As a neighboring country, Switzerland offers German companies access to innovative partners and executives along with attractive margins and loyal customers. But Switzerland is also much more: As a trilingual country, it is the ideal pilot market for startups with international ambitions, and also offers direct access to an extremely active VC scene. Especially for startups in the fields of healthcare and medtech and the IT industry as well, the neighboring country is a must.
Switzerland – a ‘glocal’ market
Even though Switzerland has many similarities to the local market from a German perspective, German companies should prepare their market entry well.
Startups that have a B2B product that isn’t just sold but also involves a consultation/service offer shouldn’t take too long to consider establishing a local office. This is because Swiss companies like to work on a collaborative and local level. A small team of employees that speak both Swiss German and French will make sales and service activities much easier while also making it possible for a German company to quickly establish a loyal customer base. Compared to Germany, it’s also possible to achieve higher margins.
What is known as the “Röstigraben” also shouldn’t be underestimated. It’s not just a linguistic boundary, but there can also be major discrepancies in terms of sales strategy, sales cycle and salaries. And even though it might sound cliché: in Suisse romande – as in France – a shared lunch will be the decisive element, and things will be a bit more formal in the beginning in Schwiz. Bilingual cantons like Bern or Fribourg could be the perfect compromise. In these areas, you will find bilingual employees who are familiar with the customs of the other business culture and can perfectly adapt.
Moreover, Switzerland also offers direct access to international executives and high-performers who found their way to Switzerland through their studies at ETH, EPFL, IMD or the University of St. Gallen. This diversity of talented individuals has led tech giants like Hewlett-Packard Enterprise, Google, Logitech, IBM, Cisco and Kudelski to chose Switzerland as the hub for their R&D activities. Scaleups like scoutbee or commercetools from Bavaria have also found strategic executives in Switzerland and opened offices in the country.
For globally active companies, Switzerland’s neutrality, attractive tax system and many free trade agreements make it an even more attractive location for establishing international sales or purchasing hubs.
An active startup scene and VC landscape
Switzerland is one of the most attractive countries in the world when it comes to access to venture capital. During the corona year of 2020, more than 2 billion CHF were invested in Swiss startups alone. Biotech and ICT companies benefit the most from access to VCs in the Alpine country. More information about VCs in Switzerland is provided by the recent Swiss Venture Capital Report 2021, which is published annually by startupticker.ch and the SECA (Swiss Private Equity & Corporate Finance Association).
The latest Swiss unicorn is from Lausanne. Nexthink, which offers digital employee experience management software, announced a Series D round of financing in early February amounting to 180 million US dollars. The company now has a valuation of 1.1 billion US dollars and plans to continue to grow.
Universities and colleges as startup hubs
Most Swiss startups are founded at local universities. They actively campaign for technology transfer between R&D and companies. EPFL Lausanne created its very own Innovation Park for just that. It is home to 135 startups and 27 corporates, including Cisco, Logitech and Siemens. Some of the well-known spin-offs are Mindmaze, the Swiss unicorn in advanced neuroscience, or AC Immune, a Nasdaq-listed biopharmaceutical company that specializes in treating Alzheimer’s Disease. Or, most recently, Nexthink.
Trust Valley & Health Valley: two strong clusters in Switzerland
Thanks to its political neutrality and position as a high-tech country, Switzerland is the ideal place for companies in digital trust to do business. Since late 2020, the cluster Trust Valley has been actively promoted in Western Switzerland. With businesses like ELCA, Cisco, SGS, Kudelski Security, Protonmail and Wisekey, several companies are already active locally. In an effort to counteract digital crime and establish a safe and more protected global cyberspace, the World Economic Forum has also opened a Global Centre for Cybersecurity in Geneva. International organizations are working with the Idiap Research Institute, which has made an international name for itself with its biometric research and biometric tests.
Switzerland has been an attractive location for pharmaceutical, biotech and medtech companies for quite some time. This is due on the one hand to the historical presence of companies like Roche, Novartis and Lonza, and on the other, to two decisive factors: the cantons’ proactive tax policies for R&D expenditures and an attractive patent system. High expenditures for R&D are encouraged in Switzerland, which in turn promotes innovations. This leads to interesting partnerships between pharmaceutical corporations and innovative biotech companies. Organizations like the BioAlps cluster or Swiss Biotech Center actively support these types of cooperation. This was how the research and production partnership between the US biotech firm Moderna and the Swiss giant Lonza was created in Western Switzerland. Lonza now produces the corona vaccine for Moderna in Visp, which is a 30-minute drive from Zermatt and the impressive Matterhorn.
Quality of living – stability and nature
Beautiful, diverse scenery, a low crime rate, an outstanding healthcare system and excellent educational institutions make Switzerland an extremely attractive country for international executives. Switzerland is also known far beyond its national borders for its top-quality infrastructure.
This is also reflected in world-renowned quality of life indexes. In the last Mercer Quality of Living Index, three Swiss cities were among the top 10: Zurich (#2), Geneva (#9) and Basel (#10).