Impact of the COVID-19 Pandemic on the Innovation Activity of Firms in Austria

This study examines the development of innovation activity of firms in Austria during the COVID-19 pandemic. The results show that there was a decline in corporate financing for R&D in 2020 due to financing constraints and entrepreneurial uncertainty. However, this decline was largely offset by an increase in public funding. Thus, business R&D spending is likely to have been stable overall in 2020. This finding is supported by results of business surveys conducted in 2020. For 2021, the WIFO-Konjunkturtest (business cycle survey) points to a catch-up effect, although restraint was still evident among small and medium-sized companies (SMEs) in 2021.