Accelerating research and innovation in Austria
Stefan Pierer turned his passion into a profession. The CEO and Chairman of Austrian motorcycle manufacturer KTM AG has indulged in racing for most of his life. Yet competing globally for more cost-efficiency, safety and better materials has been his biggest challenge to date. Fortunately for him, a pit-stop at the EIB helped him finetune his research and innovation plans - Interview.
The EIB provided KTM with EUR 75m for its research, development and innovation (RDI) programme focusing on fuel economy, safety and the development of new and lightweight materials as well as zero emission concepts. The EIB’s support is set in the framework of “InnovFin - EU Finance for Innovators” MidCap Growth Finance, which is financially backed by the European Union’s research budget, Horizon 2020.
InnovFin is a new generation of financial instruments and advisory services designed to facilitate access to finance for innovative businesses. Up to the end of 2020, InnovFin will offer a range of tailored products which will make available more than EUR 24bn of finance for innovation by small, medium-sized and large companies and the promoters of research facilities, supporting up to EUR 48bn of final RDI investments.
KTM produces and develops race-ready off-road and street motorcycles. What kind of research and innovation is needed to make this a safer, faster and environmentally friendlier business?
Safety is the number one priority in our business. Unlike the automotive sector, where we have seen rapid progress in improving driver safety, we are still facing enormous challenges with regard to better safety for motorcyclists. There is no airbag or crumple zone on a motorbike. In 50% of accidents, the motorcyclist is not responsible for causing the accident. He or she has simply been overlooked by a car driver. Vehicle-to-vehicle communication, a technology designed to allow cars and motorcycles to communicate with each other, will become mandatory by 2020. This means a car driver will receive a signal as soon as a motorcycle approaches. This is the kind of research we are working on. Emissions reduction is another top priority for us.
Why did you approach the EIB to consider financial support for your RDI programme?
We were looking for non-standard financial instruments with a counterpart that is specialised in RDI financing. It was actually word of mouth that helped us approach the EIB. Another Austrian company told us about their positive experiences with the EIB and this is how we established the first contact. And I have to say, the kind of support we received from the EIB has been absolutely unique. The advantages the EIB offers are a perfect match to our needs in terms of the volume and the investment purpose. I was absolutely delighted with the swift and incredibly efficient handling on the part of the EIB. Even the contract negotiations ran smoothly and speedily.
KTM is a classic Austrian midcap. In many parts of Europe this segment of the economy faces a particularly hard time accessing appropriate and affordable finance. What have been your experiences?
I would rather call KTM a classic “niche world leader”. We are very export oriented, with our export quota reaching 97% this year. More than half of our revenues come from outside Europe (52%), mostly from Asia, India and North America. Our business in the US currently stands at 20% of our total business volume. That’s by far the biggest share in our total business.