Eurada News nº403 - August 2020

The Situation of German and Austrian RDAs

From time to time, EURADA publishes studies on the situation of Regional Development Agencies in certain countries. The latest two studies are about Austria and Germany, two economies where RDAs play a prominent role. They include summaries about the institutional framework, the legal status and competences of the RDAs, how they coordinate at national level and which their main tasks, as well as lists in the last pages with descriptions and the contact information of the most relevant organisations. Here you can read a summary of both studies.  

Limiting ourselves to the most superficial level of analysis, Germany and Austria might look very different from each other. Germany is the most populous country of the European Union and possesses the 7th largest land area; Austria is 15th in terms of population and 20th in terms of area. However, as far as the study is concerned, their differences end there. Both countries share the same language, have very similar cultures and enjoy almost equal levels of GDP per capita. This is why it may be better to examine the two countries in parallel rather than individually. 

Both Germany and Austria are federal republics which are the result of a long tradition of decentralised government. In the case of Germany, it can be traced back to the Early Middle Ages and the consensual rule of the Holy Roman Empire, while in the case of Austria, its system of shared rule through its federal government and states (Länder) is legitimised by the Constitution of 1920. Their taste for decentralisation is not only limited to public administration, as it is not infrequent to find more than one agency performing regional development-related work. In the state of Upper Austria, for example, the number of organisations in charge of economic development policies (including the state’s government) is at least 7. In every region, however, there is at least one organisation with a larger number of responsibilities or a focus on innovation and technology transfer that we regard as the development agency representative of the region. 

Neither in the German Basic Law nor in the Austrian Constitution is there any definition of what form RDAs should take; that is a matter to be decided by the state authorities. This is why the legal status of RDAs in Germany and Austria varies across regions. It can take three forms: 

  1. a department inside the public administration, 
  2. a firm acting under private law and 
  3. a state-owned enterprise. 

RDAs were born in Germany and Austria at the end of the 1980s/beginning of the 1990s with limited responsibilities and making use of rudimentary indicators. Nowadays, their objectives have widened and they generally seek to guarantee the sustainable development of the region and the well-being of its citizens. To achieve this, they take care of: a) transferring information; b) troubleshooting crises; c) lobbying in the political and administrative realms; d) advising on matters of financing and economic promotion; e) connecting, promoting and managing new ideas relevant for their territory, and f) creating the necessary conditions to enable and facilitate the foundation of new local companies and the attraction of foreign ones. 

Regarding national coordination, the most relevant instrument the German federal government has at its disposal to carry out regional policy is the Joint Federal/Länder Task for the Improvement of Regional Economic Structures (by its German acronym: GRW), a fund dedicated to supporting those regions that lag behind. There is also a federal agency called Germany Trade & Invest (GTAI) which cooperates with the RDAs of the federal states  and together organises delegation trips and participates in trade fairs. In the case of Austria, the national organism responsible for regional policy is the Austrian Conference on Spatial Planning (ÖROK), founded in 1971. Once in a decade, representatives of the member organisations prepare a so-called Spatial Development Concept. This concept is an important (though not legally binding) reference document for the definition of the most urgent problems and priorities. 

Finally, the activities that German and Austrian RDAs perform are:  

  1. Development of business areas 
  2. Real estate construction 
  3. Corporate management/service 
  4. Self-employment and start-up creation 
  5. Funding programmes 
  6. Settlement of companies 
  7. Location marketing 
  8. Management of ERDF funds (this one just in Austria; in Germany this is carried out by the Ministry of Economic Affairs and Energy) 
  • To view these two studies in full, please download them through the dedicated section of our website
  • For other reports on RDAs in particular countries, alongside previous ones about other countries, visit the same link above. 
  • These two reports were presented via Webex in an internal virtual meeting on the 20th of August 2020. To view the recording, please visit our YouTube channel. 

Written by Alex Arcos, Communication and Project Manager at EURADA.