annual report2016

printing information

2

Publisher and Media Owner | © austrian councilAustrian Council for Research and Technology Development | 1010 Vienna | Pestalozzigasse 4

Translation | Dr. Billaudelle & Partner | Munich

Design and Production | Grafikatelier Heuberger | Vienna

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contents

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4 foreword

5 editorial

7 outlook

15 the austrian council recommends

Recommendations 2016 16

57 creating knowledge

Accomplishments 58

Reports and Studies 2016 62

International Activities 69

71 events

79 the austrian council

Review 2016, Outlook 2017 80

Members of the Austrian Council 82

Secretariat 83

84 contact

4

The importance of science, research andinnovation for knowledge-intensive soci-eties is now undisputed and will contin-ue to increase in view of the multitude of

both global and national challenges. How-ever, this requires framework conditions that

encourage people to break new ground and turnideas into action, to be able to leverage the exist-ing innovation potential in our society for thegood of our country. Politics play an importantrole in shaping these framework conditions. The Government is conscious of this responsibil-ity, and in recent years has taken numerous stepsto sustainably improve the starting position forscience, research and innovation in this country,and to position Austria in the group of innova-

tion leaders by 2020. This not only includes in-creasingly better financial support for our re-search landscape with one of the highest researchquotas in Europe – it also includes the RTI strat-egy presented in 2011, which provides a clearguideline for structural improvements.The Austrian Council for Research and Technol-ogy Development has accompanied the Govern-ment in its efforts for many years and is a com-mitted adviser here – sometimes an inconvenientcritic, but always a valuable interlocutor. With this in mind, we thank the members of theAustrian Council for Research and TechnologyDevelopment for their valuable expertise andlook forward to continued rewarding coopera-tion.

Dr. Reinhold MitterlehnerVice Chancellor and Federal Minister of Science,

Research and Economic Affairs

foreword

Mag. Jörg LeichtfriedFederal Minister for Transport, Innovation and Technology

Dr. Hans Jörg SchellingFederal Minister

of Finance

strategy does show the right path here,but it is increasingly “toothless” due to theinsufficient formulation of specific im-plementation measures. Unfortunately,however, the annual analysis by the Re-search Council on the implementationprogress of the Strategy and the feasibility ofthe originally announced goals shows that agood deal of them, and the 3.76 percent researchquota goal in particular, will not be achieved.*And these overall findings have not changed overrecent years either, which indicates that imple-mentation intensity and progress dynamic aretoo low. The overriding goal of positioning Aus-tria in the group of innovation leaders thereforewill not be achieved.

5

prosperity that was scarcely believed pos-sible. Today the average citizen lives withmore amenities and comforts than wouldhave been possible for a king living twohundred years ago. And yet the responsibil-ity connected with this is still not sufficient-ly perceived as such by this average human. Thedangers created by the Anthropocene period, inwhich humankind has became the most impor-tant influence factor on the biological, geologi-cal and atmospheric processes on the earth,can no longer be denied.Today it would appear that much thatnot so long ago appeared to be sciencefiction, will indeed soon be possible.These changes will also change ourworking world, determine our everydayand influence our lifestyle in the yearsand decades to come. The question thenmerely remains as to whether or not we willbecome the drivers or the driven of these devel-opments.

editorialWe live in a period of radical changes, which nowaffect practically all areas of life and cause socialupheaval and revolution at increasingly shorterintervals. A multitude of these changes can be at-tributed to scientific findings or technological de-velopments – key term: digital revolution. Forothers on the other hand we require science andresearch to be able to meet the challenges theybring – example: climate change.In view of these developments and the challengesthey pose, once again we must highlight the keyimportance of innovations. This is demonstrat-ed over the entire course of human history, whichis why entire eras have also been named after theinnovations that characterise them. Just thinkof the discovery of bronze, the development ofwriting and later printing, the steam engine andelectricity – and ultimately the computer andnow the digital revolution.The innovations based on science and researchover the last 500 years or so have enabled largesections of humanity to enjoy an increase in

“Set Innovation Free” (The Economist)

A positive shaping of our generation and futuregenerations will only be possible if we succeed inmeeting both existing and new challenges withthe aid of science, research and innovations. Inthis context, Austria can and must make its con-tribution. All, from individual scientists and researchers tocompanies and corporations, through to the Fed-eral Government, must play their part here. The Research, Technology and Innovation Strategy (RTIStrategy) presented by the Austrian governmentin 2011 was an important milestone on this pathin making a clear commitment to science, re-search and innovation in the increasingly morecompetitive international context and despite thefinancial crisis and austere budgets. Essentially,

Hannes AndroschChairman of the Austrian Council

Markus Hengstschläger Deputy Chairman of the Austrian Council

* See: Austrian Council: Report on Austria’s Scientific and Technological Capability 2016. Vienna 2016. Online at: http://www.rat-fte.at/performance-report.html

6

The signals sent at the beginning of 2017with the government’s Work Programmefor 2017 and 2018 are all the more pos-itive. The goal of making Austria one of

the global frontrunners in future-orientedindustries was defined herein. The Cabinet

had also already adopted an ambitious ResearchPackage in November 2016 to achieve the goal de-fined by the RTI Strategy of becoming one of Eu-rope’s most innovative countries by 2020. The strategic objective of pushing forward intothe leading innovation nations therefore also con-

tinues to be a significant determinant of the po-litical will. Of special importance here is the factthat, in addition to structural reform proposals,the Work Programme and the Research Package al-so include specific budgetary measures that couldallows us to give new impetus to the innovationdynamic, which appears to have stalled, and en-able Austria to rejoin the group of innovationleaders. In every eventuality, the Austrian Council de-clares itself ready to continue accompanying theAustrian Government in its endeavours.

editorial

The Council from left to right standing: Hermann Hauser,

Markus Hengstschläger,Klara Sekanina,

Hannes Androsch,Jakob Edler

From left to right sitting: Sabine Herlitschka,

Helga Nowotny,Sylvia Schwaag-Serger

outlook

We are poised at the beginning of anew age – the age of digitalisation. Forsome years now we have been witnes-sing its dawning and development with

increasing intensity, whereby these willcontinue to increase further, as scientific

and technological progress has initiated an in-credible technological development drive,which permanently boosts itself. On the basis of the Internet, increasingly mo-re capable sensors, genetic programming, AIprocesses and machine learning, we are rapid-ly heading towards Cyber Physical systems, i.e. thecombination if IT components with mechani-cal and electronic elements, which communica-te via a data infrastructure such as the Internet.The essentially new, indeed practically revolu-tionary element here, is the fact that these sy-stems are increasingly capable of learning anddevelop intelligent behaviour patterns, and canreact flexibly and independently to situations inequal measure.1The progress in the area of Artificial Intelli-gence (AI) is especially relevant here. With deeplearning it is already possible today to optimisethe cognitive performance of machines and pro-grammes so they significantly surpass that ofhumans.2 This means that not only the Inter-net will be made “intelligent” in the foreseeab-le future – so, too, will all connected terminaldevices. Microsoft CEO Satya Nadella sees “the

next big thing” here. Quote: “Every new pro-duct we design, and how every user is going tointeract with the environment, is going to be‘intelligence first’.”3

With deep learning processes and networkingwith the Internet and the access to the informa-tion of the global stock of Big Data that this en-ables, algorithms and machines have recentlybeen able to “really” act intelligently, and inparticular more efficiently than humans. Al-phaGo, for example, a self-learning programmefrom Google, recently clearly beat the Koreanmultiple world champion, Lee Sedol, at playingthe complex board game, Go.4 And for the firsttime ever a machine also succeeded in beatinghuman professionals in the most difficult typesof poker, whereby the programme was evenchallenged to make complicated decisions onthe basis of incomplete information, bluffs anddeception by its opponent, as well as furthercunning tactics.5Self-learning algorithms and the parallel analy-sis of large data volumes allow AI applicationsto adjust themselves to external conditions oreven to humans depending on a particular si-tuation and to perform complex tasks in closecooperation with them. A multitude of “smartmachines”6, which perform simple activitiessuch as stacking boxes in storage halls or as-sembling and welding car parts, as well complextasks such as compiling news texts, diagnosing

8

outlook

1 U. Eberl: Smarte Maschinen: Wie künstliche Intelligenz unser Leben verändert. Munich 2016 (p. 212 ff.);The Economist (9.5.2015): Artificial Intelligence – Rise of the machines (p. 17 f.); Science (10.10.2014):The social life of robots. Vol. 346, Issue 6206 (pp. 178–203, p. 186 f.).

2 The Economist (25.6.2016): Special Report: Artificial intelligence: From not working to neural networking.3 Financial Times (29.11.2016): Artificial Intelligence and Robotics: Can Microsoft get back in the game with AI?

The chief executive reboots in an effort to capitalise on machine learning.4 Die Zeit (13.3.2016): AlphaGo: Go-Meister gegen Computer 1:3.5 Neue Zürcher Zeitung (1.2.2017, p. 40): Künstliche Intelligenz: Der Supercomputer als Bluffer.6 U. Eberl: Smarte Maschinen: Wie künstliche Intelligenz unser Leben verändert. Munich 2016.

9

builds on “belief ” rather than on facts?9

The United States of America appear tobe moving in this direction.“Sciences,” according to the renownedscience historian Michael Hagner, “areamong the losers of the American presidenti-al elections, and that is to say both the humani-ties and the natural sciences.”10 And indeed thefears for the science and research sector caused byDonald J. Trump’s presidency have now beenconfirmed. Financial cutbacks in non-military re-search areas and ideologically determined restric-tions, as with the climate change issue, are im-minent. Furthermore, it is impossible to estima-te what impact the president’s juggling of outra-geous claims in the public discourse might havein the USA – not least of all on the acceptanceof science among the general public.”11

The USA can in particular thank the fact thatsince the Second World War it has been themost attractive location for the best scientistsand researchers from around the world for its ri-se to the scientific-technological global powerthat it is today. Will the new US presidencygamble with this – with still unforeseeable con-sequences for the country as a whole and its eco-nomy in particular?The United States are a classic immigrationcountry. With an estimated population of mo-re than 316 million people in 2015, the USAhad almost 42 million inhabitants or approxi-

illnesses or performing financial transactions, al-ready function on this basis.7The technological possibilities appear limitless– as does the potential for social and economicchange that they would produce. Therefore, so-me people, such as Klaus Schwab, President ofthe World Economic Forum, are already talkingabout another, or a “fourth” industrial revolu-tion.8This revolution and the entry it enables into thedigital age with robotization, artificial intelli-gence and the “Internet of Things”, require anew education revolution, because in the futu-re only existing and used brainpower will decideon the personal success and the successful lifeof both the individual and the entire state. Soif the education system does not stay abreast oftechnological development, the increasing im-balance will produce social tensions. Our youngpeople must therefore be educated to meet the-se new challenges, to prevent the emergence ofan otherwise rapidly growing new social sub-class. This requires a raising of the level of edu-cation on a broad basis, together with an increa-se in education intensity.But what will happen if the areas of education,science and research themselves fall foul of thewheels of politics? What if politically responsi-ble people no longer want to recognize scienti-fically proven facts as such, and instead present“alternative facts”? What if education once again

outlook

7 Y. N. Harari: Homo Deus. A Short History of Tomorrow. London 2016 (pp. 321 ff.); M. Ford: Rise of the Robots:Technology and the Threat of a Jobless Future. Kulmbach 2016 (pp. 109 ff., 159 ff., 177 ff.).

8 K. Schwab: The Fourth Industrial Revolution, Munich 2016.9 US Vice President Mike Pence, for example, announced that he has doubts about the Theory of Evolution and that the

Biblical interpretation of creation should be taught in schools again.10 M. Hagner: Wissen oder Barbarei. Die Wissenschaften sind in der Defensive – Schaden nimmt die Demokratie.

In: Neue Zürcher Zeitung of 11 February 2017, p. 23.11 S. Titz: Wissenschaft im Schwebezustand. In: Neue Zürcher Zeitung of 25 January 2017, p. 37.

“Like so much of American life,the story of innovation is a story of immigration …”

William J. Burns

mately 13 per cent who were born out-side the US (see table 1).The importance of immigration is inparticular reflected in the American in-novation system, which, beginning with

the rise of fascism and National Socialism inthe 1930s and the exodus of European scientiststo the United States that it brought, profited toan exceptional degree from immigration.The attractiveness of the USA can be seen intwo areas in particular – with those studying ab-road and with researchers.

The number of students that spend at least partof their studies abroad has increased sharply inrecent years. In 2013 more than 4.1 millionstudents went to another country for study pur-poses, compared with 2.7 million in 2005 andonly about 600,000 in 1975. Forecasts assumea further increase to more than 7 million foreignstudents in 2015 – a thoroughly lucrative trendfor the host countries, considering that in 2013international students in the USA, for example,contributed about USD 24 billion to the Ame-rican economy; in 2014 it was about USD 27

10

outlook

12 U.S. Census Bureau: 2011–2015 American Community Survey 5-Year Estimates. S0501: Selected Characteristics of theNative and Foreign-born Populations. Washington, DC, 2016. Online: https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

United States

Total Native Foreign-born Naturalized Not a U.S. CitizenTotal Population 316,515,021 274,797,601 41,717,420 19,448,227 22,269,193

Male 49.2% 49.3% 48.8% 45.9% 51.3%

Female 50.8% 50.7% 51.2% 54.1% 48.7%

Median age (years) 37.6 35.9 43.1 50.5 37.2

Race and Hispanic or Latino OriginOne race 97.0% 96.9% 97.7% 97.5% 97.8%

White 73.6% 77.5% 47.6% 45.2% 49.7%

Black or African-American 12.6% 13.2% 8.6% 10.1% 7.4%

American Indian and 0.8% 0.9% 0.4% 0.3% 0.4%Alaska Native

Asian 5.1% 2.0% 25.9% 32.2% 20.3%

Native Hawaiian and 0.2% 0.2% 0.3% 0.2% 0.3%other Pacific Islander

Some other race 4.7% 3.1% 14.7% 9.5% 19.6%

Two or more races 3.0% 3.1% 2.3% 2.5% 2.2%

Hispanic or Latino origin 17.1% 12.8% 45.8% 32.3% 57.6%(of any race)

White alone 62.3% 69.0% 18.3% 23.9% 13.5%(not Hispanic or Latino)

Table 1: Population of the USA not born in the USA (estimates)12

Figure 1: Top 4 countries of origin17

01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

Saudi Arabia

India

China

South Korea

billion13, and by 2015 it was already some USD35.8 billion.14

The United States continue to be the most attrac-tive country for foreign students. Between 2008and 2014, for example, the number of interna-tional students in the USA increased by 42 percent and in 2015 it was already 1,043,829 stu-dents. The increase is in particular due to stu-dents from Asia, which in 2014/15 accounted for76 per cent of all international students, with thePeople’s Republic of China taking the lead, fol-lowed by India, South Korea and Saudi Arabia.15

Depending on their respective region oforigin, the students also tend towardsspecific studies: In 2015/16 the vast ma-jority of students from India (80.1 percent), from Iran (79.7 per cent) and Ne-pal (66.8 per cent) were in STEM subjects.Students of economic sciences mostly camefrom China (24.3 per cent), Vietnam (29.8 percent) or Venezuela (28.6 per cent).16

Of the researchers active in the USA a dispro-portionately high amount had been born out-side the USA. Both the number and the percen-

11

outlook

13 A. Ortiz / L. Chang / Y. Fang: International Student Mobility Trends 2015: An Economic Perspective. New York, NY,2015.

14 Institute of International Education: Open Doors 2016. Report on International Educational Exchange. Presentationfrom November 14, 2016. Washington, DC, 2016.

15 Ibid.16 Ibid.17 Ibid.

tage of foreign employees in science/en-gineering professions have also risen he-re, and not just absolutely, but indeedrelatively as well. In 2011 the percenta-

ge of university graduates in S&E profes-sions and born outside the US was 27 per

cent, compared to the 13 per cent born abroadin the total population and the 15 per cent withall university graduates.Those foreign employees working in S&E pro-fessions generally also have a higher level ofeducation than US American employees. In2013, for example, 20 per cent of foreign scien-tists and engineers had a doctorate as their hig-

hest level of education, compared with 10 percent of scientists and engineers born in the USAin these professions. In most S&E professionsit was shown that the higher the level of edu-cation, the higher the percentage of the work-force that was born outside the US. This ratiois also weakest with the social scientists andstrongest with mathematicians and engineers.18

At 39 years old, the foreign employees in S&Eprofessions are also younger on average thantheir US American peers at an average 42 yearsold. And employees from Asia account for themajority (59 per cent) of foreign employees inS&E professions. Almost 90 per cent of all Asi-

12

outlook

18 National Science Board: Science and Engineering Indicators 2016. Arlington, VA, 2016, p. 102.19 Ibid.

Figure 2: Top 4 countries of origin19

India Iran Nepal

China Vietnam Venezuela

Science, Technologie, Engineering & Math

66.8

28.629.824.3

79.780.1

Business & Management

ans working in S&E professions were born out-side the US.20Building on this, the innovation system in theUSA is also disproportionately characterised byinnovators born abroad. A study published inFebruary 2016 on “The Demographics of Innova-tion in the United States”21 showed the importantrole that innovators born outside the US alsoplayed here. The most important results of thestudy:Immigrants form a large and vital componentin US innovation.More than one third or 35.5 per cent of USinnovators were born outside the US, even

though that demographic only ac-counts for about 13 per cent of allUS inhabitants.A further 10 per cent of innovators we-re born in the US, but have at least oneparent born outside the US.More than 17 per cent of innovators are notUS citizens, but they make inestimable con-tributions to US innovation.With immigrants that were born in Europe orAsia the probability that they will produce aninnovation is more than five times as high aswith comparable US citizens.On average, innovators born abroad are also

13

outlook

20 Institute of International Education: Open Doors 2016. Report on International Educational Exchange. Presentationfrom November 14, 2016. Washington, DC, 2016.

21 A. Nager / D. Hart / S. Ezell / R. D. Atkinson: The Demographics of Innovation in the United States. Washington, DC,2016.

22 Institute of International Education: Open Doors 2016. Report on International Educational Exchange. Presentationfrom November 14, 2016. Washington, DC, 2016.

Figure 3: Foreign-born scientists and engineers in S&E professions according to their highest level of education22

0 10 20 30 40 50 60

Scientists in biosciences, life sciences and environmental sciences

Computer scientists / Mathematicians

Physicists and similar

Social scientists and similar

Engineers

47.128.1

14

51.544.3

22.8

41.923.8

13

18.713.9

17.1

56.334.5

18.6

Doctorate

Master

Bachelor

better educated than those born in theUS, with more than two thirds havingdoctorates in STEM subjects. According to the study authors this could

to some degree be due to a selection pro-cedure for foreign innovators, with which

the most talented and best motivated innovators

come to the US because its opportunities andpossibilities are so promising.From the US American point of view the cur-rent developments, which could massively da-mage the attractiveness of the United States forstudents, researchers and innovators, must the-refore be seen to be all the more alarming.

14

outlook

recommendations

23 See Austrian Council: Report on Austria’s Scientific and Technological Capability 2015.24 K. Hranyai / J. Janger: Research quota targets 2020. Update, December 2015. Study performed by WIFI commissionedby the Austrian Council, 2015.

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Recommendations for 2016

Recommendation on funding universities and public sector research and developmentin Austria in the federal funding framework 2017 to 2020, chapter, “Science and Research” – Recommendation dated 5 February 2016

recommendations

The Austrian Council recommendsThe resources for the competitive funding ofpublic and private research within the scopeof awarding funds of the FWF and the FFGbe guaranteed by increasing the budgetframework for science and research in theFederal Fiscal Framework Act (BFRG) for2017-2020 by EUR 800 million. This meansraising the federal fiscal framework in the2017-2020 period by EUR 200 million p. a.Defining the increase in basic funding foruniversities to improve teaching and researchconditions to the tune of approx. EUR 1.4billion for the 2019-2021 performance agree-ment period.Increasing funding to boost excellence (inaddition to the funding already approved forIST Austria) (e. g. for the Academy of Sci-ences, international memberships and par-ticipation in research infrastructures) by EUR100 million p.a.Setting up the legal framework conditionsfor capacity and performance-oriented studyplace management at the universities, to es-tablish adequate capacity-oriented universityfunding. Further developing a socio-economically bal-anced composition of students and gradu-ates at universities, mode and amount of thestudent grants.Achievement of the set goals of the RTI Strat-egy by 2020 in terms of secured funding ofthe second five-year period with swift for-

mulation of the planned research fundingact, before the end of 2016.To exclude spending for science and researchfrom the general savings measures in the areaof discretionary expenditure (“cost dampen-ing”) or from restrictive budget performancewith regard to transfer to reserves. Thisshould occur as a contribution to achievingthe set goals in science and research.Securing appropriate funding of the Nation-al Foundation for Research, Technology andDevelopment, especially the provision of acompensation allocation in the federal fiscalframework (BFRG) 2017-2020 in the eventof a reduced allocation by the Austrian Na-tional Bank and the ERP.

