Upper Austria

Upper Austria produces over a quarter of Austria's total exports from roughly one-ninth of its territory — a concentration ratio that makes it a keystone species in the national economy. Remove this single state's output and Austria's trade balance restructures. The disproportionate weight traces to a specific innovation: in 1949, steelmaker VÖEST commercialised the Linz-Donawitz process in the state capital, a technique that slashed steelmaking costs so dramatically that LD converters came to dominate global steelmaking within three decades. Austria had no iron ore advantage — it won through process efficiency, competitive displacement through superior technique rather than superior resources. That 75-year lock-in is textbook path-dependence: each decade of LD dominance made alternatives more expensive to adopt, until the EU's carbon border adjustment mechanism forced Voestalpine to commit €1.5 billion to replace blast furnaces with electric arc furnaces by 2027 — punctuated equilibrium triggered by regulatory pressure, not market failure. The geography reinforces the specialisation. North of the Danube, the Mühlviertel granite plateau supports forestry and grassland farming. South, the Salzkammergut lakes drive tourism. Between them, the Danube Valley corridor — Linz, Wels, Steyr — concentrates heavy industry, automotive suppliers, and one of Europe's largest plastics clusters, where Borealis, Greiner, and recycler Erema cooperate in a production ecosystem that processes waste back into usable feedstock. Three distinct economic ecosystems within a single administrative boundary, each exploiting what the others cannot. The open question is whether green steel becomes Upper Austria's next competitive displacement — a premium product that commands margins dirty steel cannot — or whether lower-cost producers elsewhere capture that advantage while the transition is still underway. The region that won global steelmaking through process innovation faces the same test again.