Austria’s knowledge production and utilisation in international comparison
Alexandra Mazak-Huemer (Deputy Managing Director of FORWIT and Project Leader of the STI Monitor) provided the analysis as the basis for the discussion and painted a nuanced picture:
Austria’s strengths lie in high R&D investment (3.34% of GDP, approximately €17.6 billion), a solid industrial base, and high scientific quality with strong cooperation structures. At the same time, she highlighted structural weaknesses: higher education expenditure per student (US$23,000, PPP-adjusted) is significantly lower than that of the Innovation Leaders (around US$26,000) – front-runners such as Switzerland invest US$32,000 (latest available OECD data). Austria also lags behind in STEM graduates, unless graduates from higher vocational technical schools (HTLs) are included – though these often enter the workforce directly rather than pursuing further study.
In research funding (71% private financing, above the EU average) and public funding (0.94% of GDP, 2nd place), there are positives and negatives: while public funding is strong, the input-output ratio is off – Austria invests heavily but generates too few market-effective innovations.
Mazak-Huemer’s analysis of knowledge utilisation was particularly critical: Austria suffers from weak transfer performance, especially in new-to-market and new-to-firm innovations. SMEs’ innovation revenue is significantly below that of comparable countries, and there are deficits in patents (triadic patents, high-value patents) – the gap to the Innovation Leaders is closing only because they are getting worse, not because Austria is improving.
Following this, Mazak-Huemer identified the issue as less a single funding gap and more the limitations of a linear, input- and project-oriented funding logic. While research, early-stage cooperation, and technological advancement receive relatively good support, the subsequent steps towards utilisation, market entry, first customers, private follow-up financing, and international scaling are not sufficiently well-organised. This is particularly problematic for start-ups, young companies, and SMEs, meaning that funding must be more closely linked to clear market pathways, risk-tolerant growth capital, industrial anchor customers, innovation-oriented demand, and regulatory sandbox environments. Austria’s strengths in system integration, industrial competence, and technological upgrading remain an important starting point; however, they are not sufficient on their own if new technology fields, business models, and knowledge-intensive services are not more quickly transformed into scalable value creation.
Kopetz: Enabling scaling, activating private capital, and promoting risk-taking
Georg Kopetz (Board Member and TTTech Executive) shaped the discussion with clear demands for more speed and entrepreneurial courage. He criticised Austria’s innovation system for being too slow and investing too little in scaling companies. He cited Israel and South Korea as counter-examples: Israel relies on a vibrant start-up and venture capital culture with rapid company formation and IPOs, while South Korea achieves global market leadership through targeted top-down strategies in key technologies such as semiconductors and AI.
Kopetz emphasised that Austria must learn from both approaches without copying them one-to-one. It is particularly important, he said, to mobilise private investment in deep-tech companies and create frameworks that attract international investors. He warned against relying too heavily on public funding and instead called for a stronger link between private financing and public support.
A key concern for Kopetz was scaling Austrian companies into global players. He pointed to Austria’s dependence on German industrial partners, which had acted as a ‘locomotive’ for Austrian SMEs – a model that, in light of current global shifts, is no longer sufficient. Instead, he argued, Austria needs new ‘locomotives’: large, scalable companies that can pull SMEs along and keep value creation in the country. As concrete measures, he proposed establishing an umbrella fund that pools private and public funds to finance deep-tech start-ups and create jobs. He also emphasised the strategic importance of space, semiconductors, and photonics, as well as the need to invest in dual-use technologies to secure sustainable value creation.
Kopetz’s conclusion was unequivocal: Austria must strengthen the private sector to ensure the long-term financial viability of its social market economy. Only through greater entrepreneurial initiative, risk-taking investment, and a culture that embraces innovation as an opportunity can the country secure its competitiveness.
Vogel: Focusing on excellence, international visibility, and leveraging Austria’s reputation as an environmental pioneer
Theresia Vogel (Deputy Chair and Transformation Expert) directed the focus towards the international visibility and excellence of Austrian higher education institutions. She emphasised that excellence in research and teaching is the decisive ‘currency’ for global attractiveness – just as in elite sport, only a podium finish counts. Austrian higher education institutions must position themselves more strongly in international rankings to attract top talent and generate value.
Vogel criticised Austria for too often being satisfied with a position ‘above mid-table’ rather than pushing into the top tier. Another key issue for Vogel was the neglect of global market developments in energy and environmental technologies. She warned against an overly ideological approach to the climate debate and instead called for pragmatic solutions that leverage economic opportunities. As an environmental pioneer, Austria has a strong starting position that it must expand through innovation in environmental and energy technologies.
She particularly emphasised the need to develop climate-resilient infrastructure and technologies for climate adaptation – an area where Austria already has expertise but uses it too little. Compounding this is the fact that R&D spending on environment and climate has recently declined significantly – with implications for Austria’s reputation as an environmental pioneer and in a globally growing market.
Vogel also advocated for a more long-term, adaptable RTI strategy. She called for gradually supplementing existing industries with new, future-oriented fields such as quantum technologies, and for strengthening the culture of innovation among the population. Her appeal: Austria must take pride in its innovations and actively communicate them to spark enthusiasm for research and technology.
Conclusion
In her concluding remarks, Alexandra Mazak-Huemer summed up the central challenge: Austria must transition from a primarily incremental innovation model to a transformative, agile, and scalable RTI model that seamlessly integrates research, transfer, financing, demand, regulation, and international market access.
While Kopetz identified the lack of scaling and private financing as a key obstacle and highlighted the data and structural deficits in knowledge utilisation, Vogel emphasised the need for excellence, international visibility, and a long-term, globally oriented strategy. All three underscored that Austria can only achieve its ambitious goals through a combination of entrepreneurial courage, targeted funding, clear vision, and strengthened knowledge transfer.
Note: The content and conclusions of the panel discussion were incorporated into a working paper on the Austrian Innovation Paradox.