Arnold Schmidt is among the artists associated with the Gugging group. "Gugging" is the abbreviated way of referring to the Haus der Künstler (House of Artists) established in 1981 by the psychiatrist Leo Navratil at the Lower Austrian Psychiatric Hospital in the hamlet of Gugging, outside Vienna. Many years earlier, Navratil had noticed that the art produced by certain of his patients far transcended the qualitative parameters of traditional art therapy. These artists, selected by Navratil with advice from local museum officials and artists (including the well-known painter Arnulf Rainer), began to publicly exhibit in the 1970s.

Gradually, the Haus der Künstler was supplemented by other facilities on the hospital grounds, including a studio, lecture hall, sales gallery, gift shop and museum. Today, under the leadership of the psychiatrist and artist Johann Feilacher, this complex functions under the name Art/Brut Center Gugging. The Lower Austrian Psychiatric Hospital was closed in 2007 and replaced by the Institute of Science and Technology Austria, an international research center.

Predating the recent fad for "outsider" art, the Gugging colony has exhibited throughout Europe, the United States and Japan, and is widely recognized for its pioneering integrity and quality.

One of the younger Gugging artists, Arnold Schmidt creates mixed media works that evidence a quick, yet deft manner of working. Since 1989, he has exhibited drawings and paintings of figures and faces at venues such as the Stadtmuseum Oldenburg, the Neues Museum Weserburg, Bremen, and the Stichting Museum of Naive and Outsider Art, Bunnik, Netherlands.