EMCC European Monitoring Centre on Change

Austria: ERM comparative analytical report on Public support instruments to support self-employment and job creation in one-person and micro enterprises

  • Observatory: EMCC
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  • Published on: 12 January 2012



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Bernadette Allinger
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Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

A variety of public and social partner based instruments supporting self-employment and job creation are available in Austria. While there are specific measures that support entrepreneurship and hiring the first employee in one-person enterprises, there are virtually no specific job creating measures available for micro enterprises, but rather for SMEs in general. Measures include a variety of national, regional and local funding programmes, consulting and support services. The global economic and financial crisis triggered the implementation of some additional support instruments in order to decrease unemployment and foster (job) growth.

QUESTIONNAIRE

Part 1: Overall policy context

This section aims at giving a brief overview of the general development and status quo of the policy discussion and thereof resulting instruments, measures or initiatives in the field of fostering self-employment and job creation in one-person and micro enterprises (less than 10 employees). Focus is mainly on the developments during the last decade, that is before the global recession. In addition we are asking for your indication of change of policy focus since the recession.

1. General policy approach in the area of self-employment, one-person and micro enterprises at the national level


1.1. Has there been a policy focus/debate on the specific challenges facing entrepreneurship as tool for job creation before the global recession? If so, since when and for how long?

Table 1: Presence of policy focus/debate on entrepreneurship as facilitation for job creation before the crisis
 

Yes, continuously since xx? (Please indicate year)

Yes, on and off in the last 10 years

(Please indicate ‘X’ where it applies)

Yes, has been in focus, but since xx it is no longer part of the policy focus (Please indicate year)

No, it has never had policy focus before the recession

(Please indicate ‘X’ where it applies)

Self-employment

X

(has always been a topic)

     
Hiring the first employee  

X

   
Hiring additional employees/creating additional jobs in micro enterprises  

X

   


1.2. What is the main focus in policy documents or strategies in relation to public or social partner based support instruments for fostering self-employment or job creation in one-person and micro enterprises? (Please indicate ‘X’, multiple answers possible)

Table 2: Main focus in the policy documents or strategies
 

Entrepreneurship (Business development in general)

Job creation (Employment)

Growth (Competitiveness)

Others (please specify)

Self-employment

X

X

X

 
Hiring the first employee  

X

X

 
Hiring additional employees/creating additional jobs in micro enterprises  

X

(rather SMEs in general than micro-enterprises)

X

 

1.3. Please elaborate on the answer given above (with a focus on those developments aimed at employment creation and growth) and indicate if the financial recession has caused a change of focus:

The promotion of entrepreneurship and job creation have long been on (and off) the public policy agenda in Austria. Self-employment generally has increased within the last decade, from just under 24,000 to about 35,500 start-ups from 2000 to 2010 (WKO 2011). Especially from 2002 onwards, one-person enterprises have had high growth rates among start-ups and make up around 80% of all start-up companies today. Data for 2008 and 2009 suggest that the economic and financial crisis did have an effect on start-up activities overall, with decline rates of -2.5% in 2008 and -2.8% in 2009 (WKO). However, looking at OPEs only, they experienced a small growth in 2009 already. The promotion of entrepreneurship did not significantly change as an effect of the crisis – the public policy focus lies on promoting entrepreneurship in general and on fostering growth and creating jobs in SMEs and, as an effect of the crisis, more specifically in OPEs. Micro enterprises are thus only implicitly focused on. With the onset of the crisis, the Austrian government implemented measures aimed at stimulating the economy and the labour market:

Two major economic stimulus packages and two labour market stimulus packages were introduced by the government after close cooperation and consultation with the social partners. The first economic stimulus package (Konjunkturpaket I) was passed in November 2008 and focused on strengthening SMEs by facilitating access to credits and loans. Even though micro enterprises were not specifically mentioned, they were also targeted with this measure. Furthermore, rail and road construction projects were promoted. The second economic stimulus package (Konjunkturpaket II) followed in February 2009. With regards to promoting entrepreneurship and job creation, the focus of this package was on providing incentives for investment by means of advance degressive depreciation, on bringing forward infrastructure investment projects for buildings owned by the Federal Real Estate Company (Bundesimmobiliengesellschaft BIG), on promoting thermal insulation of private houses and companies, on supporting job creation at the regional level, and on providing additional support for R&D projects. The two labour market packages were first and foremost centered on changes in the regulation on short-time work arrangements and on work foundations for employees who have been made redundant. The scope of short-time work was extended to SMEs; however, for micro enterprises, those measures were of hardly any relevance in practice. Within the framework of the second labour market package, however, a new measure on reducing the costs for the first employee in OPEs was implemented. This means that the Public Employment Service (AMS) is to pay 25% of the gross wage for the first employee of an OPE for up to twelve months. The employee has to fulfil the criteria of being under 30 years of age and of either just having finished an educational or training measure or of having been unemployed and registered with the AMS. The policy is valid until the end of 2013.