BackgroundIn March 2011 the Cabinet adopted the Fed-eral Government’s RTI Strategy with the goal ofbecoming an innovation leader by 2020. Thecornerstones of this strategy are a research quo-ta of 3.76 per cent of GDP by 2020, a quota of2 per cent of GDP for the tertiary sector, andthe percentage of basic research is to reach 0.94per cent of GDP. The results of the Report on Austria’s Scientif-ic and Technological Capability 201523 of theAustrian Council for Research and TechnologyDevelopment and current calculations24 for theresearch quota goals once again indicate insuf-ficient performance with the majority of the

17

25 The target value for the basic research quota is 0.94 percent of GDP by 2020. According to current calculations (see research quota targets 2020, update 2015) basic research funding would have to almost double from EUR 1.9 billion toEUR 3.7 billion. In view of the financing situation and the budget distribution illustrated in the BFRG 2016–19 it isvery unlikely that this goal will be achieved.

26 See http://www.rat-fte.at/charts_diagramme.html. The data is generated on the basis of defined indicators for the Reporton Austria’s Scientific and Technological Capability.

27 See Report on Austria’s Scientific and Technological Capability 2015.28 See Strategy Report on the Austrian Federal Fiscal Framework Act 2016–2019.

indicators used for this, in order to achieve thegoals set in the RTI Strategy.

Awarding Competitive Research FundingWithout losing sight of the overall goal for2020, the Austrian Council believes specificsub-areas must now be funded as priorities dueto the current funding situation.With a relatively constant basic research quotain the sector of 0.53 per cent in recent years,measured on GDP Austria is actually among agroup of scientifically stronger countries, how-ever a continuous increase25, especially in thepercentage of competitively awarded funds,could not be achieved. In this important fund-ing area for research, Austria has not been ableto reduce the considerable distance to the inno-vation leaders over the considered period26.

The Austrian Council therefore believes this isextremely urgent and recommends, the per-centage of competitively awarded funding berapidly increased and a trend reversal beachieved. As the most important fundingagency for basic research, the FWF has approx.EUR 200 million per year at its disposal. Abudget increase of EUR 100 million a year forfour years would highlight this accordingly andshould be fixed in the federal fiscal framework(BFRG) 2017-2020. A comparison with theSwiss National Fund, which, with approx. EUR800 million and about the same population, has4 times the annual budget for funding basic re-search at its disposal, shows the high catch-uprequirement.The translation of research results into applica-

tion-oriented research and developmentis equally important. The AustrianCouncil recommends the percentage ofcompetitively awarded funds that are in-vested as part of the FFG awarding offunds also be increased by EUR 100 millioneach year for four years in the BFRG 2017-2020. This in particular requires the securingand expansion of the COMET programme, inparticular the successful C (Competence) cen-tres, if it is to meet strict requirements.

Basic Funding of UniversitiesThe universities are key institutions in the na-tional innovation system and represent an im-portant scientific and economic location factorin Austria. The existing potential must beutilised. The tertiary education system is analysed with15 indicators in the Report on Austria’s Scien-tific and Technological Capability. The goal ofachieving the benchmarks predefined by theinnovation leaders has only been achieved todate in specific categories. On the whole, how-ever, it must be said that the development todate will not even come close to achieving thegoals set for 202027. The goal formulated againin the Government Programme 2013-2018 ofraising the university expenditure quota to 2 percent of GDP by 2020 cannot be fully achievedeither on the basis of the current federal fiscalframework 2016-201928. The recently adoptedperformance agreements 2016-2018 betweenthe universities and the Federal Ministry of Sci-ence, Research and Economic Affairs reflect theunsatisfactory funding situation at the univer-

recommendations

sities in this respect. Even if cuts havenot been made compared with otherareas, with regard to the multitude ofuniversity tasks, under-funding still con-tinues, and the distance to the leading na-

tions cannot be reduced. In figure 4, the updated version of the researchquota goals29 shows the development of uni-versity expenditure measured on the number ofstudents in the international comparison, inUS dollars, at purchase power parity. Thegraphic shows how, despite the increasesachieved in the university sector, the per capi-ta expenditure in Austria has levelled off due tothe sharply rising number of students.30

The basic budget for Austria’s 22 universities, in-cluding parts of the higher education area struc-tural funding available during the performanceagreement period for 2016 to 2018, is approx.EUR 8.367 billion. Due to the stressed frame-work conditions (e.g. the high number of stu-dents, partially insufficient supervisor-studentratios and infrastructural failings), expenditureper student does not increase, as also shown inthe graphic. An improvement in study condi-tions is therefore only possible within limits.A comparison of Austria with Switzerland andBavaria shows different framework conditionsat the universities. In 2014 a total of approx.350,000 people studied at Austrian universities,

18

recommendations

29 K. Hranyai / J. Janger: Research quota targets 2020. Update, December 2015. Study performed by WIFI commissionedby the Austrian Council, 2015.2000–2011: Classification according to ISCED 1997 (ISCED 5A/B & 6); 2012: Classification according to ISCED2011 (ISCED 5–8).

30 For the comparison it should be noted that the OECD does not differentiate between full-time equivalents and head-counts and these must be considered for the evaluation.

Figure 4: Expenditure on higher education by student numbers and compared to other countries

Source: EAG; students in full-time equivalents; Austria: students not on basis of full-time equivalents

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Austria(ISCED 5-8)

Austria(ISCED 6-8)

Japan

SwedenSwitzerlandUSA

South Korea

In US dollars, at p

urchase p

ower parity

Finland

Denmark

Germany

of which approx. 45,600 were at technical col-leges. In Switzerland at 12 universities31 it was144,000 people and 90,000 at technical col-leges, and in Bavaria there were 238,000 peo-ple at 23 universities32 with 122,000 at techni-cal colleges. In Austria therefore, per number ofinhabitants, about twice as many people studyat universities than do in Switzerland or Bavaria.The percentage of students at technical collegesin Austria is 13.1%; in Switzerland it is 38.4%;and in Bavaria it is 33.9%.

A comparison of the budget33 (see table)shows a clear difference in the availablefunds per student or graduate.For the next PA period 2019-2021 theAustrian Council recommends an increasein the basic budget available for universitiesby approx. EUR 450 million each year, there-fore a total of EUR 1.35 billion.A considerable percentage of the students inAustria is included in the statistic as “not exam-active”. For the 2013/14 study year 176,550

19

recommendations

31 10 canton universities, Swiss Federal Institute of Technology Zurich and Swiss Federal Institute of Technology Lausanne.32 Of these, 12 universities, 3 theological universities and 8 art colleges.33 Data given refers to values for 2013, if not otherwise specified. For Bavaria: Bayerisches Landesamt für Statistik; forSwitzerland: Statistik Schweiz.

34 Source: The all-Austrian university development plan 2016–2021, table 8.35 See, Recommendation of the Austrian Council for University Governance and Management Structures, March 2015.

Students at Spending in Funding/ Funding/ universities 2014/2015 EUR billions graduates in EUR students in EUR

Austria 304,160 3.838 102,869 12,619Switzerland 143,961 7.220 216,284 50,152Bavaria 242,160 6.308 142,415 26,051

students were included as “active”.34 If we applythis number and increase the annual funding bythe recommended EUR 450 million of the ba-sic budget for the universities, the funds per stu-dent could be almost doubled and the fundingsituation at Austrian universities would be moreor less balanced with that in Bavaria.

Improved Framework Conditions At UniversitiesAn improvement in the funding situation aloneis, however, too little to achieve future improve-ments in the study and research conditions,which in turn would result in an increase in thebenefit for society as a whole. In this respect itis rather necessary to create parallel framework

conditions that enable an efficient organiza-tional structure and therefore reduced admin-istration expense for the universities and theMinistry. However, it is also important that theprospective students coming from the educationlevels upstream from the tertiary sector havean appropriate level of education. The currentsituation in Austria is insufficient for this. Thequality in the entire education chain must beraised to international level.

Study Place Management And Study Place FundingA measure that is repeatedly required is theswift introduction of capacity-oriented univer-sity funding (“study place funding”).35 Access

regulations, which only allow a pre-dictable number of students in a smallnumber of subjects, as well as a highnumber of students with (too) low studysuccess (about 40 per cent of students are

classified as study-active), however, hinder acapacity-oriented study place funding modelhere. The legal preconditions must thereforebe put in place to determine the existing capac-ities in teaching and research at the universities,and building on this in coordination with theMinistry, to define the number of capacity-ori-ented study places. This could only be achievedto an unsatisfactory degree with the currentprovisions. To be able to also use the capacitiesat the universities for optimum teaching and re-search, parallel to this, adequate access manage-ment is also required, as is consistent manage-ment of the study courses taken. An increase in exam-active students will also bepromoted in the all-Austrian university devel-opment plan. The number of exam-active stu-dents will be raised by the 2017/18 study yearby 10 per cent compared with the 2014/15study year. The offered performance at the uni-versity must also be met with a performance-oriented study attitude by the students and thismust also be encouraged accordingly. Thosewho cannot show good reason for no or too lit-tle study activity must expect to lose their studyplace as a result. Due to the existing study place funding thetechnical colleges have a clear benefit with theselection of students. In Austria, this results inthe curious situation, whereby candidates reject-ed at technical colleges, (can) bypass to the uni-versities without any access hurdles and must beaccepted there. In the discussion on access and study placemanagement it must in any case be taken intoaccount that social obstacles to study access orstudy success will be removed as much as pos-sible with a suitable (improved) study assistancesystem and an equivalent study access will betargeted. To enable an increase in the percent-

age of “non-traditional admissions”, the Austri-an Council believes the scholarship system mustalso be further expanded parallel with this. Inthis context, we would refer to the final reportof the “Social Security Students” work group of2013, whose results could now be implement-ed immediately.

Efficient Control And AdministrationIn addition to the benefits it brings, the far-reaching autonomy of the universities also re-sults in more reporting and administrative du-ties. With regard to the sharply growing ad-ministration staffing levels in some places andthe costs this brings, possibilities for a lean ad-ministration and reporting system must be con-sidered and possible synergies between the uni-versities and the responsible ministry must beworked out.Within the scope of content-related control, inview of the increasing specialization with par-allel rising complexity at the universities, theneed to interlink subjects with one another andwith IT and digital tasks, as well as on anotherlevel with the humanities and social and cultur-al sciences, also increases. On this basis OpenInnovation therefore also increases in impor-tance all the time.

The Austrian Research Funding ActThe RTI Strategy explicitly explains the needfor a stable and secure funding environment togenerate private research and developmentfunding. Medium-term funding options, goalformulations in an impact and output-orient-ed innovation system should also be defined ina new research funding law to be worked out.Quote: “In addition to the principles and goals of theresearch policy, this law will also include specific objec-tives, the definition of a corridor for research and de-velopment investments by the Federal Government, thenew version of the research funding law, planning andallocation principles, a code of conduct and a reportingsystem.” Frequently required, to date there is stillno research funding law that would enable im-

20

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proved planning capability and therefore moresecurity for a sustainable funding strategy. The Austrian Council recommends achievementof the goals set by the RTI Strategy by 2020 in

terms of secured funding of the secondfive-year period with the swift formula-tion of the planned research funding act,before the end of 2016.

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Recommendation regarding the use of the funding provided by the National Foundation forRTD for 2016 – Recommendation dated 10 February 2016

PreambleBased on the invitation of the FoundationCouncil of 19 October 2015, in accordance

with § 11 para. 1 item 1 of the RTD NationalFoundation Act, on 30 November 2015 the

Beneficiary Name Applied for Recommendation total in millions

FFG “Competence Headquarters” program 10.00 5.00

FFG Bridge building programme / BRIDGE 20.00

FFG Research partnerships – industry-related dissertations 5.00

FFG R&D infrastructure funding 15.00

FFG Spin-off & Start-up initiative within the scope of GIN 8.00

FWF Special research areas and PhD 17.10 5.00

FWF Matching Funds for supporting young 3.001researchers and women

ÖAW PostDoc Fellowships 3.00 0.00

ÖAW goldigital: Projects for scientific digitalisation 2.00 2.00

ÖAW HumanIS – Humanities and Information Science 4.00 0.00

LBG Start-up / Expansion Internationall Research Center for 6.00 2.00Open Innovation in Science

CDG 10 CD labs 10.109 2.00

aws Venture Capital Initiative (VCI) 5.633 2.00

aws Social Business Initiative 6.75267

aws aws First – from idea to entrepreneurship 4.50

aws Service-Start-up-Initiative 5.8159

Total 125.91157 18.00

Austrian Council submitted a recom-mendation on the use of the Foundati-on’s funds for 2016 for the followingpossible scenarios:1) EUR 40 million

2) EUR 50 million 3) EUR 60 million4) EUR 15 million – worst case scenarioThe total application volume for 2016 is EUR125,911,570 m.As part of its recommendation the AustrianCouncil has asked to be consulted once again inthe event of a figure above EUR 15 million butbelow EUR 40 million with the allocation ofNational Foundation funds.In view of the actually available funds for 2016

of EUR 18 million, the Foundation Council as-ked the Austrian Council in its letter of 16 Dec.2015 for a renewed referral with the Foundati-on’s applications.On this basis the Austrian Council recommendsthe available EUR 18 million be awarded toFoundation funds for 2016.

RecommendationA prioritization is only possible within limits onthe basis of the low allocation of the NationalFoundation in 2016. For this reason, the AWS,FFG and FWF agencies will be exempted fromthe use of allocated funds for the respective ap-plications. The respective use must be in accor-dance with optimum efficiency and quality.

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The RTD National Foundation plays a veryimportant role in the Austrian RTI system as anadditional funding source for long-term strate-gic measures. The Council therefore once againregretfully acknowledges that the funds provid-ed to the National Foundation have steadilydecreased in recent years, and on average are al-ready significantly below the amount proposed

in the annotations to the law. We therefore wishto make clear once again that a sufficient andsustainable allocation of funds is necessary forthe National Foundation to perform its func-tions. The orientation here follows the principle of theNational Foundation’s long-term planning ca-pability and continuity.

Priorities for awarding the funds of the RTD National Foundation 2017 –Recommendation dated 8. April 2016

Following detailed discussion and on the basis of the priority areas of action identified in the Report on Austria’s Scientific and Technological Capability 2015, the Council Board recommends the followingcontent-relevant orientation for awarding funds 2017: (Recommendation of the Austrian Council in March 2016)

Strengthening the national human potential base

Strengthening competitive funding in basic and applied research

Strengthening the research infrastructure with initiatives with appropriate critical variables and risk potential

Measures to strengthen location Austria for research-active companies

Strengthening risk capital

Strengthening innovation potential with “Open Innovation”

Coordination and harmonisation of regional and federal RTI activities

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Recommendation for funding research and development in Austria – Recommendation dated 30 May 2016

BackgroundCurrent Estimate of Research Quota GoalsThe achievement of an R&D quota of 3.76 percent of GDP by 2020 was defined as a goal wit-hin the scope of the implementation of the Fe-deral Government’s Strategy for Research, Tech-

nology and Innovation in 2011 – as a re-quirement for joining the leading innovati-on nations. According to the latest global esti-mate by Statistik Austria, Austrian R&D ex-penditure in 2016 was 3.07 per cent of GDP.36

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Figure 5: Financing path for achieving the R&D quota goal (3.76 per cent) in 2020 (in EUR millions)

Source: WIFO research quota targets 2020, update 2015. K. Hranyai / J. Janger (2015): research quota targets (2020). Study on behalf of the Austrian Council forResearch and Technology Development. Vienna, WIFO.

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

4.0%

3.5%

3.0%

2.5%

2.0 %

1.5%

1.0%

0.5 %

0.00%

Public sector R&D funding Private R&D funding R&D quota (right axis) 3.76 %

2.99 %

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

3,833

6,271

4,995

9,991

36 Statistik Austria (2016): Global estimate 2016: Gross domestic expenditure for R&D funding of research and experimentaldevelopment performed in Austria.

24

The research quota therefore stagnatedfor the third year in a row at just over 3per cent.37 As a consequence, Austria hasfallen behind five years in a row in the In-novation Union Scoreboard (IUS) since

2010.38Calculations by the WIFO, which were madeon behalf of the Austrian Council, also showthat the increase rates in R&D expenditure arenot sufficient to achieve the R&D quota of3.76 per cent by 2020.39 For this to happen, theR&D expenditure would have to increase fromcurrently EUR 10.1 billion to around EUR 15billion in 2020 (see figure 5). Assuming two different scenarios (pessimistic/optimistic), WIFO specifically concludes thatby 2020 the quota will be between 2.97 per cent(pessimistic scenario) and 3.35 per cent (opti-mistic scenario). The funding gap to the targetin 2020 here is between approx. EUR 1.6 bil-lion (optimistic scenario) and EUR 3.1 billion(pessimistic scenario). With the current fun-ding framework (see insert) this gap cannot beclosed and the R&D quota goal of the RTIStrategy definitely will not be achieved.Despite the need for budget consolidation inview of the scarcity of funding resulting fromthe financial crisis and from long overdue struc-tural reforms40, there is still an urgent require-ment for an increase in the funding for educa-tion, research and innovation. This is especial-ly necessary because investments in these areasrequire more time to be able to fully developtheir macroeconomic impact. It is therefore im-perative that greater parts of the budget be freed

recommendations up for the future areas of education, researchand innovation. Special importance is awarded in this respect tosecuring sustainable, long-term funding of theuniversities. As centres of education and researchthey are guarantors for these two key factors ofthe future capability of a knowledge-based eco-nomy and society. As the result of a NationalCouncil resolution proposal at the end of 2008,the Federal Government formulated the goal inits work programme 2013 to 2018 of raising theuniversity expenditure quota to 2 per cent ofGDP. This alone would require added annual ex-penditure of an average EUR 400 million.The new funding framework 2017-2020The Federal funding framework up to 2020was presented on 26 April 2016. The fears ar-ticulated in the preliminary stage by the RTIcommunity have therefore been confirmed:There will be no additional budget for educa-tion, science, research and innovation. The per-centage of the budget for education, research,art and culture of the overall budget will evenfall from 17.9 per cent in 2015 to 17.1 per centin 2020. By way of comparison: The budget forpensions alone (Austrian General Social Secu-rity Act – ASVG, and civil servants) will rise by2020 from 25.7 to 29 per cent. It is therefore evident that it will not be possi-ble to achieve the budget goals formulated inthe RTI Strategy and the Federal Government’sWork Programme. Corresponding recommen-dations of the Austrian Council of 5 February2016, 7 September 2015 or from the Report onAustria’s Scientific and Technological Capabili-

37 It should be noted however that the Austrian R&D quota is therefore already above the European target value for 2020of 3 percent.

38 The IUS for 2016 only appears in July of this year. However, it is likely that Austria will improve by one place. This isnot due to an improvement in performance, but rather attributable to a change in the statistic procedure with the IUS.

39 K. Hranyai / J. Janger: Research quota targets 2020. Study commissioned by the Austrian Council for Research andTechnology Development. WIFO, Vienna, 2015.

40 See Report on Austria’s Scientific and Technological Capability 2015.

25

ty 2015 have evidently not been consideredsufficiently. The RTI Strategy explicitly explains the needfor a stable and secure funding environment –not least of all to increase private R&D funding.Medium-term funding options, goal formula-tions in an impact and output-oriented innova-tion system and therefore improved planningcapability and more security for a sustainablefunding strategy should be defined in a researchfunding law, which is still not in place. Unfor-tunately, the Federal funding framework doesnot take this suggestion into account and doesnot set any recognizable priorities in future-oriented fields.A “New Deal” for AustriaFederal Chancellor Christian Kern called for a“New Deal” for Austria in his inaugural ad-dress in the National Council.41 The Coalition’snew start, also envisioned by Vice ChancellorReinhold Mitterlehner, is dedicated to comba-ting this stagnation. This “New Deal” focuseson two critical aspects: The short-term increase in willingness to in-novate and the interlinking of private andpublic investments on the basis of clearly de-fined future scenarios, and the longer-term formulation of answers to thechallenges of digitalisation and globalisationwith their effects on the labour market, soci-al security systems and the education system.

On the basis of this announcement the outlineddevelopment of the R&D budget with all itsconsequences is clearly insufficient. This is be-cause research, and basic research in particular,plays an important role for both named aspectsof the “New Deal”. If the policy of faith in the

future called for by the Governmentactually materialises and comes into ef-fect, this must also be reflected in a real-ignment of political prioritisation. Andtrue to the principle that budgets are po-litics cast in figures, at the end of the day thiswill also have to be reflected in budgetary terms.Future areas will have to be strengthened forthis at the expense of less productive or merelyconsuming areas.

