How Switzerland Won Its Title of the Country of Innovation

March 16, 2020

What makes Switzerland unique? How did the country manage to become the global leader in innovation? We had a chance to talk with Mr. Raphaël Conz, the Economic Promotion Manager for the Canton of Vaud, to get the answers and hear about the plans of Swiss government for growing the entrepreneurial landscape in 2020.

Switzerland ranks first in the Global Innovation Index 2019. What makes Switzerland the most innovative country in the world?

The Swiss government is first and foremost dedicated to its framework conditions, which are about education, training, research, taxation and facilities. However, the most prominent factor is our political system. Switzerland is a federal country where power is shared on three levels: Municipalities, Cantons/States, and the Confederation. It rests upon a direct democracy and consensus, which guarantees productive stability and allows the Swiss economy to thrive.

Indeed, according to the World Economic Forum, Switzerland is also ranked as the most competitive and innovative economy in the world. Its potential for innovation, as well as the efficiency of its workforce, is often regarded as the best on the international scene. It is then no wonder why Switzerland massively invests in research and development, which is about 3% of the Swiss GDP.

A strong public-private investment program fosters collaboration and technology transfer between academic institutions (Universities/HES) and companies. A federal initiative also launched the Innosuisse Fund. In addition to efficient public support, the private sector also invests in research, particularly in the field of life sciences and health, as well as precision industries such as micro and nanotechnologies.

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Is there something that Switzerland lacks for even better growth?

Despite some progress over the last 10 years, Switzerland is still widely known for avoiding risk type of mindset when it comes down to business and investment. We would rather be labelled slow and overly cautious than reckless and daring. Both approaches have their pros and cons.

However, we could highly benefit from expanding our national investors’ community and venture capital funds. On both the regional and national scale, we must increase our visibility so investors from abroad can be aware of what is happening here and then come to help us diversify the funding opportunities.

How do you envision your role in helping Canton of Vaud to be a pioneer of innovations?

As a public office, our main responsibility is to foresee the economic trends based on the feedback from our team and partners, while making sure our framework-conditions are well-defined and applied.

Our role is to primarily support entrepreneurs and their companies. We contribute to their success by creating the right conditions here and in maintaining an ever-growing ecosystem. Thanks to both local and regional partners such as innovation parks, academic institutions, economic associations and clusters, we can collectively help them at every stage of their development.

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What is your key focus for 2020? Is there any specific area or industry that you are trying to invest more resources in?

Our main and ongoing strategy is centred around 5 key industries and 16 innovation domains such as energy and environment, precision engineering, nutrition and FoodTech and others. Our key focus can slightly shift from one year to the next as it all comes down to finding the right amount of companies and the potential for development.

In 2020, we are going to promote a couple of initiatives in Trust-, Food- and SportTech. We will be launching a Fund for Innovation of CHF 150 million in addition to our existing financing aids. Special attention will concern collaborative innovation and sustainability. Companies located in Vaud will then have the possibility to submit their project and benefit from this Fund.

On that note, we invite the Seedstars community members interested in settling their business in Europe to consider not only Switzerland but Canton of Vaud for its one of a kind ecosystem and opportunities.

How would you describe the entrepreneurial and innovation landscape in Canton de Vaud? What are the trends among startups nowadays?

Recent studies confirmed Switzerland as a hotspot for high-tech innovation. Indeed, Swiss startups collectively raised more than CHF 2 billion in 2019.

Canton of Vaud is responsible for ¼ of it with a recent 70% increase reaching CHF 455.7 million just last year. Financing rounds increased by 32%, while the national average was only 15,7%. While ICT & Digital remains an obvious asset, Canton of Vaud also established itself as the national leader for Digital Health. Last but not least, 4 out of the first 10 best startups selected by the Top100 were from Canton of Vaud.

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How do you measure your impact and what do you consider your biggest achievement in 2019?

Our impact relies on the capacity to be in tune with the needs of our ecosystem. Hence why our innovation policies are a key factor in setting adequate strategies. We measure our impact with several indicators such as the number of companies we’ve helped through establishing, coaching, financing and networking. The amount of jobs created through the growth of those companies is also an important indicator.

Overall, our strategy has paid off so far as the Office for Economic Affairs and Innovation (SPEI) has just recorded another annual increase in terms of its financial grants (250 companies received CHF 5.7 million in 2019 generating financial leverage of x3.07).

This year, 6 Swiss startups had a chance to join one of the regional Seedstars Summits as part of the SPEI Expansion program. Could you please tell us more about the aim of the program and its efficiency? Do you have any plans to enhance the program or launch any similar initiatives in the future?

The Seedstars Expansion Program has been made for early-stage companies based in Vaud that are interested in reaching emerging markets and to benefit from our existing partnership with Seedstars. So far, about 20 companies participated and went to countries such as Tanzania, Kazakhstan, Thailand and Mexico to experience an immersive boot camp.

As 2019 marked the end of this third edition, we intend on working further with Seedstars and adjusting the format so it’s even more relevant for entrepreneurs in the near future.