Swiss innovation: a global leader with a legacy

Text: Luise Dambly (AWP)

Whether in the crevasses of Piz Palü or in the oil tanks of ocean-going vessels, the Elios drone can find its way around without assistance. It owes its flexibility to a simple idea from the animal world: continuing to fly despite collisions. Based on this principle, the start-up Flyability developed the first flying robot with a protective cage and now sells it all over the world – because Elios reduces inspection times in difficult environments from days to hours.

Elios is one of many Swiss developments in recent years. And yet, when people talk about Swiss innovation, they are rarely referring to high-tech, but rather to traditional classics such as Ricola or pocket knives. Perhaps this understatement is itself a Swiss "invention": Switzerland tinkers away quietly – and has been ranked number one in the Global Innovation Index for the past15 years.

Switzerland may not have any raw materials, but it does have ideas. The country’s long-standing tradition of continuous innovation dates back to the inception of industrialisation: the textile dye factories in Basel were followed by the chemical and pharmaceutical industries. The construction of the Gotthard Tunnel marked the start of Zurich as an important financial centre, and the watch industry laid the foundation for today's precision engineering.

Innovation with efficiency

Over the years, Switzerland has thus achieved the status of the most innovative country in the world. According to the Global Innovation Index, this is due to the perfect balance of "innovation input" – that is the framework conditions such as research expenditure and industrial diversity – and "output" are in perfect balance.

Switzerland's lead over its neighbouring countries is significant. According to the European Innovation Scoreboard, Swiss SMEs introduce more than one and a half times as many product innovations as the European Union average. This commitment to innovation is evident in various aspects of daily life, from the coffee capsules that many of us rely on in the morning to advanced hearing aids that facilitate social engagement, and blockchain technology that ensures secure online banking.

The latest innovation survey of the Economic Research Centre at ETH Zurich (KOF) finds that more than one-third of Swiss companies consistently generate around one-third of their revenue from innovative products and services. What is remarkable is that Switzerland registers more patents per capita than any other country in the world, despite investing relatively little in research and development. With an expenditure of around 3.3 per cent of gross domestic product, Switzerland ranks "only" seventh, according to the Global Innovation Index.

Innovation landscape

How does Switzerland achieve this high level of innovation? The creator of some of 20th century the most innovative ideas – Albert Einstein – said: "It's not that I'm so smart, I just stay with problems longer." Innovation is thus the result of hard work, dedication and the perseverance. Switzerland's focus on linking its research landscape with industry is a key aspect of its success in innovation, leading to a high rate of joint publications between enterprises and the public sector, according to the European Innovation Scoreboard. And it doesn't stop at theory: in 2024 around three spin-offs emerged from ETH Zurich every month, and two from EPFL Lausanne.

Innovation at the interface between research and industry is actively promoted, for example through the state-run Innosuisse programme. Funding of research cooperation between firms and universities increases firm performance substantially, according to KOF. While representing only around one per cent of total R&D expenditure, company sales increase by almost a third over five years.

This guarantees that innovation is not only driven by large corporations such as the pharmaceutical companies Novartis and Roche, but also by SMEs, which are vital to the Swiss economy. The diversity of innovation this creates is reflected in a wide range of patent applications, from transport technologies to biotechnology.

The ICT sector has been particularly successful commercially, followed by cleantech and biotech. As the annual Venture Capital Report shows, they receive the most venture capital and are closely linked to the university centres of Zurich, Lausanne, Basel, Bern and Geneva.

Diversity breeds inventiveness

However, innovation requires more than money. Because ideas come from people – and the more diverse those people are, the better. Research around the world shows that teams with a mix of different backgrounds develop more creative solutions and are more successful economically. For example, management teams with an above-average proportion of women achieved twice as good a share performance as management teams with a below-average proportion of women.

But when it comes gender diversity, for example, Switzerland has room for improvement. Women are underrepresented in start-ups, management and research. In contrast, the Swiss corporate landscape is characterised by a strong emphasis on cultural diversity. In addition to the four national languages, migration also plays an important role: according to Avenir Suisse, almost 80 per cent of all unicorn start-ups owe their existence to international specialists. And that is typical for Switzerland. More than half of the companies in the Swiss Market Index (SMI) were originally founded or co-founded by non-Swiss nationals.

In the global competition for skilled workers, Switzerland stands out with its quality of life. Despite the high costs, it is currently regarded as one of the most attractive business locations worldwide, as indicated by its position in the IMD World Competitiveness Ranking.