Dörfler: “We want to be the source of funding for the nascent investment activity of domestic companies”

Since 2014, Erste Bank and Sparkassen has made one billion euro available to finance innovative ideas, projects and business models. The volume of funds set aside for 2017 have already been used up to two thirds. “Demand is high. As of today, we have refilled the barrel with another billion euro again,” explained Dörfler. Therefore, EUR 1.3 billion are available immediately. Companies can submit their projects at http://innovationsmilliarde.erstebank.at/. “Our online ‘Innovation Check’ gives an initial view of how innovative your own company is. It provides information on current agility and to what extent potentials will be used in future,” said Dörfler. The tool was developed jointly with experienced business consultants and shows not only the degree of innovation capacity of companies, but also provides tips on how to implement innovation as well as links and a book recommendation on the subject.

It serves SMEs mainly as a working document to remedy weak spots within the company and to achieve progress. (http://innovationscheck.sparkasse.at/steps)

Digitization as an opportunity for SMEs

Three quarters of SMEs believe that innovation and digitization are closely related. Almost 9 out of 10 companies perceive this development as an opportunity rather than a threat. It is clear that the accompanying advances being achieved in the various areas are of great significance. The top goal SMEs associate with digitization is an increase in efficiency: 86% back this. Furthermore, such a move should help to retain current customers and acquire new ones, enter relevant markets and lower costs. Cutting personnel costs is only of relevance in this context for 19%.

^{Research Report Austria:
Austria’s economy achieved the highest growth rate in six years during the first two quarters of 2017 (Q1: +2.5% y/y and +0.7% q/q; Q2: +2.2% y/y or +0.9% q/q). The robust development of private consumption, which in 2016 was the main driver of growth, is still supporting the economic uptrend in 2017, but to a lesser degree. A strong economic growth stimulus came from investment activity and exports in HY1 2017. The revival of the economy in many key sales markets of Austria (Eastern Europe, euro area) has been driving the export dynamic since the start of the year. At the same time, the influence of political risks in Europe on investor and consumer confidence has decreased significantly in the past few months. This has had a very positive effect on investment activity and domestic consumption. Erste Group analysts expect the positive development of investment activity and foreign demand to continue also in the second half of 2017. Private consumption is expected to stay at a solid level on the back of this generally strong economic dynamic and improving consumer confidence despite the receding positive impulses from the tax reform 2016 and rising oil prices (and the related decline in unemployment). Due to the excellent development of the economy, Erste Group analysts have raised the economic forecasts for the next two years slightly. For the full year 2017, we expect GDP growth to reach +2.3% y/y (up by 0.2% versus our previous forecast). In 2018 we expect the economy to slow slightly to +1.9% y/y (+0.2%).}

^{SME in figures, source: Statistik Austria:
99.7% of companies in Austria are small and medium-sized companies, specifically 327,500. Over 3.5 million persons are employed in such companies – of which 1.6 million are salaried employees. SMEs account for over 60% of the market-oriented economy and attain annual sales revenues of EUR 453 billion.}

^{About the survey: Erste Bank commissioned the opinion research institution IMAS to carry out a survey of SMEs. In the period from 6 April to 25 April 2017, interviews with small and medium-sized companies were conducted on the topics of economic environment, innovation and digitization. In total, 900 interviews with KMUs throughout Austria were conducted (EUR 2 to 50 million annual sales revenues). The main persons interviewed were the managing directors (or persons responsible for commerce and/or finance). For each province of Austria, 100 companies were interviewed in order to make a separate evaluation possible. For the overall view, the provinces were weighted to adjust for their degree of representativeness.}