Austria is falling back in environmental technology
Even in turbulent times, environmental technology remains an important growth market. Yet in Austria this industry's development was already lagging behind the international average before the crisis broke out as a result of ever-tougher competition, low efficiency levels and its focus on the mid-tech segment. With targeted export offensives, productivity-boosting programs and higher spending on R&D, Austrian companies can still hold their own on the world market, according to Rupert Petry, Managing Partner at the Vienna office of Roland Berger, in a speech to mark the publication of the German GreenTech Atlas 2.0.
Even in times of crisis, environmental technology is presenting itself as a growth market all over the world. The environmental-technology sector includes environmentally friendly power generation and storage, energy efficiency, material efficiency, waste management & recycling, sustainable water management and sustainable mobility. Annual sales in these fields will more than double to EUR 3.1 trillion by 2020. Global sales in the environmental field have already overtaken those of engineered products; it is developing into a leading industry. The economic crisis will only slow this process down temporarily.
Growth in Austria is lagging behind
As global growth rates exceeded 18% worldwide and 15% in Germany in 2005 to 2007, here the momentum was already slowing before the economic crisis broke. The corresponding annual growth rate in Austria was only 12%, putting the environmental sector roughly on a par with the metal industry, and way behind production systems companies (17%). Austria is threatening to lose touch with the world leaders. Even so, the strong export orientation of domestic companies (two-thirds of sales go abroad) does still offer a good foundation and interesting prospects. In fact, net exports have actually risen slightly in recent years, although the competitive pressure is on the increase. The markets are in a transitional phase: global market and technology leaders are emerging which will increasingly be pushing their way into Europe in the coming years. For example, a quarter of all biofuel plants already come from the U.S., and three-quarters of all industrial solar thermal plants are installed in China.
Companies must become more productive and more innovative
In order to be able to hold their own even in difficult economic times, Austrian environmental-technology companies must primarily boost their productivity – and with it their financial muscle. For example, average sales growth in manufacturing between 2003 to 2007 dwarfed workforce growth six fold; in the environmental sector, by contrast, per-capita sales only doubled. A company's efficiency is a crucial factor in times of crisis, and the question is whether the companies here have prepared themselves well enough.
Austria also needs to catch up in innovation. As in other industries, most local environmental-technology firms operate in the mid-tech field. Yet sustainable success can only be achieved by focusing on the high-tech segment. Environmental-technology companies in Germany spend 4.5% of total expenditure on research and development; in Austria the figure is just 2.4% – even below the national average of 2.6%. Austrian companies must use innovation management to significantly raise their innovative potential. Petry's conclusion: "Only by successfully jumping from the mid-tech to the high-tech segment can they become – and remain – internationally competitive."
Even in times of crisis, environmental technology is presenting itself as a growth market all over the world. The environmental-technology sector includes environmentally friendly power generation and storage, energy efficiency, material efficiency, waste management & recycling, sustainable water management and sustainable mobility. Annual sales in these fields will more than double to EUR 3.1 trillion by 2020. Global sales in the environmental field have already overtaken those of engineered products; it is developing into a leading industry. The economic crisis will only slow this process down temporarily.
Growth in Austria is lagging behind
As global growth rates exceeded 18% worldwide and 15% in Germany in 2005 to 2007, here the momentum was already slowing before the economic crisis broke. The corresponding annual growth rate in Austria was only 12%, putting the environmental sector roughly on a par with the metal industry, and way behind production systems companies (17%). Austria is threatening to lose touch with the world leaders. Even so, the strong export orientation of domestic companies (two-thirds of sales go abroad) does still offer a good foundation and interesting prospects. In fact, net exports have actually risen slightly in recent years, although the competitive pressure is on the increase. The markets are in a transitional phase: global market and technology leaders are emerging which will increasingly be pushing their way into Europe in the coming years. For example, a quarter of all biofuel plants already come from the U.S., and three-quarters of all industrial solar thermal plants are installed in China.
Companies must become more productive and more innovative
In order to be able to hold their own even in difficult economic times, Austrian environmental-technology companies must primarily boost their productivity – and with it their financial muscle. For example, average sales growth in manufacturing between 2003 to 2007 dwarfed workforce growth six fold; in the environmental sector, by contrast, per-capita sales only doubled. A company's efficiency is a crucial factor in times of crisis, and the question is whether the companies here have prepared themselves well enough.
Austria also needs to catch up in innovation. As in other industries, most local environmental-technology firms operate in the mid-tech field. Yet sustainable success can only be achieved by focusing on the high-tech segment. Environmental-technology companies in Germany spend 4.5% of total expenditure on research and development; in Austria the figure is just 2.4% – even below the national average of 2.6%. Austrian companies must use innovation management to significantly raise their innovative potential. Petry's conclusion: "Only by successfully jumping from the mid-tech to the high-tech segment can they become – and remain – internationally competitive."
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