RecommendationIn the interests of the constructive realignmentof the cooperation in the Federal Austrian Go-vernment the Austrian Council recommends:The funding gap be closed so the goal of anR&D quota of 3.76 per cent of GDP definedin the Federal Government’s RTI Strategycan be achieved by 2020.The goal formulated by the Federal Govern-ment on the basis of a resolution proposal ofthe National Council in its Work Programme2013 to 2018 to raise the university expen-diture quota by 2020 to 2 per cent of GDPbe vigorously pursued. The immediate implementation of the an-nounced and required measures of the RTIStrategy for achieving both quota goals. The swift and conclusive formulation of theplanned research funding law, to secure thefunding of the second five-year period of theRTI Strategy by 2020 and the further imple-mentation of the measures included in it. The enforcing of structural reforms to reallo-cate existing resources from less productiveareas into future-oriented areas, such as edu-cation, research and innovation.

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41 http://www.bundeskanzleramt.at/site/6598/default.aspx

Tables 1, 2 and 3 show the developmentsof the three RTI-relevant UAs: UA 31 (sci-

ence and research), UA 33 (research and eco-nomics) and UA 34 (research, transport, innova-

tion and technology), each in EUR millions.These figures show how the expenditure of UA31 rises marginally, while that of UA 33 and UA34 remains unchanged.

26

Insert on the recommendation on the funding of research and development in Austria –the current Federal funding framework 2017-2020 – date issued: 26 April 2016

recommendations

Table 1: Comparison of Federal Fiscal Framework Act (BFRG) 2016–2019 and 2017–2020, UA 31 (science and research), in EUR millions

UG 31 BFR 2016–19 BFR 2017–20Payouts Payouts Deviations from previous BFRG

BVA 2015 4,119.5 4,106.5BFRG 2016 4,278.3 4,283.3 5.0BFRG 2017 4,310.1 4,315 4.9BFRG 2018 4,345.6 4,401.3 55.7BFRG 2019 4,366.0 4,421.9 55.9BFRG 2020 4,443.8

Table 2: Comparison of Federal Fiscal Framework Act (BFRG) 2016–2019 and 2017–2020, UA 33 (research and economy), in EUR millions

UG 33 BFR 2016–19 BFR 2017–20Payouts Payouts Deviations from previous BFRG

BVA 2015 101.6 109.6BFRG 2016 101.6 101.6 0BFRG 2017 101.6 101.6 0BFRG 2018 101.6 101.6 0BFRG 2019 101.6 101.6BFRG 2020 101.6

Table 3: Comparison of Federal Fiscal Framework Act (BFRG) 2016–2019 and 2017–2020, UA 34 (research, transport, innovation and technology), in EUR millions

UG 34 BFR 2016–19 BFR 2017–20 Payouts Payouts Deviations from previous BFRG

BVA 2015 429.2 429.2BFRG 2016 428.1 428.1 0BFRG 2017 428.1 428.1 0BFRG 2018 428.1 428.1 0BFRG 2019 428.1 428.1 0BFRG 2020 428.1

Sources: BMF.

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recommendationsRecommendation regarding the use of the funding from the Austria Fund 2016 –Recommendation dated 30 May 2016

PreambleAs part of the Tax Reform Act 2015/2016, Fed-eral Law Gazette I no. 118/2015, the legal ba-sis for a new funding mechanism in the Austri-an RTI system was created. According to arti-cle 12 of this act the RTD National Foundationwas allocated an additional EUR 33.7 millionin 2016 by way of the “Austria Fund”.The funds from the “Austria Fund” were allo-cated on the basis of the RTD National Foun-dation Act, similar to the previous allocation offunds from the National Foundation throughthe Foundation Council with consideration ofthe recommendation by the Austrian Councilfor Research and Technology Development.The applications must differ from the applica-tions of the beneficiaries for the funding fromthe National Foundation.The funding of the “Austria Fund” will be used,in accordance with § 3 para. 2 of the RTD Na-

tional Foundation Act, for funding basic re-search and applied research, as well as for fund-ing technology and innovation development.Based on the invitation of the FoundationCouncil of 12 April 2016, the Austrian Coun-cil for Research and Technology Developmentrecommends the awarding of the EUR 33.7million available to the Austria Fund 2016.

RecommendationOn the basis of the sharp over-subscription ofthe Austria Fund with EUR 74 million com-pared with the available EUR 33.7 million, un-fortunately it is not possible to recommend fullfunding for all applications. On the basis of the allocation allowed for in theexplanations on Article 13 of the Tax ReformAct – 50 per cent funding for basic and ap-plied research (column 1) and 50 per cent for

Beneficiary Name Applied for total Recommendation in millions

FFG Frontrunner package 27 11.2

FWF “doc.funds” FWF doctoral colleges follow-up program 10 10

FWF Jahoda-Lazarsfeld Program (Incoming/Reintegration) 7 3

CDG Funding of application-oriented basic research 5 2.5in the Life Sciences area in 2 CD labs

LBG Open(ing) Careers 2 2

ÖAW Sir Karl Popper doctoral candidates 12 0

aws Technology internationalisation of 5 2Austrian frontrunner companies

aws IP.Market: Knowledge transfer and exploitation of 5 3intellectual property of Austrian SMEs

Total 74 33.7

the research and development of basicindustrial technologies in the pro-grammes, production of the future, mo-bility of the future, energy of the futureand information and communication

technologies of the future (column 2) – acorresponding grading of the funding percent-ages was therefore performed, as documented inthe table.The Austrian Council also determined that thecontent-related prioritisation allowed for in theAct was only conditionally complied with bythe applicants. This is in particular shown forthe second column, where the thematic focuswas scarcely considered. There were therefore al-so corresponding deductions with the fundingrecommendations.The Frontrunner Package of the FFG only re-flects the content-related focus points allowedfor by the Act within limits (e. g. town, produc-tion, mobility of the future). An increased head-quarters focus is far more evident. The Austri-an Council welcomes the IP check proposed inmodule 4, but it would rather be considered apart of aws due to its strong competencies in theIP area. The Austrian Council recommends theFrontrunner Package be supported with EUR11.2 million, whereby those modules that areclose in topic to the legal requirements will inparticular be supported.To be emphasized here as particularly positiveis the intensive addressing of young talent fund-ing, as it is explicitly quoted by law for the firstcolumn, by the FWF with its doc.funds appli-cations and the Jahoda-Lazarsfeld programme.The doc.funds in particular are an importantand beneficial revised restructuring of the pre-vious doctoral colleges. The Austrian Councilwelcomes the autonomy this provides the insti-tutions in shaping the doctoral programmes.The Austrian Council therefore recommendsdoc.funds be supported with EUR 10 million. The Austrian Council believes the Jahoda-Lazarsfeld programme shows a low level of in-novation with existing measures. There are al-

so duplications here with the existing offeringat EU level in this area. Increased cooperationwith the ÖAW is recommended with a view tothe Sir Karl Popper doctoral candidates it hassubmitted. An opening of the doctoral candi-dates for all researchers and their funding via theFWF would provide more valuable stimuli tohuman capital development. With regard to theSir-Karl-Popper doctoral candidates the Austri-an Council recommends the Jahoda-Lazarsfeldprogramme be allocated EUR 3 million.The CDG addresses the important and legally ex-plicitly defined Life Science area with its struc-tures proven in applied research. In view of thescarcity of funds the Austrian Council recom-mends funding a CD lab with EUR 2.5 million.The Austrian Council believes the Open(ing)Careers are a valuable and in particular a “new”element in young talent funding. It is, howev-er, regrettable that it is restricted to people with-in the LBG. The Austrian Council recommendsfull funding of EUR 2 million, but it wouldvery much welcome a check by the applicant todetermine the degree to which the concept couldalso be opened up for people outside the LBG.The ÖAW-submitted Sir Karl Popper doctoralcandidates are a good mechanism for youngtalent funding, but structurally would be bet-ter at the FWF. An opening for non-ÖAWmembers must in particular be targeted. As al-ready quoted above within the scope of the ap-plication for the Jahoda-Lazarsfeld Programme,the Austrian Council recommends the ÖAW al-so seek cooperation with the FWF here with re-gard to funding.The technological internationalisation of Austri-an frontrunner companies makes a valuablecontribution to the market transition and inter-national market development for AustrianSMEs in the important technology areas. Dueto the scarcity of funding the Austrian Coun-cil recommends the project be funded withEUR 2 million.The IP.Market Initiative is an important mech-anism in the accession process of Austrian SMEs

28

recommendations

to the potential of better exploitation of theirintellectual property. The proposed package ofmeasures, especially the setting up of an IP mar-ketplace and cooperation with the Patent Of-fice, are very welcome. The Austrian Council

suggests checking the integration of theIP check proposed by the FFG into thispackage of measures. The AustrianCouncil recommends IP.Market be sup-ported with EUR 3 million.

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Recommendation for innovation-promoting public sector procurement in Austria –Recommendation dated 1 September 2016

The Austrian Council recommends political support and specific full-coverage implementationThe Austrian Council for Research and Tech-nology Development recommends the politicalsupport for innovation-promoting public sectorprocurement be increased further. The Austrian Council for Research and Tech-nology Development also recommends the full-coverage implementation of innovation-pro-moting public sector procurement across andbeyond department boundaries be enforced andinnovation procurement plans be compiled,and subsequently coordinated and monitored ata central location. Improvement in the data situation for (inno-vation-promoting) public sector procurementThe Austrian Council recommends a standar-dised, full-coverage and obligatory recordingof the volume of public sector procurement inAustria in general and the introduction of in-novation-promoting public sector procurementin particular.Awareness creation and qualification of all involved in the procurement processThe Austrian Council recommends the intro-duction of a standardised usage and assignment

profile for public sector procurement personnelin combination with a standardised, extensivequalification for this work. The awareness crea-tion and qualification of all participants, espe-cially decision makers, must also be ensuredand promoted.Motivation And Risk SharingThe Austrian Council recommends the inte-gration of technically competent people intothe procurement process to support the opera-tive procurement personnel and shape the in-centive systems, which encourage the accep-tance of risks and increase readiness to partici-pate in innovation processes in public sectoradministration.

BackgroundIn recent years, increasingly more attention hasbeen paid at both European and internationallevel to demand-side innovation support mea-sures, which, in addition to funding and othersupply-side mechanisms, can be used to increa-se innovation. The intensive efforts of the European Union inthe last 10 to 15 years in particular were the cri-tical trigger for an in-depth reappraisal of the is-sue by the member states42.

42 The Lisbon Strategy (2000) applies as the starting point for this development, in which innovation was focused on asthe essential motor for economic growth and whose declared goal is to make Europe a competitive economic region inthe next 10 years. Public sector procurement has in the meantime become firmly defined in the strategies at EU level asan innovation driver and an important part of the strategy for Europe 2020 (European Commission 2010) within theframework of the "Innovation Union" initiative (European Commission, 2010).

Edler & Georghiou43 define demand-si-de innovation policy as follows: “Set ofpublic measures to increase the demand for in-novations, to improve the conditions for the up-

take of innovations and/or to improve the articu-lation of demand in order to spur innovations and

the diffusion of innovations.” According to this de-finition, demand-side innovation policy notonly has the primary goal of supporting the de-velopment of new innovations, but rather mustalso promote their diffusion with the procure-ment of already existing innovations.The area of innovation-promoting public sec-tor procurement is a demand-side innovationpolicy tool. The most important difference he-re is between the commercial procurement ofinnovations (PPI – Public Procurement of In-novation) and the pre-commercial R&D procu-rement (PCP – Pre-Commercial Procurement).Furthermore, as part of the national implemen-tation of Directive 2014/24/EU on public sec-tor procurement a new award procedure called“Innovation Partnership” will also be introdu-ced, whereby public sector procurement person-nel have the use of another mechanism to sha-pe public sector procurement as more innova-tion-promoting.

Commercial Procurement Of Innovations (PPI)Commercial public sector procurement of inno-vations is the procurement of innovative pro-ducts or services by the public sector. This in-

volves a test purchase or a first purchase or theprocurement of innovative products for the pro-curing side. Pre-Commercial Public Sector R&D Procure-ment (PCP)Pre-commercial public sector R&D procure-ment mostly involves a longer joint process, inwhich the procurement personnel and innova-tion-drivers determine and specify shared requi-rements for innovative solutions. If we consider the volume of an average 14 percent of GDP44 per year, which flows within theEU into the area of public sector procurement,we can see the high potential embodied in thesystematic increase in demand for innovativeproducts and services. The increase in demand for innovative pro-ducts and services will in particular strengthendomestic small and medium-sized enterprises(SMEs), which will then have better opportu-nities in the otherwise highly regulated and ge-nerally low-risk award processes. On the otherhand with more innovation-promoting publicsector procurement it will itself become moreinnovative and can consequently offer the ge-neral public improved products and services.The benefits of innovation-promoting publicsector procurement are indeed undisputed. Thisis, however, a still very new and partially unre-searched topic and implementation as part of abroad demand-side innovation policy is oftenlinked with significant difficulties.

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recommendations

43 J. Edler / L. Georghiou (2007): Public procurement and innovation – Resurrecting the demand side. Research Policy,36, 949–963, 2007.

44 European Commission (2014): Public Procurement as a Driver of Innovation in SMEs and Public Services. Belgium:European Union, 2014.

Demand-Side Innovation Policy In AustriaIn addition to specific best practice examples,with the innovation-promoting public sectorprocurement guiding concept, since 201145 the-re has been a thoroughly ambitious initiative inAustria, which has set itself the goal of increa-sing the percentage of innovative and innova-tion-promoting procurements in the whole ofpublic sector procurement. A study on behalf ofthe Austrian Council for Research and Techno-logy Development46, which primarily focusedon the topic of innovation-promoting publicsector procurement in Austria with regard to thecurrent state of implementation, attested posi-tive findings to the initiative. Considered as awhole, it must be said that Austria is also posi-tioned well in the international comparison ofcountries.47 However, the Austrian Council’sstudy also shows specific areas of action for thefuture, which represent the key points of thisCouncil recommendation. The innovation-promoting public sector procu-rement guiding concept essentially addresses twoimpact directions. On one hand innovation-pro-moting public sector procurement will be broad-ly improved, to increase the general probabilitythat procuring parties in Austria will prefer in-novative solutions more. On the other hand stra-tegic procurement will be used as a policy mecha-nism to achieve economic and political goals.Both directions should be maintained and imple-mented more consistently in the future.

Political Support And ComprehensiveImplementationOne thing is extremely important withall areas of action shown – broad politi-cal support. Austria has set itself the goalof joining the innovation leaders by 2020,and on the whole is not badly positioned. Ho-wever, a closer examination of recent years al-lows us to assume that this goal cannot be achie-ved without ambitious and consistently imple-mented measures48.Innovation-promoting public sector procure-ment can be an innovation policy tool, but it re-quires good embedding in a broad policy mix.And it also requires high political attention, ac-companied by specific resources and supporti-ve measures. We cannot assume that innovati-on-promoting public sector procurement can beimplemented comprehensively and sustainablywithout additional resources. Furthermore the-re are no legal regulations for an obligatory per-centage of innovation-promoting public sectorprocurement.Innovation in public sector procurement will besupported on the political side not merely withconcepts and strategies, but rather with a bin-ding dimension that actively promotes and en-courages innovation as well. Innovation pro-curement plans of public institutions that illu-strate a clear positioning of their own future re-quirement are indispensable in this context.These plans should be compiled and discussed

31

recommendations

45 ÖB (2012): Innovation-promoting public sector procurement guideline concept (on behalf of the BMVIT and theBMWFW with the support of the BBG and AIT).

46 D. Murhammer-Sas: “Innovation-promoting public sector procurement in Austria – overview, obstacles and definitionof further areas of action.” spe-consulting gmbh, Vienna, July 2015.

47 Federal Austrian Government: Austrian Research and Technology Report 2015.48 Austrian Council: Report on Austria’s Scientific and Technological Capability 2015.

cross-department. A central office,which should be based in a departmentequipped with coordination competen-cies, could coordinate these plans andcheck them as part of monitoring on the

basis of clear goals.The definition of innovation procurement plansand their monitoring by a central office wouldmake it easier to achieve penetration of the en-tire level of the public sector. The coordinati-on at the ministries’ side in particular couldtherefore be made easier and already procuredinnovations, whose penetration is often especi-ally slow, could be better diffused.The Austrian Council welcomes the fact that,with the innovation-promoting public sectorprocurement service office and the competen-cy and contact points, a responsible contactpartner has been set up for innovation-promo-ting public sector procurement. The assignmentto the BBG must, however, be questioned, asthis is only responsible for a fraction of publicsector procurement. An even broader use of theservice office would have to be endeavoured,which should range from support in determi-ning requirements to the creation of businesscases and in particular the performance of theactual process. The long-term goal of the serviceoffice should, among others, be for the purcha-sing entities to change their processes and struc-tures to favour an more intense consideration ofinnovation in procurement.The Austrian Council for Research and Tech-nology Development recommends the political

support for innovation-promoting public sectorprocurement be increased further.The Austrian Council for Research and Technology De-velopment also recommends the full-coverage imple-mentation of innovation-promoting public sector pro-curement across and beyond department boundaries beenforced and innovation procurement plans be compi-led, and subsequently coordinated and monitored at acentral location (such as the Federal Chancellery, for ex-ample).

Data SituationEstimates indicate that the volume of all publicsector procurement in Austria is approx. 35 to40 billion EUR per year49. Despite Austria’s ob-ligation to report data on public sector procu-rement to the WTO and the European Com-mission, a standardised and central recordingsystem has still not been set up. The AustrianCourt of Auditors has referred in several re-ports50 to the urgent requirement of central rec-ording and underscored this recommendationwith detailed specifications with regard to cle-ar criteria to guarantee the comparability andgoal-oriented analysis of data. Based on cur-rently available data it is not possible, however,to assess the percentage of innovation-promo-ting public sector procurement or total publicsector procurement in Austria. As part of the in-novation-promoting public sector procurementguiding concept there was indeed a survey byStatistik Austria51, but this data is only condi-tionally significant because it is voluntary innature and the return was very low.

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49 W. Clement / E. Walter (2010): Innovation-promoting public sector procurement in Austria – contributions for aguideline concept for the programme of action (on behalf of the BMWFJ).

50 Rechnungshof (Court of Auditors; 2015a): Report by the Court of Auditors: Internal control system with direct awardsin selected departments, BMVIT and BMWFW.Court of Auditors (2015b): Statement: Amendment to the Federal Law on the setting up a federal procurement compa-ny with limited liability.

51 See http://www.statistik.at/web_de/frageboegen/oeffentliche_einrichtungen/innovations_foerdernde_beschaffung/in-dex.html for details.

A standardized recording of the volume couldserve as the basis for an objective to be derivedfrom it, with regard to the volume and phasedincrease in innovation-promoting public sectorprocurement, and would therefore result in anincrease in public sector expenditure in re-search, technology and innovation.The Austrian Council for Research and Tech-nology Development recommends a standar-dised, full-coverage and obligatory recordingof the volume of public sector procurement inAustria in general and the introduction of in-novation-promoting public sector procurementin particular.

QualificationOperative procurement personnel faces new andincreasingly complex requirements. In additionto economical aspects, social, ecological and in-novative criteria are also considered with publicsector procurement. However, the satisfaction ofthese requirements requires appropriate humanresources, which are frequently not available insufficient numbers. Added to this is the often in-sufficient know-how and experience of the pro-curement personnel. In many cases there simplyis not enough knowledge of new technologiesand innovations and therefore there is insuffi-cient expertise to evaluate these. Furthermore,the process leadership with innovative procure-ment projects in many organisations is in thehands of legal and administrative professionalgroups, and consumers, users or political deci-sion makers are only rarely involved. In Austria there are no specific job titles forpublic sector procurement personnel, and noris there any standardised qualification for thiswork. In addition to special information andfurther training measures of the innovation-promoting public sector procurement serviceoffice and in cooperation between the innova-tion-promoting public sector procurement ser-vice office and the administrative academy ofthe Federal Government, there is actually a re-gularly offered basic and advance seminar on

the topic of innovative and sustainableprocurement. These measures are agood basis, but they are not a standar-dised qualification. Installation in theadministrative academy of the BKA or atechnical college as own study course mightbe a possibility.The focus here should be on supporting and re-lieving the burden on the procurement person-nel. Innovation-promoting public sector procu-rement must, however, also be seen as a collec-tive process, which begins at management leveland moves across all levels of the organisation.The strategic specifications on the owner andpolicy side should in particular be consideredwith regard to risk behaviour. A high level ofcompetence of all involved, and not just theoperative procurement personnel is indispensa-ble. This must be guaranteed with the qualifi-cation and awareness formation of all partici-pants.The Austrian Council for Research and Technology De-velopment recommends the introduction of a standar-dised usage and assignment profile for public sector pro-curement personnel in combination with a standardi-sed, extensive qualification for this work. The aware-ness creation and qualification of all participants, espe-cially decision makers, must also be ensured and promo-ted.

