OECD Economic Surveys: Austria 2019

Austrian citizens enjoy high living standards, well-being and social cohesion. Until the ongoing global slowdown, robust employment growth in the private sector kept domestic demand and investment remarkably robust. More people moved into work and inward migration has been strong. At the same time, new challenges related to social cohesion challenges have emerged, as increased skill differences in the population and diverging productivity performance across firms have generated a higher range of outcomes for job quality and market wages than in the past. Myriad entrepreneurial firms across all regions should better adapt to new megatrends of ageing, globalisation and digitalisation. While small-and-medium sized firms are generally more productive, export more, and engage more in higher technology activities than in comparable countries, they need to adapt to maintain this good performance. Their capital structures are biased towards debt, and stronger equity, growth and venture capital markets would provide them with further resources for their long-term knowledge based investments. Important skills shortages, in particular in advanced digital technologies, should be overcome. As around one third of all SMEs are up for ownership transmission, ensuring successful business transfers will be crucial for maintaining broad-based entrepreneurial dynamism. Meeting these challenges would also help lift the constraints on upscaling that many SMEs face and would provide more fruitful soil for future innovative activities.