WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 1 Dear Teachers and Pupils! The Austrian export industry has been incredibly successful in recent years. In 2004 our country even captured the title of European Export Champion! Innovative business owners and employees who understand globalization as an opportunity and a challenge have been crucial to our success. The foundation for this success is laid in the education and training of young people. It will soon be up to today s pupils to make Austrian businesses successful on world markets and thereby safeguard jobs, our high standard of living, and our strength as a business location. We wish you much fun and success in exploring this exciting topic for the future: Austria s Prospects on World Markets. Dr. Martin Bartenstein Austrian Federal Minister of Economics and Labor Dr. Christoph Leitl President of the Austrian Federal Economic Chamber Owner and publisher: Österreichisches Gesellschafts- und Wirtschaftsmuseum, Vogelsanggasse 36, A-1050 Vienna, Austria Phone: 01/545 25 51, Fax: 01/545 25 51-55, e-mail: wirtschaftsmuseum@oegwm.ac.at, Website: http://www.wirtschaftsmuseum.at Commissioned by Austrian Federal Economic Chamber, Education Policy Department., Dr. Michael Landertshammer, http://wko.at/bildung, Wiedner Hauptstrasse 63, A-1045 Vienna, Austria Phone: 05 90 900, e-mail: callcenter@wko.at, Website: http://wko.at ISBN: 3-902353-33-3 Produced by: Paul Gerin Druckerei, Wienerfeldstrasse 9, A-2110 Wolkersdorf, Austria Edition 2005
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 2 1 THE FUNDAMENTAL PRINCIPLES OF AUSTRIAN ECONOMIC POLICY The Magic Polygon Population Foreign trade balance Social Partners Austrian Federal Economic Chamber, Austrian Federation of Trade Unions, Federation of Austrian Industry, Chamber of Labor Quality of life Environment Economic growth International Institutions Federal Government Just distribution of income and wealth OECD, IMF, IBRD, GATT, WTO International Agreements High level of employment Enterprises European Central Bank Monetary stability Austrian National Bank A national economy has various important economic policy goals. A foreign trade balance means that expenditure for imports is covered by income from exports over an extended period of time.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 3 2 AUSTRIAN EXPORTS AND IMPORTS 100 90 80 70 60 50 40 30 20 10 0 Exports and Imports of Goods, 1994 to 2004 in billions Imported Goods Exported Goods 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Austrian National Bank Current Account Balance in billions Surplus + 0.7 + 0.8 1.2 2.7 4.5 4.2 5.8 4.7 6.3 5.4 4.1 Deficit 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Austrian National Bank Until 2001, more cash flowed abroad from the import of goods than into Austria from the export of goods. For the past three years, these cash flows have almost reached equilibrium. Besides traffic in goods and services, the current account balance also records flows of income and transfer payments between Austria and other countries.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 4 3 AUSTRIAN IMPORTS AND EXPORTS OF GOODS Austrian Imports and Exports by Goods Category in 2004 as a % of total imports/total exports 0.5 9.2 3.6 5.6 10.3 30.4 Other Fuels, energy Raw materials Food, beverages, tobacco Chemical products 0.6 3.2 3.2 5.7 9.1 33.3 Semi-finished and finished goods 40.4 Machines and vehicles 44.9 Imports totaling 91.1 billion = 100 % Exports totaling 89.8 billion = 100 % Source: Statistik Austria, Austrian Federal Economic Chamber The structure of Austrian exports has continuously improved in quality. In 2004, the economy exported 40 billion worth of machines and vehicles and 30 billion worth of semi-finished and finished products.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 5 4 EXPORTS AS THE DRIVING FORCE OF ECONOMIC ACTIVITIES Austrian Export Rates, 2004 v 1994 Exports of goods as a % of GDP 2004 37.8 % 1994 22.1 % Source: Austrian National Bank Exports of goods account for nearly 40 percent of the Austrian gross domestic product. If exports of services are added to this figure, this share rises to well over 50 percent. In other words, more than half of the goods and services produced in Austria are sold abroad.