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City of Linz Key structural and economic characteristics

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City of Linz

Key structural and economic characteristics

The city of Linz is the regional capital of the Austrian regional (‘Bundesland’) of Oberösterreich (Upper Austria) and has a population of approx. 190.000 inhabitants on an area of around 96 km. Immediately linked to some 30 smaller towns and districts, the Linz conurbation has a population of approx. 400.000 inhabitants and an area of around 600 km² (240 square miles) and thus - with the exception of the Viennese area - constitutes Austria’s most important economic centre. International transport links are available by water, rail, road and air. Directly located on the Danube river, the Linz port handles over 77% of Austria’s total water-borne freight, while the Blue Danube Airport is only 13 km from the inner city and offers links to international hubs such as London/Stansted, Frankfurt, Munich, Vienna and Barcelona/Gerona. The Munich – Vienna – Budapest and Nuremberg – Regensburg – Vienna motorways meet within the city’s region and the rail links from Vienna to Munich and Regensburg pass through the Linz junction.

Linz also represents an educational and scientific centre. The focus of the city’s four universities and advanced college of applied sciences, which accommodate a combined total of around 20.000 students, is on technology and economics, although business-related services and the arts are also covered. Special emphases exist in IT, mechatronics and metallurgy areas and these have recently been supplemented by plastics technology. Industrial-related services (e.g. marketing) also represent a study focal point.

The combination of IT, electronics and mechanical engineering have made Linz Austria’s only mechatronics centre, while new technologies have led to the creation of a first class location for the production of steel (VOEST Alpine Group) and pharmaceuticals (Hoffmann-La Roche, Sandoz, Fresenius etc.) and plastics (based on melamine and polymers, etc.). Nonetheless, traditional strengths have been retained, intensive R&D resulting in the fact that Linz has become a globally respected metallurgical know-how centre and is ‘en route’ to a leading role in the plastics development sector (plastic electronics). The globally active Ars Electronica Center also illustrates the city’s competence in the IT sector.

These developments have led to an excellent and stable employment situation in Linz and with a unemployment level of 3% (+/- 0,2 %), full employment can be said to have existed for a considerable period.

Key business & employment sectors and clusters

The sector split in terms of employment of Linz is approx. 58% working in public and private services, 15% in retail, 22% in industry and commerce, while 5% are self-employed. Key industries in the urban region consist of metal production and processing, chemicals and pharmaceuticals, electronics and mechanical engineering, IT and foods production. Moreover, as a result of the diversity of educational possibilities available in Linz, around 30.000 people are employed in some 2.000 creative economy companies within the city region.

Importance of the SMEs in the local economy

In total 6.300 companies and institutions within the city offer self-employed and employed work to approx. 203.000 persons. Around 85 % of the city’s companies have fewer than 20 employees and only approx. 4,5% have more than 100 workers. This extensive distribution indicates the importance of the SME structure for Linz as an economic location.

Key challenges for a successful and sustainable development of the SME community

Related to social issues one main concern for the future development of SMEs is a sufficient supply of day care for children, suitable public transport links to the work places as well as a sufficient supply of medical services in the vicinity of work places.

For the enterprises access to market, premises and financing are important as well as non-bureaucratic procedures. Thus, the city of Linz seeks to provide local SMEs better access to markets, good logistic links, co-operation networks (organised clusters), market research partners, etc. The physical conditions are quite favourable offering excellent infrastructure readily available at reasonable prices, acceptable energy costs (electricity), moderate land prices and rental charges for available property with connected utilities. And also for organisational aspects the City of Linz is well concerned in order to provide rapid approval procedures and low costs for opening businesses as well as existing services and grants. There are training and qualification possibilities at appropriate times (e.g. evenings) at moderate prices and in the vicinity.

In terms of access to finance there seem to be no deficits in existing offers for start-up businesses; also seed financing is currently functioning well. The problems lie in the area of financing expansion measures following the foundation phase, deficits in small equity sharing and the lack of information about existing support services.

Existing policies and programs that cover SMEs’ access to finance and innovation

In Austria a venture support act, which frees start-ups from various costs, applies at federal level. In addition, there are guarantee and joint venture companies in the federal regions (Länder), while regional bodies offer company founders low-interest micro- and mini-loans. In the larger conurbations (such as Linz), there are frequently individual grant possibilities for founders (investment grants, rent subsidies), as well as a complete range of cost-free services.

Financing measures and their support/follow-up can be provided via laws/decrees from the federal and regional governments (‘Land’), but also on the basis of directives from individual cities/towns/districts. The handling of these measures takes place on a regular basis via the banking sector, when financing is required. Where grants are concerned, these are mainly dealt with on a direct basis. On regional level also the EDRF program foresees activities to promote innovation in enterprises, to strengthen the creation of new enterprises and to provide risk capital. There is no JEREMIE initiative in the area yet, but different JEREMIE type of instruments. Financing from the region of Upper Austria has to be agreed by the regional government or parliament.

