Structure of the Economy
Like other industrial societies, Austria found its agricultural and industrial sectors declining as the services sector expanded. The change in the relative importance of the sectors was most pronounced during the 1970s. Changes in the 1980s continued earlier trends. Whereas services and industry had nearly equal shares of GDP in 1970, by 1990 industry's share was less than half that of services. Agriculture's share has declined steadily, so that by 1990 it was no longer significant economically but still had social importance.
Employment trends have followed shifts in the relative importance of the three sectors. Agriculture's share of employment fell by more than half between 1970 and 1990. Industry employed about 47 percent of the work force in the late 1960s and 37 percent in the late 1980s. The service sector employed roughly the same portion of the work force as industry in the late 1960s but by the late 1980s employed nearly 60 percent of the work force.
Despite the increasingly powerful role played by the services sector, however, most of the major firms remain in industrial production. Services, like agriculture, are usually performed locally and by medium- or small-sized firms. Thus, a listing of Austria's twenty largest firms in 1991 showed mainly industrial companies, with the exception of such state-owned firms as railroad and postal agencies and several large retail organizations.
Most Austrian firms are small. An analysis of nonagricultural concerns in 1988 showed that well over half the nonfarm labor force was employed by firms with fewer than 100 employees. About 500,000 Austrians worked in medium-sized firms having between 100 and 499 employees, and only 140 firms had more than 1,000 employees.
The largest single enterprise in Austria is Austrian Industries, a holding company created in 1987 to take over and manage the assets that had been nationalized by the Austrian state after World War II. An enterprise of about 75,000 employees, in 1993 it was divided into four branches that respectively managed the steel, metal, petroleum, and diversified operations of the company. The latter includes mining and the manufacture of various kinds of machinery, as well as other less easily classifiable activities of the holding company. As intended, it has moved vigorously to become a competitive enterprise despite its nationalized origins, discarding some unprofitable activities and investing abroad or in Austria in other areas of activity.
The ten largest Austrian enterprises in the early 1990s, based on turnover, were Austrian Industries, Österreichische Post/Telegrafenverwaltung (national postal service), VÖEST-Alpine Stahl (steel), Österreichische Mineralölverwaltung (ÖMV) (petroleum and other mineral resources), Konsum Österreich (KÖ) (retail trade), Österreichische Bundesbahnen (Austrian Federal Railroad), Porsche Holding (vehicles), AL Technologies (diversified), Billa (trade), and Austria Tabakwerke (national tobacco monopoly). Of these enterprises, three are subsidiaries of Austrian Industries, two are state public-service monopolies, and the remainder are owned either by foreigners or by small share holder-members (such as the retail trade firm KÖ). None of these businesses except Austrian Industries has played a significant international role.
With the exception of Austrian Industries, even Austria's largest companies are small on an international scale. Only four Austrian companies were listed in the Financial Times "European 500" for 1992. Two were banks, the CreditanstaltBankverein (number 215 on the list) and Bank Austria (275). The third was ÖMV (288), the mineral and oil exploration and exploitation arm of Austrian Industries. The fourth was a construction company, Wienerberger Baustoffindustrie (318). Austrian Industries was not listed because it was not a private company. If it had been listed, it would probably have been among the top fifty.
Austria has never had a great entrepreneur-capitalist tradition. Many firms function within the Austrian market or within regions. In part because of the bitter experiences of inflation and the depression between the world wars, most Austrians do not attempt risky ventures but instead concentrate on geographic areas or on specific products where success is fairly certain. One of the challenges facing Austrian enterprises as they move into the European Economic Area (EEA) and into the European Union Single Market will be competing effectively against the giant firms that operate throughout Europe and have many more resources than virtually any Austrian firm could hope to command.
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