I had the privilege of interviewing Austria’s Trade Commissioner to the USA, Michael Friedl, and learned about the agency that he heads in New York City, Advantage Austria, which is part of the Austrian Federal Economic Chamber. They have 112 offices all over the world that work to represent Austria and help to establish and facilitate trade relations between countries.
Being an Austrian American dual citizen myself, I am passionate about finding ways to integrate the countries further, realizing how this is part of a dual cultural identity that I have. Furthermore, a pillar for bringing Austria and the US closer together is by trade and economic infrastructure. Austria provides high quality consumer goods and services and is also an extremely high performing nation across the spectrum. The benefits for further Austrian economic integration in global trade infrastructure is immense for a small nation.
Bianca: I read that Austria placed 4th in 2018 for the World Bank’s Logistics Performance Index which ranked countries on six dimensions on trade. Since Austria is exemplary in trade performance, were there factors in particular that generated such a great score? I am not surprised since there are so many other indexes which Austria scores highly on.
Michael: Austria, you know it yourself, is a very small country, maybe the size of Georgia. Trade plays a very important role in Austria as most larger companies wouldn’t survive only catering to the domestic market so they have to look to foreign markets. Trade, logistics, and investing in infrastructure for trade and trade facilitation has always played an important role for Austria. This is one of the reasons that I would say Austria scored very highly.
Bianca: What is the background of Advantage Austria?
Michael: Advantage Austria is the official trade and innovation promotion agency of Austria. We are part of the Austrian Federal Economic Chamber. Every Austrian company is a member of that chamber, which makes it different from the US chamber system, where it’s a voluntary membership and you have many smaller chambers, whereas in Austria, you have a membership by law.
Through this membership, you have a lot of benefits for free, which includes access to resources through our 112 offices worldwide which are kind of Embassies of Trade. It’s the second largest network in the world after the US. It’s a pretty large network considering that we are a very small country. What we do includes market research and market intelligence, coaching of new exporters, as well as the organization of various events – from tech and innovation conferences to trade fairs.
We also have formal partnerships with universities in the US, for instance with Stanford and MIT. We have agreements through which we bring researchers and professors to Austria or connect Austrian companies to the knowledge system at these institutions. It’s a system that goes beyond the normal consular work or trade commission work, we take a hands on approach. 99% of Austrian firms are medium sized companies, so they often don’t have the knowledge or capacity to learn about and enter foreign markets. Sometimes they could not survive without foreign markets, and we try to fulfill that bridge role and support them in their successful internationalization efforts.
Bianca: Successful trade partnerships with the US include well known companies such as Swarovski and Wolford (wow!), but is there a “typical” example of Austrian companies who have established a presence in the US through Advantage Austria?
Michael: If you look at the US, the US is the second most important trading partner for Austria, after Germany, as Germany is a neighboring country, but the US is already number two. If you look for companies from Austria doing business in the US, you would see companies across the spectrum. Most of the exports are in the automotive industry, machinery, steel… heavy industry, so we have a lot of companies in these sectors that have established subsidiaries with our help in the Southeast or Midwest.
Advantage Austria is helping with location scouting, market intelligence, finding possible partners, as well as legal regulations and customs. Beyond industrial equipment, we also have consumer goods and services coming into the US. Some of these services include engineering services or architectural services, financial services, and consumer goods include energy drinks, wine, furniture and cheese etc.
Bianca: Austria is a high performing country that has a population the size of the San Francisco Bay Area. Do you think there is a unique position that this country has with its education system, lifestyle, and the stunning environments? I cannot see any other reason for why you could not succeed with those factors aligned.
Michael: It definitely has to do with education, but I’d also like to highlight again that Austria is a very small country, so often, children start elementary school and learn at least one foreign language or even a second, so we are already trained for the international market. Secondly, I would say that many Austrians can adapt easily to foreign environments and have a certain flexibility when it comes to understanding of and negotiating in foreign markets.
Bianca: You have spent many years working overseas for Advantage Austria, I am sure those experiences have equipped you in terms of diplomacy. What motivates you to help give Austria a strong presence in the US and vice versa?
Michael: For me, I always knew that I wanted to work internationally and abroad, and I was looking for something where I could spend more time in a foreign country working in business. Our terms range from 3 to 7 years in a particular country, where you are representing Austria and the Austrian business community, but you also can also submerge and integrate in your host country. So for me, this was the ideal job where you can combine business support and consultancy with diplomacy.
