Austria has fallen behind in the EU innovation ranking. After placing 6th last year, the Alpine Republic now ranks only 8th in terms of innovative strength compared to other countries, according to the Austrian Patent Office on Tuesday, citing the European Innovation Scoreboard (EIS). One area of weakness is startup financing. However, Austria remains a leader in “Intellectual Assets,” which include design and trademark registrations.
Investments in research and development were rated positively. However, Austria lags behind in the “commercialization of innovation,” the Patent Office notes. In particular, funding for young, innovative companies remains a major challenge.
Startup Investments Have Recently Dropped
That startups are currently struggling to secure funding was also shown in a recent EY study, which reported a steep decline in the first half of the year. From January to July, €110 million in new capital was invested in Austrian startups—a 64% decrease compared to the first half of 2024. The number of financing rounds also dropped from 74 to 70. According to EY, Austria lacks a compelling “growth story.” The state holding company ÖBAG has also recently slowed its startup financing efforts.
There are ideas to give startups a boost: for example, the Patent Office proposes making intangible assets—such as patents for a company’s inventions—visible on balance sheets. This would give “potential investors a better insight into the company’s innovation potential.” The office sees this as a step in the right direction, in line with the current black-red-pink government program.
Northern Europe Leads
Although Austria has dropped to 8th place in this year’s innovation index, the country still ranks among the “Strong Innovators,” above the EU average. Sweden has taken first place this year, overtaking Denmark, followed by the Netherlands and Finland. Countries behind Austria include Germany, France, and Estonia.
Economy Minister Wolfgang Hattmannsdorfer (ÖVP) sees the ranking as a mandate “for an active, forward-looking economic policy.” Investment in innovation projects is vital even in economically difficult times, he emphasized. Infrastructure Minister Peter Hanke (SPÖ) shared a similar view, saying that advancing “research and innovation policy developments” is crucial for Austria’s growth. The drop in ranking is only partially comparable to previous years due to a change in methodology, they noted in a joint statement.
Federation of Austrian Industries: Austria Lacks Determination
According to Christoph Neumayer, Secretary General of the Federation of Austrian Industries (IV), the results show a lack of determination “to rise to the top of Europe’s innovation hubs.” “This result may be partly due to the changed methodology. However, it fits into a broader pattern of recent rankings that point to declining attractiveness and dynamism in Austria’s business environment—mainly due to high labor, energy, and bureaucratic costs,” Neumayer stated.