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 6 5 EXPORTS AS THE DRIVING FORCE OF EMPLOYMENT Gainfully Employed Persons in Austria in thousands 1) Male Female 2004 3,700 2001 3,738 1991 3,499 1981 3,342 1971 3,081 1961 3,301 1951 3,230 = 100,000 men = 100,000 women Source: Statistik Austria 2004: Estimate, 1) Defined as in Labor Force Plan. Registered unemployed are not included. The export industry is a crucial mainstay of economic activities. It allows the economy to grow and in so doing, helps to preserve existing jobs and create new ones, especially in export-oriented sectors and companies. Every one percent increase in exports generates about 10,000 jobs directly and indirectly.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 7 C M Y CM MY CY CMY K 6 EXPORTS OF AUSTRIAN INDUSTRY From every 1,000 in sales in 2003, exports accounted for the indicated amounts in the following industries 910 Motor vehicles Metal 760 Machines 760 Textile and leather 700 Optics, medical and measurement technology 670 Plastics 660 Electronics 640 Chemicals 580 500 Wood 400 Consumer products Glass and ceramics 340 Paper 290 Foodstuffs 130 Source: Austrian Federal Economic Chamber Exports by Austrian industry indicate how significant the export sector is for economic growth and employment in a small open economy such as Austria s. Many businesses earn the major part of their sales through exports.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 8 7 AUSTRIAN FEDERAL ECONOMIC CHAMBER AND ITS PROMOTION OF INTERNATIONALIZATION Work Areas of the Austrian Federal Economic Chamber WKO Austrian Federal Economic Chamber AWO Austrian Trade 70 foreign trade offices, 30 marketing offices AWO Information Publications on business opportunities and markets, worldwide presentation of Austrian companies AWO Coaching Individual coaching in Austria and abroad AWO Events Events in Austria and abroad Purchasing procedures on foreign markets Consulting and coaching on Export of services Export of goods Foreign investments Transfers of innovation and technology Source: Austrian Federal Economic Chamber Many Austrian companies utilize the services of the 100 bases of Austrian Trade worldwide. As a sub-organization of the Austrian Federal Economic Chamber, Austrian Trade provides support, advice and coaching to Austrian companies on all foreign trade issues. Austria currently has about 24,000 exporting companies. One goal of the go international initiative is to increase this number to 30,000.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 9 8 AUSTRIAN FOREIGN TRADE WITH THE EUROPEAN UNION Austrian Foreign Trade in 2004 in billions Germany 29.0 39.1 Poland 1.6 1.1 Italy 6.2 7.7 Slovakia 1.4 1.8 France 3.8 3.6 Sweden 0.9 1.2 Great Britain 1.8 3.8 Denmark 0.6 0.5 Hungary Czech Republic 3.3 2.6 2.8 2.9 Exports Ireland Finland 0.6 1.1 0.5 0.7 Spain 2.2 1.4 Imports Greece 0.5 0.1 Slovenia 2.0 1.2 Baltic States 0.3 0.1 Netherlands 1.7 2.6 Portugal 0.3 0.5 Belgium, Luxemburg 1.6 1.8 Cyprus, Malta 0.1 >0 Source: Statistik Austria, Austrian Federal Economic Chamber Austria s key trade partners continue to be primarily neighboring countries, especially Germany. Foreign trade between Austria and the countries of Central and Eastern Europe is growing at a fast pace. Many of these CEE countries acceded to the European Union in 2004.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 10 9 AUSTRIAN FOREIGN TRADE BY REGION AND ECONOMIC AREA Austrian Foreign Trade in 2004 in billions EFTA EU CIS 64.6 70.3 4.8 3.1 2.0 2.3 NAFTA 3.4 6.3 Central and South America 0.7 0.8 Other countries 3.3 3.0 0.1 0.6 0.8 1.1 Arab countries in Asia and Africa 3.6 1.7 3.0 5.4 ASEAN, China, Japan Southeastern Europe Australia and Oceania Total Exports 89.8 billion Total Imports 91.1 billion ASEAN Association of Southeast Asian Nations: Brunei, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam EFTA European Free Trade Association: Iceland, Liechtenstein, Norway, Switzerland CIS Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrghizstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan NAFTA North American Free Trade Agreement: Canada, Mexico, USA Southeastern Europe: Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia-Montenegro Source: Statistik Austria, Austrian Institute of Economic Research, Austrian Federal Economic Chamber Austria conducts about three quarters of its foreign trade with the European Union, but other major economic areas such as China and India are gaining steadily in importance. Six percent of all Austrian exports go to the USA despite the strong euro.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 11 10 THE INFLUENCE OF EXCHANGE RATES ON FOREIGN TRADE Development of the US Dollar/Euro (ECU) Exchange Rate 1994 to 2004 1.40 1.35 1.30 1.25 You receive MORE than one US dollar for one euro (ECU). 