Why Austria Is One of Europe’s Most Attractive R&D Locations

Top 3 in the EU for R&D intensity, €17.63 billion in R&D investment, and a 14% Research Grant expected to reach a record volume of €1.3 billion in 2026: Austria offers ideal conditions for research and development.

Austria is one of Europe’s leading locations for research and development (R&D). With an R&D intensity rate of 3.34%, the country ranks among the top three research locations in the European Union and significantly exceeds the EU’s 3% target. Austria has consistently remained above this benchmark since 2014.

Investment in research and development continues to grow as well. According to Statistics AustriaStatistics Austria (), total R&D expenditure is expected to reach €17.63 billion in 2026, representing an increase of approximately 1.4% compared to the previous year.

The importance of research and innovation is also reflected in public investment. According to the latest Eurostat Eurostat ()data, government R&D expenditure reached almost €530 per capita in 2025. This placed Austria fourth within the EU, behind Luxembourg, Denmark, and Germany, and well above the European average of €288.9 per inhabitant.

For international companies, this sends a strong signal. High levels of R&D spending underline Austria’s commitment to research, development, and innovation and create an excellent environment for technology-oriented businesses.

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High R&D Intensity Strengthens Austria’s Position as an Innovation Hub

Research and development are becoming increasingly important across Europe. According to EurostatEurostat (), EU Member States budgeted a total of approximately €130.2 billion for R&D in 2025, representing an increase of 60.5% compared to 2015. During the same period, public R&D expenditure per capita across the EU rose by 57.7%, reaching €288.9.

Austria performs significantly above the European average. In addition to high investment levels, Austria benefits from a strong research infrastructure and a broad talent pool. More than 93,600 full-time equivalent employees (FTEs) work in research and development in Austria, with approximately 70% employed by businesses.

The country’s higher education landscape further supports innovation. Austria is home to 23 public universities, 21 universities of applied sciences, and 19 private universities, fostering close collaboration and technology transfer between academia and industry. In addition, more than 400,000 students contribute to a continuous pipeline of highly qualified talent.

Research Grant: A Tax Incentive for Research and Development

One of Austria’s key location advantages is the Research GrantResearch Grant (). Companies can claim a 14% tax premium on eligible R&D expenditure. The incentive is available to businesses of all sizes and across all industries and covers both in-house research activities and certain forms of contract research.

International companies operating in Austria highly value this incentive:

“Advancing our projects here is possible thanks to excellent infrastructure and attractive funding programs such as the Research Grant for in-house R&D. With an R&D intensity rate of around 14%, Austria is playing in Europe’s top R&D league,” says Helmut Weinwurm, Chairman of the Executive Board of Robert Bosch AGBosch AG () and representative of the Bosch Group in Austria.

The significance of the Research Grant continues to grow. For 2026, funding volume is expected to reach approximately €1.3 billion, marking a new record! As a result, the incentive finances more than 7% of total R&D expenditure in Austria.

One particularly attractive feature is that the Research Grant is granted as a tax-free credit regardless of a company’s profitability. This makes it especially valuable for companies in their start-up or growth phases.

Since its introduction in 2002, the Research Grant has developed into a cornerstone of Austria’s innovation policy. The current premium rate of 14% has been in place since 2018. The Research Grant is complemented by additional funding programs offered by Austria WirtschaftsserviceAustria Wirtschaftsservice () (aws) and the Austrian Research Promotion AgencyAustrian Research Promotion Agency () (FFG). This allows companies to combine different funding instruments and accelerate their research and development projects effectively. 

At the same time, Austria’s Industrial Strategy 2035Austria’s Industrial Strategy 2035 () and the country’s Research, Technology and Innovation (RTI) Strategy Research, Technology and Innovation (RTI) Strategy ()underline the long-term commitment to research, technology, and innovation.

The experts at the Austrian Business Agencyexperts at the Austrian Business Agency () (ABA) support international companies without an existing business presence in Austria in establishing operations and provide free guidance on doing business in Austria and available funding opportunities.

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