Eighth Austrian Creative Industries Report

The creative industries are one of the fastest growing sectors of the global economy, not only in terms of turnover, but also in terms of job creation and exports. Asia-Pacific is the largest creative industries market in the world in terms of employment and turnover, followed by Europe and North America. The global creative industries are developing extremely dynamically, although Europe is increasingly falling behind the emerging Asian creative market. Within the EU, the Austrian creative industries rank tenth in terms of turnover generated and eleventh in terms of employment in a comparison of countries and thus have an above-average importance. In order to ensure that Europe - and also Austria - does not lose out in the global race, it is crucial that the internationalisation of the domestic creative industries is actively and efficiently promoted.

Compared to other service industries, the creative industries have a high export ratio.
However, its net exports are negative.

The analysis of the degree of internationalisation of the creative industries shows that the creative industries have a high export ratio with regard to the goods and services produced compared to other sectors and sector aggregates of the Austrian economy, especially compared to service sectors. It contributes significantly to Austria's exports and is successful in a mostly very dynamic and highly competitive field.

The creative industries have an export ratio of 19.4%. The export ratio, a key performance indicator for internationalisation, refers to that share of production taking place in a certain area of the economy that is destined for export. According to the Satellite Account for the Creative Industries (IWI), exports account for €4.15 billion of the creative industry goods and services valued at 21.42 billion.

The creative industries largely have the character of a service sector, but in some areas they are counted as goods production. Compared to the average of the service industries, which have an export ratio of 12.5%, the creative industries show a significantly higher degree of internationalisation. In comparison, goods production has an export ratio of 60.2%.

Export ratios and net exports vary considerably within the creative industries.

The analysis also shows that the ten creative industries have very different framework conditions for internationalisation and, as a consequence, different measures of internationalisation. This is true for the export rate and even more so for net exports.

Exports and export quotas differ considerably in the ten creative industries. The largest exports are in the software and games sector with €1.68 billion, followed by the creative industries sector advertising with €992 million.
publishing, which exports goods and services amounting to €752 million.

The software and games sector also leads the ranking in terms of exports. This creative industries sector produces 32.0% for export. The music industry and the design sector rank second and third with 25.3% and 24.3%, respectively. Some creative industries are only weakly internationalised in terms of the export quota, with export quotas of less than 10% (architecture, radio and TV).

Imports are also a measure of internationalisation. Net exports, defined as the difference between exports and imports, show whether an economy is exporting more or importing more of a certain good, and thus may allow conclusions to be drawn about its competitiveness or about existing opportunities for increased exports. In 2013, the Austrian creative industries exported goods and services worth €4.15 billion, while imports amounted to €5.30 billion. Net exports are thus negative and amount to €-1.15 billion or -27.7% of exports. This provides an indication of the existing potential in exports, but also of the competitive pressure that exists in many areas. In comparison, the net exports of the entire service sector (excluding the creative industries) amount to 46.1%.
creative industries) amount to 46.1% of their exports.

The net exports of the individual creative industries differ greatly, which indicates different competitive conditions. With negative net exports, the sectors of books and publishing (€-615 million), advertising (€-515 million) and the film industry (€-343 million) in particular contribute to the negative overall result. Among the creative industries with positive net exports, the software and games sector stands out (€330 million).

The focus of the target markets is on EU Europe

In terms of geographical target markets, the focus of the Austrian creative industries is on EU-28, with Germany accounting for the lion's share. According to the satellite account for the creative industries, a total of €2.87 billion in exports, or 69.1% of exports, are destined for this target market. The composition of the target markets also varies according to creative industries. The performing arts market and museums and libraries have a particularly high share of exports to countries outside the EU. EU-European exports have a particularly high share for the radio and TV sector and for the film industry, but this with rather small absolute values for exports. The EU-European export markets also have a slightly above-average significance for the two large creative industries of books and publishing and advertising.

Software and games and advertising have the highest export growth rates

With the help of the primary statistical evaluations in addition to the evaluation of the satellite account, the trends in the development of the individual creative industries in particular can be secured in the period from 2013 to 2016. The area of software and software-related services experienced particularly strong growth with annual growth rates of more than
of more than 4% in the software and games sector. The advertising sector has also recorded steady growth in exports (approx. 5%). All other creative industries do not show a clear trend in this period or show an erratic development.

New ideas and technologies and an expansion of the sales market are the main motives for internationalisation

A representative survey conducted as part of the study shows that 86% of all domestic creative industries enterprises are active abroad in the narrower sense. Active abroad in the narrower sense means that they buy products and services from abroad or sell them abroad or cooperate with foreign companies or organisations. The search for new ideas for products and services (42%) or for new technologies (29%) are the most important procurement-side motives for taking up foreign activities. On the sales side, the expansion of the sales market as well as the customer, client and audience groups (53%) or the increase of the degree of awareness (47%) and
increase in turnover (47%) are the main motives for doing business internationally.

Contacts to networks, partners as a success factor

The most frequently cited success factors for the internationalisation of creative industries companies are procurement and sales: Contacts to networks, partners (66% and 67%, respectively), language skills (53% and 56%, respectively), adaptability (55% and 53%, respectively), and on the sales side, a good corporate image (60%).

Lack of time and human resources as the main obstacle 

The main reasons why companies are not or only to a small extent active abroad are a lack of interest (36% on the procurement side; 27% on the sales side) as well as a lack of time and human resources (38% on the sales side). The latter is particularly due to the small-scale structure of the creative industries. In addition, insufficient networks/contacts are often cited by the companies as an obstacle (28% on both the procurement and sales sides). This is also reflected in the study of the internationalisation process of two small Austrian
Polycular (a start-up in the software and games sector) and Formquadrat (design sector): Both identify the additional time, financial and human resources required for travel and communication activities as the main challenges.

