Recent international research places Austria squarely in the middle of a shifting productivity debate. Evidence published over the past two weeks suggests that productivity outcomes are no longer driven primarily by headline policy instruments alone, but by how well firms adapt—digitally, organisationally, and institutionally—to structural change.
New analysis from the Centre for Economic Policy Research highlights this dynamic through the lens of remote work. Using detailed firm-level data, the research shows that productivity losses associated with the initial shift to working from home faded as firms adjusted their processes. Larger, digitally prepared firms adapted more quickly, while firms with highly qualified workforces were able to turn remote work into a net productivity gain over time. For Austria, with its strong base of mid-sized, export-oriented firms, the findings underline the importance of digital readiness rather than the remote-work model itself.
Parallel work by the Organisation for Economic Co-operation and Development reinforces this message at a regional level. The OECD’s Connecting FDI and SMEs for Productivity and Innovation in Europe report maps where foreign direct investment (FDI) is concentrated across EU regions and examines local conditions associated with stronger FDI–SME linkages. It suggests that gaps within and across countries are increasingly explained by firm quality, management capability, and access to innovation networks—a pattern reflected in Austria’s mixed regional performance.
Foreign direct investment (FDI) is identified as a potential lever for productivity, but only when effectively connected to the domestic economy. The same OECD report argues that spillovers are not automatic. Productivity gains materialise when local firms are capable of integrating into multinational value chains, absorbing technology, and upgrading management practices—an area where Austria’s SME-dominated structure presents both an opportunity and a constraint.
Events such as the STEG–PEDL Virtual Course on Private Enterprise, Productivity and Economic Growth, jointly presented by CEPR’s research programmes, reflect growing interest in firm-level productivity issues. The series explores the structural factors behind productivity growth and how private-sector firms can adapt to dynamic economic environments.
Regulatory design also features prominently in the productivity discussion. OECD commentary on regulatory compliance costs indicates that, while regulation supports stability and standards, excessive administrative burdens disproportionately weigh on smaller firms. In Austria, where compliance requirements are often cited by SMEs as a barrier to growth, this dynamic risks reinforcing existing productivity gaps between large enterprises and smaller operators.
Labour market institutions add another layer of complexity. New research from the Centre for Economic Policy Research shows that minimum wages can act as insurance within firms, protecting lower-skilled workers from income volatility during productivity shocks. However, this mechanism shifts adjustment pressures toward higher-paid workers, raising open questions about longer-term effects on firm incentives to invest, automate, or reorganise—issues that resonate in Austria’s coordinated wage-setting environment.
Taken together, the recent evidence positions Austria at the heart of a broader European productivity transition. Macroeconomic policy, regulation, and labour institutions remain influential, but their effectiveness increasingly depends on firm-level capabilities: digital maturity, workforce skills, management quality, and the ability to connect to international markets. Productivity growth, the signals suggest, is now less about single reforms and more about sustained organisational adaptation.
It remains unclear how quickly Austria’s smaller and less digitally advanced firms can build these capabilities, particularly as hybrid work becomes entrenched. There is also limited evidence on which policy tools are most effective at accelerating productivity diffusion across regions and firm sizes without amplifying existing structural advantages.