References:

All four coalition government work programmes since 2000:

ÖVP (People’s Party) / FPÖ (Freedom Party) coalition government work programme 2000

ÖVP (People’s Party) / FPÖ (Freedom Party) coalition government work programme 2003

SPÖ (Socialdemocratic Party) / ÖVP coalition government work programme 2007

SPÖ (Socialdemocratic Party) / ÖVP coalition government work programme 2008 (-2013)

BMWFJ (2010): Mittelstandsbericht 2010, Federal Ministry of Economic Affairs, Family and Youth, Vienna.

BMWA (2003): Nationaler Aktionsplan für Beschäftigung 2003, Vienna.

FO.FO.S (2005): Analyses of data and statistic Austria in Austria (sic), project deliverable “Guidance and counselling for self-employment”, financed under EU Leonardo da Vinci Programme, Vienna.

Schubert, M./Keck, W. (2005): State of the Art Report über Ein-Personen-Unternehmen in Österreich, fo.fo.s, Vienna.

Frank, H./Keßler, A./Korunka, C./Lueger, M. (2007): Gründungsrealisierung und. Erfolg von jungen Unternehmen in Österreich. Eine Analyse der Entwicklung im Verlauf von acht Jahren (1998-2005), Vienna.

Mandl, I. et al. (2007): Ein-Personen-Unternehmen in Österreich, Endbericht. Austrian Institute for SME Research, Vienna.

Statistik Austria (2007): Erfolgsfaktoren österreichischer Jungunternehmen, Vienna.

Table 3: The policy content and significance of the financial recession
Self-employment
Elaboration of content (please describe and also indicate whether it is treated explicitly/implicitly)

Measures directed towards promoting self-employment include a variety of different programmes and financial subsidies offered by various public bodies (federal, regional, communal – selection here concerns only federally available programmes):

The Austria Economy Service (aws) as the federal business development bank for SMEs is the major funding partner. It supports companies in different stages of business development, starting at the pre-founding stage up to a phase of internationalisation. Support is given in the form of credits with favourable interest rates (ERP funds), subsidies, liabilities and guarantees, as well as with consulting and advisory services. The aws supports companies in all sectors with the exception of the tourism and leisure industry. For companies in these branches, the Austrian Hotel and Tourism Bank (ÖHT) provides support in the form of credits. Furthermore, it provides consultancy regarding investments and financing and offers pre-financing of export payments and supports investments. Additionally, the ÖHT offers services with regards to software (consultation and training). The Kommunalkredit Public Consulting subsidises companies which make investments targeted towards environmental protection. The FFG (Austrian Research Promotion Agency) is the national funding body for applied research and offers various programmes for start-ups, established SMEs and research institutes, e.g. by offering a specialised SME package which includes an innovation cheque, funding of feasibility studies, the start of a research project, and management support/coaching. Micro credit schemes have recently been introduced, as well, initiated by the Federal Ministry of Labour, Social Affairs and Consumer Protection (BMASK) (more information on micro credits see below).

Further programmes promoting self-employment include a business start-up programme by the AMS, which encourages unemployed people to become self-employed (counselling, training programmes, subsidies); a bonus payment on the starting capital of a newly established enterprise of up to € 8,400 (programme run by the Federal Economic Chamber WKO and aws); a support service for establishing companies by the WKO (‘Gründerservice’ or ‘Foundation service’) offering counselling services, workshops and extensive information on its website; and various events (e.g. ‘Gründertage’ (‘Foundation Days’), Lange Nacht der Förderungen (‘Long Night of Subsidies’), to name just the most well-known ones).

With regards to specific laws supporting self-employment, the so-called ‘start-up promotion law’ (NeuFöG), implemented in 1999, plays a major role for business start-ups: it exempts business founders of some administrative costs and – for the first year – of incidental wage costs for their employees.

Self-employment is covered both explicitly and implicitly in the policy framework, depending on the specific measure/programme.

Change due to the financial recession

Please tick:

Yes: x

No: □

If ‘Yes’, please elaborate:

Within the framework of the first economic stimulus package (Konjunkturpaket I) which was passed in November 2008, access to credits and loans were facilitated for SMEs, including micro enterprises.

