Austria, the East-West Hub
Hardly any other city is as diverse as Vienna. Naturally, this internationality is partly attributable to the inhabitants themselves. More than one-third of Vienna’s inhabitants were born abroad. They not only bring valuable know-how but also parts of their culture to the Austrian capital city. Moreover, the city boasts a special geographical location, namely only one hour by car or train to Bratislava and two and a half hours to Budapest. Naturally, companies also profit from all this. It is not without reason that Austria is the first location of choice when it comes to setting up business operations and headquarters to open up new markets and regions.
Vienna is not the only place suitable for a hub
There is enough evidence to demonstrate Vienna’s attractiveness. For example, the Industrial and Commercial Bank of China (ICBC), China’s largest bank, will open up a subsidiary in Vienna before the end of the year. The branch office will serve as the bank’s CEE headquarters and coordinate all activities in Central and Eastern Europe as well as the Nordic countries. The decisive reason underlying the selection of Vienna as a business location is the excellent availability of specialized staff in addition to the outstanding tax framework and the high level of security and political stability.
However, multiculturalism also plays a crucial role outside of the nation’s capital. About one-fifth of the Austrian population has a migration background, of which 75 percent come from Central and Eastern Europe. They know the language and culture of the region, often possess knowledge about the local economies and simultaneously profit from Austria’s application-oriented educational landscape. International companies exploit the far-reaching cultural and economic understanding to open up new markets and regions, not to mention the existing pool of service providers for South East Europe such as banks, law firms and advertising agencies professionally supporting firms in their expansion efforts.
Eastern Europe in the lecture hall
Furthermore, Austria’s educational institutions systematically prepare students for their work in playing a mediating role between Eastern Europe and Western Europe. The Vienna University of Economics and Business offers a broad range of courses focusing on the CEE region and issues such as emerging markets. In this way, they convey vital Eastern European competencies. These study programs not only cover economic and legal but linguistic and cultural aspects as well. One prime example of this is the one-year “Master Class CEE” program. In this case the Vienna University of Economics and Business targetedly prepares students for management positions in Eastern Europe in collaboration with companies such as Erste Bank, Siemens and Boehringer Ingelheim.
Partnerships with universities in South East and Eastern Europe are also not unusual. Karl Franzens University of Graz works together with universities in Serbia, Macedonia and Croatia. Together they offer the interdisciplinary Master’s degree study program “South-Eastern European Studies”, with particular attention attached to legal issues, politics, economy, cultures and society in a South Eastern European context.
The gateway to the East is not a one-way street
Austria serves as the gateway to the East for many Western companies and service providers. They take advantage of the country’s profound level of know-how and outstanding location to enter the South East and Eastern European market. They highly value the fact that Austria never loses sight of the West. For this reason, developments in Western economies are closely observed and adapted to new markets.
Similarly, Eastern European firms also exploit the Austrian business location as a springboard for expanding to the West. In the meantime, more than 5,000 companies from South East and Eastern Europe actively operate in Austria. The Russian energy group LUKOIL is a particularly successful example. It already established business operations in Vienna in the 1990s and further expanded its commitment to Austria recently. In 2016 the new headquarters of LUKOIL Lubricants Europe was opened in Vienna’s Lobau region, and in 2017 the company strengthened its foreign activities bundled in Vienna by carrying out a capital increase to the amount of EUR 6.2 billion. In addition to internationality and know-how, the energy group also values the opportunities opened up by the infrastructure. The business location in Vienna enables the company to reload goods from inland waterway vessels to the rails, and thus serve both Central Europe and Western Europe.
Austria is not a one-way street from West to East, but a hub and interface. As a central geographical and economic junction, the Republic of Austria equally links East and West with each other. It is impressive to see how the country is leveraging its potential and how the internationality one repeatedly confronts in Vienna is used as key selling point in the international competition among business locations.