HOW TO LURE THE NEW ARGONAUTS TO AUSTRIA? BRAIN COMPETITION POLICY IN A SMALL OPEN EUROPEAN ECONOMY

Human capital is one of the key input factors for the competitiveness of developed countries and regions. As a result, demand and locational competition for highly-skilled individuals has sharply increased. Policy agents react by taking several policy measures, denoted here as "brain competition policy" (BCP). The first part of the paper analyses the relevance of attracting and retaining talent for small open economies and proves the high importance of BCP and foreign talent for these countries to manage their internationalisation of innovation, production and trade by means of four stylised facts. The second part describes the case of Austria along the lines of industrial specialisation and university performance taking into account patterns of path-dependency and structural change. It emerges, that the rather weak competitiveness of Austria in the competition for talent, i.e. "brain drain instead of brain gain", can be - inter alia - explained by an unfavourabely large share of non-high-tech industries and a mediocre university performance.