Swiss army knives, champagne truffles, private banking? Switzerland is constantly surpassing its reputation for innovation and in 2019 ranked number one in the Global Innovation Index – for the 9th consecutive year!
Once exclusive to Silicon Valley, high-tech start-ups are now being founded in Switzerland at an ever quicker pace. In 2019, the highest number of start-ups to date was recorded in Switzerland with more than forty four thousand new companies (a 3% increase over the previous year). Investment in start-ups also grew strongly, exceeding CHF2 billion (US$2.06 billion) for the first time. These numbers are impressive when GDP growth during the same period stood at just 0.9%, due to poor Eurozone performance and Brexit – which also affected Switzerland.
In an interview with Startup Guide, Isabelle Moret, President of the National Council, stated “Switzerland has traditionally always been a fertile ground for entrepreneurship, supported by a liberal culture and good governance”.
Several innovation hubs in Switzerland appear similar to the Silicon Valley model launched by Stanford Professor Frederick Terman when he founded the Stanford Industrial Park to cross-fertilise research between Stanford University and local business.
Switzerland also has two world class universities supporting start-ups: EPFL in Lausanne and ETH in Zurich, both highly ranked in the QS World University Rankings. They incubate a significant number of start-ups by their students.
In which geographic areas and in what sectors are Swiss start-ups most prolific?
Start-ups in Switzerland are widely dispersed, albeit with city and sector specialisations. Here are some of the most prominent centres:
- Basel is a well-known Pharmaceuticals hub, home to more than 700 companies in the life-sciences sector. Start-ups established in Basel raised more than 200 million Euro in investment during the first half of 2019. As a result Basel ranked 8th in Europe for such investment.
- Bern is home to 280 Medtech companies employing over 7’000 staff with an annual turnover of CHF 2.7bn. Bern is also home to Switzerland’s innovative energy industries.
- Geneva is also a strong cluster for life sciences in addition to the finance industry. According to 2019 Global Ecosystem Ranking, Geneva was recently ranked in the top 10 cities globally for scientific patents, research and policy.
- Lausanne was the first city to be awarded the European Energy Award (EEA) and is now known as the City of Energy. The Canton of Vaud of which Lausanne is the capital, provides a strong supportive network for start-ups. Due in part to a large number of spin-offs coming from the EPFL University, there are now three innovation parks in the area that house over 400 companies.
- Zurich accounts for 30 percent of Switzerland’s total number of start-ups. Home to the famous ETH, Zürich’s unique ecosystem focuses on the fusion between government, entrepreneurs and venture capital representatives. In 2018 CHF 500 million was invested in more than 100 start-ups in Zurich. Being among the world’s most important financial centres and second in Western Europe only to London, Zürich is the leading Fintech hub in Switzerland and Europe: 10% of Europe’s Fintech resides in Switzerland with 45% in Zurich.
The Greater Zürich Area is at the global forefront of unmanned aerial vehicles for commercial use or drones with applications in many areas, from agriculture to journalism, from the mining industry to the humanitarian sphere. Both the ETH and the EPFL support the world leading Swiss drone industry.
- Zug is fast becoming a leading international centre for Blockchain innovation, gaining the reputation of being the Crypto Valley of Switzerland by dealing with digital currency and blockchain. This is used in supply chain management and the insurance sector to just name two key areas.
Switzerland has a supportive and robust ecosystem based on governmental and private support.
Recognising the need of emerging companies for long-term financing, a new Federal program was introduced in April 202o under the existing guarantee scheme aimed at facilitating access for startups to longer-term credit funding rather than mere short-term loans. Since then a number of cantons such as Zurich, Berne, Fribourg, Vaud, have launched additional measures to support start-ups.
In addition to the educational institutions, there is an established private sector support structure in Switzerland for start-ups:
- There are numerous smaller Technoparks dispersed across Switzerland which foster collaboration between startups and service providers.
- One leading platform that provides start-up and investor profiles, news, investments and resources is startup.ch. The platform also acts as a radar for Swiss start-ups to spot trends and rising stars.
- Another privately financed support organisation is the Swiss Start up Factory which describes itself as a “venture builder” for corporates and start-up’s to innovate and accelerate the best new technologies.
- There are numerous other organisations now involved with start-ups in Switzerland and recently a start-up guide was published that features Switzerland. www.startupguide.com
We believe The Startup Guide sums up the situation in Switzerland very well “With big money investing in big ideas, pioneering entrepreneurs across Switzerland are showing the world that impact start-ups aren’t just a trend – they’re are the new norm”