Motivation And Risk Sharing In view of the complex requirements of procu-rement personnel there are often hardly anyobjective reasons to purchase innovative pro-ducts or services. The costs are mostly higher,at least in procurement, the empirical valueswith the products are low by nature, costly pre-liminary searches are required and in the pre-commercial area in particular the specific pro-curement projects are connected with signifi-cant added expenditure in terms of time. Addedto this are fears connected with legal require-ments, so that often the known, frequently lessinnovative path is travelled with public sectorprocurement. With this multitude of risks, the

33

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operative procurement personnel aregenerally left alone and are only givenspecific support with, for example, theacceptance of financial risks.

The Austrian Council for Research and Techno-logy Development recommends the integration of

technically competent people into the procurement pro-cess to support operative procurement personnel andshape the incentive systems, which encourage the accep-tance of risks and increase readiness to participate in in-novation process in public sector administration.

OutlookAs the next step, the Austrian Council suggeststhe further implementation be discussed and anexpansion of the concept be agreed on, in par-

ticular for the obligatory definition of innova-tion-promoting public sector procurement inprocurement plans. Special attention should be paid to the area ofinnovative SMEs, which often do not succeedin winning procurement projects from the pu-blic sector. Efforts should be increased in thisarea to identify the barriers to access for inno-vative SMEs and to offer solutions. Generally speaking in Austria there must bemore new cooperation projects between the pu-blic sector and companies and new structuralinroads must also be made in this area. Initia-tives in Scandinavian countries such as Swedenand Denmark52 can serve as role models for thisaccess.

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Recommendation for funding education, research and development in Austria –Recommendation dated 5 September 2016

BackgroundThe general theme of the Alpbach EuropeanForum 2016 was the “New Enlightenment”.This was to bring attention to the need to re-new the Enlightenment Project with its focuson education, science and research in times ofmajor upheaval and global “grand challenges”.To meet this challenge the Technology Forumin particular dedicated itself to the search fornew paths and tools for shaping the future. The debates and discussions in the plenary ses-sion, in the work groups and in the informalsetting made one thing clear: More than ever werequire a well-functioning education system,excellent science institutions, efficient researchand effective implementation of research re-

sults in market-enabled innovations. Appropri-ate financial resources are required for this.Leading innovation nations such as the USA,Switzerland, Sweden, Finland or Denmark havedetermined consequences of this and increasedinvestments in these areas for some time now. In Austria, securing funding for education, re-search and innovation ranks among the great-est challenges. The Federal Government alsospecified this in its Research, Technology andInnovation Strategy (RTI Strategy). The Feder-al Government’s decision to commit funds re-sulting from the reform of bank levies to edu-cation, science and research is evidently orient-ed on this.

52 V. Lember / R. Kettel / T. Kalvet (2014): Public Procurement, Innovation and Policy. International Perspectives. Heidelberg: Springer.

Bank Levies Funding for Education And ResearchIn the Cabinet meeting of 12 July 2016 theFederal Government reached an agreement onthe reduction of bank levies and the distributionof advance payments of the banks to the tuneof EUR one billion. This funding will be usedto finance future investments in the areas ofeducation, research and innovation.53Basically, the intention to provide additionalfunds for important future areas is a very pos-itive step and is expressly welcomed by the Aus-trian Council for Research and Technology De-velopment. Specifically, EUR 750 million arecommitted to the expansion of all-day schools.A further EUR 100 million will flow into theexpansion of the technical colleges’ offering,whereby some 5,000 study places will be creat-ed in the STEM area in particular. EUR 50million are earmarked for the Education Foun-dation and EUR 100 million for the NationalFoundation.The expansion of the all-day school is also a keyeducation policy topic, as are the steps initiat-ed for the eduction reform in this regard. As theAustrian Council has repeatedly determinedwith its evaluation of Austria’s scientific andtechnological performance, appropriate meas-ures for early childhood development and fortackling early social selection in the school sys-tem with parallel performance differentiationand talent development are urgently required.54The expansion of the technical colleges’ offer-ing in the area of the STEM subjects is also very

positive, and indeed corresponds withthe increasing demand from the econ-omy. The Austrian Council also welcomes thecommitment of EUR 100 million eachfor the expansion of technical college studyplaces and for the additional allocation of theNational Foundation. However, the followingshould be noted here: Since its foundation in2003, the National Foundation for Science,Technology and Development has pursued theobjective of sustainable funding for AustrianRTI system projects. EUR 125 million a yearwere originally earmarked for this. Due to thenegative interest rate trends in recent years, therevenue from ERP funds and the NationalBank, from which the Foundation is funded,have fallen continuously. Prior to this, therewas an additional allocation of the NationalFoundation from funds provided by NationalBank profits, which is also hoped for this year.But this doesn’t provide the original amount ofthe payouts either. And nor will the EUR 100million from the bank levies change anythinghere.From an overall perspective of the Austrian RTIsystem, the additional funds must therefore beseen as a drop in the ocean and clearly insuffi-cient. The “fresh money” hoped for from thebank levies is an important signal at best. How-ever, on the whole it is still too little to achievethe research quota goal that the Federal Govern-ment actually set itself.

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53 See www.apa.at/News/6330811234/regierung-einigte-sich-auf-senkung-der-bankenabgabe.html54 Austrian Council (2016): Report on Austria’s Scientific and Technological Capability 2016, p. 19; Austrian Council forResearch and Technology Development (2015): Report on Austria’s Scientific and Technological Capability 2015, p. 34.

RTI Strategy Funding Goals Cannot Be AchievedThe Federal Government defined thegoal in the RTI Strategy of increasing theresearch quota to 3.76 per cent of GDP by

2020 to catch up with the quotas of the in-novation leaders. In order to actually achievethis goal, between 1.6 and 3.1 billion EURwould be additionally required (for this, see thetarget values shown in figure 5, which now ac-tually differ considerably from the actual val-ues). Even with the funds now provided fromthe reform of the bank levies, it will not be pos-sible to close this substantial gap to the goal ofan R&D quota of 3.76 per cent of GDP. The same applies for the Federal funding frame-work up to 2020 adopted on 26 April 2016.55This does not allow for an increase in the budg-et for education, science, research and innova-tion. On the contrary: The corresponding per-centage of the budget will fall from 17.9 percent in 2015 to 17.1 per cent in 2020. By wayof comparison: The budget for pensions alone(ASVG and civil servants) will rise by 2020from 25.7 to 29 per cent.The Federal Government’s RTI Strategy explic-itly explains the need for a stable and securefunding environment – not least of all to in-crease private R&D funding. Medium-termfunding options, goal formulations in an impactand output-oriented innovation system andtherefore improved planning capability and

more security for a sustainable funding strate-gy should be defined in a research funding law,which is still not in place. Unfortunately, nei-ther the Cabinet decision on the allocation offunds from bank levies nor the Federal fundingframework up to 2020 nor the Federal Govern-ment’s activities to date take this request into ac-count. Despite the positive signals, the Austri-an Council must emphasise the absence of adedicated and clear prioritisation of future ar-eas and the investments they require.The Austrian Council therefore believes thebudget goals formulated in the RTI Strategyand in the Work Programme will clearly not beachieved. Corresponding recommendations bythe Austrian Council on 7 September 2015, 5February 2016, 30 May 2016 or from the Re-port on Austria’s Scientific and TechnologicalCapability have evidently not yet been consid-ered sufficiently. Despite the need for budget consolidation inview of the scarcity of funding resulting fromthe financial crisis and from long overdue struc-tural reforms, there is still an urgent require-ment for an increase in the funding for educa-tion, research and innovation. This is especial-ly necessary because investments in these areasrequire more time to be able to fully developtheir macroeconomic impact. It is therefore im-perative that greater parts of the budget be freedup for the future areas of education, researchand innovation.

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55 Austrian Federal Law Gazette, issued on 8 June 2016: Federal Fiscal Framework Act 2017 to 2020 and amendment tothe Federal Budget Act 2013, of the Federal Fiscal Framework Act 2016 to 2019 and the Federal Fiscal Act 2016 (NR:GP XXV RV 1096 AB 1120 p. 128).

Budget Development – Universities And FWFAs An ExampleThe development of the budget for the univer-sities in the time frame of the five periods of theperformance agreement (PA) from 2004 to2008 and the financial funding of the sciencefund (FWF) for 2005 to 2015 are illustrated inthe following as examples for an insufficientincrease in the funding for education, researchand innovation.The global budget for universities rose in theobserved period more or less linear. EUR 5.2billion was awarded to the universities for thePA period 2004-2006. This rose to EUR 8.2billion for the PA period 2016-2018. This is anincrease of 57.9 per cent. However, in the sameperiod (2004-2015) the number of studentsrose by more than 47 per cent. If we now cal-

culate the changes relative to the con-sumer price index (HICP 2004), a dras-tic reduction in the funds per studentbecomes evident with the global budget(see figure 6).A similar situation is observed for the budg-et trend with the FWF. Total funding rose herefrom EUR 122.4 million in 2005 to EUR173.4 million in 2010. In 2015 the total fund-ing rose to EUR 204.7 million. However, CPI-adjusted in particular, the increase in funds be-tween 2010 and 2015 is still low. In the sameperiod, both the number of applications and thenumber of people funded from the projects al-so rose. 2,156 researchers were funded in 2005;in 2015 it was 4,110. This reduced the approvalrate, which in 2015, with regard to the total ap-plication amount, was only 21.4 per cent.56

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56 FWF Annual Report 2015.

Figure 6: Evolution of financing of global budgets for universitites

Source: unidata; university performance negotations; global allocation without third-party funding; Statistik Austria: VPI values.

2004 – 2006 2007 – 2009 2010 – 2012 2013 – 2015 2016 – 2018

11,000

10,000

9,000

8,000

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5,000

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20%

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Student numberchanges in %Funding per student inflation-related in EURGlobal budget inflation-related in EUR millionsGlobal budget acc. to PA1(nominal in EUR millions)

These developments result in fallingavailability of funds relative to thefunded people (see figure 7). Comparatively speaking, the leading in-novation nations have increased their

budgets in this respect. In Austria this in-creases the danger of losing highly qualified re-searchers and damaging Austria as a science lo-cation.

Innovation Leader Goal Remains DistantThe financial contributions to R&D are al-ready condensed in the most common interna-tional indices – and this although their effectscan only first be seen in the long term. Austriaimproved on the previous year by one place tonumber 10 in the European Innovation Score-board (earlier the Innovation Union Score-

board/ IUS).57 However, in recent years a rathernegative dynamic was evident: In 2009, Austriawas number 6 and therefore had a lead positionin the follower group. Austria has since fallenback five times in a row by one place each year.The year before, Austria was only number 11and therefore ranked at the bottom end of thefollower group.This year Austria also fell with the recently re-leased Global Innovation Index (GII) to num-ber 20.58 The best place was achieved in 2009at 15. The top ten here also include the leadinginnovation nations, Switzerland, Sweden, Fin-land, Denmark and Germany. This development runs in the opposite direc-tion as that intended by the Federal Govern-ment with its RTI Strategy. The Strategy definesthe goal of catching up with the leading inno-

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57 European Innovation Scoreboard 2016, p. 12 ff.58 https://www.globalinnovationindex.org/gii-2016-report

Figure 7: FWF Budget Evolution

Source: FWF annual reports 2015, 2010, 2015; CPI, Statistik Austria, own calculation.

2005 2010 2015

250

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100

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Revenue from research allocations total (nominal in EUR milions)

vation nations and joining the group of inno-vation leaders by 2020. The Austrian Councilbelieves this goal orientation still applies as itdid before. On the basis of its monitoring ac-tivities in conjunction with its reports on Aus-tria’s scientific and technological performance,the Austrian Council believes it is also clearthat the current measures to implement theRTI Strategy are insufficient to keep up with thedevelopment dynamic of the leading coun-tries.59 This means the innovation leaders willmove further away if the trend remains as it is. As other countries show a stronger develop-ment dynamic, continuing the status quo is notan option. If Austria does not want to fall fur-ther in global competition and lose its connec-tion with the lead group, the topics of educa-tion, research, technology and innovation mustbe afforded the highest possible priority – thefunding required must be provided and struc-tural adjustments must also be made. The Austrian Court of Auditors report must al-so be mentioned in this respect. According tothe report, the structures of research funding inAustria are both characterised by complex andunclear cash flows and continue to be ineffi-cient.60 The Austrian Council repeatedly refersin this context to its findings and recommen-dations for this in the White Paper on control-ling research, technology and innovation inAustria, which are intended to simplify fundingstructures.61 Freed up funds could then be useddirectly for research.

These and other structural reforms (al-ready defined in the RTI Strategy) arerequired to improve the output and ef-fectiveness of the Austrian RTI system.However, this would also require an ap-propriate budgetary basis, sustainable fund-ing security and medium to long-term plan-ning capability.

RecommendationThe Austrian Council therefore recommendsonce again:The funding gap to be closed so the goal ofan R&D quota of 3.76 per cent of GDP de-fined in the Federal Government’s RTI Strat-egy can be achieved by 2020.The goal formulated by the Federal Govern-ment on the basis of a resolution proposal ofthe National Council in its Work Programme2013 to 2018 to raise the university expen-diture rate by 2020 to 2 per cent of GDP bevigorously pursued. The immediate implementation of the an-nounced and required RTI Strategy measuresto achieve funding goals. The swift and conclusive formulation of theplanned research funding law, to secure sus-tainable funding security and medium tolong-term planning capacity. The enforcing of structural reforms to reallo-cate existing resources from less productiveareas into future-oriented areas, such as edu-cation, research and innovation

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59 Austrian Council (2016): Report on Austria’s Scientific and Technological Capability 2016, p. 54 f.; Austrian Council forResearch and Technology Development (2015): Report on Austria’s Scientific and Technological Capability 2015, p. 83 f.

60 Report by the Court of Auditors: Research Funding in Austria. Vienna 2016/4.61 White Paper on controlling research, technology and innovation in Austria, p. 18 ff.

Position of the Austrian Council for Research and Technology Development

An extensive process to improve university ac-cess was initiated with this draft on the “Na-tional strategy for the social dimension in high-er education – for more integrated access andbroader participation”. The Austrian Councilhas already voiced its opinion in earlier state-ments on the implementation of capacity-ori-ented study place funding with fair access reg-ulations and improved study conditions. Withregard to “socially just” access, the AustrianCouncil emphasizes the importance of perform-ance-oriented study funding. This draft dealswith and illustrates these aspects in detail. The Austrian Council believes it is importantthat the framework conditions in university ac-cess reduce social selection, rather than increaseit. This should not contradict performance-ori-ented selection of suitable students at the begin-ning or in an early study phase either. As the Austrian Council has often specified, an

education-minded society must also be createdin all development phases, from pre-school de-velopment right through to tertiary study age.Family, social and education policies are re-quired here as one to enable socially just accessto education. The scholarship system must al-so be further expanded to increase the percent-age of “non-traditional admissions”. A signifi-cant increase in income limits would signifi-cantly improve the situation for many students.The lines of action illustrated in the documentcorrespond in content with the Austrian Coun-cil’s position and for implementation shouldbe equipped with a specific measures plan,which is also reflected accordingly in the budg-ets. A clear definition of the responsibilities toimplement the measures must be defined inthe next step. A further burden on the tertiarysector without beefing up the funds to meetthe objectives would be counterproductive andwould result in restrictions in other areas ofhigher education operations.

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Statement of the Austrian Council for Research and Technology Development on thedraft for the “National strategy for the social dimension in higher education” –Recommendation dated 25 November 2016

Recommendation regarding the use of funding provided by the National Foundation for RTD for2017 – Recommendation dated 28 November 2016

recommendations

PreambleOn the basis of the Foundation Council’s de-cision of 27 September 2016 with respect toawarding funds for 2017 on 3 October 2016,the Austrian Council for Research and Tech-nology Development was invited in acc. with§ 11 para. 1 item 1 of the RTD National Foun-dation Act to issue a recommendation on theuse of the Foundation’s funding for 2017. Thisis to be made on the basis of the applicationssubmitted. The total application volume for 2017 is EUR169,335 million. With regard to the approvedEUR 100 million from bank levies the Austri-

an Council structured its recommendation inline with three scenarios for potentially availableFoundation funds for 2017: 1)EUR 10 million (expected to be fundingfrom the National Foundation)

2)EUR 35 million (Foundation funds plusEUR 25 million from bank levies withtranching over four years)

3)EUR 60 million (Foundation funds plusEUR 50 million from bank levies withtranching over two years)

In view of the difficult financial situation, theNational Foundation becomes especially sig-

nificant, this being manifested in the support oflong-term effect interdisciplinary research meas-ures (see § 2 of the RTD National FoundationAct). The Austrian Council advocates a sufficientand sustainable financing of the National Foun-dation. The Austrian Council is concerned withthe extremely fluctuating allocation of funds.The amount of allocated funds since at least2008 tends to hover far below the EUR 125million per year provided for in legal stipula-tions.The basis for the decision on awarding funds arethe strategic importance and socio-political rel-evance of the projects submitted and their clas-sification in the overall context of Austrian re-search funding. The Austrian Council also de-fines the following priorities for awarding fundsfor 2017: Strengthening the national human potentialbaseStrengthening competitive funding in basicand applied researchStrengthening the research infrastructure withinitiatives with appropriate critical variablesand risk potential Measures to strengthen location Austria forresearch-active companiesStrengthening risk capital

Strengthening innovation potentialwith “Open Innovation”Coordination and harmonisation ofregional and federal RTI activities

RecommendationThe applications of the beneficiaries for fund-ing by the National Foundation basically com-ply with the Council’s recommendation on pri-oritisation and in principle can therefore besupported. Should the worst case scenario of EUR 10 mil-lion occur, the Austrian Council recommendsno allocation be made to the beneficiaries andthe funds be held over to 2018 instead.In the event of a figure above EUR 10 millionbut below EUR 35 million with the allocationof funds of the National Foundation, the Aus-trian Council recommends reappraisal.The Austrian Council for Research and Tech-nology Development favours scenarios 2 and 3on the basis of an extensive audit and evaluationof the projects submitted for the pending allo-cation of funds (see table on next page).Due to the application volume that is also farabove the funds to be expected for 2017 a num-ber of projects cannot be covered by the Nation-al Foundation. This has been left out in thetable for matters of better transparency.

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42

Beneficiary Title Amount applied for Recommendation Recommendation in EUR m EUR 35 m EUR 60 m

FFG Bridge building programme / BRIDGE 10.00 9.00 14.00

FFG Research partnerships – 2.00 2.00 2.00Industry-related dissertations

2nd R&D tenderFFGInfrastructure funding

20.00 0.00 15.00

FWF Special research areas and PhD 35.260 7.00 12.00

FWF Matching Funds for supporting 5.23 3.00 3.00young researchers and womenCDG 12 CD labs 10.259 3.00 3.00LBG Development, set-up, operation & evaluation 4.00 3.00 3.00

of an OIS-enabled research institutionÖAW Austrian High Performance 8.441 4.00 4.00

Data Analysis Center

aws aws First – from idea 4.21 4.00 4.00to entrepreneurship

FFG Frontrunner 5.00 0 0

FFG Early Stage – early research ideas 5.00 0 0of innovative companies

FFG21st Century Skills – human resources

5.00 0 0for digitalization

FFG Better Life – pilot programme 5.00 0 0for prevention research

CDG Programme Partnership in 4.00 0 0Research (PIR)Sustainable establishment of Open

LBG Innovation in Science Research and 4.00 0 0Competence Centre

ÖAW HumanIS – Humanities and 4.00 0 0Information ScienceSpeaking Truth to Power? For the

ÖAW professionalization of scientific 1.76 0 0policy and society consulting

ÖAW Multi-photon interferometry for 2.90 0 0quantum networks (VQN)

aws Venture Capital Initiative (VCI) 10.275 0 0

aws Translational Life Sciences Austria 10.00 0 0

aws License.IP: Technology transfer to SMEs 5.00 0 0through Innovation In Licensing

aws / FFG Expansion of the Global Incubator Network 8.00 0 0

Total 125.91157 35.00 60.00

recommendations

43

Reason – comment

Bridge is a long-established programme. The cooperation between science and economy is an attractive option. The highest possible allocation in linewith the funds available is recommended, which in the third scenario goes beyond the applied for volume of EUR 10 million. If there is no requirement atthe FFG side to use this additional EUR 4 million for Bridge, then it must be allocated in line with the other projects submitted with FFG.

