chapter  8
32 Pages

Running After the International Trend: Keynesian Power Balances and the Sustainable Repulsion of the Innovation Paradigm in Austria

Austria seems to deviate from the general trend in the OECD where in many countries a principal approach to a learning economy based on the innovation paradigm could be observed during the 1990. Until recently, the Austrian mode of development has rejected the new paradigm to a large extent. The main reason for this can be found in the strong implementation and the success story of the bureaucratic-corporative Keynesian welfare state2 along with the corresponding power balances and institutional set-ups. The deep institutionalization of these arrangements embodied in the state bureaucracy, in the social partners’ organizations as well as in many businesses, especially in the Austrian SMEs, has reproduced traditional policy strategies for longer than in other countries. Consequently, until the mid 1990s, the patterns of change in economic policy as well as in RTD policies mainly took place within the Keynesian-Fordist framework. The evolutionary trajectory established by the ‘Fordist class compromise’ (Hirsch 1991, p.67) has - to a large extent - enabled a co-operative and more or less smooth strategy of adjustment to new economic and social conditions, keeping at bay a full-fledged realization of neoliberal policies implemented by some other countries in the 1980s. On the other hand, the Austrian trajectory with ‘an affinity towards corporatist decision structures,

along with compensatory interventions by welfare-state measures to absorb the effects of the high exposure on the world market’ (Aichholzer et al, 1994 p.376) can be seen as a barrier to the introduction of a new innovation paradigm. Consequently it was not until the mid-1990s - with a major impact from the countries’ accession to the European Union in 1995 - that a gradual change of paradigms could be observed.