Switzerland is globally recognized as a center of commerce and innovation, and many nations have attempted to follow its example. While many economies in Europe and the Americas are similar to the Swiss economy, the rapid development of ideas and technology in Switzerland is remarkable. What is the cause of this quick rate of innovation?
Government institutions play a large role in the stability of the economy in Switzerland, but credit should also be extended to startup companies. Switzerland’s commitment to small risk-taking companies with fresh ideas helps the country stay relevant in the global business arena.
The Swiss Government Creates Functioning Markets
Unlike many governments in the world, the Swiss government takes important steps to ensure that markets are free to adapt to changing economic conditions. Switzerland uses a minimalist approach to government regulations in most industries. This supports competition between firms.
The logic of this commitment to minimal regulations is lost to many people across the globe, but it is important for building a robust economy. When governments apply strict and excessive regulations, companies spend a large portion of their revenue on lobbying efforts. If successful, the lobbyists will earn relaxed regulations for their companies and stricter regulations for their competitors. To respond to the stricter regulations, the competitors’ lobbyists will also interfere with the political process.
Regulations allow companies to compete via lobbying efforts instead of innovation, quality, and pricing. Over time, lobbying budgets will increase, and research and development budgets will decrease. This may also result in a situation of slow job growth and stagnated innovation. The Swiss government has avoided this unfortunate scenario by making data-based decisions about regulations and economic policy. By limiting regulation to issues such as matters of health, safety, and the environment, Switzerland prevents companies from using their revenue for lobbying efforts. Instead, Swiss companies reinvest their earnings in research and training initiatives to boost innovation. This unbridled competition has helped the Swiss economy remain strong across the years.
Startups Lead Economic Growth
While minimal regulation can explain the strong markets of Switzerland, the steady growth rate of the Swiss economy may be caused by the high number of startup companies in Zurich and other urban centers.
In Switzerland, entrepreneurship and innovation are encouraged by corporate investment and government policies. Heritage’s 2017 Index of Economic Freedom gives Switzerland a 90 out of 100 for financial freedom, so investors are free to invest in ideas that they believe will grant high returns. This attracts many global investors who are willing to offer funds to Swiss inventors and entrepreneurs.
Switzerland has also developed a culture for solving problems with creative ideas and new technologies. This innovative culture may be due to the fact that Swiss citizens are among some of the most educated people in the world, but it is clear that many people in Switzerland have a passion for creating problem-solving inventions. This is reflected by the fact that Switzerland has the highest patent applications to population ratio in Europe.
Companies that are dedicated to spurring Swiss innovation are also responsible for the success of startups and the economy at large. Swiss Startup Factory is one of these companies. Founded in 2014, Swiss Startup Factory uses a team of financial and business experts to help grow inexperienced startups with innovative ideas into successful companies. With this support from experienced professionals, new entrepreneurs can focus on making a product that can compete on the open market. Many startups fail due to investment and organizational errors, so groups like Swiss Startup Factory may be boons to Swiss innovation.
Swiss Startup Company was founded by Mike Baur, a finance expert with over 20 years of experience in the banking industry. Prior to becoming a professional investor, Baur studied at the Univerity of Bern. His highest degree is the Executive Master of Business Administration. In addition to Swiss Startup Factory, Baur leads the Swiss Startup Group. Mike Baur’s commitment to disruptive ideas and startup companies has been featured in popular publications like the Wall Street Journal.
Dozens of successful startups have benefited from Swiss Startup Factory and similar organizations. Carhelper, the car repair booking service, was financed by Swiss Startup Factory in 2016. This services allows customers to receive estimates for car repair services from various companies. Swiss Startup Factory has also financed and supported the innovations of companies from the finance, green technology, and software industries.
Startups serve the demands of the market because they have forward-looking goals. For example, the startup Bestmile is creating a software platform that can monitor and manage an entire fleet of automated vehicles. This technology will be critical when automated cars are used on a regular basis in urban centers. As education adapts to the modern world, the remote education platform Diplomero will also become important.
The demands of the world are more dynamic than they have ever been, and startups can adapt to these changing needs. If this trend continues, Switzerland will be a bastion of innovation for many years to come.