This relatively new programme line promises a boost to human capital in terms of training; the industry shall be integrated in this programme, too.

As the Austrian Council has already specified, an own funding mechanism for setting up research infrastructures of critical dimensions is not provided inAustria. These findings are also reflected in the focus points of the National Foundation recommended for 2017. However a greater financial volume mustbe applied for a beneficial implementation, which is only possible in the third scenario. Within the scope of the special tranches for the NationalFoundation 2015 and 2016 the Austrian Council already recommended a total of EUR 20 million for the first tender. In terms of long-term and appropriate-ly dimensioned financing, the Austrian Council believes consideration within the scope of the Research Financing Act is conceivable.The special research areas (German abbreviation: “SFB”) are a superb funding concept with very high quality and maximum requirement for research andteaching. SFB financing is an essential factor of top-quality interdisciplinary research in Austria. The PhD programme (German abbreviation: “DK”) received avery positive evaluation in 2014 with a view to its value for training highly qualified scientists. Although the PhD courses are among the core tasks of the universities, the additional and complementary financing of the structured PhD programme by the FWF seems essential for the universities until further notice.Matching Funds is an innovative governance model that promotes an efficient interconnection of federal and state funding in the RTI area, and it in particular pursues the priorities and recommendations of the RFTE.The CD labs are a proven mechanism in promoting the cooperation between science and economy and for promoting knowledge transfer. The application clearly corresponds with the Open Innovation focus set by the Austrian Council for 2017. Setting up an OIS-enabled research institutionfirst in addition to the already existing Competence Centre would be especially welcome here.The initiative proposed by the ÖAW covers an important infrastructure aspect. The international embedding at one location must be positively emphasizedin this respect. The Austrian Council believes the initiative is extremely innovative and focuses precisely on the point where leverage is the greatest, i.e. young people. Thisis a programme with which much can be achieved with relatively little funding. The explicit integration of existing projects must also be positively highlighted.Frontrunner is a fusion of the two programmes, “Frontrunner” and “Competence Headquarters”.The application was set quite low at EUR 5 million. As the programme was already covered within the scope of the Austria Fund 2016 with EUR 11 mil-lion, due to the scarcity of funds for the National Foundation 2017 a recommendation will not be given. However at this point it should be noted that inconceiving the Austria Fund it was not intended that beneficiaries should submit the same projects to both sources of funds, the National Foundation andthe Austria Fund.“Early Stage” is viewed critically in that on one hand the costs appear very high (70% of funding) and on the other hand the goals of the project areunclear. Furthermore the quality of the application also appears to be in need of improvement.This involves the FFG's existing funding mechanisms, which focus on digitalisation, without generating corresponding added value.

The delimitation to other programmes in the Life Science area is blurred. It is also more about a consciousness raising initiative than about an R&D-related project.The Austrian Council does not see any gap to be covered with these support measures. It is much more about duplicating already existing initiatives. Due the scarcity of funds, preference is given to the second application for the LBG's Open Innovation (see above). The Open Innovation ScienceResearch and Competence Center was already covered in 2016 by the National Foundation and therefore put back for 2017.

The application, and its unique position in particular, are viewed critically here. The objectives are broad and insufficiently focused. On the whole theapplication shows quite a bit of room for improvement.The initiative is viewed very critically. Learning from international experiences is missing, so that similar initiatives on EU level, for example, are not con-sidered.

An interesting initiative, which unfortunately cannot be funded due to the scarcity of funds.

Basically, the Venture Capital Initiative addresses a weak point of the Austrian RTI landscape. The fund's investments over recent years must now takeeffect in the system. The percentage of investments outside Austria is still too high. This trend must continue to be observed. Additional funds are there-fore not recommended for 2017 either.The application also features a very high financial requirement, which can only be covered by the National Foundation with great difficulty. On the nega-tive side we should also say that there is no more docking on other programmes either.Before new initiatives are started in the IP area the presentation of the national IP strategy and the planned new activities of the patent office in particularmust first be seen. The establishment of the Global Incubator Network (GIN) was only recently recommended during the course of the special tranche of the National Foundation2015 for funding. Before this concept is further expanded the Austrian Council believes the sustainability of the initiative's effect should first be observed.

RecommendationThe Austrian Council recommends set-

ting up a mechanism to fund Top End BlueSky Research. As part of a strategic initiative forexcellent researchers and/or research groupsfrom all disciplines this will enable additionalfreedom for their research work. The AustrianCouncil also recommends the mechanism beelaborated under the guidance of the FWF sci-ence fund with the integration of all relevantstakeholders.

GoalThe core idea of this new mechanism is to pro-mote strategic research initiatives of excellentAustrian players, who have the potential to takeon the lead shaping role in international proj-ects, with which radical new and innovative so-lutions are worked out for current social chal-lenges and global “grand challenges”. The over-riding objective here is to develop internation-al research initiatives with an Austrian lead, inorder to create strategic benefits for nationalresearchers and/or research groups. It is also important here that the new mecha-nism address the potential issues of “safe sci-ence” and also support high-risk projects morethan before. The research groups will also beguaranteed the greatest possible freedom to actand flexibility here. An appropriate mechanismfrom the Austrian Council’s point of view couldbe a new column in the FWF’s portfolio ofmechanisms, which would also portray an en-hanced self-image within the scope of its strate-gic realignment.The idea here also focuses on international

benchmarks such as the National Research Pro-gramme of the Swiss National Fund (SNF) forfunding scientific research or the Metascans ofPolicy Horizons Canada. Both methods supportscience-based contributions to the solution ofimportant present-day problems on the basis ofmore interdisciplinary and interdisciplinary re-search.Elements Of A Conceivable Administrative ToolBottom-up elaboration of proposals by par-ticipating project consortiaImpact evaluation, no requirements for co-fi-nancing – purely risk capital for a highly-professional consortium with a brilliant ideaA new project is financed every 3 yearsNo allocation of funds – only the best proj-ect is financed

BackgroundThe acceleration of excellent research at inter-national level is an important issue for the Aus-trian Council. However, excellent internation-al research projects require an appropriate leadtime. With most strategic initiatives, Austrianplayers are at best co-shapers (“followers”), andrarely lead in a shaping role. Essential strategicinsights are then lost and participation in fol-low-up activities is more difficult. Mechanismsthat support these kinds of projects in their for-mation and guarantee the required freedom forresearch groups do not exist yet.The Austrian Council already published pro-posals in 2013 to create new freedom for re-search in its White Paper on controlling re-search, technology and innovation in Austria.62

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62 White Paper on controlling research, technology and innovation in Austria, p. 21.

Recommendation to set up a mechanism to enforce Blue Sky Research – Recommendation dated 2 December 2016

recommendations

The funding base required for this could beprovided on the basis of freed-up funds fromthe reform of administration structures in re-search funding. In its report on research funding in Austriapublished on 24 June 2016 the Court of Audi-tors also argued in the same direction: Accord-

ing to the Austrian Court of Auditors,research funding structures in Austriaare both characterised by complex andunclear cash flows and continue to be in-efficient.63 Appropriate structural reformscan free up funds, which can then be useddirectly for research.

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63 Report by the Court of Auditors: Research Funding in Austria. Vienna 2016/4, p. 127.

Statement of the Austrian Council for Research and Technology Development on the WorkGroup 5 package of measures: Research, technology, start-ups –Recommendation dated 2 December 2016

BackgroundThe Cabinet adopted an ambitious researchpackage on 8 November 2016. Its objective isto achieve the goal defined by the Research,Technology and Innovation Strategy (RTI Strat-egy) of joining Europe’s most innovative na-tions by 2020. In addition to structural reformproposals, the adopted package of measures al-so includes specific budgetary measures. Withspecific research funding (the Federal Govern-ment intends to invest a total of approx. EUR700 million by 2021), these will create a lever-age effect that will stimulate an additional ap-prox. EUR 500 million in private investment inthe research sector. On the whole a “researchbillion” is to be enabled here.

Austrian Council’s Appraisal Of/Position OnThe Adopted Package Of MeasuresThe Austrian Council essentially welcomes theadopted package of measures for research, tech-nology and start-ups. The Council believes thisshows how the Federal Government affordsgreater importance to the topics of research, in-novation and technology as key future-relatedfactors for Austria than it has previously done.

This is highly significant in that the key resultof the Council’s Mid-Term Review was rathersobering with regard to implementation of theRTI Strategy in 2015: In summary, the overrid-ing goal of the Federal Government to join theleading innovation nations by 2020 was de-fined as not achievable. The reason for this ap-praisal was the insufficient implementation in-tensity of recent years. In its previous reports onscientific and technological capability, the Aus-tria Council has repeatedly pointed out andrecommended that the measures of the RTIStrategy be implemented with greater empha-sis to achieve the ambitious objectives. It has al-so urged the qualification of the objectives andspecific budgetary provisions for individualmeasures several times. This was also addressedaccordingly in the latest presentation to theCabinet. All recommendations of the AustrianCouncil have also been accepted and proposalsfrom its Performance Reports and its WhitePaper on controlling research, technology andinnovation in Austria have also been incorpo-rated. The Council believes this is all entirelypositive.

In summary, the Austrian Council be-lieves the adopted package of measuresis beneficial and important. It includesthe required specification of implemen-tation steps to achieve the innovation

leadership targeted by the RTI Strategy.However, it remains to be seen whether or notand when the intended projects will actually fol-low and whether or not the budgetary coveragerequired for this will be provided.

The Austrian Council’s Position On IndividualProposed MeasuresThe Austrian Council’s position on some meas-ures of the presentation to the Cabinet consid-ered to be especially relevant is as follows:1 Governance and framework conditionsRTI Task Force:The agreed upgrading of the RTI Task Forcefor implementation of the RTI Strategy isemphatically welcomed by the AustrianCouncil. The Council had already recom-mended this measure in 2013 in its White Pa-per and more recently as part of the Mid-Term Review in its Performance Report 2015.The Council believes a new policy develop-ment phase is required to achieve the goal ofbecoming an innovation leader. A package ofreform steps must be pursued in place of thefragmented individual measures seen to date.This package must be harmonised with theentire RTI system. This, however, also re-quires stronger political commitment and ahigher degree of political energy. The Austri-an Council therefore believes the planned an-nual sessions of the Task Force at politicallevel, with which the results of operative ac-tivity will be discussed and a work pro-gramme for the next year will be defined arean important step in this direction.Coordination of preparation work for theRTI Strategy 2030, including OECD “Coun-try Review”:The coordination of preparation work for anRTI Strategy 2030 is to be welcomed, but it

is also recommended that this be performedin close coordination with the AustrianCouncil. The Austrian Council believes itmust be ensured that the planned CountryReview of the OECD actually results in find-ings that can be applied. A look at existingOECD Country Reviews allows us to con-clude that primarily existing material isanalysed and the findings will correspondwith already existing studies and reports (suchas the Austrian Council’s Performance Re-port). We would therefore have to considerwhether or not a deeper analysis in the formof a system evaluation would be a beneficialaddition and enhancement. In this context,the evaluation of research funding in Austriaaddressed here and the amendment to theFederal Statistics Act are extremely impor-tant and therefore also to be welcomed.Cost-benefit analysis of a research fundingdatabase (in acc. with the Court of Auditorsreport on research funding in Austria(2016/8):The Austrian Council already recommendedthe setting up of an all-Austrian researchfunding database in 2011. The goal here wasextensive and transparently understandabledocumentation of all research funding by theFederal Government and the states in onestandardised, public access database. Thisshould also serve as the basis for meeting spe-cial legal reporting obligations (e.g. Reporton Austria’s Scientific and Technological Ca-pability, Research and Technology Report,facts documentation, reporting obligationswithin the framework of “Europa 2020”, etc.)and evaluations. Corresponding data is al-ready recorded today by the respective fund-ing institutions as part of their standardiseddata collection with all instances of funding.The Austrian Council therefore explicitly wel-comes this proposal and will work intensive-ly on the foundations for setting up a re-search funding database.Activate European subsidies:

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The Austrian Council has repeatedly referredto the problems with the EFRD and thereforewelcomes all measures that would simplifyand in particular increase legal certainty forresearch institutions. National Foundation for Research, Technol-ogy and Innovation:As part of its recommendation work, the Aus-trian Council has continuously called for thelong-term securing of the allocation of fundsof the National Foundation in past years.This should now be secured immediately toguarantee the allocation of EUR 125 millionannually originally intended by by the legis-lators.Improvement in the services of AustriaWirtschaftsservice GmbH (aws) and FFG/re-duction in the fragmentation of programs:The Austrian Council welcomes the intro-duction of a transparent search option acrossall available aws and FFG programs and theplanned expansion to funding by regionalgovernments in particular. The targeted re-duction in the fragmentation of the Austrianprogram landscape is especially positive. Co-ordination with the planned system evalua-tion appears expedient here, as this should al-so include conclusions on optimisation op-tions. The continuous evaluation of aws andFFG is also considered positive. The resultsshould in any case be taken seriously, pub-lished and rapidly implemented regardless oftheir critical content.

2 Expedite Innovation BasisIncrease in the allocation of the FWF sciencefund/reinforcing of institutional excellent re-search/funding human potential:The announced increase in funds for com-petitive funding of basic research by the FWFfrom currently EUR 184 million p.a. to EUR290 million by 2021 is expressly welcomed bythe Austrian Council, but Austria is indeed farbehind the innovation leader average in allo-cating competitive research funds. A swift in-crease in funds is one of the most urgent meas-

ures required to support excellent re-searchers in Austria and to maintainAustria as an attractive research loca-tion. This is also supported with theannounced funding of non-universityexcellent research and by the plannedmeasures to fund human potential and theR&D infrastructure available in Austria.Innovation-promoting public sector procure-ment:The Austrian Council has already emphasisedthe importance of demand-side mechanismsto fund innovation and in particular publicsector procurement in its recommendation ofSeptember 2016. Of the measures plannedby the Federal Government in this area theAustrian Council believes the introduction ofa procurement training course and the tar-geted improvement of the data situation mustin particular be singled out. These points werealso key stipulations of the Austrian Council’srecommendation in this respect.

3 Support Digital TransformationBroadband/5G strategy:We are poised at the beginning of the 4th in-dustrial revolution – triggered by the digitalrevolution and the technological develop-ment boost it has initiated. The Cabinettherefore believes that innovation leadershipcan only be achieved on the basis of appro-priate foundations in the area of digitalisationand the Internet. The Austrian Council ex-pressly welcomes measures in this respect,such as the ongoing “digital offensive” forbroadband expansion or the 5G strategy cur-rently being prepared, which are announcedin the presentation to the Cabinet.Endowed chair for the digitalisation of pro-duction systems: Basically an increase in the number of profes-sors, especially with research focus on thedigitalisation of production systems, is verywelcome, but sustainable securing of fundingis considered essential. As these are temporaryprofessorships and the term is 5 years, the

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question is – what long-term financialconsequences will this have for the uni-versities? 4 Broader Access To InnovationsOpen-theme innovation workshop:

With respect to the planned setting up of“living labs” and open-theme innovationworkshops, the Austrian Council welcomesthe explicit consideration and support to dateof less innovation-active players.Impact Innovation Program:The early consideration of customers andcustomer requirements in the innovationprocess, especially in combination with socialinnovation aspects, must also be positivelyemphasised.

5 High-Risk ResearchFrontrunners and Early Stage/1000 Ideas Pro-gram:The increased funding of especially risky proj-ects has long been an issue for the AustrianCouncil and it is also reflected in its variousrecommendations. While with the Frontrun-ner Line we can assume fewer high-risk proj-ects, there are definitely more with the newEarly Stage Initiative or the planned 1000Ideas Program of the FWF. The AustrianCouncil therefore supports the appropriateinitiatives and recently referred to their rele-vance for the domestic RTI system.

6 Boost the science-economy interface & start-upsResearch investment fund – Uni-Spin-offFund:For several years now the Austrian Councilhas highlighted the insufficient interactionbetween public sector-funded R&D and pri-vate equity capital. It therefore welcomes theplanned initiatives in this direction to lever-age private early-phase capital for uni spin-offs and start-ups. Creation of an Austrian private equity growthfund:The Austrian Council considers the tender ofa “cornerstone investment” to create a private

equity growth fund for scaling and interna-tionalising start-ups to be especially positive.There is still an insufficiently covered fund-ing gap in Austria here in particular. The in-tention to shape the tender so that the capi-tal actually benefits Austrian companies andin particular is also administered in Austria tocreate more dynamic for the Austrian finan-cial market in this area is also very welcome.Prototype funding for knowledge transfer:The Austrian Council already referred in itsrecommendation on knowledge transfer inNovember 2011 to the lack of appropriateProof-of-Prototype funding to support thecommercialisation of research results. This isalso demonstrated in the requirements withPRIZE. The Austrian Council very muchwelcomes the fact that fresh money will beprovided here to continue this initiative.Stronger link between economy and science/COMET competence centres programme:The Austrian Council believes the intensifi-cation of the BRIDGE programme is a ben-eficial measure. The planned expansion ofthe funding spectrum to include social inno-vations is also positive. The Austrian Coun-cil also welcomes the realignment of the im-portant COMET programme and the intend-ed additional Call for C1 centres by 2018.

What Is Missing / CriticismNo secured funding:The presentation to the Cabinet forecaststhat a total of EUR 700 million will be invest-ed by the public sector by 2021. Specific re-search funding with higher leverage effectwill also stimulate an additional EUR 500million from private funding sources. At firstglance this looks very promising. However, oncloser consideration the package of measuresis revealed to be pure dreams of the future, asthe majority of these funds will only be fixedfor the years 2018 to 2021 with the nextfunding framework. Only 16.4 of the EUR700 million are earmarked for 2017. And the

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chosen formulation of the presentation tothe Cabinet goes even more drastically to theheart of the funding, because, as stated here:“As part of the work for the Federal Institutefor Risk Assessment 2018 to 2021 the finan-cial coverage of the measures mentionedabove will be negotiated and checked.” No focus on universities:Approx. 80 per cent of basic research in Aus-tria is done at the universities. Internationalcomparisons (with Germany and Switzerlandin particular) illustrate that the Austrian uni-versities are dramatically under-funded. Asbasic research is the foundation for all inno-vation, neglecting the universities is a massiveproblem. This factor – which was correctlyrecognised in Chapter 3 “Facilitate insight,accelerate excellence” – unfortunately is nottaken into account with the presentation tothe Cabinet. The budget for the 2019-2021performance agreement period of the univer-sities must already be defined by the end of2017. The requirement for a first step to-wards implementing the study place funding

at the universities alone is some EUR500 million per year. All measures toincrease the university budget musttherefore also be included in the com-ing BFRG.No attention paid to the science-societydialogue:Chapter 5 “Provide steering, set framework”,in which the RTI Strategy deals with essen-tial aspects of the structures and priorities atmeta level (e.g. Grand Challenges or inter-national positioning). The society-science di-alogue, which has an important function withthe general public’s attitude to research, isdealt with in this section with specific stipu-lations. In this respect specific references aremissing in the illustration of the measures inthe presentation to the Cabinet. References toRRI or Open Access, for example, would havebeen expedient. This is problematic becausethe Austrian general public is defined in allinternational comparisons and surveys as notvery science-minded and above-average tech-nology-unfriendly.

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Recommendation on setting budgetary priorities in Austria –Recommendation dated 19 December 2016.

RecommendationThe Austrian Council for Research and Tech-nology Development emphatically recommendshigher budgetary priority on future-orientedareas such as eduction, research and innova-tion. Only then can the Federal Government’sstrategic objectives to join the leading innova-tion nations and consequently increase Aus-tria’s competitiveness again be achieved. The Austrian Council also urgently recom-mends the National Foundation for Science,Technology and Development be merged withthe Austria Fund. This would allow the constantfunding problems to be addressed. Synergy ef-fects in the administrative area can also be bet-ter utilised.

BackgroundWith increasing concern the Austrian Councilfor Research and Technology Development al-so perceives a discrepancy between the strategicobjectives of the Austrian RTI policy and itsachievement. This is illustrated in the followingusing some prominent examples.

