Day 5 – Federal Ministry of Science, Research and Economy

Friday 8th September was the fifth and last day of our study trip in Vienna. We started the day with a feedback session, where the students of the Msc in Business Administration with a Specialization in Public and Non-profit Management could provide both positive and negative criticism of the past week.

Our first stop of the day was a presentation of the main priorities of the Federal Ministry of Science (BMWFW), Research and Economy by Magister Dr. Iris Rauskala. She is a former colleague as she worked as a lecturer project manager from August 2011 to August 2015 at the ZHAW. She is now the head of the forth Section called “Science and Research”.

Entrance BMWFW

Dr. Rauskala talked mainly about the financial management in the university sector. There are 22 public universities, 21 universities of applied sciences and 12 private universities. The last ones are not financed by the federal government but stated at local government. In 2016 there were about 350’000 students enrolled in all three types of universities. In 10 years the number of students increased about 150’000, which shows the commitment to the territorial sector of the government. Therefore, the student-staff ratio increased as seen in the second figure (Blue line: Number of students in examination; Red line: full time professors)

Support Relation. source:

Dr. Rauskala explained that in 2002 a law was passed, which increased the autonomy of the universities. They are now able to choose their top administrators and professors without needing permission from the BMWFW to do. Student fees were mostly abolished and universities have no entry restrictions (universities of applied sciences have then tough) expect for majors like medicine and art.

One of the top challenges of the BMWFW is that there is not enough money available to finance the huge increase of students by hiring more professors and infrastructure needs. On the other hand, if entry restrictions were adopted in all universities and for all majors, student numbers would decrease and youth unemployment would go up.

The BMWFW finances universities with a so called global budget. Universities then decide by themselves how to spend that money. The BMFWF is not able to in fluence how the money is spent, although a top priority would be to increase the number of graduates in STEM (science technology engineering mathematics) majors.

Dr. Rauskala stressed that without political will nothing can be achieved.

After the presentation, we went to our last stop of our week in Vienna. We had a delicious farewell lunch at the restaurant “Mariahilferbräu”, where we had also started the study trip on Monday morning. Then it was time to say goodbye to the beautiful city of Vienna and go back to Switerland.

We enjoyed our very interesting study trip tremendously and learnt a lot about the digital agenda of Vienna, e-voting, public finances and resource allocation.

Day 4 – World Bank and Ministry of Finance

Also the 4th day started with a briefing in the hotel lobby. As first, in the morning we visited the Centre for Financial Reporting Reform (CFRR) of the World Bank. CFRR provides knowledge, convening and capacity development services in support of financial reporting reform, institutional strengthening and the dissemination of good practice in the area of financial reporting and auditing. They work together with countries in Europe and Central Asia and support them to adopt and implement high-quality financial reporting standards. Further information here.

Jerry Decker, Head of CFRR, welcomed us on the 19th floor of the Galaxy 21 office building, which has a beautiful view.

He informed us that their department CFRR has a longstanding relationship with Switzerland as Switzerland is one of the major donors. In 2006 the EU issued a mandate to upgrade the accounting, auditing and financial systems of its member states. But the countries didn’t get any help to implement these new regulations. John Hegarty noticed this and founded the CFRR to help the countries to implement the new EU regulations. Austria offered to provide free office space for this new centre and gave initial funding to develop the programmes.

CFRRs goal is to create wealthy and functioning market economies in countries in Europe and Central Asia through financial transparency and reporting. The people need to understand the value of financial accounting as this kind of reporting is needed for tax issues, statistics, to attract more investors etc. The World Bank has a lot of different projects. CFRR is partof it and a special institute as it has a long-term view and is funded entirely by donors.

After this introduction Andrej Busuioc, PhD, Senior Financial Management Specialist, gave us a general overview of CFRRs activities geographical coverage and areas.

CFRR employees are technical experts for every area needed. They are active on three different levels to foster high quality reporting:

  • Assessment of university curricula to help improve accounting professions, (e.g. training-of-trainers programs, benchmarking of accounting curricula).
  • Ensuring compliance: it is important, that someone checks accounting statements and auditing documents and that the auditors are overseen by an authority.
  • Setting reporting requirements (e.g. EU acquis guide, policy advice on audit reform).

Alfred Borgonovo, Senior Financial Management Specialist, informed us about a reform project in Serbia. He showed us the process of such a project. The results can be downloaded here.

