Is Switzerland an entrepreneur friendly country?

Ecrit par| Culture

Switzerland is a country known around the world for its political and economic stability, its high quality of living and excellent education, but why does a country having all these advantages isn’t also known for its innovative startups and entrepreneurial spirit ?

According to the Swiss Entrepreneurial Ecosystem Report (Swiss Startup Monitor 2015-2016) there are some non-entrepreneurial related factors (market, infrastructure, innovation, government/ regulation and geographical location) and some entrepreneurial factors (entrepreneurial support, network, entrepreneurship education, culture and venture financing) we must consider when evaluating an entrepreneurial ecosystem.
The aim of this article is to find out how is the entrepreneurship ecosystem in Switzerland in the form of Pros and Cons as follows:

Cons

  • Home market relatively small therefore, dependency on the international trade.
  • Lack of financing for startups in the early growth stage.
  • Lack of entrepreneurship education for youth (Secondary level education)
  • Not too many Swiss consider entrepreneurship a desirable career choice, entrepreneurs do not receive a very high status and there is moderate media attention. (Global Entrepreneurship Monitor 2014)
  • High cost of living compared to other countries in the world. Per a recent study from UBS, Zurich and Geneva are the most expensive cities worldwide. Despite that, workers in those cities rank second and third in terms of relative gross salaries. This could be a problem for entrepreneurs who dedicate their 100% developing their projects without any income, there is a big opportunity cost, which entrepreneurs should be able to support.
  • High presence of multinational companies which contribute significantly to the economy, many of them have their European headquarters in this country. This could be a high barrier of entry for entrepreneurs willing to compete with big brands in the market.


Pros

  • Market Stability, Switzerland Gross Domestic Product (GDP is the value of the goods and services produced in a country in a year) has been growing constantly at an average rate of 1,8% over the past 10 years (World Bank, 2014)
  • High purchasing power, the GDP per capita (GDP per country’s habitant) is the fourth largest in the world or the ninth if adjusted to the purchase power.
  • Excellent infrastructure, Switzerland ranks between the bests in the Global Competitive Index. The country has a modern and reliable telecommunications system, stable energy and water supply and excellent Air
    ports, railways and highways.
  • High investment in research and development. Almost 3% of the country’s GDP go to research and development.
  • Excellent education and easy access to it. The country possesses 60 higher education institutions and 4 of them are on the top 100 of the Times “Higher Education World Universities Ranking”. Switzerland also has the largest number of scientific publications per researcher and the largest number of Novel prizes per habitant.
  • Strategic geographical location. Three from the four Europe’s strongest economies are neighboring countries (Germany, France, Italy)
  • Multicultural country, four official languages (French, German, Italian and Romansh), different religions, and large proportion of foreigner residents.
  • Competitive regulation and tax system for companies. The country ranked 20/189 in the World Bank’s Doing Business Index in 2015.
  • Wide variety of support for entrepreneurs. There are a lot of governmental and non-governmental institutions, incubators, hubs, co-working spaces, coaching initiatives. (Commission for Technology and Innovation, Startup Weekends, Swiss Challenge, ETH Innovation and Entrepreneurship Lab, EPFL Innovation Parks, The Wyss Translational Center Zurich, Impact Hub, Basel Incubator, Fintech Fusion)
  • Developed clusters in different industries. Machinery, electrical engineering and metals industry particularly present in Zurich, Aargau, the Ticino, the Valais. Financial center which is mainly in Zurich and Geneva. IT cluster mainly in Zurich
  • Diverse sources of financing for startups in the seed stage. (A3 Angels Lausanne, Start Lausanne, STI Stifung fru technologische Innovation Biel, Biomed Invest Basel, Novartis Venture Fund Basel, 100 days Zurich, C-Crowd Zurich, Club Valaisan de Business Angels Sion, Seed Capital Freiburg, Vinci Capital Lausanne…)
  • Swiss are on average fearless to failure, they are also positive about opportunities for starting a business in their country and having the knowledge necessary for succeeding. (Global Entrepreneurship Monitor 2014)
  • Growing rate of women entrepreneurs, equal woman to man ratio (Global Entrepreneurship Monitor 2014)

 

As per this evaluation there are more positive aspects than negative ones for starting a business in Switzerland, because it represents an excellent opportunity to enter a stable, innovative and profitable market with access to the European market, also it gives you the possibility to test your product/service in a multicultural environment, which is very useful if you are planning to enter in the heterogeneous European Market, and there is plenty of support for startups in the seed stage.
However, some of the negatives ones such us the lack of cultural support for entrepreneurs and the high cost of living could be strong barriers for entrepreneurship. According to the Global Entrepreneurship Monitor 2014 there are some signs of progress in the cultural aspects on regards of entrepreneurship in Switzerland and this country is providing the necessary tools for developing a flourishing entrepreneur environment.

To boost entrepreneurship growth even further there should be more funding for enterprises in the early growth stage, as well as more cultural support to the entrepreneurship activity, this can be reached throw more media exposure to this kind of topics and more events of successful and event not successful entrepreneurs, additionally entrepreneurship should be promoted not only in the young population but also in the elderly one.

In conclusion, Switzerland is an entrepreneur friendly country and entrepreneurs in this country should exploit even more the opportunities they have in order this country to be an innovation an entrepreneur hub in the future!

 

Last modified: 1 mars 2017

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