Forecast IT spending 2016/17 - Where does Austria stand?

Very little momentum, both good and bad. These words could be used to summarize the current economic development in Austria and the eurozone as a whole.

After an extremely subdued 2015 with growth of 0.9%, the Austrian Institute of Economic Research (Wifo) is forecasting growth of at least 1.6% in Austria for 2016. According to economic researcher Marcus Scheiblecker from Wifo, there is every indication that the gap with Germany can be closed.

ICT trends in Austria

Martin Barnreiter from the market analysis institute PAC took a positive view of economic development with his outlook for the software and IT services market (SITS) in Austria. This will grow by 3.3% in 2016, twice as fast as the economy as a whole.

"ICT is and will remain a strong growth driver for the Austrian economy. We see the greatest willingness to invest in the areas of cyber and network security, analytics, but also in the realization of the digital workplace"

explained Barnreiter.

PAC has identified growth opportunities in the already billion-euro Application-Related Services and Infrastructure-Related Services segments, with increases of EUR 49 million and EUR 43 million respectively.

While the hardware market is unsurprisingly stagnating at a high level in terms of volume, SaaS software is proving to be a hope for the future with growth of 29%. However, the total market volume remains manageable at EUR 70 million in 2016. The entire Austrian IT market is estimated at 6.7 billion euros.

Not a priority: Cloud and IoT

There is also reluctance when it comes to cloud computing and the Internet of Things. While a good quarter of Austrian businesses expect to spend more on the cloud in 2016, according to a survey, the topic is rather low on the list of IT priorities. In contrast, there is more interest in the trending topics of the Internet of Things (IoT) and machine-to-machine (M2M), although specific investment plans are still being formulated with extreme caution.

For Günther Seyer from PwC Austria, the key to success lies in open standards. As long as established players try to artificially prolong their technologies on the market with their proprietary solutions and interfaces, the Internet of Things will hardly celebrate its breakthrough.

"The Internet of Things is not a market, but is made up of a wide variety of market components."

The question of the extent to which the automated factories of the future will drive up unemployment figures even further was also a topic of discussion at the event.

"Economists have very different views on this and paint doom scenarios with up to 40 percent of all jobs being lost. My personal approach is:

We and the labor market survived the advent of the railroad, the telephone and the computer. It won't be much different with Industry 4.0, as with any other technological advancement"

says Scheiblecker.

Shortage of skilled workers worsens

An acute issue for the entire ICT sector, however, is and remains the glaring shortage of skilled workers. According to estimates, there is currently a shortage of up to 3,000 specialists. The high number of job seekers has hardly been able to solve the problem so far.

Applicants often fail due to the high degree of specialization that is often required by companies. The variety of requirement profiles for people in the ICT sector has risen sharply in recent years and poses a major challenge for the industry.

For employment agencies such as the Arbeitsmarkt Service (AMS), it is difficult to respond to the rapidly changing job profiles with suitable training. In future, special computer programs will help to match advertised job profiles with suitable applicants.

The aim is to use software algorithms and technologies familiar from online dating sites, for example, to bring together suitable profiles. Norbert Weidinger from the Vienna Municipal Directorate also believes that schools and other educational institutions need to respond to the shortage of skilled workers.

This would require changes to the curriculum. In addition, it is important to raise awareness among the population of the importance of the ICT sector in the country.

"The added value of the IT industry in Vienna is four times as high as that of tourism. But only very few people are aware of this"

says Weidinger.

In Vienna, the "Digital Agenda Vienna" developed with the population has not only led to a high level of citizen participation, but has also helped to raise public awareness of the topic of IT.