New business location report by Bank Austria Economics & Market Analysis:
Tyrol: Austria's no. 1 tourist destination scores with dynamic economy
- Growth and employment driven by export success
- Above-average wealth thanks to strong labour market
- Still need to make up ground in underdeveloped growth sectors
Tyrol is Austria's premier tourist destination and is one of the most dynamic regions in Europe because of its above-average economic growth and one of the lowest unemployment rates. Whilst tourism continues to provide a solid basis for Tyrol's high standard of living, increasingly the economy and growth rates are being driven by new, innovative companies and the export success of recent years. This is the conclusion reached by an up-to-date Bank Austria Economics & Market Analysis location report presented today by Erich Hampel, Bank Austria CEO, Stefan Bruckbauer, Deputy Chief Economist at Bank Austria, and Markus Sappl, Bank Austria's Provincial Director, Corporate Clients Tyrol.
Tyrol came sixth, tying in the middle of the table with Vienna and Lower Austria, in a standardised comparison of the Austrian provinces based on a variety of economic indicators. In Hampel's opinion "Tyrol is a superb economic and tourism location. The Tyrolean economy is, however, experiencing structural change which has the potential to strengthen the location's capacity and competitiveness in the long term as the result of a broader economic basis characterised less by tourism. Above-average economic growth and positive labour market trends are early signs that the province has embarked on a successful path."
"It is clear from average operating results that the Tyrolean economy is in good health and exhibits enormous strengths in many areas, but on the other hand there are, however, some weaknesses that offer opportunities to shape the future," explains Bruckbauer.
Tyrol is one of Europe's leading tourism regions
Tyrol's strength in the field of tourism and its broad industrial orientation have made it a wealthy Federal province and have also formed the basis for above-average growth in recent years. Tyrol's wealth is closely associated with its traditional strengths in the field of tourism. Thanks to its high quality and extensive provision for tourists, Tyrol's per capita GDP is above the Austrian average, as is that of Vienna, Salzburg and Vorarlberg. Tourism's share of overall economic performance is Austria's highest by far, at more than 12 percent. Almost 42 million visitor nights' accommodation highlights the intensive way in which the economy is geared to this sector.
Growth and employment benefit from impetus from innovative businesses
The Tyrolean economy's additional growth came less from tourism, though, than from new service sectors and higher value industrial segments, or from the establishment of innovative companies respectively. Backed by a favourable international environment, goods production has been able to pick up pace, especially in more technologically developed sectors such as electronic engineering, the chemical industry, the plastics industry, metrology and the automobile industry. In the service sector, trade and business-related services provided additional growth. The unemployment rate fell steadily as a result of powerful expansion in the Tyrolean economy and employment rose considerably. Tyrol's unemployment rate of 5.3 percent is significantly below the Austrian average.
"Tyrol has long since outgrown its small Alpine origins and is benefiting from the open borders in a unified, expanding Europe because of its favourable location and economic ties to the high-tech base that is Bavaria and the dynamic territory of northern Italy," explains Sappl. "The Tyrolean economy is gaining speed and diversifying. A broader basis will mean that the location will be more stable and better able to withstand the impact of economic cycles." Since the turn of the millennium the Tyrolean economy has experienced the second highest export growth of all the Austrian provinces. The export quota has risen 16 percentage points since 2000.
Need to make up more ground in knowledge and technology-based growth sectors
Despite the satisfying trend towards a technological upgrade of the economy, reflected in rising employment figures in higher value, innovative branches of industry and business-related service sectors, Tyrol still has some catching up to do compared with Austria as a whole. There is still room for development in the knowledge-based service sector in particular, such as consultancy and information services, advertising, and data processing, as well as legal and economic consultancy. Whilst Tyrol is amongst the leaders, on the basis of wealth and the labour market, in a comparison of the provinces, it is below average in terms of economic structure analysis.
Position as an education and research location
Tyrolean location policy is relying on accelerated development of its education and training offering to change this position. Publicly Tyrol has established itself as showcase province in matters of research and development in Austria thanks to the universities and technical colleges. Three universities top the education pyramid. The University of Medicine is based in Innsbruck alongside Leopold-Franzens-Universität, which has 15 faculties. The private health and life sciences university UMIT in Hall has provided a high-quality addition to the life sciences, medical IT and medical engineering fields since 2001. Public funds exceeding one percent of GDP, well above the Austrian average, are being invested in research focusing on life sciences, biotechnology, medical IT, nanotechnology, new active ingredients, the Alpine area and IT. Whilst Tyrol's education offering focuses on the areas of tourism and health, this is still a need for action with regard to the technical professionals, as well as financing of private research undertaken by companies. Efforts to position Tyrol as a location for innovation and research are already bearing fruit though.
"Location Tyrol" brochure: economic handbook and guide for new development structures
Together with Tyrol's provincial administration, Bank Austria's Macroeconomics department has prepared a comprehensive brochure that puts Tyrol's attractiveness as a location, its competitiveness and growth potential to the test. The second part of the "Location Tyrol" brochure provides a summary of the development scenario, giving national development schemes and joint financing by the EU. As a member of the UniCredit Group, Bank Austria has recourse to a global network, with especially in-depth orientation towards Germany, Italy and the Central and Eastern European area. This Bank Austria handbook is intended to help companies thoroughly equip themselves for the impending economic challenges, irrespective of whether they are at the start-up, consolidation or expansion stage. "Location Tyrol" is part of a new series of analyses of the Austrian provinces available from Bank Austria branches and on the Internet as a download from www.bankaustria.at.
Enquiries: Bank Austria Press Office Austria
Martin Halama, Tel. +43 (0) 50505 ext. 52371