VIENNA: While others in Vienna took time off this summer, Yuji Mizobuchi and Simone Springer toiled in their studio, which overflowed with boxes, tools and shoes of all shapes and sizes.

The Austrian-Japanese duo, who met at a London shoemaking college in 1999, are running “rosa mosa,” a funky footwear and accessories company, from the artsy 5th District of Vienna.

Mizobuchi, 32, and Springer, 35, are part of a growing group of energetic entrepreneurs benefiting from a Vienna funding initiative to attract, keep and develop business-savvy creative talent to a city known more for Mozart and museums than modern trends.

Since May 2004, the initiative, “departure,” has doled out \7.2 million, or $9.9 million in grants to Vienna-based companies in creative industries like fashion, design, music and multimedia.

“Were trying to contribute to the reinvention of Vienna,” the departure founder, Norbert Kettner, said in an interview.

Kettner, who described the program as the first of its kind in continental Europe, said he wanted Vienna to attract talent from Eastern Europe and elsewhere to turn the city once again into the forward-looking center for creativity and innovation that it was about 100 years ago.

“Vienna was a birthplace of Modernism at the turn of the last century,” he said, noting that creative talent was important to more than the improvement of the city atmosphere.

“Its really about reinventing the modern economy of cities,” said Kettner, who became Viennas top tourism official Sept. 1. A similar program in London, known as Creative London, is led by the mayors agency for economic development.

According to Viennas Chamber of Commerce, more than 100,000 people - not counting an unknown number of freelancers - work in the citys creative sector.

The departure initiative claims that more than 520 jobs have been created or secured since the program began.

“We focus on talent who want something,” Kettner said. “We want the people who want something,” he said, adding that there ad been a fourfold return on every euro invested by departure.

“The pop culture generation - theyre very undogmatic, they simply approach life, and thats what we want to promote and support.”

But getting a grant is competitive. Applicants have to prove that their projects reflect international trends, are competitive globally and would promote the citys economic growth. Those chosen dont get all the money at once, and financing can be revoked for a variety of reasons.

Grants vary in size and companies can receive funding for several departure programs. However, total funding per company cannot exceed \200,000 in three years. The paperwork, including a detailed business plan, often takes weeks to compile before it is reviewed by an independent panel.

Mizobuchi and Springer, who are using their \84,000 grant to work on six new collections over three years, say it was time well spent. While they say they could have managed without the extra cash, they say it has allowed them to delegate duties.

“It speeds up growth, because of course if many people are working in parallel on different things, more happens,” Springer said.

Springer and Mizobuchi moved to Salzburg from London in 2001, before relocating to Vienna in 2004. Their collections, which have been shown in Paris and Milan, are medium- to high-priced niche products made by artisans at a footwear manufacturer near Vienna.

Peter Jдger, the 38-year-old chief executive of AUTLOOK Filmsales, an agency that markets Austrian films around the world, says getting his business off the ground would have been “a very close call” without departure. He received approval for an \85,417 grant in 2005.

“For me its very clear - we couldnt have grown and stayed true to our philosophy without departure,” said Jдger, a Belgian national, adding that the grant had enabled him to hire staff.

Departure is also helping traditional companies reposition themselves to become more modern. One example is Mьhlbauer, a Vienna milliner that opened in 1903. The company is using a \73,470 departure grant to help rejuvenate its image, according to Klaus Mьhlbauer, 39, who took over the family business in 2001.

Among other things, Mьhlbauer is using the money to tap into new markets, including the United States. Mьhlbauer products are now available across the Atlantic at upscale stores like Bergdorf Goodman in New York.

“There are great things from Vienna that are still being overshadowed by Mozart and Strauss,” Mьhlbauer said.

NEW YORK: By now, all of Wall Street understands that the private-equity gravy train has jumped the tracks. But few seem to realize how ugly the pile-up could become.

With the buyout market in free fall, lots of attention has focused on a few obvious pressure points, like which investment banks will rack up big losses on the $330 billion in debt that they committed to pay for leveraged buyouts over the last year.

For the most part, though, Wall Street seems to be taking it all in stride. James Dimon, the chief executive of JPMorgan Chase, said last month that he was “comfortable.”

Comfortable? Let me offer a more dour view: wide swaths of Wall Street, and many of the industries that serve it, are in for some serious collateral damage. Not only has private equity been out of business for the past two months, but that activity is not likely to resume with any significance soon. And when it does, it will be at a fraction of its recent peak.

So what does that mean? For much of Wall Street, a severe case of withdrawal. Forget about cutting the size of bonuses: lets start really thinking about the possibility of slashing jobs.

Virtually every major investment bank in recent years had staffed up its “financial sponsors group” - which serves private equity firms - and many now have dozens, if not hundreds, of people devoted to the effort of calling on Henry Kravis every day.

Heres the thing: Kravis wont have much business going on, so the bankers wont, either. Even if you redeployed a large number of them to other activities, many jobs would have to go. Further down the line, the private equity firms themselves may begin to cut personnel, or at least stop hiring. That goes against the grain for most private equity firms, because their limited partners have pressured them to have increasingly larger staffs, not smaller ones.