Hiring the first employee
Elaboration of content (please describe and also indicate whether it is treated explicitly/implicitly)

Under the framework of the second labour market package that was introduced during the crisis, a new measure on reducing the costs for the first employee in OPEs was implemented. This means that the AMS is to pay 25% of the gross wage for the first employee of an OPE for up to twelve months. The employee has to fulfill the criteria of being under 30 years of age and of either just having finished an educational or training measure or of having been unemployed and registered with the AMS. The policy runs from 1 September 2009 until 31 December 2013. Hiring the first employee is treated explicitly.

Change due to the financial recession

Please tick:

Yes: x

No: □

If ‘Yes’, please elaborate:

This measure was implemented during the financial crisis as a policy directed towards creating jobs and reducing unemployment.

Hiring additional employees/creating additional jobs in micro enterprises
Elaboration of content (please describe and also indicate whether it is treated explicitly/implicitly)

---

Change due to the financial recession

Please tick:

Yes: □

No: □

If ‘Yes’, please elaborate:

---

2. Disincentives for self-employment and job creation

The following two questions will investigate whether there has been a change in the political agenda which has forced new political initiatives that may result in disincentives for job creation and business development (e.g. considerations regarding public budget).


2.1 Have public measures (e.g. with the aim to increase public revenue or cut public spending) led to disincentives for self-employment or job creation in one-person or micro enterprises before the financial recession? (Please briefly describe the major developments/initiatives (max. 300 words)

There were no public measures leading to disincentives for self-employment or job creation in one-person enterprises or micro enterprises before the financial recession. On the contrary, some measures that facilitated entrepreneurship and job creation (e.g. voluntary unemployment insurance for self-employed; subsidies for starting a company) were implemented or at least agreed upon before the onset of the crisis. There was an increase in the number of start-ups in the years before the financial recession (see above). The mineral oil tax was increased twice lately, in 2007 and 2011; however, it remains unclear how this could have been a disincentive on self-employment or job creation.


2.2 Have public measures (e.g. with the aim to increase public revenue or cut public spending) led to disincentives for self-employment or job creation in one-person or micro enterprises as a result of the financial recession? (Please describe – max. 300 words)

No public measures were implemented that would lead to disincentives for self-employment or job creation. Self-employment and the creation of jobs were rather encouraged during the crisis (e.g. increasing the tax allowance for profits from 10% to 13% in 2010). On the contrary, some measures targeted towards supporting those businesses were implemented during the crisis in order to stimulate entrepreneurship and limit the rise of unemployment.

3. Representation of/lobbying for self-employed and micro enterprises


Are self-employed and micro enterprises in your national context explicitly or implicitly (e.g. entrepreneurs or SMEs in general) represented by the following types of organisations (e.g. for lobbying, defending their interest etc.)?

Table 4: Representation of self-employed and micro enterprises
 

Self-employed

Micro enterprises

Employers’ organisations

Self-employed holding a business licence: Federal Economic Chamber (WKO) and its relevant subgroups

(implicit representation)

Federal Economic Chamber (WKO) and its relevant subgroups

(implicit representation)

Employees’ organisation

One-person enterprises holding a business licence and self-employed not holding a business licence: Union of Salaried Employees, Graphical Workers and Journalists (GPA-djp) and its subgroup work@flex.

(trade union: implicit representation; subgroup work@flex: explicit representation)

Employees of micro enterprises in the private economy are compulsory members of the Chamber of Labour (AK) and voluntary members of the respective trade unions under the umbrella of the Trade Union Federation (ÖGB) – according to the sector they work in and their employment status (white-collar, blue-collar, public employee).

(implicit representation)

Not-for-profit organisations

fo.fo.s (forum supporting self-employment)

(explicit representation)

--

Others

--

--

Part 2: Identification and description of relevant recent support instruments

The following section asks for the identification of public or social partner based support instruments initiated during or after the recent economic crisis (that is, 2008 onwards). These measures might have, but must not necessarily have been triggered by the recession. Measures may also have been initiated earlier, but changed in order to adapt to the recession or other recent developments. Rather than a comprehensive list of all instruments available at national, regional or local level, the most important, most innovative, most interesting and most effective tools are to be described. Thereof, a selection of up to three ‘Good Practices’ to be described in more detail is to be made.

1. Selection of region(s) when total coverage of the entire regional and local level is too comprehensive

When providing the brief overview and the three ‘Good Practices’ in this section of the questionnaire, measures and instruments at national level have to be included. We would in addition ask you to include regional and local level initiatives where relevant. Nonetheless, a complete coverage of regional and local levels may not be possible for all countries (e.g. because of a high degree of decentralisation resulting in a wide range of respective measures characterised by considerably heterogeneity). At the same time, it can be assumed that for instruments targeting at supporting self-employment and the creation of employment in one-person and micro enterprises the local administrative level is of considerable importance. If so, such measures will be designed to fit to the local characteristics and needs, resulting in a wide variety of different approaches. In this case, one or few local areas or regions may be selected to be covered in this report. Details on the selection are given in table 5.

