Expenditure on R&D encompasses much of those resources which are used more or less like an investment into the future and spent with a view to obtaining and securing competitive advantages. During the 1990s, Austria made a serious effort to catch up: From 1.39 percent of GDP in 1990, spending on research successively grew to 1.95 percent in 2002, which has brought Austria to a medium level within Europe; but there is still a wide gap to leading countries such as Finland or Sweden. Disadvantages for Austria stem from the comparatively low participation of domestic companies in the financing and carrying-out of research activities. During the 1990s, countries such as Denmark, Finland, Ireland, Sweden and the USA stood out for their substantial widening of the share of company-financed R&D. Furthermore, these countries showed a particularly high growth rate in their overall R&D expenditure. Considering that industry sectors differ considerably in their expenditure for R&D, the sectoral structure of the Austrian economy constitutes a barrier against accelerating the catching-up process. The domestic economy not only includes a high share of labour-intensive sectors, but also specialises to a large degree in products of medium-tech level, such as mechanical and vehicle engineering. High-tech sectors, on the other hand, are mostly underrepresented. An analysis of patent data shows similar structural weaknesses of the Austrian economy, as have been evidenced based on data on production and international trade: salient features are an excessive specialisation on low-tech sectors (e.g., those in which technological change progresses at a slower rate and those which get little impetus from current scientific research). Science contributes to the technological performance of an economy by carrying out basic research (experimental and theoretical scientific work aimed primarily at achieving new knowledge and explaining known phenomena, but not at discovering applications) on the one hand and by developing highly specialised human resources on the other. When using selected indicators of the scientific publication rate, Austria is found to be positioned in the European middle, but noticeably behind the leaders Switzerland, Sweden, Denmark, Finland and the Netherlands. Domestic scientists achieve their greatest response rates when working in physics, mathematics and pharmacology. Rates are still above average for those working in the material sciences, mechanical engineering, computer sciences and molecular biology. As a result, Austrian science still connects to international developments in many scientific disciplines. The situation, however, differs when it comes to higher education. International comparisons of qualification levels confirm Austria's traditional strength in the medium segment, i.e., a high rate of graduations from secondary level II courses, where Austria is in the top group together with Denmark, Germany and Sweden. When it comes to tertiary education levels, on the other hand, Austria is at the lower end of the scale, together with Italy and Portugal. And contrary to countries such as France, Ireland and Spain which have over the past two decades put considerable efforts into catching up with regard to tertiary graduation levels, Austria is stagnating at a low level.