1.20 1.15 1.10 1.05 1.00 0.95 0.90 0.85 0.80 You receive EXACTLY one US dollar for one euro (ECU). You receive LESS than one US dollar for one euro (ECU). 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Austrian National Bank If the euro loses value against other currencies, Austrian goods become cheaper for foreign customers. Austria can export more but imports become more expensive. If the euro gains in value, the situation is reversed: Exports become more expensive while imports become cheaper.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 12 11 ACTIVE AND PASSIVE DIRECT INVESTMENTS 10 9 8 7 6 5 4 3 2 1 0 60 Annual Direct Investments, 1994 to 2004 in billions Passive Annual Direct Investments Active Annual Direct Investments 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total Direct Investments, 1994 to 2004 in billions Source: Austrian National Bank 50 Total Passive Direct Investments 40 30 20 10 Total Active Direct Investments 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Austrian National Bank Active direct investment sets capital flowing from Austria to other countries. Austria has become an especially important investor in the countries of Central and Eastern Europe. As a business location with many advantages, Austria also attracts foreign capital, referred to here as passive direct investment. This capital goes towards building up businesses and creating jobs.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 13 12 THE ADVANTAGES OF AUSTRIA AS A BUSINESS LOCATION Austria s Advantages as a Business Location Innovation Research & Development DIRECT INVESTMENTS Social Partnership Consensus-based Approach to Solving Labor Conflicts Market Proximity to Eastern Europe Geographic Location in Central Europe Social and Political Stability Economic Promotion and Development System Basic Tax Conditions WILLINGNESS TO INVEST Infrastructure, Quality of Life, Economic Situation, Environment, Security; Education, Continuing Education, Mobility, Motivation, Employee Creativity It is up to investors to decide whether to locate their enterprises in Austria or to keep or expand existing enterprises in the country and thus assure the security of domestic jobs. What they ultimately decide depends on a number of factors. The willingness of businesses to innovate is one factor that plays a crucial part in these decisions.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 14 13 RESEARCH AND DEVELOPMENT IN AUSTRIA Expenditure for Research and Development, 1994 to 2004 as a % of GDP 2.3 2.2 2.2 2.0 2.1 1.9 1.8 1.7 1.6 1.6 1.5 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Austrian Federal Economic Chamber Expenditure for Research and Development in the EU, 2003 as a % of GDP Sweden 4.3 Slovenia 1.5 Finland 3.5 Czech Replublik 1.4 Germany 2.5 Italy 1.2 Belgium 2.3 Ireland 1.1 France 2.2 Hungary 1.0 Austria 2.2 Estonia 0.8 EU-15 ø 2.0 Lithuania 0.7 Netherlands 1.9 Poland 0.6 Great Britain 1.9 Slovakia 0.6 Source: Austrian National Bank GB, I: 2002; NL, S: 2001. Intensive research and development and the new products and production processes resulting from it form the basis for increased exports, economic growth and employment in a national economy. R&D is essential to the competitiveness of domestic enterprises in a global economy.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 15 14 CAREER OPPORTUNITIES IN THE EXPORT INDUSTRY Career opportunities as a result of... Specialized expertise as regards export industry foreign languages information technology (IT) communication technology (CT) marketing science Personality profile as regards mobility creativity innovativeness sense of personal responsibility intercultural skills adaptability Career Opportunities Supplemental qualifications through foreign stays and work experience Exchange program for secondary students e.g. Leonardo Exchange program for university students e.g. Erasmus Foreign studies, training placements abroad Temporary work at companies Basic and continuing education and training through life-long learning WIFI (training organization of Economic Chamber) WIFI offers: Language courses; seminars; management courses of study; in-house company training; courses of study ending in a diploma for export, marketing and sales. www.wifi.at The many Austrian companies selling products abroad help to keep existing jobs secure and to create new ones. The export industry has good career prospects for individuals with specialized expertise and a suitable personality.
WKO 2005_engl->Gerin 01.12.2005 14:12 Uhr Seite 16 C M Y CM MY CY CMY K AUSTRIA S PROSPECTS O N WO R L D M A R KE T S