Table 5: Administrative level/region(s) covered for the following research (max. 50 words per region)

Administrative level relevant for the rest of the questionnaire

National level

If a specific regional/local are is selected, please provide the following information

Name of region

 
Motivation for selecting this region

Facts about the region e.g.

- Geographic location

- No. of inhabitants

- Business structure (sector, size)

- Labour market

- Specific characteristics if applicable

 
Table 6: Administrative level/region(s) covered for the following research (max. 50 words per region)

Administrative level relevant for the rest of the questionnaire

Regional level

If a specific regional/local are is selected, please provide the following information

Name of region

Vienna

Motivation for selecting this region

Vienna is the province with the highest number of one-person enterprises and the highest number of start-ups in Austria (almost a fourth of all new establishments in Austria are in Vienna). Companies operating in the services sector in Vienna make up 80% of the regional economic performance. Thus, the policies developed in this area are explored in more detail.

Facts about the region e.g.

- Geographic location

- No. of inhabitants

- Business structure (sector, size)

- Labour market

- Specific characteristics if applicable

Vienna is the capital of Austria and one of the nine Austrian provinces in its own right. It has 1.7 million inhabitants (2011), some 960,000 employment relationships (2008) and its unemployment rate is higher than the overall unemployment rate for the country. The largest sector is the real estate sector with more than 150,000 employees in over 31,000 companies. The sector contributes almost a quarter of the overall net product. The commerce sector with almost 24,000 companies and 140,000 employees is second. Those two are by far the largest sectors in Vienna.

Table 7: Administrative level/region(s) covered for the following research (max. 50 words per region)

Administrative level relevant for the rest of the questionnaire

Regional (provincial) level

If a specific regional/local are is selected, please provide the following information

Name of region

Tyrol

Motivation for selecting this region

The national level policy of subsidies for hiring the first employee in OPEs is accompanied and topped up with a specific regional measure in the province of Tyrol.

Facts about the region e.g.

- Geographic location

- No. of inhabitants

- Business structure (sector, size)

- Labour market

- Specific characteristics if applicable

Tyrol is a province in western Austria with about 710,000 inhabitants. Some 300,000 employees were working in the province in 2008; about 52,000 in the manufacturing sector, followed by the commerce sector with 45,000 employees and the hotels and restaurants sector with some 33,000 employees. Tourism is a major economic factor and employer in the province.

Table 8: Administrative level/region(s) covered for the following research (max. 50 words per region)

Administrative level relevant for the rest of the questionnaire

Local level

If a specific regional/local are is selected, please provide the following information

Name of region

Graz, capital of the province Styria

Motivation for selecting this region

Graz has a comparatively high rate of start-ups (4.2 per 1,000 inhabitants, WKO data). According to a recent study (Initiative Taten statt Worte 2009), 89% of all companies in Styria are micro enterprises, securing some 97,000 jobs. The city of Graz has encouraged start-up activities lately. It thus seems worthwile to explore the measures implemented in more detail.

Facts about the region e.g.

- Geographic location

- No. of inhabitants

- Business structure (sector, size)

- Labour market

- Specific characteristics if applicable

Graz is the capital of Austria’s southeastern province Styria. It has 260,000 inhabitants and is thus the second-largest Austrian city. Some 80% of employees work in the tertiary sector in Graz, as compared to 63% in all of Styria. Almost 20% of the net domestic product of all Styrian companies can be attributed to micro enterprises. Between 2002 and 2007, the number of micro enterprises has increased by 18 percentage points, while the number of other enterprises has only risen by 7 percentage points. Of all 37,000 enterprises in the province, 38% are OPEs, 40% companies with one to four employees and 11% companies with five to nine employees (Taten statt Worte 2009).

2. Brief overview of recent instruments to foster self-employment or job creation in one-person and micro enterprises


2.1. Please provide a brief description (max. 800 words) of public or social partner based instruments recently initiated (2008 onwards) to support self-employment and job creation in one-person or micro enterprises.

Measures covered by the European Employment Observatory Review on self-employment 2010, European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities are to be omitted to avoid duplication (see Part 3 of this questionnaire).