Satisfaction with self-set internationalization goals is very low

Only 5% of the creative industries enterprises surveyed describe themselves as very satisfied with regard to their foreign projects. In contrast, 17% express their extreme displeasure; exactly one third of the companies, on the other hand, are neutral or ambivalent about their foreign activities.

Visibility abroad most helpful for own internationalization

Most helpful for successful foreign activities is the support of companies with regard to their visibility abroad, for example via platforms and participation in trade fairs/exhibitions abroad as well as trips abroad. As far as support services in connection with internationalisation are concerned, companies see potential for improvement in the provision of contacts with foreign companies or customers (38%) as well as in the
direct contact and access to local networks (32%). This is also confirmed by the two Austrian case studies: Both Polycular and Formquadrat recommend participating in international competitions to increase their own level of awareness and visibility.

Polycular considers a certain flexibility for travel activities and fluency in English to be "must-haves" for international activities and recommends the establishment of "collaborative workplaces" across national borders. Formquadrat, on the other hand, advocates the use of contacts (to customers), networks and cooperations, openness to inquiries from abroad and the use of funding and consulting offers.

Current strategies at EU level offer increased financial strength, cross-border political cooperation, exchange programmes and cross-border projects.

Internationalisation is the key factor for a successful creative economy. This is why the EU is pursuing strategies to enable creative businesses to make the leap from local to global. With Creative Europe, the EU supports the creative industries through its own
programme. With the sub-programmes MEDIA and the Guarantee Fund, the focus is on strengthening financing or access to external financing and on transnational political cooperation. Equally relevant for the creative industries, but addressed to all sectors, are the research programme Horizon 2020 and the programme for the competitiveness of enterprises, COSME: While Horizon 2020 aims at international cooperation and industrial leadership (innovation, growth and an expansion of markets), COSME focuses primarily on the internationalisation of enterprises and access to funding. Another EU-level programme is Erasmus for Young Entrepreneurs, a cross-border exchange programme for (budding) entrepreneurs. In addition, the EU Structural Funds offer opportunities for the implementation of cross-border projects for the creative industries, such as through Interreg Europe.

The focus of internationally oriented creative industries policies at national level is on improving structural access. 

A collection and examination of national, supra-regional and regional strategies to support internationalisation and export in the creative industries sector shows that there are different types of internationally oriented creative industries policies in Europe: explicit creative industries strategies, general internationalisation approaches (with a focus on the creative industries), cultural policy and cooperative internationalisation approaches as well as support strategies for international networks and clusters. The focus of the strategies examined is on improving structural access (platforms, trade fairs, events, etc.). Training, export advice and information, but also local support (e.g. via trade representations) are important here.

Strategies in Denmark, the Netherlands and the UK provide advice, export promotion and grants for international projects.

In this study, three national internationalisation strategies for the creative industries in the countries Denmark, the Netherlands and the United Kingdom were examined. Taken together, these internationalisation strategies for the creative industries offer advice, export promotion and grants for international projects. All are based on a broad stakeholder process. Contents include targeted and intensive advice on export opportunities and barriers for the company as well as consideration of the needs of creative companies (e.g. sector, type). For all three strategies, long-term financing and a sufficient budget for the strategies are important in order to ensure planning security for the companies.
planning security for the companies. In addition, in order to assess and analyse the planned/implemented projects and activities, good sector knowledge is required of the experts who act as contact persons for the support measures in an advisory capacity.

Current strategies and measures in Austria

In Austria, there are already a number of measures aimed at increasing the export rate of (creative) products and services: The internationalisation offensive "go-international" of the Federal Ministry for Digitisation and Economic Location (BMDW) and the internationalisation and innovation agency Außenwirtschaft Austria of the Austrian Federal Economic Chamber (WKÖ) motivates companies to take the step across borders with coaching, events, but also subsidies and other support services. Existing exporters are also
exporters the development of new foreign markets is facilitated. In addition, the special programme "Focus on the Creative Industries" offers knowledge, events and networks and aims to position Austria's creative industries as a driver of innovation abroad. The Austrian
Music Export, the AFC (Austrian Film Commission), the AFA (Austrian Fashion Association), the OeKB (Austrian Kontrollbank) and Section II "Arts and Culture" of the BKA offer further financing and funding opportunities for internationalisation.

Conclusions and recommendations

The basic professionalisation of the company is a basic prerequisite for its internationalisation. Consideration of the small-scale structure of the creative industries is necessary in order to be able to offer adequate support measures, such as increased cooperation with intermediaries, incubators, clusters and networks or matching formats. Since internationalisation is not only about increasing exports, but also about exploiting internationalisation potential, a broad understanding of internationalisation should be taken into account when offering support measures. Low-threshold offers such as participation in international industry events or competitions help to establish contacts and networks. When designing support measures, their success and sustainability should be taken into account. This includes identifying companies with high internationalisation potential or offering longer-term programmes/financing. Strengthening intermediaries and bundling and utilising information is another step towards offering adequate support services and promoting the internationalisation of the creative industries. The identification of current topics and trends in the creative industries at home and abroad with the help of intermediaries is also important for the internationalisation efforts of creative enterprises. There are different needs within the creative industries with regard to their own internationalisation: In the software and games sector, for example, there is a lack of investors and adequate financing structures; formats such as "pitching days" can help here. In the field of advertising, a strengthening of international networking is recommended. In the music industry, a key factor for successful music export is the professionalisation of the industry, to which exchange programmes and matching formats could contribute. In the field of design, international presence and networking is highly relevant. The introduction of a national brand "Design from Austria" could be considered here.

Press conference


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