Spotlight Austria: digital megatrends and hesitant enterprises

Austria is set up incredibly well when it comes to its digital education, public services and economy. However, small gaps and a mediocre infrastructure indicate that especially the economy needs to be bolder with its digital choices.

Content: 

1. The Strengths: Digital skills and exceptional e-Government
2. The Weaknesses: Infrastructure and digital basics
3. The Future: Fill the gaps to forge ahead

According to the Digital Economy and Society Index (DESI), Austria ranks 10th among 27 EU member countries which places it in the lower top (source: European Commission). But despite some strong highs, the weaknesses need to be fixed to ensure a long-lasting digital future.

The Strengths: Digital skills and exceptional e-Government

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Austria is digitally skilled, with two third of the population having at least basic digital skills and 39% having above basic digital skills. Additionally, 69% have at least basic software skills which is 11% more than the European average.

When it comes to ICT expertise, Austria is equally strong with 4,5% of the workforce being in the ICT sector (opposed to 4,3% EU-wide) and 20% of those being female, which is slightly above the European average. Additionally, Austria boasts 4,5% ICT graduates which puts it above the average EU numbers.

Austria is innovative

When it comes to infrastructure, Austria's strength lies in 4G and 5G coverage, the latter being 15% ahead of the rest of Europe with 66% readiness. Additionally, the mobile broadband take-up as well as broadband prices are around 10% higher than the EU average. In fact, Austria already offers 5G services for consumers which makes the country a pioneer in this megatrend.

As most countries, the integration of digital technology specially in companies is high in some and low in other areas. Nearly two out of three companies have at least a basic level of digital intensity and enterprises make more use of social media, artificial intelligence and ICT for environmental sustainability than most of their European counterparts. Especially e-commerce is strong in Austria, with small to medium-sized enterprises offering almost twice as often online shops for cross-border customers than the EU average (15% vs. 8%).

E-government role model

Where Austria really excels is in the fields of public services and e-government. In all points of this DESI-category, Austria has higher numbers than the EU average. And in contrast to quite a few countries with sufficient offerings, the Austrian population also overwhelmingly uses the services (81% vs. 64% EU-wide). A likely reason for this might be several measures to decrease administrative burdens for businesses and also to make electronic communication between people with the government easier.

The weaknesses: Infrastructure and digital basics

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At some point we need to question why digitally higher-ranking countries such as Austria and Germany lack a proper infrastructure compared to some of the lower ranking countries. In Austria, not only is the infrastructure for Very High-Capacity Networks (VHCN) 20% lower than the European average, the broadband take-up is also lower. For 100 Mbps fixed broadband, it's only 12% compared to 34% EU-wide, especially in rural areas. The question here is whether that's mainly due to poor network in rural areas or a lack of interest (especially since the prices are actually below the average).

Enterprises hesitate to implement digital basics

Another question is also, why companies are so forward when it comes to AI, social media and ecommerce across borders, whereas digital foundations such as cloud and big data are underrepresented. It is possible that especially enterprises in rural areas do not have the sufficient network capacities to successfully make use of big data analysis and cloud-based systems and services. However, the fact that only 22% offer e-invoices compared to 32% EU-wide seems more due to cultural or compliancy challenges, since this service does not need 5G speeds to be implemented.

I want to note that Austria currently is working on several cloud and edge computing projects with Germany and also has been part of a European quantum computing project. The country itself is very advanced when it comes to cloud computing and AI, it seems rather that small to medium-sized companies either don't have the right means or lack the right use cases to implement these technologies in their own strategy.

Skilled ICT personnel is hard to find (and to educate)

Additionally, fewer Austrian enterprises offer ICT training than the EU average which further implies that many Austrian companies don't see the value in digitalization and the necessity to implement it for long-lasting business impact. It's all the more crucial, since in 2018, almost 10% more enterprises offered ICT training than in 2020, which seems to be counter-intuitive considering that the need to digitize work places, services, and platforms has only increased in recent years.

Another big problem - which almost all other countries face as well - is the lack of an ICT workforce despite the high numbers of ICT graduates. According to a status report by the WKO, the dropout rates for ICT students is much higher than that in other fields. Whereas many dropouts in the master programs happen due to the so-called "job out", e.g., when students drop out due to an ICT job offer, many bachelor students simply quit and leave the ICT sector. It seems as if the academic courses don't meet the expectations of the students. Universities and companies need to find the specific reasons and develop solutions.

At DIGITALL, we offer you the right resources to realize your digital projects. With our agile project management and collaboration style, we support and train your employees as well as augment your staff the right skills for your digital strategy.

The Future: Fill the gaps to forge ahead

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Austria as a country is at the forefront of digital education, science, and public services, however, to build up on its success, it needs to guarantee an infrastructure that delivers high-speed internet across the country. Additionally, Austria's economy needs to strengthen their digital transformation with the use of cloud-based technologies, big data and online services to be competitors on the global market.

Already, many enterprises are on top with their AI strategies and ecommerce services but successful transformation is about the connection of all processes, data and platforms to fully realize business potential.

This includes developing training programs in companies and develop attractive degrees and academic courses to decrease the droput rate in the ICT area. Companies need to work closely with educational institutions to increase awareness of ICT jobs and offer attractive trainings and academic degrees.

For example, at DIGITALL, we offer students the opportunity to gain work experience and write their thesis in collaboration with our digital experts.