Switzerland: #1 country for ease of starting and developing a business

Last year, GEM introduced the National Entrepreneurship Context Index (NECI), which summarises the assessment of Entrepreneurship Framework Conditions into a single composite score of the ease of starting and developing a business. Data from NECI was derived from the 2019 GEM National Expert Survey (NES) in which national experts are asked to assess the national environment for entrepreneurship in terms of 12 GEM-defined framework conditions.

According to the expert ratings in the latest report, Switzerland topped the rankings among the 54 countries involved in the study, followed closely by the Netherlands, Qatar, China and the United Arab Emirates. Switzerland’s physical infrastructure is rated the most well developed of the framework conditions that support entrepreneurship. Switzerland also leads the ranks in the individual framework conditions of commercial and legal infrastructure, R&D transfer, culture and social norms, entrepreneurship education at the post-school stage and Government policies, especially taxes and bureaucracy. 

“This is testament to the investment done by Swiss cities and cantons, positive media coverage about entrepreneurship in the country, and an increase in corporate entrepreneurship,” said Rico J. Baldegger, team leader for the report in Switzerland and Director and Professor of Strategy, Entrepreneurship and Innovation at the Fribourg School of Management. “Many companies are investing in startups, and this is making a difference. We also have a high level of diversity - culture, languages and disciplines, etc. - and this has been an important factor driving entrepreneurship.”  

Motivating factors for starting a business
According to the current study, more than 40% of entrepreneurs in 35 of 50 countries agree or strongly agree that their motivations for launching a business, is to make a difference in the world. For 43% of the Swiss participants, this factor holds while more than 50% want to make a living from their entrepreneurial activities or build great wealth (38%).

Low entrepreneurial activity
Despite the good framework conditions as seen by experts the share of people starting a business in Switzerland remains low. Only 9.8% of the adults are starting or planning to start a business, in this regard Switzerland ranks 31^st. The reasons for this lack of activity seems to lie in the attitudes and perceptions of the Swiss population. Only a few people see good opportunities to start a business in their area and the share of people with fear of failure is among the highest in the report. 

Taxation of startups hinders entrepreneurial activity
The experts see also some room for improvements despite their excellent evaluation. Switzerland still has to boost more areas such as Entrepreneurship Education at the school-level,  internal market dynamics and Government policies: support and relevance, which performed poorly compared to some of the 54 countries.  

Moreover, Switzerland could improve its entrepreneurial sector by investing in policies that encourage women entrepreneurship and growing the country’s entrepreneurial mid- to low-technology sector. The report has further acknowledged that taxation of startup investment has discouraged some entrepreneurial activity.

(Press release/ran)