In the EEO report on Austria, the following measures are covered (in more/less detail): business start-up programme by the AMS (Unternehmensgründungsprogramm); incidental wage costs subsidies for hiring the first employee; increase of tax allowance for profits; micro credit schemes. The measure of micro-credit schemes is represented in this report in 2.1, as well, due to the fact that the programme was extended from formerly only two provinces to all federal states in May 2011. Also, the increase of tax allowance for profits is devoted a table on its own, as it was only very briefly mentioned (one line) in the EEO report.

Table 9: List of recent instruments

Title

Gewinnfreibetragerhöhung / Increase of tax allowance for profits

Aim/objective

Compensation for entrepreneurs for the 13th and 14th monthly income that dependent employees receive

Description of support

Tax allowance for profits was increased from 10% to 13%; thus, 13% of the profit are tax-free (up to EUR 100,000); this favours annual profits of up to EUR 769,230

Target group

All entrepreneurs earning up to EUR 769,230 annual profit

Initiator and other actors involved

Government, Federal Economic Chamber (WKO)

Duration (please also indicate whether the measures has been initiated due to the recession)

Part of the tax reform 2009; implemented 2010

(not initiated due to the recession, has been planned/demanded for by the WKO for a long time)

Table 10: List of recent instruments

Title

EPU-Förderung / Regional subsidies for OPEs hiring their first employee in the province of Tyrol

Aim/objective

Decrease unemployment, support businesses in growth industries, provide incentives to hire the first employee and thus make the business grow

Description of support

Wage subsidies for first employees in one-person enterprises;

Subsidies received since 1 September 2010 (in brackets subsidies received in the first year of the programme running from 1 September 2009 until 31 August 2010):

Full-time employees: Persons aged 18-24 years EUR 200 per month (2009: EUR 400); persons aged over 24 years EUR 150 per month (2009: EUR 300);

Part-time employees: Persons aged 18-24 years EUR 100 per month (2009: EUR 200); persons aged over 24 years EUR 80 per month (2009: EUR 150);

Target group

One-person enterprises with no employees (not even marginally employed) located in the province of Tyrol

Initiator and other actors involved

Provincial government of Tyrol, Public Employment Service (AMS) Tyrol branch

Duration (please also indicate whether the measures has been initiated due to the recession)

Implemented on 1 September 2009; funding period per person is 1 year; limited to the first 100 persons; programme was prolonged on 1 September 2010 with reduced wage subsidies (see above)

(initiated due to the recession)

Table 11: List of recent instruments

Title

Mikrokredit / micro credit scheme

Aim/objective

Promote entrepreneurship or provide financial means for extending an existing business when no capital resources and no collateral securities are brought in

Description of support

Provision of a loan of up to EUR 12,500 for OPEs and up to EUR 25,000 for business partnerships; the running time is 5 years (credit can be paid back any time before), interest rates are fixed at 3-month-Euribor plus 3%; first rate (first quarter of a year) is grace period

Target group

In May 2011, the programme was extended to all nine federal states of Austria, after being initially implemented in Vienna and Styria only (mid-2010) and in Burgenland and Lower Austria in February 2011.

Initiator and other actors involved

Federal Ministry of Labour, Social Affairs and Consumer Protection (BMASK); further partners are the bank ERSTE, insurance company WIENER STÄDTISCHE and several private foundations; it is further being implemented by ÖSB Consulting and aws

Since 2006, several micro-credit schemes (mostly run by governments or government-related agencies like the aws or AMS which take on extended liability) have been implemented which have strongly improved the availability of funds for smaller companies (including micro-enterprises) and for employed or unemployed persons planning on starting a company. The BMASK started a new micro-credit programme in cooperation with the AMS in June 2010 as a pilot project; since May 2011, it is available in all nine federal states.

The micro credit scheme is treated explicitly.

Duration (please also indicate whether the measures has been initiated due to the recession)

Implemented mid-2010 as a pilot project in two provinces and in May 2011 at the national level; running time is up to five years for individual OPEs or companies

(partly initiated due to the recession)

Table 12: List of recent instruments

Title

Gründungspaket der Stadt Graz / Founding package for the city of Graz

Aim/objective

Strengthening the business location Graz and making it more attractive for entrepreneurs

Description of support

Networking, subsidies for rent, support for business succession

Target group

Entrepreneurs of either OPEs or micro enterprises in the following areas: human and biotechnology; energy and environmental engineering; automotive industry and mobility technology; creative industries

Initiator and other actors involved

Local government (city of Graz); partly subsidised by financial resources of the EU

Duration (please also indicate whether the measures has been initiated due to the recession)

2008 – 2010

(not initiated due to the recession, started before)

Table 13: List of recent instruments

Title

Dienstleistungsaktion Förderwettbewerb / Services action funding competition

Aim/objective

Support SMEs and entrepreneurs in the services sector in Vienna

Description of support

Financial support with regards to: infrastructure; machinery; software; personnel; training; consulting services

