download all articles
send via email
Country profile: Switzerland
Switzerland recognises the value of research and channels its resources accordingly. It spends 2.93% of gross domestic product (GDP) on R&D, among the highest research intensities in continental Europe. More than two thirds of this investment comes from the private sector, especially the chemical, pharmaceutical, electronics and metallurgical industries.
It’s no wonder that Switzerland values knowledge work so highly. The CIA World Factbook lists its natural resources as ‘hydropower potential, timber, salt’, but says literacy rates are 99%. The country reiterated its commitment to its future as a knowledge-based economy at the end of 2007 when it signed a budget to spend €12.5bn to promote education, research and technology between 2008 and 2011 - for a population of 7.5m. This will be combined with monies set aside in 2006 for EU research co-operation, to bring the total investment of €13.2bn.
The money will be spent to improve education, and to foster research and innovation. This means more investment in basic research, the promotion of knowledge transfer from universities to business, support for promising application-oriented R&D, and funding to help young scientists.
Education
According to Mauro Dell’Ambrogio, secretary of state for education and research in Switzerland, when the country was formed in the mid-nineteenth century, it was decided that it was preferable to have a dozen universities, each run by one of the country’s cantons, than one national university. However, a single engineering institute was established in Zurich, to provide the country with the engineers it needed. This became the Swiss Federal Institute of Technology, known as ETH Zurich.
ETH has grown to become a network of organisations, that also includes EPF Lausanne and four application-oriented research institutes, that operate under the ETH domain. Together they have 580 professors, 12,000 staff and 20,000 undergraduate and post-graduate students. They also undertake in-depth collaborations with industry: Nokia, ETH Zurich and EPFL have established a long-term research program that sees Nokia opening a laboratory in Lausanne to link into the Institutes of Technology. These key universities and research institutes will get further support under the new budget, in part because of their role as a benchmark of excellence. There will also be more support for vocational education and training, and for the Universities of Applied Sciences.
The Swiss federal system puts the responsibility for the promotion of scientific research on the Swiss National Science Foundation (SNSF) and the Innovation Promotion Agency CTI.
Basic science and research
The SNSF backs high-quality basic research projects and some applied research. Its €367m budget funds 7,000 researchers, the majority of whom are under 35. It supports basic research in all disciplines, from philosophy and biology to the nanosciences and medicine. The SNSF is also responsible for carrying out the National Research Programmes and for the National Centres of Competence in Research (NCCR).
The National Research Programmes are designed to support research projects dealing with contemporary issues of national importance that can make a scientifically sound and innovative contribution within a practical period of time to a solution to urgent societal or economic problems. Current topics range as widely as the benefits and risks of the deliberate release of genetically modified plants, and resistance to antibiotics.
The National Centres of Competence in Research are research projects of national importance, with an emphasis on interdisciplinary approaches and knowledge transfer. Each centre has a leading member and a network of partners. It also has a clearly defined area of research and is financially supported for ten years by the federal government. Centres are studying topics ranging from computer-aided and image-guided medical interventions to quantum photonics.
Promoting innovation
The CTI supports the transfer of knowledge and technology between businesses and universities, as well as promoting the development and application of new technologies. It brings companies and university researchers together by supporting their co-operation in applied R&D. CTI services range from action programmes in informatics to support the formation of high-technology firms. The tools that the CTI provides can also be used by small and medium-sized enterprises.
Switzerland has also been diligent in ensuring that it can collaborate widely by finding ways to play a part in European Union and other projects. It is already taking a role in the development of the European Research Area, and signed a bilateral agreement for full Swiss involvement in FP7 (2007 - 2013) that went into effect on 1 January 2007. It has also created a Web presence for Swiss researchers who want to join in with European projects.
Switzerland is also a member of European and international bodies that range from the European Space Agency to the International Commission for the Scientific Research of the Mediterranean Sea.
Inward investment
Switzerland’s political structure gives it the kind of long-term stability that is attractive to companies considering investing in the country, or partnering with companies based there. The country is organised as a confederation of 26 states (or cantons), each of which maintains a degree of local autonomy. The Swiss government has been made up of a coalition of four parties since 1959. The federal government funds and directs the ETH domain of technology institutes, while the cantons provide support for the country’s other universities.
The OECD offers a rather outdated assessment of Switzerland’s role in foreign direct investments, both into and out of the country, here. The basics haven’t changed much since the report was written in 1996: Switzerland remains an attractive central European location with educated people, good infrastructure and several key industries, many of them already working in formal or informal clusters and networks.
The Swiss economy has a relatively small public sector and low overall taxation, of just 29.2% of GDP in 2007, about the same as the United States, Ireland, or Estonia. The nominal GDP per head is higher than that of the larger western European economies. The economy is also the second most competitive in the world, according to the World Economic Forum.
Switzerland’s success in managing its economy and the savings habit of its people and businesses has created a potential issue for inward investors. The country has a current account surplus that rose to 15.1% of GDP in 2006, compared to the 4% seen in many other OECD countries. An OECD analysis suggests that a lot of the surplus is due to increased household savings and businesses saving more, rather than investing in the local economy. This has exposed Switzerland to a possible sudden increase in the value of its currency, which would cut demand for exports and for local goods and services that compete with imports.
Switzerland is home to several large multinationals, including Nestlé, UBS AG, Zurich Financial Services, Credit Suisse, Novartis, Roche, ABB, Swiss Re, and The Swatch Group. The key industries include chemicals, health and pharmaceuticals, instruments, real estate, banking and insurance, and tourism.
Those who want to explore potential opportunities are directed to the Location Switzerland website and this list of documents, for inward investors, or Business Network Switzerland for wider issues.