Recommendations for improving the Swiss entrepreneurial ecosystem

2023 began with a lot of tension and uncertainty: war, high energy costs and of course, the lasting effects of the COVID-19 pandemic. An unstable environment which disrupted the entrepreneurial ecosystem. And yet, opportunities are still there. "In the second half of 2023, trends show that there are solutions, provided you have a bit of audacity and a taste for innovation", says Rico Baldegger, Director of the Fribourg School of Management (HEG-FR) and Team Leader of GEM Switzerland, when presenting the key facts relating to Switzerland from the Global Entrepreneurship Monitor (GEM 2022/2023).

It appears that in Switzerland, making a difference in the world is the main driver for starting a business. With a rate of 57.4%, this is the only criterion higher than the average of countries with a high GDP per capita (Level A, 45.6%). Other motivations are the need to work (47.1%), wealth creation (37.1%) and far behind, the pursuit of a family activity (11.2%).

Gender gap

Thus, there is still work to be done to promote entrepreneurship as a career choice. Among Level A countries, Switzerland stands at 38.3%, well below the average of 65.1%. Just under half (47.6%) of the Swiss population also assess their skills and knowledge as sufficient to start a business. Here Switzerland is in the middle of countries with a high per capita GDP. There is a large gap between the genders: 57% of the male population, but only 38% of the female population assess their skills and knowledge as sufficiently good to start a business.

Low rate of digitalisation of businesses

The rate of use of digital technologies in order to sell products is particularly low in Switzerland: 31.9% for companies under 5 years old (average level A, 48.5%). The rate for those over five years of age drops to 20.8% (average level A, 37.9%). "Despite a highly innovative economy, most start-ups in Switzerland are not highly digitally-based when compared internationally", says Pascal Wild, a member of GEM Switzerland.

Improving the ecosystem

Improving entrepreneurial ecosystems to stimulate entrepreneurship - and, ultimately, prosperity for all - has become an issue of central importance to many governments worldwide. Policymakers have realized that improving the conditions for entrepreneurship should not just involve individual, isolated policy interventions. The context in which these interventions occur and the interdependencies with other parts of the entrepreneurial ecosystems should all be taken into consideration. 

Recommendations for Switzerland:

Promoting entrepreneurial cultural openness, entrepreneurial education, and entrepreneurship as a career choice. Entrepreneurial DNA is to be injected further into education programs to foster skills like creativity, goal setting, reaching ambitious goals, and implementing a project. The aspirations of the younger generation should be the focus. The value of entrepreneurship in business and society must be enhanced by information campaigns or internships.

Too little use of digital technologies. Compared to our international peers, the added value of digitalization in these business models is not sufficiently recognized by Swiss entrepreneurs. 

Considering social and environmental implications – We are good but not great. Most Swiss entrepreneurs apply social and environmental goals in their decisions. There is still potential for the future in establishing funding programs and grants that specifically support socially impactful startups and innovative ventures. Furthermore, the development of incubators and accelerators that provide mentoring, networking, and resources for entrepreneurs focused on creating positive social and environmental change has to be installed in urban and rural regions.

Fostering women entrepreneurs and diversity. The challenges that women entrepreneurs identify in starting a new venture are apparent and traditional instruments, such as training and grants, need to be expanded. The innovation and financial support system should be enlarged.

Nurturing Entrepreneurial Finance. Innovation-based businesses and Gazelles still create most net new jobs in an economy. Government should create special dispensation for these two categories of enterprise, for example, by providing special funding vehicles and funding for business development services.

Enhancing ease-of-market entry and fostering a competitive market dynamic. Enhancing market dynamics and facilitating ease of entry requires a comprehensive approach involving regulatory reforms, support for startups, strengthening infrastructure, and fostering collaboration between stakeholders.

The policy brief with detailed analyses and recommendations can be downloaded from the webite of HEG-FR.