Economic Security

Economic security refers to an economy's ability to safeguard its vital interests even under geopolitical pressure and to remain functional in the face of external shocks. The aim is not isolation, but openness combined with strategic safeguards.

For Austria, as a small open economy, international integration is the foundation of prosperity, but also a source of vulnerabilities. The pandemic, the energy crisis, trade conflicts and armed conflicts in Ukraine and the Middle East have shown how quickly supply disruptions, price shocks or politically motivated trade restrictions can have an impact – particularly as dependencies are increasingly being used as a means of exerting geopolitical pressure. The EU has responded with a strategy for economic security, and the issue is also gaining prominence in Austria.

This Thematic Platform analyses where the Austrian and European economies are vulnerable and how risks can be strategically mitigated: from critical dependencies on raw materials, energy, intermediate goods and key technologies, through the resilience of supply networks and critical infrastructure, to sanctions, export controls and investment screening. It also assesses instruments such as diversification, stockpiling, industrial policy, technology protection and international partnerships. The focus is on conflicting objectives: greater security reduces risks, but incurs costs and can impair efficiency, competition and innovation. In addition to the topics mentioned, it also brings together research on the impacts of defence spending.

Methodologically, the Thematic Platform draws on its own tools and databases. Critical dependencies in foreign trade are highlighted by the WIFO Dependency Index (WIFO-AI), which was developed as part of the KIRAS security research project "Phoenigs". It shows the extent to which Austria is dependent on specific supplier countries for individual products, taking into account interdependencies across multiple sourcing countries within the global trade network and weighting these against the country risk of the trading partners; as an open system, it can be flexibly adapted to new research questions. For the analysis of sanctions, the "Global Sanctions Data Base" (GSDB), co-developed by WIFO, is available; it records all publicly verifiable sanctions worldwide since 1950 and is continuously updated.

The research findings provide policymakers, public administration, interest groups and businesses with an evidence-based foundation for decision-making. To this end, the Thematic Platform brings together the expertise of several WIFO Research Groups, ranging from international economics and industrial policy through to energy and resource economics, macroeconomics and public finance as well as regional development.