Interview with Henrietta Egerth and Klaus Pseiner, Managing Directors, FFG (Austrian Research Promotion Agency)

Mar 2020 Interview with Henrietta Egerth and Klaus Pseiner, Managing Directors, FFG (Austrian Research Promotion Agency)

PRISMA REPORTS: Austria is a European success story for research and innovation. It is a leader in the Horizon 2020 framework program, having surpassed the 1 billion Euro mark in 2018 and on track to reach its goal of receiving 1.5 billion Euro by 2020. Austria boasts the second highest success rate in the Framework Program, a remarkable 17%, well ahead of the EU average of 14.7%.Why don’t we begin the interview by talking a bit about the history of FFG, how it came to be, and its role as the National Contact point for Horizon 2020 ?

Henrietta Egerth The Austrian Research Promotion Agency was founded in 2004 through the merger of 4 organizations. One organization called the Bureau for International Research and Technology Cooperation (BIT), who dealt with most of the R&I related European funding initiatives, is now one of the bigger parts of FFG with about 35 employees and experts working in this area. In Austria, the system of the National Contact Points (NCPs) is organized as a one-stop shop. We have the NPCs for all topics in the FFG in this area of the European Framework Programme for Research and Innovation. As we have learned, all our mechanisms like interview trainings, reading of the proposals, going through the ideas with the researches, finding out what applications they want to take to the European level — there is a 2.5 times higher percentage of being successful, if you run through our mechanisms have proven. So, what we’re doing makes sense and is an enormous support for the researchers and companies. We’re trying to stop applications that we think don’t make sense, from going through this whole process and then not succeeding at the European level because this is really frustrating. We want our researchers and companies to not have to go through this process without being relatively sure that this will be successful. We are trying to break the 1.5 billion mark by the end of this 7-year period of the European Framework Programme Horizon 2020, before the start of Horizon Europe and I think we are on track.

Prisma Reports: How would you describe the current Austrian research and innovation ecosystem?

Klaus Pseiner The Austrian innovation system, R&D cluster and the innovation-focused and scientific community operate at a high level compared to international standards. This is what we are striving for here at the Research Promotion Agency. We see the 3 dimensions – International, European and National. We place a strong emphasis in connecting these dimensions which is partly what makes the Austrian output in R&D successful. We define output as achieving a goal with respect to the competitive advantages of companies in Austria. We have very good cooperation with major R&D areas which are highlighted in the European Programmes like energy, resources, IT and manufacturing, which is very specific to Austria. We have a very strong scientific and R&D community with a really comparable output at the highest level for all the niches which are important for Austria .

Prisma Reports: The Austrian economy remains a powerhouse in advanced manufacturing backed by a powerful set of « hidden champions » in key sectors including metal technology and aerospace to name a few. These companies are leaders at the global level in their respective sectors, specialize in niche areas, and tend to invest heavily in R&D and innovation. As an agency with a bird’s eye view of the innovation landscape in Austria, cutting across sectors and institutions, what are some of the up-and-coming niches which international investor should keep an eye out for in Austria ?

Henrietta Egerth There are 3 or 4 important areas where we can find a niche in, because as a small country we cannot dominate everything. We have niches like quantum physics, where we have 2 or 3 good groups, and they act as hubs that head research in the theoretical parts of quantum computers and quantum communications. This is a sector where we can make a difference in the research field but also in products, that’s the most important part of the game and is also what the Austrian Research Promotion Agency is interested in. Beyond fostering basic research, we strongly focus on applied research where we bring the idea to the market. Using the example of the quantum computer, it really makes a difference if it’s possible to get basic research in quantum physics into the market before the US or other countries. Another niche we have is in the area of Cyber Security. We have strong hubs in Styria and Upper Austria. AI is another large sector which can make a difference in the future and we have up and coming groups in Linz with Professor Sepp Hochreiter for example. He is really an AI-pioneer! It’s about how we can connect companies to basic research – to identify market possibilities and products and get R&D started. These are the niches. The strongest medium sized firms sold technology bases we have are in machinery, tribology, and many other sectors.

Prisma Reports: Start-ups and small businesses are also a critical component of the innovation landscape. They are small and agile and can have a big impact on investment in research as well as in job creation. FFG recognizes their value and dedicates a significant amount of funds to fast-growing SMEs both in urban and rural communities. What are some of the latest figures for 2018 and 2019 in terms of funding of SMEs and start-ups by your organization and are there any particular success stories that you would like to share with us?