National Foundation for Research, Technologyand DevelopmentThe most up-to-date example for this is the de-velopment of the funding of the National Foun-dation for Research, Technology and Develop-ment. According to the original intention of thelegislators the Foundation was to have been al-located EUR 125 million annually. However,

this goal was only achieved in the firstthree years after the Foundation was es-tablished in 2004. Since then the allo-cated funds have fallen continuously andrecently dramatically (see figure 8). Not

even EUR 10 million are available for 2017!As a consequence an award decision could notbe made in the Foundation Council’s meetingon 6 December 2016. Due to the negative interest trend, in 2015 theMinister of Finance provided an additional al-location, which resulted in a total award of EUR76 million. Because of the continued low allo-cation by the National Bank and the ERP fundan additional allocation of this kind was alsohoped for in 2016. However, this did not hap-

pen – the main argument being that in additionto the allocation of resources of the Austria Fundto the tune of EUR 33.7 million, an additionalEUR 50 million should come from the reformof the bank levies adopted by the Cabinet on 12July 2016. However, the approved funds frombank levies are no longer available for this year,as was seen at the end of 2016. This can only beexpected (if at all) in the second half of the com-ing year, so that these funds will no longer ac-tually be effective in 2017 either. This means a blatant under-funding of EUR19.9 million for 2016 and a currently promisedEUR 8 million for 2017, whereby the Nation-al Bank contributes nothing to this, although itstarget contribution is EUR 75 million. If this

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150

125

100

75

50

25

0

Figure 8: Evolution of the annual allocation of funds for the Austrian National Foundation for Research, Technology and Development (in EUR millions)

Source: National Foundation RTD, own presentation. *Hypothetical funding flow with constant funding volume.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

National Foundation (EUR millions) Austria Fund (EUR millions) National Foundation (deflated)*

is not massively countered, 2016 and 2017 willbe lost years for the Foundation and the re-search in Austria that it favours. This is alsocompounded by the fact that even with thefunds from bank levies and the allocations fromthe Austria Fund, the original amount of the al-locations would not be achieved. And the infla-tion-related depreciation since 2006 hasn’t beenconsidered even once here. If we were to balancethis the Foundation would have to have an an-nual award volume of approx. EUR 155 milliontoday. Claim and reality therefore clash dra-matically here.

The FWF Science FundA further example here is the development ofthe FWF Science Fund’s budget. The FederalGovernment’s Research, Innovation and Tech-nology Strategy identifies clear need for actionhere and focuses on an expansion in the com-petitively awarded funds for basic research.

However, if we orient ourselves on theleading innovation nations (and this isthe approach followed by the RTI Strat-egy), we can see that Austria is far behindthe innovation leaders’ average. The FWF is allocated approximately EUR200 million annually. With EUR 812 million,the Swiss National Fund has more than 4 timesthis at its disposal. A comparison of the com-petitive research funding per inhabitant withthe leading nations produces a similar picture:In Austria about EUR 25 is spent per inhabi-tant. In Switzerland it is EUR 85, in FinlandEUR 58 and in Germany about EUR 35. Theability to attract competitive research fundingat national level is therefore restricted in Aus-tria. Among other factors, this has a negative ef-fect on the average FWF approval rate, whichwith individual projects is at approximately 25per cent, while with the Swiss National Fund itis 45 per cent (see figure 9).

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Figure 9: Approval Rates FWF – SNF

Source: FWF, SNF, own presentation.

2005 2010 2015

1,000

800

600

400

200

0

50%

40%

30%

20%

10%

0%

Approval total in EUR millions

Approval rate in %

SNF

FWF

45%

25.4%

The increase in funds for the competi-tive funding of basic research by theFWF to EUR 290 million p.a. by 2021adopted on 8 November 2016 as part ofthe Cabinet’s Research Package is indeed

an important signal. But there is a wide gaphere between claim and reality, because the an-nounced funds have not been budgeted evenonce and therefore depend on the negotiationsfor the Federal funding framework 2018 to2021.

UniversitiesA further aspect of the basic research topic: Ap-prox. 80 per cent of basic research in Austria isdone at the universities. International compar-isons (with Germany and Switzerland in partic-ular) illustrate that the Austrian universities aredramatically under-funded. The expenditurefor the entire university sector, especially forthe universities, measured on GDP has stagnat-ed for years now. The Federal Government hascommitted in its Work Programme for 2013 to2018 to developing an overall strategy for theuniversities to improve its positioning in the in-ternational comparison. Budgetary measures,among others, should be implemented here toachieve a university expenditure quota by 2020of 2 per cent of GDP, which takes into accounta resolution of the National Council. Howev-er, if we consider the expenditure path toachieving this goal, approximately EUR 3 bil-lion more would be required with the fundingdynamic remaining as it is (see figure 10). But even if these funds were provided by 2020,which is rather unlikely on the basis of the cur-rent funding dynamic, the Austrian universitysector would still only have about 75 per centof the resources available to the Swiss universi-ty sector as things stand today. As basic researchis the foundation for many innovations, ne-glecting tertiary education and the universitiesfirst and foremost is a massive problem. Added to this is the fact that the budget of do-mestic universities also includes the rents that

they must pay to the federal real estate compa-ny (BIG). Among other factors, this means thatrental payments must also be included in the re-search quota. If we also considered the deltafrom the missing EUR 3 billion to achieve the2 per cent goal and the research-relevant per-centage of the university budget (46 per cent),then research will require another approx. EUR1.38 billion in 2020. Claim and reality alsodiffer very sharply from one another in thisarea as well.

Research QuotaThe same pattern can also be seen with respectto the research quota. The Federal Governmentdefined the goal of increasing the research quo-ta to 3.76 per cent of GDP by 2020 to catch upwith the quotas of the innovation leaders bothin the RTI Strategy and in its Work Programme.This objective was also communicated to theEU. An additional EUR 1.6 to EUR 3.1 billionare required to actually achieve it (see figure11). Even with the funds now hoped for fromthe reform of bank levies or the research pack-age, it will not be possible to close this consid-erable gap to the goal of an R&D quota of 3.76per cent of GDP by 2020. The discrepancy be-tween objective and goal achievement is evi-dent.

International Rankings For Innovation And CompetitivenessThe overriding goal of the RTI Strategy is to be-come an innovation leader by 2020. But thereis also a gap here between claim and reality, be-cause instead of reducing the distance to theleading nations, Austria has lost innovation dy-namic. This is reflected in Austrian performancein international rankings on innovation andcompetitiveness.In the European Innovation Scoreboard Austriaonly ranks at the bottom end of the group offollowers. Austria has indeed improved by oneplace compared to the previous year up to num-ber 10 in the ranking. However, a very negative

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dynamic was registered in recent years: In 2009,Austria was number 6 and therefore had a leadposition in the follower group. Austria has sincefallen back five times in a row by one placeeach year. Austria also falls back this year to place 20 withthe Global Innovation Index (GII). The best re-sult was achieved in 2009 with place 15. Thetop ten here also include the leading innovation

nations, Switzerland, Sweden, Finland,Denmark and Germany. Figure 11 pro-vides an overview of the Austrian plac-ing in some of the most relevant rankingson innovation and competitiveness.Figure 11 shows that Austria has fallen backsuccessively in most rankings since 2007. Evenif individual rankings show positive trends insome cases, the tendency is indeed clearly neg-

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Figure 10: Evolution of higher education expenditure until 2016 and required expenditure path for the higher education quota goal, in EUR millions

Source: WIFO research quota targets 2020, update 2015.

10,000

8,000

6,000

4,000

2,000

0

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

Higher education expenditure (in EUR millions) Higher education quota2,00 %

1.47% 1.47%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

4,649

4,839

7,921

ative. The Austrian Council believesthis is a significant contributing causefor the stagnating economic dynamic,the levelling off of exports and furtherincreasing unemployment, which, accord-

ing to current forecasts by the Austrian Na-tional Bank, will reach a record level of 6.3 percent in the coming year.This development runs in the opposite direc-tion as that intended by the Federal Govern-ment with its RTI Strategy. This expresses theclaim of “further developing the potential of sci-ence, research, technology and innovation in

Austria to make our nation one of the most in-novative in the EU by 2020, and to consequent-ly strengthen the competitiveness of our econ-omy and increase the prosperity of our society.”The Austrian Council believes it is clear that thecurrent measures to implement the RTI Strat-egy are insufficient to stay abreast of the devel-opment dynamic of the leading nations. The in-novation leaders will pull further away aheadwith the trend remaining as it is. The fact therefore is that the strategy goalscannot be achieved. Despite some individualpositive signals (research package, bank levies),

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30

25

20

15

10

5

0

Figure 11: Austria's Performance in the context of international rankings

Source: IMD World Competitiveness Index, World Bank Doing Business, Heritage Index of Economic Freedom, INSEAD Global Innovation Index, Innovation Union Scoreboard, German Innovation Indicator, WEF Global Competitiveness Report, own presentation.

2007 2008 2009 2010 2011 2012 2013 2014 2015

World Economic Forum Global Competitiveness

IMD World Competitiveness IndexHeritage Index of Economic Freedom

Innovation Union Scoreboard

Doing Business World BankDoing Business World Bank

German Innovation Indicator

the Austrian Council believes a systematic set-ting of priorities is absent, and therefore alsothe investments this would bring. A compari-son of the funding developments of the areasaddressed above illustrates their stagnation andregressive development compared with the ris-ing trend in government spending and theGDP (see figure 12).

Renewed Budgetary Prioritisation RequiredThe Austrian Council believes budgetary priori-tisation in Austria is currently imbalanced.While there are additional funds for consuming

areas such as healthcare or pensions,the budgets for future-oriented sectorssuch as education, science, research andinnovation are stagnating. According tothe Federal funding framework the budg-et for pensions alone (ASVG and civil ser-vants) will rise by 2020 from 25.7 to 29 percent. An increase in the budget for education,science, research and innovation on the otherhand is not foreseen. On the contrary: The cor-responding percentage of the budget will fallfrom the current 17.9 per cent to 17.1 per centin 2020.

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350

300

250

200

150

100

50

0

2.0%

1.5%

1.0%

0.5%

0.0%

Figure 12: Evolution of Various Financing Factors

Source: Statistik Austria, surveys on research and experimental development (R&D) in Austria; National Foundation data; WIFO, research quota targets 2020, update 2015;own calculations, Austrian Council.

20042000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

National Foundation (EUR millions)Total government spending (EUR billions)

Nominal GDP (in EUR billions)

Expenditure for universities in % of GDPR&D expenditure for university sector in % of GDP

Expenditure for university sector in % of GDP

There is therefore an urgent require-ment for an increase in funding for ed-ucation, research and innovation. Thisis especially necessary because invest-ments in these areas require more time to

be able to fully develop their macroeconom-ic impact. It is therefore imperative that greaterparts of the budget be freed up for the future ar-eas of education, research and innovation.

As other countries show a stronger develop-ment dynamic, continuing the status quo is notan option. If Austria does not want to fall fur-ther in global competition and lose its connec-tion with the lead group, the topics of educa-tion, research, technology and innovation mustbe afforded the highest possible priority – thefunding required must be provided and struc-tural adjustments must also be made.

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creating knowledge

58

Feasibility StudyIn its meeting of 2 December 2016 the Aus-

trian Council for Research and Technology De-velopment decided to perform a feasibilitystudy together with cost-benefit analysis forsetting up an Austria-wide research database.The goal of the study is to check the requiredframework conditions for setting up a nation-wide research database. The database will enablestatistically-based statements on the effect ofresearch funding on regional, national and in-ternational level and the research input andoutput in Austria will be illustrated on the basisof appropriate KPIs. The feasibility study willwork out the heuristic, technical, legal and com-mercial principles to identify relevant stake-holders in the Austrian RTI system and outlinenecessary implementation steps.

Court of Auditors Criticism As StimulusIn its report on research funding in Austriapublished on 24 June 2016, the Court of Au-ditors also criticised the complexity of the fund-ing system. The key point of criticism is themultitude of players: 216 organizational unitsand 24 agencies are responsible for researchfunding. Also criticised is a “jungle of pro-grammes” with 136 research programmes byFederal Government and the states. Accordingto the Court of Auditors the Federal Govern-ment and the states had a total of EUR 3.1 bil-lion at their disposal in 2014 for research fund-ing. However, there is still no clear overviewfor the actual cash flows. The multitude of data-bases for research funding with Federal Gov-ernment, the states, funding institutions andresearch organisations do not provide a clearoverview either. In its report the Court of Au-ditors therefore suggests setting up a standard-ised database to ensure full and completerecording of research funding in Austria.

Court of Auditors and Austrian Council Pull TogetherThe Austrian Council for Research and Tech-nology Development welcomes the suggestionby the Court of Auditors, as it already recom-mended setting up a standardised researchfunding database itself in 2011. The recom-mendation focuses on the extensive and com-prehensible documentation of research fundingby the Federal Government and the states in astandardised and publicly accessible database.This should also serve as the basis for meetingspecial legal reporting obligations (e.g. Reporton Austria’s Scientific and Technological Ca-pability, Research and Technology Report, factsdocumentation, reporting obligations in theframework of “Europa 2020”, etc.) and evalu-ations. Corresponding data is already collectedtoday by the respective research institutions asstandard for funding cases.But all-Austrian research documentation ismissing, which, in addition to the research in-put (third party resources, funding, etc.), alsoillustrates the research output (publications,patents, etc.) Existing data must be merged forthis anyway and integrated into an Austria-wide database.With reference to the Court of Auditors reportand the corresponding recommendation of theAustrian Council, the BMVIT and theBMWFW approached the Council’s Chairmanin writing on 12 October 2016 with a requestto perform a feasibility study complete withcost-benefit analysis. The Austrian Council hasdefined an appropriate project in its Work Pro-gramme. The study will be commissioned in2017 and performed by mid-year.

Update: Accomplishments

Setting up a nationwide database to illustrate research input and output

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Improvement of the data situation is an urgentrequirement to be able to specify an envisagedthree-per cent annual increase in RTI-relevantstart-ups in the RTI Strategy. For this reason, the Austrian Council for Re-search and Technology Development alreadyinitiated a pilot project to collect RTI-relevantstart-up data in 2014 within the scope of the“Global Entrepreneurship Monitor 2014(GEM)”. An RTI module was added to theconventional GEM basis module, a global studyon business activity.

The Global Entrepreneurship Monitoris based on a survey in a representativegroup of the general public, and thereforedelivers an initial usable indicator for thenumber of RTI-relevant start-ups. In Austria,these surveys are performed by Joanneum UAS. The GEM’s RTI module must be repeated atregular intervals for continuous monitoring andforecasts. In 2016 a repeat RTI survey wastherefore started as part of the Monitor, whichwill be completed in 2017.

creating knowledgeSecond RTI Module In The Global Entrepreneurship Monitor 2016

Social Business

Social entrepreneurship (Social Business) isgrowing in importance as a supplement to, butnot a replacement for government action. Socialbusinesses contribute to de-stressing an increas-ingly challenged social system in individual ar-eas. Typical social business models provide sup-port in the education sector, on the labour mar-ket, promoting integration, in the health andsocial sectors, etc.The difference with public benefit organisationsis in the entrepreneurial activity. Social busi-nesses act market-based, so therefore want togenerate profit. The purpose of the business isclearly the social contribution, while the profitis predominantly reserved for this purpose. Due to their special nature, social businessesare often very innovative in finding new meth-ods to achieve their goals. They therefore makea contribution to the national innovation sys-tem that should not be underestimated. Thefact that social businesses are predominantlySMEs is also noteworthy. For this reason the Austrian Council for Re-search and Technology Development has al-ready monitored national social business activ-ities since 2014 within the scope of a self-or-ganised multi-stakeholder group. In addition

to social business representatives, this also in-cludes Austria Wirtschaftsservice GesmbH(aws), the Vienna Business Agency, the Feder-ation of Austrian Industry and the BMWFW.In 2015 the Austrian Council gave its first rec-ommendation on the required funding frame-work conditions for social businesses.In 2016 the multi-stakeholder group and theAustrian Council got to grips with a suitablelegal form for heterogeneous businesses. Socialbusinesses do not have a suitable legal structurein both worlds at the interface between profitorientation and non-profit status. Help comeshere in the form of hybrid solutions and dupli-cate structures. But these do not provide thedesired legal certainty in a legally grey area.This affects both the social business itself andpotential investors, who have special value inthis business area. In addition to legal certainty,these also require more visibility for their in-vestments. An own “social business” legal formcould offer this signal effect outwardly.The discussion is not trivial, as in addition tothe industrial code, the fiscal code, the principleof equal treatment, etc., and a multitude of le-gal, economic and political factors must alsobe weighed up. The process is on-going and is

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expected to be completed in 2017. TheAustrian Council will support the resultwith a recommendation, provided it is

met with broad approval.The Austrian Council, namely Prof.

Markus Hengstschläger, took part in the pressconference for the opening of aws’s Social Busi-ness Calls and thereby expressed the AustrianCouncil’s support for this initiative in the gen-eral public.

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Higher risk in research funding

A work group of the Austrian Council for Re-search and Technology Development conferredwith the BMWFW and the funding agencies(FWF, FFG and aws) for an entire year. The fo-cus of this intensive cooperation was the question

as to how scope for ground-breaking innovationscan be created in the Austrian RTI funding sys-tem. This is because disruptive or radical inno-vations conceal more risks, while also requiringmore freedom. Parallel to this an accompanying

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study was commissioned with Technopolis,which sounded out the international best prac-tice examples for their suitability for Austria. Itappeared in October 2016.During the course of the work group processesand investigations it was demonstrated that Aus-tria already has a series of established mechanismsfor funding excellent, high-risk research projectsin the area of basic research – in particular theWittgenstein Award of the FWF Science Fund,but also the Innovation Fund for Research, Sci-ence and Society of the Austrian Academy ofSciences. Private initiatives such as the Freigeist-Fellowships of the Volkswagen Foundation inGermany, for example, on the other hand arestill lacking in form and scope. There is a gapwith the funding of application-oriented researchand innovation when it comes to genuinely new,disruptive solutions. Their benefit is often stillnot known at all or cannot be documented atthe beginning of the funding application.

Funding Invention Instead Of InnovationThe Austrian system primarily and consciouslyfunds innovations. The emphasis here is on prov-ing implementability on the market. The fund-ing of inventions – inventive ideas without anyspecific market orientation – is insufficient. His-tory tells us that the specific application or thebenefit of an invention ultimately was not theoriginally intended one. If the application hadbeen already specified in advance for a specificarea, in many cases radical innovations probablywouldn’t have materialised.Innovation processes require sufficient room tomanoeuvre at the beginning in particular. Cleverbrains must experiment, reject, start again andreject again, run through new combinations andthink through scenarios – without constant proofof success and applicability. Many creative mindsare not in a position to convey their ideas inwriting in the restrictive categories of a grantapplication. Their strength is in oral presenta-tion, which is not provided for as an option inthe Austrian funding system (yet).

However, if the economic benefit of in-novation projects is not a beneficial se-lection criterion, how then can we dif-ferentiate good ideas from bad ones? Look around in the international sphereand you’ll find a whole series of alternativeselection procedures. The “Pitch to Peer” work-shops of the British ESRC (Economic and SocialResearch Council) funding institution, for ex-ample, where applicants present their projectsorally for ten minutes. The audience consists ofexperts and co-applicants. The “Sandpits” of theBritish EPSRC (Engineering and Physical Sci-ences Research Council) are also exemplary inthis respect. Active researchers and users, mentorsand independent stakeholders are brought to-gether in multi-day interactive workshops. Thiscomposition is designed to promote cross-think-ing and radical approaches. The “Idea Labs” ofthe Norway Research Council also present anexciting approach. Applications are not submit-ted here – initial ideas are put forward instead.These are processed by the participants in a mul-ti-day workshop.

An experimental space for domestic inventionsInnovation funding in Austria requires experi-mental spaces free of application reference andfinancial intention. This then allows inventivecuriosity and creativity to develop. In best casescenarios the innovation funding is providedwithout written applications. It then offers max-imum flexibility in evaluation and nonethelessprevents misuse and copycatting. This kind offunding generally does not involve large sums,but rather freely available experiment money forinventions without any specific market orienta-tion. A difficult balancing act – but it can bedone! And it is also required to avoid obstructingpromising inventions, just because their benefitsare not immediately visible at the beginning. Anappropriate proposal will be formulated as partof an Austrian Council recommendation.

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Obligation To Report Annually To The National Council

The Austrian Council for Research and Tech-nology Development compiled the fifth Reporton Austria’s Scientific and Technological Ca-pability in 2016. The Performance Report ispresented to the National Council togetherwith the Federal Government’s Research andTechnology Report since 2012. The Cabinetissued the basic assignment for it on 9 Septem-ber 2010. An important frame of reference forthis regular monitoring is the Research, Tech-nology and Innovation Strategy (RTI Strategy),which was also adopted in 2010. The AustrianCouncil believes the Strategy is an importantmilestone in the development of Austria’s RTIpolicy and very much reaffirms this processwith the Performance Reports.

