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Economist wake up call for sleepy Vienna
The Economist Schumpeter columnist has warned that despite its obvious attractions Vienna is losing out to other regional capitals in attracting big business.
The well known and respected Schumpeter column takes its name from Joseph Schumpeter, an Austrian-American economist who likened capitalism to a "perennial gale of creative destruction"
In the latest offering it asks: "Who would swap the baroque splendour of Vienna, its Spanish riding school and Hofburg palace, for bourgeois Geneva or even post-Communist Prague? Alas, more and more companies locating a regional headquarters for central and eastern Europe (CEE) tend to now put good communications and an internationally-minded labour force ahead of grand opera and Sachertorte. That includes The Economist, which moved its regional office from Vienna to Geneva in 2008.
To be sure, Vienna is still the regional hub. At the last count, 303 companies have their CEE headquarters in Vienna, 14 more than two years ago. But during that period eight companies pulled out, or were lost through mergers. And firms no longer just look to Vienna’s west, where Munich, London and Amsterdam loom large, but east—to Bratislava, Budapest, Prague and Warsaw. Between them, these four cities now boast 80 regional headquarters, according to a study by Wolf Theiss, a consultancy.
Vienna has not played its cards well recently, says Leo Hauska, whose public relations firms fronts for Headquarters Austria, a local initiative. Take infrastructure. The expansion of Vienna airport has been dragging on since 2004 and may not even be completed by mid-2012, the latest new target date. Worse, Austrian Airlines, the national carrier, has been bought by Lufthansa and is likely to see its hub shifted to Munich—a heavy blow for an airport that today has more connections to central and south-east Europe than any competitor. Taking the train is no pleasure either: the fast rail link from Vienna airport ends in a concrete jungle and regional railway links are underdeveloped. To boot, the road to Prague is a nightmare.
Still, a few companies still swear by Vienna. Henkel, a German detergent maker, has huge regional headquarters and a logistics hub there. The generally good economic environment, the quality of life and the city’s central position are Vienna’s most important assets, says Günter Thumser, head of Henkel CEE.
If others have hopped across to Bratislava in Slovakia, for instance, it is mostly because the cost of living is lower. Johnson Controls, an automotive supplier, moved its global financial headquarters there from Mexico. Darby Overseas Investments, the private-equity arm of fund managers Franklin Templeton, decided to relocate from Vienna to Bratislava last year. Bratislava is also gaining weight as a cluster for information technology firms: Citrix Systems, Hewlett Packard and SAP use it as a regional base.
Glen Farrell, an Irishman at Sario, Slovakia’s agency for inward investment, says attracting headquarters has become his big mission. On a recent trip to America, he found that Slovakia’s finer points were largely unknown, such as its membership of the euro zone. “That blew their minds,” he recalls.
Yet Vienna will not be beaten so easily. Headquarters Austria and the Austrian Business Agency are planning a big congress next October to tout the city’s horn. They will still have plenty of things to boast about. According to the Economist Intelligence Unit’s liveability ranking, the quality of life Vienna is second only to Melbourne: it has great international schools; the city is stuffed with everything from cafés and restaurants to parks and palaces; and inner city transport is a delight.
Other than its infrastructure Vienna has one big weakness, however: languages are not its peoples’ strong point; nor, apparently, is the readiness to move to another location at the behest of a global employer. But who can blame a Viennese for that?
Austrian Times
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Glen Sweeney wrote on 14. 12. 2011 from Vienna about "Economist wake up call fo..."
Absolutely, 'wake up' Vienna or rather the business folk that still live in the past and think that 'status quo' is going to lasts for ever. Look beyond how you have done things and who you have known and used for the last twenty years. If you stick to the old ways, so that you protect yourselves and your secure positions, the world will overtake you; indeed it already has and continues to do so. It seems impossible for you to embrace change and progress, when both can be welcomed, without threatening the culture of the city. With inspired, decisive and uncorrupted business leadership, there is no reason why the past and the future can not live in harmony within our present time. As the original article demands ?Wake up?, and see beyond yourselves.
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