On regional/local level there are regular, tailor-made funding measures in line with the needs of individual companies or groups of businesses. Moreover, diverse financial possibilities are indicated via regional marketing and service facilities. Financial support for SMEs provided by the city is generally agreed by the city council (directives or individual measures).
Assessment of possibilities for local SMEs to get access to finance

Concerning access to finance for SMEs there is support during the start-up period of companies (launch costs, operating costs in the first phase: e.g. rents, etc.). Moreover financing is eased via guarantees and interest grants for company loans as well as venture capital funds and joint ventures. Access to innovation, knowledge and R&D is ensured by co-operations with universities, colleges of applied sciences (‘Fachhochschulen’), technology centres, venture centres and incubators as well as research grant consulting.

Thus, there are a lot of support offers for start-ups, like grants, special loans, start-up centres, coaching measures (business angels, education measures, guarantees and interest grants for company loans etc.). The problems lie in the area of financing expansion measures following the foundation phase, where the development of venture capital measures, participation financing models via the classic instruments ranging from stocks to bank loans would be interesting and important. Moreover, there are only a few measures of small equity sharing at the moment. Another problem is the lack of information about existing supports and grants in the start-up phase and the way of access to finance.

Foreseen Local Action Plan and Local Support Group

Overall objectives for addressing specific problems and topics

The City of Linz has decided to focus its Local Action Plan on the establishment and further development of the creative and innovative industry sector. This objective is also related to the organisation of the Cultural Capital of Europe in 2009 which shall, among others, serve as further booster for this industry sector with high growth potential. The Local Action Plan will be realised through the formalisation of a network of all the relevant local stakeholders (“local round table”), who, under the chair of the Municipality, will implement the Local Action Plan considering the expected input from the FIN-URB-ACT exchange.

Single Activities and steps within the Local Action Plan

For fostering the local creative and innovative industry sector in Linz, activities are foreseen in the field of mapping existing support offers, analysing business requirements and needs and better promoting existing support.

Mapping public support measures applicable to innovative and creative industries in Linz

Under the guidance of the Johannes Kepler University, Institute for Entrepreneurship, an internet homepage will be prepared compiling existing public support offers available for innovative and creative industries in the Linz SME community. This will be based on a respective survey/documentation including short descriptions of the support measures for SMEs and related web links. The compilation will gather existing national and regional support measures which are tailor made for Linz, Upper Austria. The survey will have a maximum volume of 10 pages and will be circulated among the participants of the local round table organisation for complementary information and updating.

Survey on the requirements of the local target businesses

An internet survey will be conducted on a representative number of local businesses of the target group to collect detailed information on their requirements and needs in terms of access to finance and related support services. The questionnaire and evaluation will be also conducted by the Institute of Entrepreneurship. Other FIN-URB-ACT cities may participate in this survey to find comparative facts. Complementary exemplary business case studies will be conducted by means of interviews.

Establishment of the “Round table”

The local project partners will set up periodic meetings. The objective is the continuous joint exchange of information about support proposals and development projects, offering a large and comprehensive support network for all the business life phases (start-up preparation, founding, growth phase etc.) and to jointly agree on and develop further proposals.

Awareness-raising and organisational events

An information campaign with reports about study results and cases of good practice of local businesses and support proposals is planned in collaboration with support of the region’s most important news paper (Oberösterreichische Nachrichten). Supplementary information and awareness-raising measures for businesses and potential start ups (for example students) by the members of the round table, individually and jointly, are planned.

Composition of the Local Support Group


Name of the representative

Position in the organisation

Expected contribution to LSG


Federal Government of Upper Austria

Mag. Eva Zsigo

Director of Economic Department

Expertise in public grants

Federal Government of Upper Austria

Dr. Günther Knötig

Director of the Department for Spatial Planning

Expertise in regional economic situation

Federal Government of Upper Austria

DI Andreas Mandlbauer

Project Manager

Expertise in regional economic situation

City of Linz

Dr. Wolfgang Hofmann

Director of Economic Development Department of the City

Expertise in local economic situation

City of Linz

Dr. Barbara Kovsca-Sagmeister

Project Manager

Expertise in local economic situation

Sparkasse Oberösterreich Bank AG

Mag. Robert Schernhuber

Director of the Public Grants Department

Financial expertise

OÖ. Kreditgaran-tiegesellschaft m.b.H.

Anton Grottenthaler

Managing Director

Financial expertise in the investments sector

OÖ. Unterneh-mensbeteili-gungsgesell-schaft mbH

Anton Grotten-


Managing Director

Financial expertise in the investments sector

Wirtschafts- kammer OÖ

Dr. Thomas Denk

Managing Director

Bezirksstelle Linz

Expertise regarding SME needs

Wirtschafts-kammer OÖ

Dr. Gerald Silberhumer

Managing Director


Expertise regarding SME start-ups

techcEnter Linz- Winterhafen

DI Georg Spiesberger

Center Manager

Expertise regarding SME needs

tech2bGründer-zentrum GmbH

Mag.(FH) Markus Costabiei

Managing Director

Expertise regarding SME needs

Clusterland OÖ.

Mag. Regina Leutgeb

Project Manager

Expertise in consulting SME´s

Johannes-Kepler-University Linz

Dr. Norbert Kailer

Uni-Professor, Director Institut Unternehmens-gründung und

Expertise in corporate finance

CATT Innovation Management GmbH

DI Wilfried Enzenhofer

Managing Director

Expertise in research consulting

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