Limited growth despite strong innovation

For the Country Report the School of Management Fribourg (HEG-FR), collected data in Switzerland: 2,008 interviews (telephone and online) and 36 talks with experts revealed entrepreneurial attitudes, activities and aspirations. The interviews in Switzerland took place from mid-June to mid-July 2020. In total 140’000 people in 43 economies took part in the survey.

In March, the Swiss team headed by Rico Baldegger already published results regarding the impact of the Corona crisis. Key results included lower growth ambitions and a higher fear of failure rate however the Total Entrepreneurial Activity (TEA) remained stable.

The Country Report, which has now been published in its entirety, contains a wealth of other interesting findings that allow a comparison of Switzerland with other high-income economies and, in particular, with strong start-up nations. The results show that there is strong start-up activity in Switzerland, and that the country is on a par with nations such as Israel or the UK in terms of its export rate and focus on innovation. At the same time, Swiss founders avoid risks. This results in very low growth rates as well as in a low failure rate.

The percentage of people who have taken concrete steps to start a business or have done so in the last 3.5 years is 9.5% in Switzerland. The rate has doubled over the last ten years. Israel (8.5%), Sweden (7.3%) and the UK (7.8%) have lower rates. The highest rates are found in the USA (15.4%) and Canada (15.6%).

Switzerland has the highest share of start-ups in medium or high technology sectors. It is ahead of Norway, Israel, South Korea, Sweden and the UK. The share of founders who export is also impressive. Here it is on a par with other small economies such as Israel, the Netherlands or Sweden.

At the same time, however, only a small number of Swiss are pursuing growth plans. Only 12% of Swiss founders want to create more than six jobs in five years. In Israel, Sweden and the UK this rate is 20%, in the USA and Germany even 30%. At the same time, the lack of ambitious strategies leads to a very low failure rate. It is 1.2%, while the rate in Israel is 3%, in Sweden 2.3% and in the USA 4.4%.

Framework conditions less attractive

In 2018 GEM introduced the National Entrepreneurship Context Index or NECI, a composite index representing in one figure the weighted average state of the set of national entrepreneurial framework conditions. Switzerland holds the 10th position of the 2020 ranking after losing several positions compared to last year, where Switzerland was at the top of the list. The NECI index score decreased to 5.4 points, which means that overall the Swiss entrepreneurship context is still considered very supportive for developing entrepreneurial and established business activities. But compared to the two previous years, all the 12 conditions were rated lower, without exception, by the chosen experts.

The report can be downloaded from the website of HEG-FR.

(Stefan Kyora)