New WIFO Radar of Competitiveness

27.12.2020

Austria Trails Slightly Behind the Best Third of European Countries

The WIFO radar of competitiveness, presented for the first time in a recent article of the WIFO-Monatsberichte (monthly reports) by Michael Peneder, Angela Köppl, Thomas Leoni, Peter Mayerhofer and Thomas Url, summarises selected findings on the strengths and weaknesses of Austria as a business location.

The focus is on achieving high real incomes and improving social and environmental living conditions. In the future, the ongoing analysis of the WIFO radar will highlight selected determinants of competitiveness and their spatial manifestation. In this first edition, the spotlight is on performance indicators, i.e. the results of competitiveness.

Using percentile ranks as a normalised measure (ranging from 0 for the poorest to 100 for the best rank) allows the indicators to be easily aggregated into average values. On average across all 24 indicators of the radar, 66.1 percent of all European comparison countries showed the same or less favourable performance than Austria in the latest available year (mostly 2019 or 2018). Overall, Austria was thus just behind the top third of countries. Three years earlier, the median percentile rank had been 66.7, and ten years earlier, 71.8. These averages subsume very different developments:

With a mean percentile rank of 76.3, Austria performed best in the dimensions of real income, productivity and regional balance. The position for these indicators is stable over time and has even improved slightly. Austria's first place for GDP per capita in the non-metropolitan regions (percentile rank 100) is remarkable. On the other hand, the below-average value for multifactor productivity is a negative factor in this dimension.

Among the indicators for the use of natural resources, Austria achieved an overall percentile rank of 62.3. The high dependence on energy imports and the low share of environmental technology patents weigh on this average, while the relatively high share of renewable energy sources and rail freight transport improve the CO2 balance.

In terms of foreign trade, Austria was among the top third of comparator countries, with an average percentile rank of 68.8. Austria's position in terms of market share in tourism exports was the best and most stable, with a percentile rank of 83.8, ahead of its market share in global merchandise exports (67.7). In terms of the current account balance, Austria was just above the European average. Due to the specific measurement concept, this average does not take into account the development of the real effective exchange rate index, which remained unchanged in a long-term comparison but improved by around 1 percent year-on-year in 2019.

The WIFO Thematic Platform "Competitiveness" bundles research at the institute on relevant issues.
 

Publications

WIFO-Monatsberichte, 2020, 93(12), pp.887-898
Online since: 22.12.2020 0:00
 
Das neue WIFO-Radar der Wettbewerbsfähigkeit erfasst die Leistungsfähigkeit des Standortes Österreich unter Berücksichtigung sozialer und ökologischer Zielgrößen anhand von 24 ausgewählten Indikatoren in vier Dimensionen. Stabile Werte im oberen Drittel verzeichnet es in Bezug auf die realen Pro-Kopf-Einkommen und den Außenhandel. Hinsichtlich der Dimensionen "soziale Lebensverhältnisse" und "Einsatz natürlicher Ressourcen" rangiert Österreich zwar ebenfalls über dem Durchschnitt, aber nur im europäischen Mittelfeld. Nach beständigen mäßigen Positionsverlusten in den letzten Jahren liegt Österreich im Durchschnitt aller Indikatoren knapp hinter dem oberen Drittel der europäischen Vergleichsländer.
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Michael Peneder

Research groups: Industrial Economics, Innovation and International Competition
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© NASA/Unsplash