Klaus Pseiner I would just like to add one more sector called the Aeronautical and Space sector, which has a high focus in the US. In this sector, Austria had to catch up in terms of technology and application over the last years and we are now a very strong partner to US companies and R&D efforts and the Chinese economy. This sector is fast-growing with many highly specific know-how and R&D expertise in the fields of mechanisms, thermal control and signal processing, where we have very strong cooperation with companies – specifically with Boeing in the Aeronautic field and NASA as far as scientific missions are concerned. I expect that to grow over the years. We are also very interested in intensifying the cooperation between the US and Austria. In this context, startups play a vital role specifically in the field of space application. A number of startups have developed over the last few years and we support them with our strong portfolio. Our R&D efforts and support mechanisms for startups are independent of their thematic goals – we have other criteria to decide if we should invest in them or not. The startup scene in Austria is highly dynamic. Many visible initiatives like the Pioneers Festival, have been established in Austria over the last years and they have brought together the international community in the startup space. In FFG, we provide strong support to them especially at the beginning of their lifetime. We have a startup package which we offer. We are the largest startup promoter in Austria: in total we have invested about 70 million euros over the year 2018 into the early stages of various startups and there are visible successes we can report.

Prisma Reports: One of the key challenges that has been identified not only in Austria, but at the European level as well, is the skills gap that currently exists when looking at digital competencies. Today, close to 40% of the European labor force lack strong enough competencies in the digital sphere to compete globally. Tell us more about some of the key initiatives you are spearheading from FFG to address the skills gap?

Henrietta Egerth Austria is a good place to be for R&D companies. Firstly, we have a very good university landscape with many technical universities and universities for applied sciences (Fachhochschulen), they act as skills-focused hubs. With the also international highly recognized dual system of apprenticeships and the graduation from applied schools, there are different paths of professional education. In Austria, this is a pool of human resources that you can tap on. Secondly, Austria is in the heart of Europe and we are surrounded by Eastern European countries, which allows us to attract people from Eastern Europe who are highly educated. There is a pull mechanism from Austria which creates the possibility where companies can reach out for human resources. Thirdly, we already have highly motivated people in the workforce. We have programs in the FFG like Digital Bootcamps, where we focus on people working in companies and SMEs who need further education and trainings. As we cannot wait for the young people to finish their education, we need to focus on people who are already in the workforce and upgrade them within half a year to one year. Not all of them need to be highly skilled in IT. Some just need coding skills etc. Hence, Austria is really a place where you can attract good people, which is what we have also learnt from companies like Infineon, who invests heavily in R&D and have been able to attract highly skilled people in addition to the good funding scheme.

Prisma Reports: FFG has successfully hosted annual editions of the FFG Forum since 2010. The last edition in 2018 was called Best of Austria meets Europe, celebrating that Austria had surpassed the 1 billion Euro of funds received from the Horizon 2020 Program. The event planned for this year 2019 is called « Best of Future ». Can you give us a snapshot of what we are to expect from the 2019 edition and what is the significance of the name ?

Klaus Pseiner We are the focus of the Austrian innovation system and that means that we invite all our cooperation partners once a year and have a structured dialogue to better understand their needs for the future and show them our new initiatives. This is done through our FFG FORUM. It’s a platform for all our cooperation partners. It’s impossible to discuss all the topics in one day and thus, we need to focus on some. This year, one major driver was to show the community that we need to take the next step in creating new ventures on all levels. That means that we as a Research Promotion Agency, should think about all our intervention structures and interfaces that exist within our company, industry and universities. We expect them to stay active in that field, take risks, and go ahead. We are prepared to share those risks and uncertainties which are linked to the R&D efforts. This is what we will be talking about on 12 September with partners from all over Austria and the world.

Prisma Reports: In your opinion, what does the near future hold for Austria (politics aside)?

Henrietta Egerth Austria is known for it’s stability and that’s also due to our small-medium enterprises who are robust and probably more resilient than other companies and countries because we have this strong company base in Austria. We will see changes and one major change is our export market. It is now 80% Europe focused and we need more exports and connections beyond Europe like the US and countries in Asia. That is one of the challenges we have to tackle – how to get good partnerships and projects with countries outside Europe. Within Europe we already have very strong ties. We need to go beyond Europe.

Prisma Reports: To conclude this interview, what’s your final message?

Klaus Pseiner We are a strong partner and will remain a strong partner to strengthening Austria as a place to be for research and innovation. We will do everything we can to increase the competitiveness of the Austrian R&D sector. This is the best selling point for our international partners to cooperate with us because cooperating with Austria means you have a partner who is dynamic. Nationally, every partner gets heavy support in parallel to the international requirements. Challenging developments can be created together with partners, and support will be given on all levels of the Austrian government and industrial sector.

Henrietta Egerth Strong partner and one-stop shop are the two key messages.