Current trends among Austrian enterprises
Austrian small and medium-sized enterprises (SMEs) are increasingly using and seeking alternative financing possibilities, such as venture capital. Apparently, they are also becoming more innovative and active abroad. Those were some of the findings of the annual structural survey of Austrian enterprises conducted by the Austrian public funding bank AWS, the Economic Chamber WKO and market research institute marketmind, which was presented in Vienna last Friday, 12 April.
According to the survey, the use of alternative forms of financing has risen to a total share of 9% in 2012 from 5,4% in the previous year. The survey was conducted among 1907 entities, the majority of whom were one-person companies (689) and such with up to nine employees (832). Almost a quarter of the interviewees plan to use venture capital, mezzanine capital, silent participation, staff participation, business angels, external equity in the future. At the moment, 44% of Austrian enterprises make their investments primarily over their own cash flow with only 25,5% naming bank loans as a source of financing.
Worse conditions for conventional financing
“The results show that a noticeable deterioration of the conditions for financing has been perceived in 2011 and 2012. In particular, young enterprises and newly founded companies suffer from this. So, it is obvious that they are looking around for alternative means of financing,” AWS CEO Bernhard Sagmeister has commented on the results, of course, stressing the role of AWS in contribution to alleviating this problem through initiatives like the Gründerfonds (founders’ fund) introduced at the beginning of 2013 as an answer to this problem (see our previous report).
According to Ralf Kronberger, who heads the WKO’s department for financial policies, the findings underline the importance of enforcing alternative forms of financing from a legal perspective. Inthis connection, the WKO has been making suggestions for concrete measures to facilitate the availability of capital with its Advisory Board on crowdfunding amongst other initiatives (see our previous report).
Interestingly enough, although some trends seem to be in place, a clear comparison between this and the results of the previous years cannot be drawn. Matthias Bischof, Head of Corporate Communications at AWS told inventures.eu that the survey was restructured for the purpose of offering a more precise analysis.
Although the conditions may have become more difficult, innovation seems to have increased in recent years, especially in the fields of R&D and product development, where the share of companies engaging in it has risen from 12% in 2009 to 18,5% in 2012. The survey also shows a connection between the rise in innovations and exports, in that enterprises that foster innovations are more likely to export their products or services rather than those who do not. Despite the general trend towards internationalisation, half of the interviewees have no plans to do business beyond the Austrian borders.
For more information see the original German press release here.