Objective Of The Annual Performance ReportThe Performance Report surveys the status ofthe Austrian research and technology landscape,compares the performance of the Austrian sys-tem Europe-wide and evaluates the implemen-tation of the Federal Government’s RTI Strategyusing the respective measures and the goals set. The following questions are answered in theReport on Austria’s Scientific and Technolog-ical Capability: How is implementation of theRTI Strategy progressing? Where does the Aus-trian RTI system stand today? Will the goalsset out in the RTI Strategy be achieved? WillAustria be an innovation leader in 2020? Anestimation of how much energy and resourcesare required to achieve the 2020 goal is alsocritical. The Austrian Council is concerned withboth pointing out positive developments andaddressing difficulties with equal clarity.

The Council accompanies the Federal Govern-ment in the specification and quantification ofthe objectives of the RTI Strategy in its imple-mentation. The Report on Austria’s Scientificand Technological Capability reinforces the in-novation policy agenda each year.

NewsThe fifth Report on Austria’s Scientific andTechnological Capability presented in 2016 isthe first following the major Mid-Term Reviewin 2015. For the first time not all sub-areas andobjectives were dealt with completely by theRTI Strategy adopted by the Federal Govern-ment in 2011. Instead the Austrian Councilfocussed on the five priority areas of actionfrom the Mid-Term Review: (1) Education system performance that fails to

meet expectations. (2) Basic research funding (competitive) that is

not competitive in the international com-parison.

(3) Insufficient start-up dynamic and insuffi-cient growth dynamic of start-ups with par-allel absence of corresponding investmentcapital.

(4) Private funding share in R&D is basicallytoo low.

(5) Governance weak points in the RTI system.The current status of the Austrian RTI systemwas analysed in these five areas on the basis ofdevelopments since 2010; strengths and weak-nesses were demonstrated and proposals for ac-tion were worked out in the form of recom-mendations.

Basic Expertise: Reports And Studies 2016

Report On Austria’s Scientific And Technological Capability

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The study addresses the issue of the conditionsthat could help children and young people de-velop their interest and capabilities with regardto science and research. Workshops for childrenand young people by the “Science Pool – Plungeinto Worlds of Knowledge” association in Vien-na, Lower Austria and Burgenland were studiedas case examples (“Qualitative examination ofthe offers for knowledge transfer for children andyoung people as part of the Initiative SciencePool”). Children and young people perform ex-periments themselves in the Science Pool Work-shops. The research pursued three goals: (1) Tostudy the transfer formats with regard to theeffect on how children and young people viewscience, (2) to estimate the range of the offers,and (3) to illustrate scope for action.

Key ResultsIt was demonstrated that the didactic methodsof the workshops depend heavily of the use ofmaterials. These allow participants to experience

phenomena and perform experimentsthemselves. The children use results fromthe workshops as resources to communicatetheir view of science and describe the work ofscientists. They get to see the workshop leadersas people who are experienced and confident withscience, who can equip them with the skills rel-evant for research. The study showed that the workshops that werestudied reach children and young people fromkindergarten age to school-leaving age in Austria.Event venues close to Vienna are preferred hereover further distant locations. In addition to re-gional differences, social aspects were also ascer-tained. The offers for knowledge transfer on sci-ence basically reach children and young peoplefrom different social backgrounds. However,practical experiences allow us to assume that par-ticipation fees prevent some children and youngpeople from participating. The study is available as a download on the web-site of the Austrian Council.

creating knowledgeStudy Knowledge Transfer Offers For Young People

Effects of the Trans-Atlantic Trade and Investment Partnership (TTIP) on Austria As An Ed-ucation And Research Location – An Appraisal

The United States of America (USA) and theEuropean Union (EU) have been negotiatingsince 2013 on a free trade agreement withinthe scope of the Trans-Atlantic Trade and In-vestment Partnership (TTIP). Sharply differingpositions between the negotiating partners since2015 increasingly complicate an objective eval-uation of the content of the planned agreement.The negotiations were put on ice during theUS presidential election campaign in 2016. Itis still not clear when they will continue. To better appraise possible positive or negativeconsequences of the TTIP for Austria as an ed-

ucation and research location, the AustrianCouncil for Research and Technology Devel-opment assigned a study at the end of 2015,which was completed in March 2016. Thestudy focused on education and research in gen-eral, research policy decisions, the offering ofeducation institutions, legal requirements forresearch and development, scientifically-basedapproval methods and future standards or reg-ulations. In addition to the analysis of officialdocuments, interviews were also held with ex-perts from public sector and civic institutions. The study is structured in two parts64. The first

64 W. Raza / B. Ecker / H. Gassler (2016): Effects of the Trans-Atlantic Trade and Investment Partnership (TTIP) onAustria as an education and research location – an appraisal.

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illustrates the research and technology-relevant interactions between Austriaand the USA and the trade and invest-

ment interconnections between the twoeconomic regions. The second part deals

on this basis with the status of the negotia-tions up to the end of January 2016 and isstructured in chapters for service and invest-ment liberalisation, mobility of natural persons,intellectual property protection and regulatorycooperation.The results of the study are singled out heremerely by way of example. The entire study isavailable at http://www.rat-fte.at/publikatio-nen.html.

Important ResultsThe USA and the EU have by far the highestR&D spending worldwide. In 2013 the USAinvested USD 424 billion in the production ofnew knowledge. The USA is therefore respon-sible for approximately 28 per cent of globalR&D spending. In the EU the share is 22 percent (or USD 334 billion in absolute figures).China follows in third place with USD 220billion. In global R&D expenditure it has al-ready overhauled Japan with USD 162 billionper year. The USA is traditionally an attractive scientificlocation and central hub within the global“Brain Circulation”. A temporary or permanentstay in the US is considered a springboard foran academic career for students and young sci-entists, and even for already established scien-tists. The mobility of scientists and exchangesbetween Austria and the USA are supportedwith several grant and funding programmes65.

The interaction in knowledge production andtechnological interactions are manifested injoint patents.The areas of educational services, research anddevelopment services, mobility of scientists andresearchers, intellectual property protection andregulatory cooperation projects were studiedmore precisely and recommendations wereworked out to appraise the current status ofnegotiations. However, due to ongoing, non-public sector negotiations, only preliminaryconsequences can be drawn. Educational Services: The current informationsituation is based on documents and statementsof Austrian government offices that deal withthe material. The analysis did not show anysignificant changes in the status quo of liberal-isation obligations in the EU or Austria to beexpected with the TTIP. An uncertainty factoris here the traditionally offensive US negotia-tion position on tertiary and other educationservices. Demands by the USA in this respectwhen the negotiations continue cannot be com-pletely ruled out. The planned dispute settle-ment procedure (ISDS) with regard to an au-tonomous education and funding policy is afurther unpredictability factor here. If there aremore international education providers in Aus-tria in the future, the focus will be on the designleeway of the education policy. Preferenceshould be given here to public interests beforethe profit expectations of individual providers.It is therefore recommended that educationservices be clearly removed from investment ar-bitration. Research Services: Research and developmentservices have already been largely liberalised

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65 The two most important are the Schrödinger Programme, which was initiated in 1985, and the Lise-Meitner Programme(since 1997), which supports "incoming mobility"

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with regard to market access and national treat-ment for international providers. The planneddefinition of certain protection provisions inthe EU offering of services is essentially bene-ficial. Increased cooperation relations in re-search policy, with new bilateral research pro-grammes, for example, would on the other handbe welcome. Nothing is known of this to date.A chapter on research cooperation projects thatis only limited to declarations of intentionwould be a lost research policy opportunity. Mobility Of Scientists And Researchers Fromtoday’s point of view a significant change inthe status quo of the liberalisation situation inthe European Union is not foreseeable either.The mobility of scientists and researchers is de-termined by applicable EU regulations, as wellas the national rights of foreigners, rights ofresidence and employment of foreigners law.The liberalisation obligations of the EU TradeAgreement in the area of Mode 466 reflect theapplicable legal provisions grosso modo. Onthe USA side we cannot expect further-reachingconcessions for domestic policy reasons. In viewof the political sensitivity of the topic of “mo-bility of natural persons” it does not appearvery beneficial either to make demands as partof the trade policy to make things easier forscientists and researchers. Relevant attemptshave so far failed regularly (see the proposal ofthe European Services Forum for an own visacategory for people posted according to Mode5 with the GATS negotiations of the WTO-Doha round). Bilateral agreements on research

cooperation would therefore be recom-mended to make the trans-Atlantic mo-bility of scientists and researchers easier. Protection of Intellectual Property Rights(IPR) The TRIPS-plus method (agree-ment on trade-related aspects of intellectualproperty rights) applied undifferentiated in theEU and US trade policies will be retained with-in the scope of the TTIP. In principle thismeans that the level of protection of intellectualproperty rights will be raised above that of theTRIPS agreement. Intellectual property rights(IPR) will be protected more in patent andcopyright law, as well as with geographical des-ignations of origin in particular. In the eco-nomical expert discussion doubts are increas-ingly expressed as to how much further increas-es in IPR protection would promote innova-tion. Within the scope of the TTIP negotiationsprotection provisions should therefore bechecked precisely. Regulatory Cooperation This negotiation chap-ter has long-term, far-reaching implications andan indirect effect on the (corporate) researchand innovation landscape. TTIP can contributeregulatory harmonisation, among other factors,if new standards are created or existing onesare harmonised, without reducing the publicprotection level. However, the text of the ne-gotiation chapter does not allow us to concludethat extensive consultation processes with reg-ulatory authorities and integrated stakeholderswill require more capacities. The costs of theregulatory policy will therefore increase.

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66 The General Agreement of Trade in Services (GATS) defines four types of provision:Mode 1 – Cross-border supply: The service is handled across borders (e.g. E-Commerce).Mode 2 – Consumption abroad: The service is "consumed" abroad (e.g. tourism sector service).Mode 3 – Commercial presence: Branch/office set-up in host country.Mode 4 – Presence of natural persons: Temporary movement of natural person across borders for the purpose of service provision.

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There is also a risk that regulatory plansand the legislative processes connectedwith them will be slowed down by con-

sultations with a multitude of players.In successful cases administration savings

and reduced inspection costs for companies(e.g. with mutual recognition of equivalent pro-cedures) are foreseeable. It is therefore recom-mended, as part of regulatory cooperation proj-ects, that areas in which underlying regulatoryapproaches and methods are similar be concen-trated on (e.g. in the automotive industry). Analternate recognition can be achieved in theshort and medium-term in these areas. A further recommendation addresses the scopeof the legal areas incorporated by regulatorycooperation. Unless something changes, incor-porating national laws of EU member stateswill be of no benefit either. On one hand EUlegislation can already be applied in manyplaces, and on the other hand national laws arecombined with the provisions of EU Law any-way (internal market legislation, for example).

Ultimately it should be noted that the increasedrequirements with regard to the evaluations ofthe effects of regulatory measures result in nu-merous methodical questions, which are han-dled differently within the scope of existing ef-fect analyses in the USA and the EU. The pre-liminary TTIP contract text suggests usingmore scientific methods in effect analysis. How-ever, this recommendation ignores the fact thatthere is no consensual methodology. There aredifferent methodologies (e.g. cost-benefit analy-sis, multi-criteria analyses, etc.), which are spe-cific and partially incompatible. It should alsobe noted that in addition to the costs factorthe social benefits of regulation must also beevaluated from case to case. Cooperation andexchanges on effect analysis questions must befavoured. However, regulatory effect analysesare limited in their methodology and cannotreplace an extensive policy evaluation of regu-latory plans with democratically legitimised in-stitutions.

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Study on “Strategies Of Active Market Cultivation In Research”

To remain internationally accessible, universitiesand non-university research institutions acquireincreasingly more third party funding in the in-ternational comparison. Austria still has catch-uprequirements here. In basic research in particular,in many cases there no or only limited strategiesfor active market cultivation. These findings haveprompted the Austrian Council to define an ap-propriate project in its Work Programme and tocommission a study. The contractor was Wolf-gang Filz from spe-consulting.The study provides an overview of the strategiesfor acquiring third party funding of national uni-versities and non-university research institutions,illustrates this in the comparison with internatio-nal best-practice models and derives developmentpotential for the future from it. The focus is onstrategies of active market cultivation of re-

searchers in the areas of technology and the naturalsciences focusing on “Science to Business”.The final report provided identifies essential suc-cess strategies and addresses possible areas of actionfor the body politic, university management andresearchers. The sequence of the strategies namedreflects the frequency of their application:1. Thematic concentration – building unique

expertise in a clearly defined, industry-relevantfield of competence

2. Concentration on key customers3. Prevention of fragmentation of the scope of

the project4. More specific deployment of personnel ac-

cording to personal strengths 5. Customer relationship approach – long-term

consideration of business relations6. Set-up and maintenance of an industry-friend-

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ly organisational culture7. Conscious strategic, independent and proac-

tive development of topics8. Linking of basic and applied research9. Development of a multiple organisational eco-

system of special purpose units for coveringstructural market requirement situations

10. Securing the competition positionwith in-depth connection of the valuecreation systems with key customers

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Study On Innovation-Promoting Public Sector Procurement

In recent years, more attention has been paidat European and international level on the de-mand-side to innovation-promoting measures.These are used to boost the innovation land-scape together with additional funds and fur-ther supply-side mechanisms. Innovation-pro-moting public sector procurement is a demand-side innovation policy tool. In Austria it is estimated some EUR 40 billionflow every year into public sector procurement.Spending even just a small part of this volumeon innovative products and services wouldmean an enormous increase in R&D funding. Increased demand for innovative products andservices in particular strengthens domesticSMEs. On the other hand innovation fundingalso makes public sector procurement itselfmore innovative. The general public benefitsfrom the offering of improved products andservices.Innovation-promoting public sector procure-ment incorporates two areas: pre-commercialprocurement of research and development per-formance(Pre-Commercial Procurement) and the publicsector procurement of innovations (Public Pro-curement of Innovation Solutions). Even if the positive effect has been proven manytimes, the implementation of a broad demand-side innovation policy often still causes signif-icant difficulties. The Austrian Council for Research and Tech-nology Development has therefore had impor-tant principles worked out in a study. An ex-

ploratory study was commissioned at spe-con-sulting, which provides an overview of the de-mand-side innovation policy with focus on in-novation-promoting public sector procurementand illustrates the current situation in Austriain more detail.The following questions guided the analysisprocess:

What positive effects can innovation-pro-moting public sector procurement have on acountry’s innovation policy? What role will the state play here? What is the general situation in Austria inthis respect? What activities will be implemented? What structural barriers are there in Austria,which would hinder the best-possible imple-mentation of innovation-promoting publicsector procurement? How is Austria positioned in the area of in-novation-promoting public sector procure-ment in the international comparison?

In addition to a broadly coordinated Austrianinnovation-promoting public sector procure-ment guideline concept, national and regionalactivities in Austria were also illustrated. Inter-national good practice models were alsoanalysed to define further action possibilities.The identification of structural obstacles thathinder a demand-side innovation policy wasan essential aspect.The following barriers for innovation-promot-ing public sector procurement were identifiedin the study.

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Structural Obstacles:Political backingResponsibilities and fragmentation of

(innovation-promoting) public sectorprocurementLegal framework conditions

Data situation for (innovation-promoting)public sector procurement

Operative Obstacles:Financial and staffing resourcesKnow-how and expertise of operative pro-curement personnelMotivation and incentives with innovation-promoting public sector procurement

Stakeholders were then interviewed about howstructural and operative barriers could be over-

come and five primary areas of action were de-rived from international examples. The priorityareas of action

FinancingPolitical controlTraining and qualificationData situation for (innovation-promoting)public sector procurementFragmentation of responsibilities

were once again the subject matter of a Councilrecommendation on innovation-promotingpublic sector procurement in Austria dated 1September 2016.Details can be read in the study. You’ll find ithere www.rat-fte.at/publikationen.

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Pocketbook: “(Fast) Alles über Wissenschaft und Forschung / ((Almost) Everything About Science And Research)”

This pocketbook was published in April 2016by the Holzhausen publishing house to makeyoung people curious about science and re-search. It was distributed for free to interestedpeople, and also during the Long Night of Re-search on 22 April. Partners in its productionincluded several ministries, funding agenciesand research institutions.The book was hammered out together with thescience journalists Stefan Müller and VerenaAhne and a graphics team, issued by the Aus-trian Council and printed with the support of

several partners. The publication can be down-loaded as an e-book on various platforms. Thebook is intended to make young people aged17 and over aware of scientific topics and sci-entific working methods. The research topic isexplained on the basis of successful people andinstitutions. In easy to read, jokey illustratedchapters, young people are conveyed an imageof scientific work and possible research areaswith examples from Austria. The idea here isto highlight the “researcher” job descriptionand careers in science.

Hrsg. Rat für Forschung und Technologieentwicklung

(FAST) ALLES ÜBER WISSENSCHAFT UND FORSCHUNG– Wie Forschung funktioniert und was Wissenschaft eigentlich bedeutet

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The media were represented by ClaudiaZettel, Editor-in-Chief of futurezone and Kuri-er, Tanja Traxler of Standard and Harald Hor-nacek, Editor-in-Chief of Austria Innovativ.The first day began with a meeting of the Chair-man of the Austrian Council with the Czech-Austrian group of experts for energy (www.en-ergy-europe.org). Jiřina Jílková, Vice Rectorfor Research at Jan Evangelista Purkyně Uni-versity, and Jaroslav Knápek, Executive Boardof the Department for Economy, Managementand Human Sciences of Prague UAS, gave anexciting insight into the activities of the groupof experts, followed by a discussion of furtherjoint activities.

In March 2016 a delegation of the AustrianCouncil accepted an invitation by Pavel Bělo-brádek, the Chairman of the Czech Councilfor Research and Technology and Vice PrimeMinister for Science, Research and Innovation.Chairman of the Austrian Council Dr. HannesAndrosch visited Prague for two days accom-panied by selected journalists. Along with Dr.Androsch, members of the Austrian delegationincluded Deputy Managing Director Dr. Con-stanze Stockhammer, Mag. Michael Hlava,Head of Corporate and Marketing Communi-cations of the AIT, Dr. Elvira Welzig, StrategicHR and Science Networks of the AIT, and In-grid Sauer, Dr. Androsch’s Personal Assistant.

International Activities

Meeting with the Czech Council for Research and Technology –Prague, 14 and 15 March 2016

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From left to right:

Dr. Hannes Androsch, Chairman of the Austrian Council forResearch and Technology Development

Pavel Bělobrádek, Czech Vice Prime Minister for Science, Research and Innovation

Press statement by Dr. Androsch:

“Austria has had a longer re-lationship with Bohemia andMoravia than with any of itsother neighbours. With thefall of the Iron Curtain andentry to the EU, the CzechRepublic now finally has theopportunity to re-establish its‘old’ contacts. This in particu-lar also applies to researchand innovation policy. Jointresearch projects, student ex-changes, teachers and re-searchers, cross-border inno-vation cooperation projectsbetween companies – they canall contribute to positioningand strengthening a CentralEuropean innovation hub.The Austrian Council also re-commends such activities. Thenext stop will be Bratislava.”

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In the evening the Chairman of theCzech Council, Deputy Prime MinisterPavel Bělobrádek invited all involved

to a mutual exchange. Discussions in-cluded long-term national research, tech-

nology and innovation strategies and theneed for thematic focus points in applied re-search.The next day was dedicated to a joint councilmeeting under the direction of the DeputyChairman of the Czech Council, Arnošt Marks.Following two-way presentations on the na-tional innovation system, possible cooperationprojects were discussed, and the following stepsof closer cooperation between Austria and theCzech Republic were defined:

More in-depth cooperation of technical andmedical universities at rector levelMore exchange and mobility of students Increased cooperation between research agenciesInvitation to a Czech delegation to the tech-nology fora in Alpbach

The visit to Alpbach took place in summer2016 and offered greater scope for constructivecooperation talks of both research councils onintensifying cooperation.The result of this discussion was presented ina joint press conference to the media represen-tatives of both Council Chairmen, DeputyPrime Minister Pavel Bělobrádek and HannesAndrosch.

The first youth summit of the “European Hori-zons” think tank on the topic of the “Trans-At-lantic Digital Economy” was held at the Collèged’Europe in Bruges (Belgium) from 20 to 22November 2016.Data protection challenges also grow continu-ously with the digital economy and the rapidintroduction of new technologies. Trans-At-lantic dialogue and discussions are requiredhere because the legal position and legislationin the USA and continental Europe differ great-ly. The European summit of the US-based “Eu-ropean Horizons” think tank therefore broughttogether representatives of the EU, other thinktanks, the technology industry and studentsfrom the USA and Europe. The participants agreed that digitalisation offersnumerous opportunities, which can be consid-ered benefits (in the education area, for exam-ple). The discussion then turned to how exist-ing knowledge can be transformed into specificactions in the European economy. It should al-ways be noted that the digital economy also

brings numerous challenges with it. The ques-tion of data security was intensively discussed,as was the danger posed by algorithms, whichare still only confronted with one-sided searchresults. If they were to remain the only newssource all other aspects would remain hidden.The leitmotif of all discussions was the term“would”, which can and must serve as a guidein the age of digitalisation with the dramaticchanges in the way we live and work that itbrings with it. Where, for example, data pro-tection until recently was presented as a hin-drance to the economy, this view now changesincreasingly all the time. One challenge wasconsistently identified in the discussions: Typ-ical misunderstandings, which result from thecomplexity of the digital economy, must becleared away. When confidence between busi-nesses, citizens and governments is established,the change connected with the digital economywill be easier to deal with, and to everyone’sbenefit.