After these inputs Lada Strelkova, Operations Advisor, gave us a general overview of the World Bank. The World Bank has 180 member states and is divided in five departments (IBRD, IDA…). In Vienna they represent two departments. They distinguish Part 1 countries, which provide funds and part 2 countries which borrow loans. Most programmes are located in part 2 countries in order to be with the clients. Therefore, the Vienna office is an exception and they have very unique programmes.

Furthermore, she explained that they have several mechanisms to avoid problems with the loans e.g. in case of corruption and they monitor everything (also environmental and social issues etc.).

After the lunch break we were invited to the federal ministry of finance. SC Dipl. Kfm. Eduard Müller, MBA, informed us about the digitalisation („Finanzamt 4.0“) in the federal ministry of finance. He talked about today’s challenges for the ministry of finance e.g. the complexity of the economy (globalization, digitalisation), clash of generation (digital and analogue) etc.

Daphne Aiglsperger gave an overview about customer service in their ministry. As there are a lot of regulations this is a difficult topic. The challenges are complex e.g. the rising number of regulations and laws, communication problems (the citizens don’t understand the officialese), etc.

Today they already offer an e-service-portal for 7x24h service. Furthermore, they reduce the bureaucracy with the one-stop service system. For the future, they wish to use more channels for communication such as chats, videos (e.g. video authentification), cognitive computing (computer learns and can therefore answer questions) etc. At the moment, the digital identification is still a problem. As we already learned this week the “Bürgerkarte” goes in this direction. At the moment they also work with an online platform to get feedback and ideas of their citizen:

A new law in Austria gives the citizen the right to communicate digital with all governmental institutions. Due to this an innovation pressure exists which is necessary to adopting it into the law. Furthermore, service platforms like exist. These platforms were only information platforms, but they evolve into platforms for interaction e.g. “eGründung” for the incorporation of legal entities.

We discussed also the problem of privacy protection. There is a conflict between higher service quality and supervision of the citizen. The government tries to provide a good service through automatic exchange e.g. between Nonprofit Organisations and the tax office with regard to donations made. Such new approaches lead to discussion about privacy and data security.

After the interesting discussion we had a guided tour through the wonderful building “Winterpalast des Prinzen Eugen”.

At the end of the 4th day our study group enjoyed a social dinner at „I Ragazzi“. The food was delicious and we ended our day in a relaxing atmosphere.

Day 3 – Ministry of Defence and Sports

We met today at 9 a.m. to get a briefing of today’s program from the responsible study group. The group gave us a short overview of the ministry and compared the Austrian army with the Swiss army. We heard that although the two countries are about the same size and population Switzerland (5.1 bn) is spending roughly two times the budget of Austria (2.1) for its army. The same applies for the number of soldiers. The armed forces of Austria include 55’000 persons, whereas the Swiss forces include 124’000. Looking at the number of fighter jet Austria owns 15, Switzerland 54. The group ended the briefing with a look on the current focal points of the Austrian military. One is the challenge that came with the immigrants from Syria in the last two years, the other is that the army aims the get more female soldiers. The group showed an old promotion video for female soldiers that was both funny problematic from a gender perspective.

At 10 a.m. we were welcomed by Mag. Dr. Iris Rauskala at the ministry of education (unfortunately, for security reasons we were not allowed to access the Ministry of Defence and Sports buildings) and could enjoy an interesting lecture given by General Lieutenant Mag. Franz Leitgeb. He is a top military leader and responsible for budgets and resource planning.

After introducing himself he talked about the budgeting and planning processes at the Austrians ministry of defense. In recent years, the army and other ministries changed their resource planning from an input oriented planning to an output oriented planning. What does this mean? A typical input target is to have e.g. 1’000 soldiers over a certain time in a certain region. This is easy to evaluate but it’s hard to say what your actual impact is. A typical output target is to foster peace and democracy in a region, aiming to establish a stable state and democracy in five years. Once the targeted outcome is given it is needed to plan the necessary measures to get there. It has to be defined what all the lower hierarchical levels have to do, so you get the requested outcome in the end. The concentration on the output makes more sense from a planning and managing perspective. The problem is, that it is much harder to evaluate.