Why is that? Well, it is hard to justify how the 2 percent management fee from a $20 billion fund - thats $400 million for those of you doing the math - is going to be divided among only 50 people. (Yes, if it was evenly distributed, that would be $8 million a person, which doesnt even include possible performance fees.) If private equity firms stop hiring, the system of irrational compensation packages across Wall Street will also change.

In recent years, private equity helped artificially inflate the market by hiring talent at astronomical prices, pushing up pay scales at banks, law firms and hedge funds - anywhere that private equity tried to take talent from. Then there are the support systems, which may also be taken apart.

Consider the management consulting industry: Its a dirty little secret, but most of the big-name private equity firms had been outsourcing some, if not much, of their due diligence on deals to firms like McKinsey Co. and Boston Consulting Group. The consultants, in turn, built up their own groups to handle the enormous work flow.

(In case youre wondering why private equity doesnt do all of its own spadework, heres another secret: Its cheaper than hiring talent and - get this - some of the cost of outside consultants can be charged back to the investors as a deal expense.)

So, whoops, there go the consultants.

All those starry-eyed MBAs are in for a shock, too. For the last four years, MBAs have been clamoring for jobs in the private equity industry. About 11 percent of Harvards MBA class of 2006 secured private equity positions, up from 7 percent in the class of 2004. And the number from the class of 2007 is even higher.

That alone should probably have been a sign of a market top. In any case, the partys over, and its not clear where all these MBAs will go. Many were former bankers who had taken jobs at private equity firms and hoped to return to the equity shops afterward. Now the door to private equity and banking - and dont forget hedge funds - may be shut, too.

The collateral damage may keep mounting. Consider the ultimate bellwether: a little company called SeamlessWeb. As an online food-ordering service used by the major banking houses and law firms, SeamlessWeb does a brisk business with young analysts who get stuck late at the office. Without all those buyout deals requiring all-nighters, SeamlessWebs messengers may not be as busy, either.

GlaxoSmithKline cheered investors yesterday as it nearly tripled its share buyback programme to 12bn over the next two years. The announcement came as the pharmaceuticals group reported better-than-expected first half results despite a safety scare over its diabetes drug Avandia.

Shares in the group, the world’s second largest pharmaceutical company, rose 29p, or 2.3%, to 12.75. Peter Cartwright, an analyst at Evolution Securities, said: “Initially, there was a huge relief rally. If you’d opened the windows on to the City, you would have heard a big ‘phew, thank god for that’.”

GSK posted a 1% drop in profits to 4bn, on sales 3% lower at 11.3bn. But stripping out exchange rate movements, its sales were up 3% and profits rose 9%. The group also maintained its 2007 earnings guidance, indicating growth of 8% to 10% at constant exchange rates.

However, this could change after next Monday, when the US Food and Drug Administration (FDA) advisory committee makes its decision on Avandia.

The diabetes drug - the group’s second-best seller - has seen its prescriptions in the US tumble since May 21, when Dr Steven Nissen, a leading cardiologist, published a study in the New England Journal of Medicine linking the drug to an increased risk of heart attacks and death.

GSK has strongly defended its drug and disagrees with the findings, accusing researchers of combining complex, conflicting studies.

David Stout, GSK’s head of pharmaceuticals and a probable successor to the chief executive, JP Garnier, when he retires next year, said further data collected from 400,000 patients comparing all commonly-used diabetes treatments would be published today, in advance of the Monday meeting. He said: “There is very convincing data that there is absolutely no increase in cardiovascular death.” He said there was good data on the incidence of heart attacks and strokes.

The FDA’s decision next Monday could go three ways: a proposal to ban the drug, which would be disastrous for Glaxo but which analysts say is unlikely; a vote to impose new regulations governing the sale of the drug, including the possible addition of a warning on the label; or it could defer its decision to a later date.

But analysts say that regardless of the outcome, the image of Avandia is now so tarnished that it will be hard to relaunch the drug. Analysts at Lehman Brothers said: “Our conversations with doctors at the recent ADA [American Diabetes Association] meeting reveal the Avandia brand to be significantly tarnished and we believe GSK will face significant difficulties in regaining market share.”

Mr Stout acknowledged that was the case, but said some drugs with a tarnished image had recovered. He cited Crestor, AstraZeneca’s cholesterol drug, which has recovered after safety concerns in 2004.

New prescriptions of Avandia have fallen 46% in the US since the publication of the study, and total prescriptions have dropped 37%. Global sales of the drug, as a result, were down 22% to 349m, although Europe did not seem affected by the study, as sales grew 20% to 63m.

But the Avandia scare only affected the last month of the group’s second quarter, and analysts said the impact of the drop in prescriptions would be felt more in the third quarter.

The other divisions of the group performed well. Sales of Advair, for example, the group’s best-selling asthma treatment, were up 12% to 871m.

The company’s consumer healthcare unit, which includes Lucozade and Aquafresh, recorded record sales in the second quarter, up 18% to 899m.