Youth Summit At “European Horizons” On The Topic Of The “Trans-Atlantic Digital Economy” – 20 to 22 November 2016

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Stakeholder workshop as part of the Open Innovation Strategy – 18 January 2016

The Austrian Parliament commissionedthe Federal Government in June 2015

with the development of an Open Inno-vation Strategy for Austria by summer 2016.

The Federal Minister for Transport, Innovationand Technology at the time, Alois Stöger, andthe State Secretary at the Federal Ministry ofScience, Research and Economic Affairs, Dr.Harald Mahrer, were entrusted with its imple-mentation.An own website on the Federal Government’sOpen Innovation Strategy invited participationin this development process. The communitywas asked to contribute own ideas, proposalsand suggestions. Participation was supported,condensed and intensified by the AustrianCouncil for Research and Technology Develop-ment with a stakeholder workshop. Invited werespecialists from the areas of science, economy

and social innovations. The Workshop offeredthe opportunity to discuss paradigm changesand incorporate specific concerns and issues. Welcome and opening were performed by thePresident of the Austrian Federal EconomicChamber, Dr. Christoph Leitl, Chairman ofthe Austrian Council, Dr. Hannes Androsch,and State Secretary Dr. Harald Mahrer. Feder-al Minister Alois Stöger was represented with avideo message. The keynote on the “Open Innovation” topicwas provided by Dr. Gertraud Leimüller, Man-aging Director of the consultancy agency, win-novation, which specialises in open innovation.The breakout sessions that followed were mod-erated by a team from the consultancy firm.The results of the workshop served as importantinput for the continued strategy process.

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Dr. Hannes Androsch,

Chairman of the

Austrian Council for Research

and Technology Development

Austria is a European leader in terms of thenumber of evaluations of the RTI policy. Fol-lowing approximately 15 years experience withthis control instrument the effectiveness of var-ious players is now increasingly questioned.This is not a purely Austrian phenomenon. Thequestion of the reflection potential of evalua-tions in the RTI area is also increasingly posedat international level as well. The AustrianCouncil therefore commissioned a meta-studyto provide evidence-based estimates on the use-fulness of Austrian programme evaluations andimprovement methods. The survey over a peri-od of twelve years is based on the generallyrecognised international body of knowledge of

a “good evaluation” and aspects of the usabili-ty of such studies. The meta-study analysesstrengths and weaknesses of evaluation prac-tice against the background of internationalevaluation research.Study author MMag. Landsteiner presented theresults as part of the “fteval inside : fteval in-sight” series of events of the fteval platform(Austrian research and technology developmentplatform) and the Austrian Council as host. In-vited were all colleagues of the fteval memberorganisations,who appeared in great numbersand discussed lively.

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“Austrian Global Academy” – 25 January 2016

“fteval inside : fteval insight”: Metastudy presentation of Austrian RTI evaluations – 18 February 2016

The “Austrian Global Academy” set up by theAustrian Council for Research and TechnologyDevelopment in 2014 focuses on Austrian in-novation and university managers and politicaldecision-makers. It is implemented in cooper-ation with Bank Austria and the Vienna Insti-tute of Strategy & Competitiveness (VISCO) asa series of workshops and events. The objectiveof the Global Academy is the knowledge trans-fer of international innovation expertise in theAustrian RTI landscape. Current global aspectsserve in the format as stimuli for the discourseon the innovation system in Austria. An entire day was dedicated to the AustrianGlobal Academy on 25 January in Vienna.While the specialist conference during the daywas oriented on a restricted group of partici-pants of 15 to 25 people, the event in theevening was open to the public. The theme this

time was Asia and its role in interna-tional competition.In the workshop, Annie Koh from theSingapore Management University andChristopher Kummer from VISCO presentedcurrent papers on questions relating to Asia’scompetitiveness compared with Austria and dis-cussed these with the participants.Klara Sekanina from the Austrian Council forResearch and Technology Development andVietnamese Ambassador Viet Anh Vu wel-comed the guests in the evening. The audiencewas tuned in with a keynote by Annie Koh onthe topic of “Asian Competitiveness: Opportu-nity or Threat for Austria?”. Johann Hipfl fromHoerbiger Kompressortechnik Holding GmbHwas also a guest on the podium with the subse-quent discussion.

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The Austrian Council’s “Zukunftsgespräche”were continued in 2016 due to the enormoussuccess of previous years with three dates in Vi-enna, Linz and Graz. The event will promotepublic discussion of innovation, research and

technology topics. Specific solution methodsfor improving Austria’s position will also beworked out. The series of events were held aspart of a cooperation agreement together withBank Austria.

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Zukunftsgespräche (Discussions About The Future)

Zukunftsgespräch Linz: “Innovation LocationUpper Austria” – 14 March 2016Keynote speaker of the evening was Prof. Dr. Ju-lian Nida-Rümelin, Minister of State and Profes-sor for Philosophy at Ludwig-Maximilians Univer-sity in Munich. State Secretary Dr. Michael Strugl,President of Industriellenvereinigung Oberöster-reich, Dr. Axel Greiner, President of the UpperAustrian Economic Chamber, Dr. Rudolf Trauner,Rector Prof. Meinhard Lukas of Johannes KeplerUniversity Linz and Dr. Ludovit Garzik from theAustrian Council’s offices then discussed innova-tion location Upper Austria with him.

Zukunftsgespräch Graz: “Industry 4.0” – 5 April 2016With its publications “Austria 2050” and “Vision Austria 2050”, the Austrian Council hasinitiated a discussion with a view to general struc-

tural changes and possible future scenarios for re-search and innovation. The Industry 4.0 topicand its significance for innovation was illustrat-ed on 5 April 2016 in Graz within the scope ofthe “Zukunftsgespräche”.The evening was opened by Robert Zadrazil,Chairman of Bank Austria, and Dr. ChristianBuchmann from the Styrian State Government.A brief introduction to the idea and objectivebehind the event was given by Dr. Sabine Herl-itschka from the Austrian Council for Researchand Technology Development, and CEO of In-fineon Technologies. Prof. Christian Ramsauerfrom the Institute for Industrial Managementand Innovation Research of the University ofTechnology in Graz set the framework for thesubsequent podium discussion with his eagerly-awaited keynote “Industry 4.0 and Makerspaces– How to win the Innovation Race”. The current

People with migrant backgrounds arefrequently above-average in business.The current research provides the follow-

ing explanation for this: People that emi-grate and start a new life are more prepared totake risks (business). Immigrants in particular should therefore beasked about their experiences to promote inno-vations and start-ups in Austria in general.For this reason the Austrian Council for Re-search and Technology Development supportsthe Café ImmiCo series of events, which is or-ganised by Immipreneurs of Austria and washeld for the sixth time in 2016.

Immipreneurs of Austria supports immigrantbusinesspeople with financing, coaching, ad-ministration, sales and networking in the localeco system. With Café ImmiCo the initiativeoffers Bootstrapper breakfasts. In an informalsetting 15 businesspeople exchanged ideas andexperiences with mentors and experts. Search-es are made together for strategic partners and/or support structures. Six selected busi-nesspeople also got the opportunity to partici-pate in the ImmiAccelerate micro-accelerationprogramme.

Café ImmiCo – (Six Dates In 2016)events

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From left to right:Mag. Peter Koren, Deputy General Secretary of the Federation of Austrian Industryem. Univ. Prof. Dr. Helga Nowotny, Austrian Council for Research andTechnology DevelopmentDr. Wolfram Schmidt, General Manager, Roche Austria,

situation with Industry 4.0 and other milestoneswere discussed on the podium. Along with SabineHerlitschka, Dr. Ronald Henzinger, ExecutiveDirector Research & Development at Anton PaarGmbH, the Rector of the Technical University inGraz, Prof. Harald Kainz and DI Georg List,Vice President of Corporate Strategy at AVL Listalso took part here. The successful evening wounddown with informal chats at the buffet.Zukunftsgespräch Vienna: “What frameworkconditions do international researchers need inAustria?” – 6 April 2016Not just scientific networking in the European re-search area is on the increase – the knowledge inthe heads of international researchers is also trav-elling around the world. The competition for thebest brains is becoming tougher. Universities, re-search institutions and companies are supportedwith focus on research & development in keep-ing their staff and making their location attrac-tive for foreign researchers. Together attempts are

made to stem the “brain drain”, or emi-gration of Austrian scientists abroad. On 6 April 2016 the Austrian Councilorganised a discussion on the future to-gether with Bank Austria and the Swiss Em-bassy. The focus was the right framework con-ditions for Austria to ensure the best brains arenot lost in European and global competition.Host Robert Zadrazil, Bank Austria Chairman,welcomed participants together with Prof. Hel-ga Nowotny. The evening was introduced with awide-ranging keynote by Dr. Wolfram Schmidt,General Manager from Roche Austria, who spokeabout education, research and innovation as “mi-tochondria of our economy”. Representing theAustrian Council Prof. Helga Nowotny took partin the subsequent podium discussion, along withRector Dr. Sonja Hammerschmidt, Chair of theUniversities’ Conference, and Deputy GeneralSecretary of the Federation of Austrian Industry,Mag. Peter Koren.

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High Potential Day Cooperation Event With “profil” – 27 June 2016

The News publishing group organised the“High Potential Day” for students for the ninthtime on 27 June 2016. The information day fo-cuses on university and technical college grad-uates with above-average success and practicalexperience, who want to take control of theirfurther career planning. Due to the high visibil-ity and attractiveness of the event for the grad-uates target group, the Austrian Council imple-

mented a podium discussion in cooperationwith the “profil” magazine especially for youngresearchers. Hailing the title “How do researchers live inAustria?” career models in science, human cap-ital and requirements in training are addressedto make research more attractive as a career op-portunity.

Long Night of Research – 22 April 2016

Once again in 2016 the Austrian Coun-cil actively participated in the nation-wide coordination of content with the

Long Night of Research. Together withAkzent-PR the Austrian Council acted in itsproven role as an interface between advisoryboard (with representatives from the depart-ments) and operative administration in the re-gions (with representatives of the federal states).The Long Night of Research has established it-self as the biggest domestic research event. In

2016 it once again inspired even more people.Around 180,000 visitors were counted at morethan 2,150 stations across Austria. A new visi-tor record! The Austrian Council for Researchand Technology Development believes the dia-logue between science and society is extremelyimportant. As a visitor magnet the Long Nightof Research makes a significant contribution topresenting the services of the domestic researchand innovation community to a broad public.Parallel to this the Austrian Council has devel-oped the “Everything (almost) about scienceand research” book for the target group of youngpeople and study beginners, which, among oth-er material, was distributed for free with theLong Night of Research 2016. The next Long Night of Research will be on 13April 2018.

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Long Night of Research atHeldenplatz, Vienna.From left to right:Walter Schneider, Barbara Weitgruber, Reinhold Mitterlehner,Hannes Androsch.

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events

The Alpbach Technology Forum set itself thegoal of encouraging the dialogue between youngresearchers and established personalities. TheAustrian Council welcomes the intensificationof discussion formats and focused on a newformat in 2016 with the “fishbowl”. In a fish-bowl discussion, a small group in the inner cir-cle discusses the topic, while the other partici-pants observe the discussion in an outer circle.In the inner circle is an empty guest chair, onwhich anyone from the outer circle can sit at

any time and join in the discussion. The seat isoccupied until the guest has said everything oranother guest from the outer circle wants totake the seat.The event with the title “Ivory tower vs. shan-ty? Enlightenment in the Fishbowl!” was heldon 24 August 2016 in the Hotel Böglerhof withthe enthusiastic participation of the audience.This allowed numerous aspects and experiencesfrom the research everyday to be incorporatedinto the discussion.

Fishbowl Discussion As Part Of The Alpbach Technology Forum – 24 August 2016

In addition to supply-side mechanisms (i.e. fund-ing, etc.), in recent years increasingly more atten-tion has also been paid at European and interna-tional level to demand-side innovation-promot-ing measures.The topic of “demand-side innovation policy” isemphatically defined in the Austrian Council’sWork Programme. An important milestone was

reached in September 2016 with the “Recom-mendation on innovation-promoting public sec-tor procurement”.This recommendation by the Austrian Councilwas presented as part of the event on 14 Septem-ber 2106 and future challenges of the demand-side innovation policy for Austria were discussedwith experts. Along with the responsible mentor

Presentation: Innovation-promoting public sector procurement – 14 September 2016

Fishbowl discussion in the Hotel Böglerhof. From left to right:Participants from the audience,Klemens Wassermann,Barbara Weitgruber, Walter Schneider

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“Singaporean-Austrian Science and Business Day” – 30 September 2016

The “Singaporean-Austrian Science and Busi-ness Day” was held in Vienna for the secondtime already in 2016. This initiative started bythe BMWFW and administered by the FFGwill push existing RTI cooperation projects be-tween Singapore and Austria into the limelight,increase Austria’s visibility in the Singaporeanresearch community and illustrate opportuni-ties for boosted RTI cooperation between thestates.

This year the BMWFW invited the AustrianCouncil to take part as host. Prof. HelgaNowotny opened the evening reception of the“Singaporean-Austrian Science and BusinessDay” in the presence of the Singaporean Am-bassador Soo Kok Leng and the Minister ofState for Foreign Affairs and Transport,Josephine Teo. The participants enjoyed an in-teresting evening above the rooftops of Viennain “TUtheSky”.

in the Austrian Council, Prof. JakobEdler, the head of the national service of-fice for innovative public sector procure-ment, MMag. Stefan Wurm, and the re-sponsible departmental representative, Sec-

tion Head Andreas Reichhardt (BMVIT) andMag. Josef Mandl (BMWFW) also took part.The speaker of the regional experts conference“Public sector procurement of the federal states”,

Hannes Pöcklhofer, and Stefan Kollarits, Prisma-Solutions Managing Director as SME represen-tative also joined in on the podium.Prof. Edler briefly listed the essential key pointsof the Council’s recommendation, which werevery well received by the community present.This was followed by a lively discussion on theCouncil’s recommendation and the topic on thewhole.

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the austrian council

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Review 2016

Outlook for 2017

2016 can be described as the year ofdisappointed hopes and surprising suc-

cesses. The greatest success was certainlythe fact that the topic of start-ups received

broad political attention with the Start-up Pack-age and further measures. Some are even al-ready speaking about an inflationary use of“start-ups” in areas that do not have much in

common with technology. The end justi-fies the means – the topic is important: es-pecially in a country in which knowledgepotential is great, but its actual imple-mentation in the economy shows sig-

nificant room for improvement.But the disappointment is also written on thefaces of many players and stakeholders whenthey think back on 2016. Absolutely everythingwas going to be financed! The bank levies weregoing to provide the majority of the fresh mon-ey. “Unfortunately not” then appeared in theletters that the community so enthusiasticallytore open. Notices have not yet produced anyscientific breakthroughs, and the research gen-erations will only see the bill for this in a fewyears.

Hope springs eternal. Because it returns –with the announcement of stable funding, suchas the National Foundation with EUR 100 mil-lion per year in the next three years. The Cab-inet was to adopt this decision in April already.Should the National Bank pick up the bill forthis? The memory of the last “special tranche”in 2015 is still too fresh, where we had to strug-gle in various boards and committees for half ayear for EUR 18 million. And now EUR 300

million are to flow with no problems? Onceburnt it’s hard to believe, but all will work hardon making it happen, however long it takes.In 2017 the Austrian Council will publish a se-ries of studies and recommendations, led bythe Performance Report on 1 June and the“Universities of the Future” book in August inAlpbach. Only in the rearview mirror will wethen be able to see if the calls for funding andreforms were loud enough.

Ludovit GarzikHead of the Secretariat

the austrian council

the austrian council

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the austrian council

Univ.-Prof. Dr. Markus Hengstschläger Head of the Institute of Medical Genetics at the Medical University in Vienna, Vice Chairman of theBioethics Commission at the Federal Chancellery (since 2009)

Univ.-Prof. Dr. Jakob EdlerDirector of the Institute of Innovation Research,Manchester Business School

Dr. Hermann HauserCompany founder, computer and risk capital businessman in the UK, Co-founder of SiliconFen ("British Silicon Valley")

DI Dr.Sabine Herlitschka, MBACEO of Infineon TechnologiesAustria AG

em. Univ.-Prof. Dr. Helga NowotnyFormer President of the European Research CouncilBoard of the ERA Council Forum Austria

Univ.-Prof. Dr.Sylvia Schwaag-Serger Director of International Collaborations & Networks,Swedish Government Agency for Innovation Systems(VINNOVA)

Dr.Klara SekaninaCouncil member of the Swiss Federal Foundation forthe Promotion of the Swiss Economy through scientificresearch Former Head of the Swiss Commission forTechnology and Innovation (CTI)

Dkfm. Dr. Hannes Androsch Chairman of the Austrian Councilis an industrialist and former minister of finance who also served as a consultant to the World Bank. He is a member of the Senate of the Austrian Academy of Sciences (ÖAW) andhead of the Supervisory Board of the Austrian Institute of Technology (AIT))

The Members of the Austrian Council

Advisory Members

Mag. Jörg Leichtfried Minister of Transport, Innovation and TechnologyDr. Reinhold Mitterlehner Vice Chancellor and Federal Minister

of Science, Research and Economic AffairsDr. Hans Jörg Schelling Minister of Finance

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Priv.-Doz. Dr. Gerhard ReitschulerCompilation and processing of R&D data, macro-eco-nomic developments and trends, output/impact (indica-tors), modelling and simulation, technology flow analy-sis, indirect research fundingg.reitschuler@rat-fte.at

Margarete RohrhoferAccounting and HRm.rohrhofer@rat-fte.at

DI Dr. Ludovit Garzik, MBAHead of the secretariat, management and coordinationof the secretariat’s activities and external representa-tionl.garzik@rat-fte.at

Dr.in

Constanze StockhammerDeputy head of the secretariat, business-oriented research, innovative sourcing, IPR, National Foundationand Austria Fund, start-up and growth financing, SME and innovation funding, Social Business c.stockhammer@rat-fte.at

Mag. Dr. Johannes Gadner, MScDeputy head of the secretariat, project manager for the“Report on Austria’s Scientific and Technological Capa-bility”, coordination of strategic processes (AustrianGovernment RTI Strategy, Strategy 2020, Strategy forExcellence.j.gadner@rat-fte.at

Mag. Maria Husinsky Office Managementm.husinsky@rat-fte.at

Dr. Anton GraschopfUniversities, research infrastructure, life sciences, ba-sic research, international affairs and research cooper-ation projectsa.graschopf@rat-fte.at

Mag. Bettina Ruttensteiner-PollerScience/RTI and society, human resources, humanities,social and cultural sciences, advancement of women andgender mainstreaming, ethics in research, public relationsand administrative support b.ruttensteiner@rat-fte.at

The Secretariat

The Secretariat supports the Austrian Council both in terms of organiza-tion and content, in particular with regard to preparing and organising themeetings of the Austrian Council and work groups, and in respect of com-munication both within the Council and externally. The operations of the

Austrian Council are financed by the Ministry of Transport, Innovation andTechnology. The head of the secretariat, deputy head of the secretariatand members of staff (in alphabetical order):

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DI Walter SchneiderResearch cooperation, coordination of the Long Night ofResearch, science communication, EU research and inno-vation policy, EU Framework programmes for RTD, agricul-tural sciences, cooperation between Austria's federal gov-ernment and its “Bundesländer”, security researchw.schneider@rat-fte.at

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contact

Federal Ministry for Transport,Innovation and Technology(Supervisory Responsibility for the Austrian Council)

A-1030 Vienna, Radetzkystraße 2Tel.: +43/1/711 62-0 www.bmvit.gv.at

Federal Ministry of Science,Research and Economy

A-1010 Vienna, Stubenring 1Tel.: +43/1/711 00-0www.bmwfw.gv.at

Federal Ministry of Finance

A-1010 Vienna, Johannesgasse 5Tel.: +43/1/514 33-0www.bmf.gv.at

Austrian Council for Researchand Technology Development

SecretariatA-1010 Vienna, Pestalozzigasse 4/D1 Tel.: +43/1/713 14 14-0Fax: +43/1/713 14 14-99office@rat-fte.atwww.rat-fte.at

www.rat-fte.at

www.rat-fte.at

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