Vienna
IT growth
The Austrian Business Information states that telecommunication industry accounts for 1% of the Austrian GDP (Sweden 1.3%; USA 2.8%). Historically, the government and education sectors have been the drivers of IT development. With the increased office automation, however, more and more businesses demand sophisticated computer hardware and software. This was mainly a result of falling market prices due to competition and the growing acceptance of the Austrian workforce to use computers. Telecommunication prices are still high and a major inhibitor of networking and Internet growth. With full deregulation in 1998, the market is expected to take off. Also growing is the private demand for computer equipment and communication devices. Especially notebook computers and cellular telephones have experienced considerable demand growth. 48
Major customers
Major IT customers in Austria are the government as well as the health care industry. The government's R&D programs are designed towards improving the IT usage of content providers. The content industry in Austria has a rather weak representation but is one of the most important stimulus for IT usage. There is no internationally relevant media industry. The tourism and cultural sectors, however, could become a major content provider in the international arena.
Customer sophistication
The computer literacy in Austria is still too low. Another inhibitor of IT growth is the users' lack of awareness of the opportunities that arise with sophisticated technology. Hence, education in telecommunication and Information technology is of strategic importance because it provides a long-term stimulus for IT usage. Another important source of IT stimulus would be an exchange of information between the public and private sectors. Hence, one of the goals of the Austrian Telecom Initiative is to provide the private sector with electronic access to databases and public information in order to increase the use of IT.
Small, recently founded companies are more active in the Internet. They use the Web for external communication, coordination with customers and suppliers, market watch, and e-mail. 60 % of the companies using the Web are in Vienna and in the service sector. Typically, those companies have less than 10 employees and only recently started to use the Internet for their business. The Internet allows small companies to reduce their marketing, PR and administrative costs. It is also used as a leverage to compete internationally against larger corporations. 49
Effect of the European Union on IT in Austria
One of the most important drivers of deregulation and increased IT cooperation has been Austria's entry into the European Union. Especially in the R&D sector is Austria's participation on a pan-European basis invaluable. Austria's structure of small and medium-sized enterprises (SME) makes a demand-pull approach less successful. Hence, with better research cooperation, the technology-push approach will be reinforced. The SME will have a greater market opportunity within the EU but they will also face stiffer competition.
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