I started living abroad as a teenager in the UK, Spain and France and then studied at the age of 21 in Canada. I loved Canada and also visited the US for various occasions during this time. When I had an opportunity to head our office in Washington D.C. about 15 years ago, it made me understand and like the US even more and I knew that I wanted to come back. As you might have seen, I’ve also lived in South Africa, the United Arab Emirates, and Iran. I liked the variety of cultures and business environments in these countries as well.
Bianca: Do you consider trade to be a bridge between nations that is critical to global infrastructure now? I look at trade this way.
Michael: If you look at Austria from a political or a military as well as security perspective, I guess Austria does not feature prominently on the map in the US other than culturally or as the country of the Sound of Music. We are trying through trade to expand and complement that image. There are many hidden champions in Austria, who are world market leaders in their field. If you look at med-tech or pharmaceuticals, infrastructure or green energy solutions, tunnel or underground engineering, a lot of that technology is coming out of this small country of Austria. That’s something that people might not be aware of, so yes, there is Mozart, yes there is chocolate, but there is also hardcore business and technology that we want to bring to the rest of the world.
Bianca: What motivates you to help give Austria a strong presence in the US and vice versa?
Michael: I have been to other countries where Austria is more well-known, for example, in the Arab countries or in Iran, Austria is an important gateway to Europe. It’s particularly difficult to raise awareness for a country like Austria. Here in New York, where you can find representatives from the whole world, and where competition is extremely high, you have to know how to do this. It’s not only done by serving cake or wine, you have to convince people that there is a benefit cost-wise or quality-wise to do business with Austria.
Also, in the US, it’s not so much where a product comes from (be it from Shanghai, Santiago de Chile or Salzburg), as long as the product is a good product, it helps reduce costs or increase revenue, or promotes a cause, and you know that story about the product as well. You have to be able to sell that extra benefit, and on top of it, you can serve some whipped cream with it, which is the Austrian culture. Ultimately, the underlying product has to make sense. Nobody will buy it just because it is Austrian.
Bianca: With respect to forecasting trade relations, do you see the future of trade with the US being related to being the more impactful industries versus the typically romanticized images of Austrian exports?
Michael: Well, I think it’s both. I am convinced that the relationship will continue to be expanding as commercial exchanges between the US and Austria, at least in the past five years, have been growing. Every year, we have trade increases of around 10% year-on-year, and that on top of an already very high absolute volume.
On the other hand, tourism has also been expanding; Americans visiting Austria, and Austrians visiting the US. And to complete the picture financial cross-border investments have also been growing. We have around 700 Austrian companies providing 40,000 jobs to Americans. We have about 28,000 jobs in Austria created by American companies, and maybe another 60,000 jobs in Austria directly depending on trade with the US. It’s an ever expanding relationship and a win-win situation for both countries. I think in the future it will be even more so.
Bianca: Do you see a lot of the work that you’re doing is asking Austrians to come this way? It just makes sense that way given the sheer volume of approaching the American population.
Michael: Our most important clients, of course, are the Austrian companies, but one of our goals is further integration of both economies. Yes, we also try to bring investment to the US from Austria and vice versa and bring extra benefits to US companies by linking them with their Austrian counterparts. The best witnesses of Austrian successes are Americans. If an American in Ohio or Iowa or any state talks highly of Austria, that’s much more valuable than if I am talking highly of Austria. Obviously, I’m an Austrian, but if the American counterparts say, “Well, with this technology, I can save so much more money,” or “With this green tech, I am not using as much CO2,” or “Now I can employ 10,000 more people with the help of an Austrian partner,” these are the stories that we want to elevate.
Bianca: What do you see for the future of trade with Austria? How can young people support this trade?
Michael: It’s about stories, and of course, I can tell you to “buy more Red Bull” or “buy more Swarovski,” but I think in the end it’s about listening to what people know about Austria and then tell a surprising story that expands their knowledge about Austria.
Sometimes people are surprised when I tell them that when they landed by plane at LaGuardia, their plane probably landed safe because of an Austrian communication system. And when you take a taxi and come via RFK bridge and you don’t have to stop at the toll station, it’s because of an Austrian automatic tolling system and if you then go into the subway, you’re driving on Austrian steel, and maybe even through tunnels created with Austrian engineering finesse. You may then pass a Swarovski shop or a Wolford shop by foot, so Austria is all around you. Austria is more well-known for industrial or B2B products, not so much for consumer goods and popular brands as you have in Germany, Italy or Japan. We often say, Austria is more on the inside than seen on the outside, in the sense that you find it as a very important part of a machine or as an engine in famous brands such as BMW. As a consumer you might not see much of the Austrian products, but your favorite brand or the technology you depend on might not be the same or work as well if it were not for the parts from Austria.