The current priorities in #upperVISION2030 are fundamentally sound: Smart Manufacturing (increasing productivity through digital transformation) is the top priority, while Energy Supply and Materials and Circular Economy—both designated as Priority B—form a solid foundation for the challenges ahead. However, to remain successful in international competition in the future and to sustainably ensure competitiveness, it is necessary to focus on these areas and to accelerate the implementation of measures.
1. Digitalization as the Foundation for Efficiency and Productivity
The expansion of automation, big data, and data-driven modeling, as well as the use of new technologies such as artificial intelligence (AI), will be crucial for industry in Upper Austria. These technologies offer the potential to make production processes more efficient, optimize resource use, and minimize waste.
To drive digitalization forward in the region, incentives should be created to carry out the necessary digital transformations. The introduction of digitalization strategies, data collection infrastructure, as well as the use of cloud solutions and smart factory technologies must be promoted to enable even small and medium-sized enterprises to access modern, competitive production methods. The state government plays a central role here by launching tailored funding programs that support digital transformation and shorten the time-to-market for new products and technologies.
Risk-sharing for new technologies and the expansion of (new) infrastructure are also essential in this regard. To facilitate the transition to digital, smart, and autonomous production systems, companies must commit to adopting new technologies, which is often associated with high investment costs and uncertainties. The state government should provide targeted funding and advocate for tax incentives at the federal level to help companies bear these risks and accelerate the transformation.
Recommended Measures:
- Funding: The state government should provide targeted funding for digital transformation (e.g., innovation vouchers; research grants; including as part of the flagship initiative “Automate Upper Austria”) and, at the same time, actively advocate with the federal government for tax incentives that further drive this process forward. This is in addition to the existing KMU.DIGITAL funding program (2024–2026 budget: 35 million euros), which is implemented in collaboration with Austria Wirtschaftsservice (aws) and the Austrian Federal Economic Chamber.
- Expand digital infrastructure: Promote data collection and the provision of cloud solutions and smart factory technologies in collaboration with technology parks, as well as training in the aforementioned disciplines, and offer continuing education opportunities for employees (see the section “Time Horizon 2025–27”).
- Risk Mitigation: Provide government/public safeguards or equity investments in pilot projects for the deployment of new technologies.
Best Practice:
Germany – Mittelstand-Digital: A government-funded support program to assist SMEs with digital transformation. (https://www.bmwk.de/Redaktion/DE/Publikationen/Mittelstand/mittelstanddigital.pdf?__blob=publicationFile&v=1)
Time Horizon:
- Short term (2025–2027): Establish support programs; offer digital training.
- Medium term (2028–2032): Digitize production.
2. Expansion of Energy Systems and Infrastructure: The Path to Electrification and Decarbonization
Alongside digitalization, the expansion and transformation of energy systems are of central importance for sustainable industrial production. Upper Austria is an economically strong state and, compared to other states, a pioneer in implementing the energy transition through renewable energy, but currently relies on energy imports for about two-thirds of its needs. This dependence must be reduced to ensure both security of supply and cost competitiveness.
A crucial step is the electrification of industry and the increased use of renewable energy. This means the defossilization of production through the greater integration of solar, wind, and hydroelectric power into industrial infrastructure. The expansion and optimization of electricity and heat supply, as well as the integration of high-performance and smart grids and storage technologies, must be driven forward swiftly. In this regard, the state government can provide special support for innovative technologies for energy storage and distribution and encourage the exchange of best practices among companies to accelerate the transition to a sustainable industry. For those industrial processes that cannot be fully decarbonized—due to the necessary carbon content in the process—systems for active carbon utilization must be established, and carbon storage must be supported.
The challenge lies not only in expanding infrastructure but also in the optimal interconnection of the sectors of electricity, heating, transportation, and industry. An energy-system-wide approach is necessary to create synergies between these sectors, thereby reducing CO2 emissions while simultaneously increasing resource and energy efficiency. A key component of this is also promoting the use of waste heat from industrial processes.
