Spotlight Switzerland: Digital front runner with industry gaps

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4 min read

According to the Global Innovation Index 2021, Switzerland tops every other country with the number one spot. However, the success lies mainly on the shoulders of three distinct industries.

Content: 

  1. The Strengths: Innovation & Know-how
  2. The Weaknesses: Connecting the dots
  3. Switzerland: Holistic innovation for longevity

The Global Innovation Index 2021 (PDF) puts Switzerland at the top spot among circa 130 countries. In fact, the index places Switzerland in the category of "performances above expectations for level of development", which indicates that the country is much more innovative than its status quo implies. However, this can also mean that the level of development has room to grow even further.

The Strengths: Innovation & Know-how

To start of article

Switzerland absolutely excels in knowledge and technology outputs, such as patents, utility models, and scientific and technical articles. Especially in the fields of chemistry, manufacturing and the finance and insurance (FSI) industry, Switzerland's innovation level is high. Additionally, a report on the digital innovation level in Switzerland, conducted by Deloitte and BAK, shows that the country excels in digital development for process automation, artificial intelligence and batteries.

Likewise, its infrastructure ranks #2, with ICT use as well as its ecological sustainability being far above average. All in all, Switzerland places among the Top 15 places in all categories which shows how well infrastructure, usage, and development interact.

5% of all employees are ICT experts, which is above EU average of 4,3% (based on the DESI report which I used for previous Spotlight articles ). According to the Deloitte/BAK report, Switzerland profits from highly specialized ICT experts. Especially in the fields of chemistry, finance, and manufacturing - key industries in the digital economy of Switzerland - the country also has a high number of scientists.

The future of its ICT workforce lies in a strong educational system for natural sciences as well as MINT careers. Last but not least, the quality of life in Switzerland as well as its reputation puts the number and quality of Swiss ICT careers well above the average. Regarding the current global lack of ICT personnel, this is a crucial variable for long-lasting success.

Likewise, Switzerland ranks #1 when it comes to ICT use. However, the results are less outstanding in terms of ICT access (#15) and general infrastructure (#24) but still above average.


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The Weaknesses: Connecting the dots

To start of article

The Deloitte/BAK report takes a close look at the variables that might hinder Switzerland's ongoing digital development and innovation status.

A concerning weakness is the lack of a strong start-up culture. Start-ups are often a crucial part of innovation, since they are more likely to "think outside the box" and create disruptive technologies. A country therefore needs the mentality as well as the guidelines to support start-ups. According to Deloitte/BAK, start-ups are not considered very attractive career choices in Switzerland. The report suggests that this has less to do with a lack of opportunities but more with the abundance of safe career alternatives.

Additionally, many investors prefer late to early investments, which decreases the number of start-ups that even make it till the late investment phase. Given that Swiss salaries and costs in general are high, early investments are needed to reach the proof of concept.

Another weakness noted in the report is Switzerland's main focus on chemistry, pharma, FSI and manufacturing, which leads to mean patents, specialized experts and companies but also creates big gaps for other industries and the penetration rate of new technologies. This rate measures how much digitalization also penetrates other technologies. In comparison with countries such as the USA, Finland, Israel or Iceland, Switzerland's penetration rate is mainly average but hardly anywhere above average.

Switzerland: Holistic innovation for longevity

To start of article

A focus and core strength in key industries does not put a country at a disadvantage. Switzerland's high position and reputation for its manufacturing, FSI, pharma and chemistry industries is based on a long history of high-quality products, innovation, and sustainability.

However, long-term stability almost always comes from diversity. The more gaps there are in ICT knowledge, patents, as well as successful business models, the weaker a country is in case of global disruptions.

Whether through events such as a pandemic or climate crisis or through disruptive new trends, an economy needs a variety of pillars to stand on. It's not unheard of, that entire industries have been disrupted by new technologies from different industries and sectors. For example, the development of video meetings due to the pandemic is speculated to have a lasting effect on air travel (source: Forbes).  

Switzerland's economy outside of pharma, manufacturing, FSI and chemistry needs to be just as innovative and digital to create strong global competitors.

Additionally, Switzerland needs to strengthen its start-up culture. Given the high quality of life as an employee and/or manager in an established company, this can only happen with more incentives to start a new business. Investors need to take more risks instead of investing in already proven business models. To truly drive innovation, you need to experiment and try out new things. Otherwise, you might miss out on the next DVD while investing in Laser Discs.


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by Juliane Waack

Juliane Waack is Editor in Chief at DIGITALL and writes about the digital transformation, megatrends and why a healthy culture is essential for a successful business.

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