Economic Success without an Industrial Strategy: Austria in the 1970s

Starting from the relative success of the Austrian economy in the 1970s the problems of industrial policy and the position of industrial policy in the context of economic policy are examined. Policies directed towards improving the industrial structure have had a lower priority than policies aimed at producing sufficient total economic growth to avoid unemployment and disputes over the distribution of the GNP. The structure of Austria's foreign trade shows that Austria still has not achieved the industrial structure appropriate for a small industrial country in an exposed geographical position. In Austria the problems of industry are regarded as legitimate affairs of government and, although there is criticism of the details of government intervention, the economic responsibility which is conferred on the government is an extensive one. Austria's political culture exhibits both consociationalist traits, with most laws being passed with the support of the two big parties,, and ‘social partnership’ in the form of voluntary co-operation between the unions and employers' associations. The political consensus means that discussion tends to revolve round technical rather than fundamental issues of industrial policy. Since the early 1970s the preservation of full employment has become the dominating industrial policy goal of the Austrian government; as a result, policy is mainly reactive rather than proactive. Fiscal investment aids are by far the most important industrial policy instrument, though their use has been criticised. There are also direct expenditure schemes, aimed at particular sectors as well as the general stimulation of investment; these aids have also been criticised. The prospects for the introduction of industrial policies more focussed on qualitative changes in industrial structure are not considered good, but political stability seems assured.