A study by the University of St.Gallen has comprehensively examined the framework conditions for startups in Switzerland from a legal and economic perspective. While the higher education landscape and the financing conditions for start-ups are considered satisfactory, there are clear deficits with regard to administrative requirements. In particular, the start-up process in Switzerland is too complex, lengthy and costly by international standards.
Switzerland offers good conditions for startups and has, for example, produced some so-called "unicorns" with On, Mindmaze or Wefox, i.e. fast-growing companies valued at over one billion US dollars. As a country that regularly leads rankings such as the "Global Innovation Index" and has an excellent higher education landscape and a strong financial center, the framework conditions here are very good. Nevertheless, it must be asked how even more success stories can be written.
Researchers at the University of St.Gallen (HSG), under the scientific leadership of Prof. Dr. Dietmar Grichnik and Prof. Dr. Markus Müller-Chen, have investigated this question and, in addition to the positive aspects, have also identified a number of obstacles: the experts surveyed in the Swiss startup ecosystem perceive the bureaucratic process of founding a company as very complex. From the preparation of the necessary documents to the public notarization as well as the registration with the commercial register, time-consuming physical processes are necessary instead of being able to incorporate online in a one-stop store and by means of digital notarial services. Here, Switzerland lags behind other countries in terms of digital solutions. There are also warning signals regarding venture capital activities. Switzerland is increasingly falling behind other European countries. Prof. Dietmar Grichnik emphasizes: "Switzerland has a great opportunity to establish itself as a unicorn hotbed for startups. However, only if we don't lose out internationally on the location factors of digital startups, attractiveness for investors, taxes and regulation."
Especially in the MedTech and FoodTech sectors, startups have a high structural relevance in Switzerland. However, this is precisely where a high degree of regulatory uncertainty and rigidity cause problems. Prof. Markus Müller-Chen explains: "Innovations in these key industries are hindered by slow, insufficiently digitized and partly non-transparent approval or authorization procedures." MedTech startups have also suffered since 2021 from the suspension of Mutual Recognition Agreements (MRAs) with the EU due to the lack of an institutional agreement. Another problem that affects startups in all industries equally is the possible classification of venture capitalists (so-called "business angels") as professional securities traders. Here, a statutory adjustment could create more legal certainty.
The study was conducted by the HSG on behalf of the Swiss Entrepreneurs & Startup Association SWESA. The association is committed to improving the economic policy framework for startups and innovative SMEs in Switzerland and runs the secretariat of the parliamentary group Startups and Entrepreneurship. Andri Silberschmidt, for example, is one of them: "The results of this study will help us to derive political initiatives and take concrete measures to offer startups in Switzerland optimal conditions," says the FDP National Councilor. The Swiss Mobiliar Cooperative supported the study as a benefactor.
Image: University of St.Gallen (HSG)
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