Mapping the Foundational Economy in Austria – Size, Spatial Distribution and Sources of Finance

Neoliberal restructuring has not been as important in Austria´s corporatist welfare state as in other countries e.g. Britain. Hence, much of what constitutes the foundational economy, particularly public services and infrastructure, remain relatively more protected from market forces. However, new public management continues to be implemented and organizational reform transforms the way in which mundane goods and services are delivered. Moreover, strategic economic policy, including industrial policy and structural policy, is focused on the central areas to the detriment of peripheral regions.

Against this backdrop the paper seeks to make three contributions to the emerging debate around the foundational economy. First, we propose a measurement framework to gauge the importance of foundational activities. We start from the observation that these activities may be found in market, state or also autonomous (neither market nor state) areas. In order to arrive at a comprehensive picture of the foundational economy, it will therefore be necessary to use data sources on all three areas. These include official national statistics which serve as a first entry point into operationalisation of mundane activities. They have to be supplemented by data sources on the household and care economy and other activities that are usually not entering into the national accounts (e.g. activities of a range of associations). Second, we make an empirical contribution by applying the framework to Austria and its regions. Based on the measurement framework we provide an estimate about the overall importance and the historical evolution in terms of employment and production and its spatial distribution. Finally, we also seek to classify and estimate the sources of finance underlying the foundational economy in Austria.