Switzerland ranks in the top ten most entrepreneurial countries

05.06.2013 18:48

The School of Management Fribourg recently published the results of the Global Entrepreneurship Monitor. Again Switzerland is one of the most entrepreneurial countries in the world. The world’s largest study of entrepreneurship highlighted the peculiarity of the Swiss start-up scene.

The purpose of Global Entrepreneurship Monitor (GEM) is to explore and assess the role of entrepreneurship in national economic growth. From its first survey in 1999, GEM has grown into a consortium of more than 400 researchers from 99 economies over its 14 year history.

One element of the report is the Global Entrepreneurship and Development Index (GEDI). With this sophisticated indicator a realistic ranking of the countries became possible. The ten most entrepreneurial countries in 2012 were:

Country

GEDI 2012

Rank 2012

United States

0.60

1

Sweden

0.57

2

Australia

0.56

3

Iceland

0.55

4

Denmark

0.55

5

Canada

0.54

6

Switzerland

0.54

7

Belgium

0.50

8

Norway

0.49

9

Netherlands

0.48

10

Taiwan

0.48

10

 

Apart from this ranking the current Global entrepreneurship monitor delivered several interesting results for Switzerland.

After the 2010 cycle, which was strongly influenced by the aftermath of the financial crisis, many Swiss entrepreneurship activity indicators for 2011 and 2012 turned upward again, with the total entrepreneurial activity (TEA) being one of them. After the all-time low of a Swiss TEA rate in 2010 of only 5%, the most important indicator for entrepreneurial activity once more reaches a normal level (6%).

Although the Swiss TEA rate tends to be higher than in neighboring countries such as France or Germany, adopting the 95% certainty, TEA rates of these countries are not statistically different from their Swiss counterpart. Among the comparison group, only the United States differs considerably.

A weakness of Switzerland are founders that are not very ambitious. They do not plan to grow fast within the next five years. Switzerland shows no great potential with regard to creating new jobs via young companies, at least in the short term. On the other hand, a clear orientation on (combined product-market) innovation and orientation to international markets is clear. In these areas, Switzerland ranks 8th and 6th respectively, which, in the long term, reaps positive results: it is known that product innovation and a company`s orientation to international markets are closely related to an increase in global demand. This, in turn, creates new jobs and economic growth. In addition, Swiss founders may be risk-averse but this allows them to build sustainable businesses. The Global Entrepreneurship Monitors shows that in Switzerland relatively few entrepreneurs have to close their company.

Strengths of Switzerland are also the entrepreneurial activities of women and migrants. Switzerland enjoys one of the best positions in terms of women`s entrepreneurial activity rates (a practically equal woman-to-man ratio). In 2012 Switzerland even ranked first place of all innovation-based economies. Data collected for the first time on the entrepreneurial behaviour of migrants is also of interest. Entrepreneurial activity for both first and the second generation migrants is significantly higher than the Swiss average.

The age structure of entrepreneurial activity in Switzerland is noteworthy. Entrepreneurial activity among the young in Switzerland (18-24) is the lowest of all comparable countries, whereas the 35-44 age group shows the highest entrenpreneurial activity.

The overall entrepreneurial framework conditions in Swit­zerland — along with those in Singapore — are generally better than those of other innovation-based economies included in the study. Switzerland achieves outstanding results in finance, commercial infrastructure, tertiary education, and knowledge and technology transfer, as well as in stable internal market dynamics.

The report on Switzerland of the Global Entrepreneurship Monitor can be downloaded below.

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