About the budgeting process General Lieutenant Mag. Franz Leitgeb said that they have introduced a rolling 4 years budget. Every year they make a budget for the next 4 years where only the first year is fixed and the following years might be adapted later. Nevertheless, this gives a much higher planning security, which is needed for the long-term investments.

In the following discussion, he further mentioned that he appreciates the possibility for making reserves if a certain budget isn’t fully used. He additionally spoke about the recent growth of the budget after a long period of decreasing budget. The reason for that was mainly the huge number of immigrants passing the border in 2015, when the government of Austria wasn’t able to control them. Besides that, the destabilizing environment in Syria, Turkey and the behavior of Russia had some influence as well.

Further we were discussing the challenge that the army always has to be prepared for the worst case. But at the same time, it is from an economic perspective not possible to run the whole infrastructure you need to have for the worst case in times of peace.

Day 2 – Digital Vienna

The second day of our trip on Tuesday September 5th, started at the hotel lobby with a short group briefing about the topics ahead. At our first visit, we were introduced to two subjects related to the Smart City Strategy Framework of Vienna. The department of organization and security deals with the “Digital Agenda” of the municipality of Vienna.

Dipl. Ing. Birgit Lutz and MSc Thomas Schuhböck gave us deep dive into this topic. The Digital Agenda is an initiative derived from the “Smart City Strategy 2050” aiming to cope with the future digital challenges Vienna will encounter. The initiative was kicked-off by the municipality of Vienna by inviting and encouraging not only private companies and the people of Vienna but also everyone to participate and come up with innovative ideas. 172 ideas were submitted and condensed by several task forces into five fields of action, which were outlined in a strategy paper. Subsequently, the strategy paper was again steered by the online community. After all inputs, options and comments were incorporated into the strategy, the final version was published in July 2015. Seven lighthouse projects evolved out of this process mainly focusing on mobility, health and e-government.

Through this lighthouse projects the municipality of Vienna wants to promote firstly, data security and transparency, secondly the early fostering of IT skills, thirdly the usage of IT capabilities to save time and resources and last but not least, to improve digital mobility. Mag. Schuhböck mentioned that subject matter data security has to be treated as a “holy cow” as the citizens have a keen interest into the protection of their privacy. With this mantra in mind Vienna launched 2015 as the sixth lighthouse project “Digital City Vienna” within the field of action “I like it – Digital City Vienna” a marketing campaign together with leading IT companies based in Vienna. This draw immense public attention on the “Digital Agenda” and highlighted how crucial the IT industry is for this city. The added value created by these companies is four times higher than the one generated by tourism. What led to a successful project execution was the uncompromising inclusion of all relevant stakeholders – and as a best practice – the involvement of Vienna’s citizens in the decision making process.

The second subject was the pioneer role of Vienna’s government with the introduction of Open Government Data (OGD). Dipl. Ing. Lutz explained that OGD fosters the data usage which is collected by various individuals, institutions or companies. She mentioned that “data is the oil of the 21 century”. In order to prevent that difficultly gathered data becomes useless ending on data graveyards, the data is collected centrally and made available for others to use. Since the government does not have the capacities and resources to extract and analyze the data, entrepreneurs, scientists and companies are encouraged to develop based on the provided data various applications to make citizens life’s easier.

After the introduction to these two topics we had fruitful discussions followed by a soon ending of the first visit.

After lunch we visited the “Bundeskanzleramt” where we got an introduction into Government 4.0 by Mag. Christian Rupp who is the speaker of the “Platform Digital Austria”. The Government 4.0 claims to be efficient, digital and smart.

He emphasized that this process “is a journey and not a destination” containing various aspects needing particular attention. The four main components are legal landscape, political will, customer needs and technical feasibility. An integral part of the Government 4.0 is the e-citizen card which acts as a digital identification instrument enabling a secure one-stop-shop for all ministerial matters and services. The card is not mandatory for every citizen but rather optional to enroll. Approximately 1 Million out of 8.6 Million Austrian citizens have registered so far. The technical and legal aspects coming along with this e-card where explained by two specialists. Dr. Bernhard Karning introduced us to the legal aspects also indicated by the EU and Dr. Alexander Banfield-Mumb demonstrated the technological parts and functionality of the e-card with a particular focus on cybersecurity.

All in all, we had a very pleasant, educating and interesting day in Vienna and are very grateful for the time all these experts have taken and for the guide on e-government provided.