Target group

SMEs, entrerpreneurs and companies in the founding stages (up to three years from company establishment)

Initiator and other actors involved

Economy Agency Vienna

Duration (please also indicate whether the measures has been initiated due to the recession)

Funding competition first took place in 2010; funding is a one-time payment

(not initiated due to the recession)

There are many other measures supporting self-employment and job creation, with regards to advice and counselling (founder services, founder days, founder counselling), coaching or mentoring (when founding a business, e.g. funding of up to EUR 3,520 in the province of Upper Austria), provision of business infrastructure and access to networking and further support services (e.g. programme Mingo - running since 2007 - by the Economic Agency Vienna, specialised counselling and mentoring programme for female entrepreneurs), prizes and awards (e.g. annual award of young entrepreneurs in Upper Austria), qualification subsidies (EUR 100 funding for courses at the WKO’s further training institute WIFI, available in Lower Austria) and many different funding opportunities. However, all of those programmes were either established well before the onset of the latest economic and financial crisis or are very small measures and are thus only briefly mentioned here. Other small projects not considered in the list are e.g. a book project by the WKO in which 101 successful OPEs are introduced; the e-government platform on founding activities by the federal government www.usp.gv.at; an event ‘Long Night of Funding’ in Vienna; i2b competition (award for the best business plan, since 2000); and the founding centre for handicapped persons (since October 2008), to name a few.


2.2. In-depth description of ‘Good Practices’

Please choose up to three examples from the above list that can be considered as ‘Good Practice’ (e.g. because of their effectiveness, innovative character or beneficial cooperation among different stakeholders) and describe them in detail.

Table 14: Description of ‘Good Practice’ examples of recent support instruments

Name of the programme/instrument

Dienstleistungsaktion Förderwettbewerb / Services action funding competition

Is the instrument explicitly addressing any of the following:

Self-employment

Hiring the first employee

Hiring additional employees/creating additional jobs in micro enterprises

Please ‘X’ and/or describe if relevant

x

x

x

Operational level

Local

Regional

National

Please ‘X’ and/or describe if relevant

 

x

 

Rationale/motivation for the instrument

(please describe)

Support SMEs and OPEs to become internationally competitive

Purpose and aims for the instrument (please describe)

Support sustainable and stable growth for companies in sectors which are important for the business location Vienna; job creation

Initiator
Please ‘X’  

x

   
Other stakeholders actively involved in implementation (please name them and describe their roles)

City of Vienna and its Economic Agency (financed by public funds)

Target groups        
Please describe the target groups (sector, age, level of education, gender)

Target groups are SMEs, entrepreneurs, OPEs and companies in their founding stages (within three years of establishment) located in Vienna

Funding        
Please describe the funding of the instrument/programme (national and European sources, budget available)

The Economic Agency Vienna is financed by public funds, mostly by the City of Vienna (and some additional, not specified EU funding). For the programme, some € 2.5 million are available in 2011. The maximum support lies at 35% of investments up to € 70,000.

Activities    
Please describe the activities of the programme or institutional initiative as detailed as possible

The programme is a funding competition that first took place in 2010. Entrepreneurs (OPEs) and SMEs can apply if they meet the criteria of having been established not longer than three years and of being operative in the service sector. If selected, financial support is given for investments with regards to: infrastructure; machinery; software; personnel; training; consulting services. Additionally, for every job created in connection with the innovation project, € 2,000 are being paid (‘job creation bonus’). A ‘female bonus’ of € 2,000 is paid if a woman is member of management at the time of submission.

Results (Effectiveness)      
Please describe the results e.g. number of beneficiaries, advised enterprises

The service action took place for the first time in 2010 (modelled on a similar programme for the manufacturing sector which was implemented in 2007). Some 92 companies applied for funding, of which 49 were awarded and received € 3.2 million. The main activities of the awarded lie in the subsectors wholesale and retail; providing services in information technologies; business consulting; film production; and data processing. 55% of all awarded companies and OPEs were awarded public funds by the City of Vienna for the first time.

Challenges in order to reach the objectives e.g. for the organisation offering the instrument, the entrepreneurs (Please describe); and if available how these have been overcome

n/a

Assessments of the effectiveness e.g. investments made in order to reach the objectives of the programme (outcome vs. investment) (Please base this assessment on evaluations when possible)

In 2010, the investment of € 3.2 million triggered an expected overall investment volume of € 10.1 million.

