Why Innovation Is Not an Accident: Lessons from Austrian Businesses

Austria invests heavily in research and development but fails to translate scientific and technical output into successful market innovations, according to an analysis.

The Innovation Deficit and Economic Risk

Data from 10,000 examined companies indicate that the proportion of Austrian firms developing new products has recently declined. Franke noted that cutting university budgets undermines the foundation of the country’s research landscape, comparing the cuts to a farmer who cannot afford seeds after a poor harvest.

Organizational Transformation at Mawa

Successful innovation requires systematic transformation rather than isolated research budgets or single-department tasks, according to the findings by Franke and co-author Rudolf Dömötör in their book Innovation ist kein Zufall. The authors point to coat hanger manufacturer Mawa as a case study in corporate reinvention. After facing insolvency from Chinese price competition, Michaela Schenk took over the company in 2007 and restructured operations around innovation, transforming the product category into a recognized brand. Franke noted that the aim was for Mawa to become for coat hangers what Tempo is for tissues—a brand that stands for an entire product category.

Following this strategic pivot, Mawa more than doubled its employee count and now generates nearly half of its turnover and profit from innovations introduced over the prior three years.

Balancing Growth and Agility

Growing startups face the challenge of introducing necessary business structures without succumbing to excessive bureaucracy. Franke observed that while startups require operational frameworks to prevent organizational chaos as they expand, companies must actively manage the tension between stability and creative freedom.