Austria STRUCTURE OF THE ECONOMY
A railroad car manufactured by Jenbacher Werke
Courtesy Austrian Federal Economic Chamber, Vienna
Like other industrial societies, Austria found its agricultural
and industrial sectors declining as the services sector expanded
(see
table 9, Appendix). The change in the relative importance of
the sectors was most pronounced during the 1970s. Changes in the
1980s continued earlier trends. Whereas services and industry had
nearly equal shares of GDP in 1970, by 1990 industry's share was
less than half that of services. Agriculture's share has declined
steadily, so that by 1990 it was no longer significant
economically but still had social importance
(see The Agricultural Sector
, this ch.).
Employment trends have followed shifts in the relative
importance of the three sectors (see
table 10, Appendix).
Agriculture's share of employment fell by more than half between
1970 and 1990. Industry employed about 47 percent of the work
force in the late 1960s and 37 percent in the late 1980s. The
service sector employed roughly the same portion of the work
force as industry in the late 1960s but by the late 1980s
employed nearly 60 percent of the work force.
Despite the increasingly powerful role played by the services
sector, however, most of the major firms remain in industrial
production. Services, like agriculture, are usually performed
locally and by medium- or small-sized firms. Thus, a listing of
Austria's twenty largest firms in 1991 showed mainly industrial
companies, with the exception of such state-owned firms as
railroad and postal agencies and several large retail
organizations.
Most Austrian firms are small. An analysis of nonagricultural
concerns in 1988 showed that well over half the nonfarm labor
force was employed by firms with fewer than 100 employees. About
500,000 Austrians worked in medium-sized firms having between 100
and 499 employees, and only 140 firms had more than 1,000
employees.
The largest single enterprise in Austria is Austrian
Industries, a holding company created in 1987 to take over and
manage the assets that had been nationalized by the Austrian
state after World War II. An enterprise of about 75,000
employees, in 1993 it was divided into four branches that
respectively managed the steel, metal, petroleum, and diversified
operations of the company. The latter includes mining and the
manufacture of various kinds of machinery, as well as other less
easily classifiable activities of the holding company. As
intended, it has moved vigorously to become a competitive
enterprise despite its nationalized origins, discarding some
unprofitable activities and investing abroad or in Austria in
other areas of activity.
The ten largest Austrian enterprises in the early 1990s,
based on turnover, were Austrian Industries, Österreichische
Post/Telegrafenverwaltung (national postal service), VÖEST-Alpine
Stahl (steel), Österreichische Mineralölverwaltung (ÖMV)
(petroleum and other mineral resources), Konsum Österreich (KÖ)
(retail trade), Österreichische Bundesbahnen (Austrian Federal
Railroad), Porsche Holding (vehicles), AL Technologies
(diversified), Billa (trade), and Austria Tabakwerke (national
tobacco monopoly). Of these enterprises, three are subsidiaries
of Austrian Industries, two are state public-service monopolies,
and the remainder are owned either by foreigners or by small
share holder-members (such as the retail trade firm KÖ). None of
these businesses except Austrian Industries has played a
significant international role.
With the exception of Austrian Industries, even Austria's
largest companies are small on an international scale. Only four
Austrian companies were listed in the Financial Times
"European 500" for 1992. Two were banks, the CreditanstaltBankverein (number 215 on the list) and Bank Austria (275). The
third was ÖMV (288), the mineral and oil exploration and
exploitation arm of Austrian Industries. The fourth was a
construction company, Wienerberger Baustoffindustrie (318).
Austrian Industries was not listed because it was not a private
company. If it had been listed, it would probably have been among
the top fifty.
Austria has never had a great entrepreneur-capitalist
tradition. Many firms function within the Austrian market or
within regions. In part because of the bitter experiences of
inflation and the depression between the world wars, most
Austrians do not attempt risky ventures but instead concentrate
on geographic areas or on specific products where success is
fairly certain. One of the challenges facing Austrian enterprises
as they move into the European Economic Area (EEA) and into the
European Union
(EU--see Glossary)
Single Market will be competing
effectively against the giant firms that operate throughout
Europe and have many more resources than virtually any Austrian
firm could hope to command.
Data as of December 1993
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