Outcomes (Efficiency)  
Increasing self-employment, growth and employment e.g. number of start-up and/or jobs created etc. (please describe, preferably based on evaluations, otherwise on experts’ assessment)

In 2010, the awarded companies employed 454 workers. The expected employment effect triggered by funding the 49 awarded companies lies at creating 121 additional jobs (full-time equivalents). Furthermore, the ‘female bonus’ of € 2,000 paid for every female member of management was awarded seven times.

Please provide link to evaluation documents if possible

n/a

Example 2:

Name of the programme/instrument

EPU-Förderung / Regional subsidies for OPEs hiring their first employee in the province of Tyrol

Is the instrument explicitly addressing any of the following:

Self-employment

Hiring the first employee

Hiring additional employees/creating additional jobs in micro enterprises

Please ‘X’ and/or describe if relevant

 

x

 

Operational level

Local

Regional

National

Please ‘X’ and/or describe if relevant

 

x

 

Rationale/motivation for the instrument

(please describe)

Decrease unemployment, support businesses in growth industries, provide incentives to hire the first employee and thus make the business grow

Purpose and aims for the instrument (please describe)

Initiator
Please ‘X’

x

x

   
Other stakeholders actively involved in implementation (please name them and describe their roles)

n/a

Target groups        
Please describe the target groups (sector, age, level of education, gender)

One-person enterprises (with no employees, not even marginally employed workers) located in the province of Tyrol

Funding        
Please describe the funding of the instrument/programme (national and European sources, budget available)

Wage subsidies for first employees in one-person enterprises;

Funds received for full-time employees from September 2010 onwards (in brackets funds for September 2009 – August 2010): Persons aged 18-24 years € 200 per month (2009: € 400); persons aged over 24 years € 150 per month (2009: € 300);

Activities    
Please describe the activities of the programme or institutional initiative as detailed as possible

The first 100 OPEs that apply receive wage subsidies for their first employee for the duration of 12 months. Furthermore, the Tyrol branch of the WKO provides consultancy for OPEs on different topics, among others, about hiring the first employee (the consultancy service is partly funded by the Tyrol branch of the WKO and the provincial government).

Results (Effectiveness)      
Please describe the results e.g. number of beneficiaries, advised enterprises

Between July 2009 and the end of December 2010, some 143 applications were filed, of which 35 applicants did not meet the eligibility criteria, one application was incomplete and 107 applications were granted the funding. The allocated funding amounts to € 275,075 total, of which € 206,805 were paid in 2009 and 2010. The funding programme was used mostly by OPEs in the trades and crafts sector (37.4%), followed by OPEs in the commerce sector (23.4%) and information and consulting sector (20.6%).

Challenges in order to reach the objectives e.g. for the organisation offering the instrument, the entrepreneurs (Please describe); and if available how these have been overcome

n/a

Assessments of the effectiveness e.g. investments made in order to reach the objectives of the programme (outcome vs. investment) (Please base this assessment on evaluations when possible)

The aim of the programme was that OPEs would keep their first worker even after the funding for the first twelve months has expired. No information/evaluation is available whether this could be achieved.

Outcomes (Efficiency)  
Increasing self-employment, growth and employment e.g. number of start-up and/or jobs created etc. (please describe, preferably based on evaluations, otherwise on experts’ assessment)
Please provide link to evaluation documents if possible

n/a (based on expert assessment by project manager)

Example 3:

Name of the programme/instrument

Gründungspaket der Stadt Graz / Founding package for the city of Graz

Is the instrument explicitly addressing any of the following:

Self-employment

Hiring the first employee

Hiring additional employees/creating additional jobs in micro enterprises

Please ‘X’ and/or describe if relevant

x

 

(x)

Operational level

Local

Regional

National

Please ‘X’ and/or describe if relevant

x

   

Rationale/motivation for the instrument

(please describe)

Strengthening the business location Graz and making it more attractive for entrepreneurs

Purpose and aims for the instrument (please describe)

Job creation, optimising the framework conditions for entrepreneurs

Initiator
Please ‘X’  

x

   
Other stakeholders actively involved in implementation (please name them and describe their roles)

Partly subsidised by the EU.

