The Role of Innovation in the Recovery of Austrian Regions after the Crisis in 2009

Abstract

Innovation – the development of new products and services as well as the application of new technologies – is widely assumed to be an important strategy for securing or improving competitiveness, growth and welfare. It is also a central strategy of regional development and the EU's cohesion policy. Usually, it is expected that rising competitiveness leads to positive effects on employment, particularly through product innovation. Comparing the innovation activity in the industries of the Austrian economy covered bei the European innovation survey CIS in the period 2008-2010 with the employment trends in the Austrian provinces (Bundeslander) in the years of recovery from the crisis in 2009 until 2012 shows that the situation at regional level is more diverse. The correlation analysis of the innovation and employment data in Austria at regional level does not provide evidence for a simple positive relation between innovativeness and employment growth. There are significant differences between the provinces of Austria regarding the recovery after 2009 but it is not the relative innovativeness which makes the difference. In the group of the eight successfully recovering provinces there are highly innovative regions with a rather modest employment growth like Upper Austria as well as regions with a relatively strong increase in employment like Styria and Vorarlberg. And there are less innovative regions with a rather slow recovery like Lower Austria, Carinthia and Salzburg as well as regions which are performing well regarding employment growth despite low innovativeness like Tyrol and Burgenland.