The startup nation strategy defines necessary actions in different policy areas, which need to be taken in order to turn Austria into Europe’s leading startuphotspot. It therefore covers 40 specific measures in the following 5 policy areas: promoting innovation, expanding access to finance, raising awareness for entrepreneurship, creation of new and strengthening of existing networks and improving the regulatory framework.
The development of this strategy was a best practice example for participative policy making: it was created over a period of 6 months and through the participation of more than 250 experts from the startup community, including inter alia startups, other entrepreneurs, seed investors and business angels, venture capital investors, promotional banks, research institutions and special interest groups. Experts and economic scientists of the whole country were involved to develop Austria’s “startup nation strategy”.
The “startup nation strategy” defines necessary actions in different policy areas, which need to be taken in order to turn Austria into Europe’s leading startuphotspot. It therefore covers 40 specific measures in the following 5 policy areas: promoting innovation, expanding access to finance, raising awareness for entrepreneurship, creation of new and strengthening of existing networks and improving the regulatory framework.
The “startup nation strategy” has not only set the framework for policy measures that need to be implemented, but also raised awareness for the importance of a vibrant startup scene and an innovative business environment among other policy makers in Austria. State Secretary Mahrer has been the driving force behind many initiatives which have been started and adopted since the presentation of the strategy in 2015. The most prominent ones are the new crowdfunding bill, the creation of the Global Incubator Network (GIN) for international exchange around the world, the Young Investigators Spinoff Fellowship, the “Startup hot spot Austria” campaign, the Open Innovation Strategy and the Digital Roadmap for Austria.
A major milestone in the implementation of the “startup nation strategy” was reached in July 2016. Following Mr. Mahrer’s continuous efforts, the Austrian government adopted a comprehensive startup package, which covers a period of 3 years and entails a volume of EUR 185 million, including an increase in public funding schemes and incentives for more private investment in startups as well as measures to retain and attract the best talents and support them in starting their own business in Austria:
• Innovative startups are exempted from paying auxiliary wage costs for the first three employees during a period of three years.
• Seed financing schemes of the Austrian promotional bank (aws) will be increased by EUR 20 million. An additional EUR 20 million will be put at the disposal of startups through new funding sources for the aws Business Angel Fund.
• 24 hours quick check for funding applications by the Austrian Research Promotion Agency FFG and the Austrian promotional bank aws.
• New risk capital premium for investors to promote private investment in innovative startups. Accumulated investments of up to EUR 250.000 per year are supported with a 20% reimbursement of the investment volume..
• New financing company for SMEs (“MiFiG”) which provides risk capital for small and mediumsized companies. Tax exemptions will apply for up to EUR 15.000 in dividends for investors in a MiFiG.
• Digital onestopshop for setting up a business will make the process quicker and less expensive.
• Founding fellowships for academic spinoffs (Young Investigator Spinoff Fellowships) along the lines of the Swiss Federal Institute of Technology in Zurich (ETH) to support scientists and students with innovative ideas in setting up their own company by covering for salary costs and providing access to the academic infrastructure. Some 50 founders will be supported in teams up to 2018 with a total of EUR 15 million.
• New “startup visa” which give the applicant a residence and work permit for selfemployed work in Austria.
A full implementation of the Austrian “startup nation strategy” has the potential to create 100.000 new jobs by 2020.
Given that the measures have only been taken in 2015 and 2016 no detailed impact assessment is available yet. However, the first available data sets are very encouraging. The number of new businesses established has reached an alltime high in the first half of 2016: 16.324 new businesses have been founded, which equals 126 new businesses per working day and represents an increase of +5,8% compared to the first half of 2015.
The startup package adopted in July 2016 increases public spending in areas relevant for startups by EUR 185 million. it is expected to lead to even more businesses being established according to the President of the Austrian Federal Economic Chamber: He stated that the proposed measures are an important impulse for innovative startups and will have a significant positive impact, especially regarding access to finance.
The introduction of the crowdfunding bill in September 2015 has led to a sharp increase in the volume raised through the means of crowdfunding: the amounts raised have sextupled (!) from Q3/2015 to Q4/2015 (EUR 611.000 in Q3 as compared to EUR 4.2 million in Q4). Overall EUR 10 million have been raised during the first six months after the introduction of the new bill. In the first half of 2016 EUR 13.5 million have been raised which equals an increase of EUR 4.8 million to the total amount raised in 2015.