Target groups        
Please describe the target groups (sector, age, level of education, gender)

Entrepreneurs of either OPEs or micro enterprises in the following areas: human and biotechnology; energy and environmental engineering; automotive industry and mobility technology; creative industries; enterprise must have been founded within the last three years in order to be eligible

Funding        
Please describe the funding of the instrument/programme (national and European sources, budget available)

Subsidies for rent for commercial purposes; 1st year subsidies of up to 50% of the net costs; 2nd year subsidies of up to 40% of net costs; 3rd year subsidies of up to 20% of net costs; upper limit of € 6,600 over the course of three years (monthly net costs of up to € 9 per square metre are funded); networking activities: ‘Club of Founders’ is a series of events for founders which centres around founding activities in Graz; the aim is to provide entrepreneurs who have started a company within the last three years with a platform where they can network and exchange information; this is accompanied by presentations and discussions by successful entrepreneurs; furthermore, travel costs to international fairs are being subsidised; the project ‘Follow me’ which also forms part of the city of Graz’ founding package is addressed towards providing entrepreneurs confronted with business succession with support; the support is threefold: 1. active succession management: provision of (pre-existing) services like internet platforms, funding programmes, etc.; 2. development of an active network, i.e. organisation of semi-annual network meetings; 3.support of a PR campaign in order to address target groups and popularise the advantages of a business succession

Activities    
Please describe the activities of the programme or institutional initiative as detailed as possible

Results (Effectiveness)      
Please describe the results e.g. number of beneficiaries, advised enterprises

see below

Challenges in order to reach the objectives e.g. for the organisation offering the instrument, the entrepreneurs (Please describe); and if available how these have been overcome

n/a

Assessments of the effectiveness e.g. investments made in order to reach the objectives of the programme (outcome vs. investment) (Please base this assessment on evaluations when possible)

n/a

Outcomes (Efficiency)  
Increasing self-employment, growth and employment e.g. number of start-up and/or jobs created etc. (please describe, preferably based on evaluations, otherwise on experts’ assessment)

In 2010, some 32 enterprises employing some 81 workers took advantage of receiving rent subsidies within the framework of the founding package. Between 2008 and 2010, some 16 events were organised by the ‘Club of Founders’ with some 76 participants on average. Furthermore, 16 trips to fairs were organised with 205 participants who received funding. Within the framework of the ‘Follow me’ programme, the following numbers of business successions in Graz were accompanied: 2008 – 346 business successions; 2009 – 360 business successions; 2010 – 300 business successions.

A separate evaluation on those entrepreneurs receiving rent subsidies was done showing that the participants were highly satisfied with the programme. Of the 68 companies that had received rent subsidies at the time when the evaluation took place, some 67 were still alive and the number of employees has since increased by 2.6 persons on average.

Please provide link to evaluation documents if possible

n/a (based on expert assessment by project manager)

Part 3: Annex: Update on recent self-employment study

The recent European Employment Observatory Review on self-employment 2010, European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities provides insight into support instruments for self-employment. To avoid duplication of this information, we ask you as National Correspondent to omit these measures already covered in your research (Part 2 of this questionnaire), and only update or add any additional details or measures that exceed the information already provided in this report.

Table 15: Additional information on specific instruments to the EEO national report on self-employment:

Title of the instrument

Mikrokredit / micro credit scheme

Additional information

See above (2.11). Since publication of the EEO report, the pilot programme has been extended to all nine federal states.

Table 16: Please add any other comments to the EEO national report on self-employment:

n/a

Table 17: Please indicate ‘X’ if you have no additional information to the EEO national report on self-employment:

Please indicate ‘X’ if you have no additional information to provide

 

Commentary

Self-employment and job creation have always been on and off the political agenda in the last decade. The governing political parties have put an emphasis on increasing entrepreneurship and reducing barriers for becoming self-employed. Thus, the number of start-ups has increased markedly within the last ten years. Besides instruments available at the national level, a variety of innovative support measures are available at the regional and local levels, which are tailored to the specific labour market needs. While the majority of support available caters to establishing a start-up, generally, only few measures are available which specifically cater to job growth; instead, the availability of credits and funds is expected to encourage hiring employees. The global financial and economic crisis had hardly any impact on the significance of self-employment. With regards to job creation, new measures were implemented as a consequence of the crisis, in order to encourage OPEs and facilitate the hiring of their first employee. The province of Tyrol has introduced an accompanying support instrument and provides a top-up for OPEs in its province which provides an even bigger incentive to hire their first employee. In Vienna, measures targeting the self-employed have existed for a long time; only minor changes have occurred since the global economic and financial crisis hit the Austrian economy. In Graz, self-employed can resort to a whole package of support measures. Furthermore, the WKO is specifically active in promoting entrepreneurship and offers a variety of consulting services all over the country.

Additional sources (to the ones mentioned in 1.3):

Initiative Taten statt Worte (2009): Mikrounternehmen in der Steiermark 2009, Graz.

Wirtschaftsagentur Wien (2010): Förderaktion für Innovative Projekte in der Dienstleistung 2010. Abschlussbericht, Wien.

Bernadette Allinger, FORBA (Working Life Research Centre)



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