Recommended measures:
- Electrification of industry: Integration of renewable energy (solar, wind, hydropower) into industrial processes.
- Grid expansion and storage technologies: Promotion of competitive, robust, high-performance, and smart grids and storage systems to balance the fluctuating availability of renewable energy.
- Sector coupling: Integrating electricity, heating, transportation, and industrial systems to increase efficiency.
Best Practice:
- Denmark – Energy system integration: Denmark has successfully integrated renewable energy with smart grids and thermal storage to ensure a high level of supply security. (https://germany.representation.ec.europa.eu/news/12-milliarden-euro-furgrenzuberschreitende-energie-infrastruktur-grosste-forderung-fur-deutsch-2025-01-31_de)
Time Horizon:
- Short term (2025–2027): Launch feasibility studies and pilot projects.
- Medium term (2028–2032): Scale up grid expansion and increase electrification.
- Long term (2033+): Full integration of renewable energy into industrial production.
3. Materials Management and Circular Economy: Ensuring the Supply of Raw Materials
Another crucial aspect for the industry’s future viability is the sustainable use of raw materials and the increased development of a circular economy. Upper Austria must intensively address the recovery of raw materials and secondary raw materials—and thus the recyclability of materials—to avoid becoming dependent on materials critical for imports. Access to (rare) raw materials, which are indispensable for production in many industrial sectors, could lead to a risky dependency on other nations in the future.
To avoid potential risks, it is necessary to develop new resource strategies in addition to the Austrian Raw Materials Strategy (Raw Materials Master Plan 2030) and the Austrian Circular Economy Strategy (Austria on the Path to a Sustainable and Circular Society—The Austrian Circular Economy Strategy). This encompasses not only the recycling and recovery of secondary materials, but also the design of products that are optimized for recycling from the outset. A stronger focus on the cascade use of raw materials and the integration of recycling processes into production workflows can reduce material requirements in the long term, while ensuring the sustainability of production and also reducing dependence on raw materials.
Recommended Measures:
- Promotion of recycling technologies: Support companies in developing and implementing resource-efficient and competitive production processes.
- Design for Recycling: Raise awareness of the importance of “Design for Recycling” to improve the recyclability of products and facilitate the reuse of materials.
- Cascade use: Multi-stage use of raw materials to extend their service life.
Best Practice:
- Sweden – Circular Economy Strategy: Sweden has introduced a national circular economy strategy that supports companies in their transition to sustainable production models. (www.circularsweden.se/in-english)
Time Horizon:
- Short term (2025–2027): Awareness-raising and initial pilot projects.
- Medium term (2028–2032): Widespread implementation of recycling technologies.
- Long term (2033+): Establish the circular economy as the standard.
Recommendation to the State Government
To maintain Upper Austria’s competitive edge on the international stage and position it as a model for sustainable industrial production, the following measures are necessary:
- Promotion of digitalization and automation: The state government should establish funding programs and tax incentives to support companies in their transition to big data, AI, and smart factory technologies. This will enable companies to increase their productivity and ensure their competitiveness in international markets.
- Expansion of energy systems and infrastructure: A comprehensive energy transition must take place, encompassing the expansion of renewable energy as well as the decarbonization of industry. To this end, existing measures must continue to be pursued with high priority, and additional measures must be implemented. The state government should continue to drive the expansion of storage technologies, high-performance and smart power grids, and infrastructure for renewable energy to ensure a stable, competitive, and sustainable energy supply.
- Promoting the circular economy and material efficiency: Upper Austria must focus more strongly on recycling, security of raw material supply, and the circular economy. The state government should support companies in using raw materials more efficiently through innovative technologies and in prioritizing design for recycling.
The state government should support companies by mitigating technology risks through the provision of subsidies, advocating for tax breaks at the federal level, and expanding infrastructure so that future technologies can be implemented and Upper Austria can be established as a technology hub with a promising future. The time to act is now to secure and further expand Upper Austria’s leadership position in sustainable and innovative industry.
