Swiss companies invested record volumes in research and development (R&D) in 2015, despite the franc exploding in value at the start of that year. The private sector was responsible for most of the CHF22 billion ($22.6 billion) R&D spending in 2015, according to official figures released on Monday.
This was an increase of 10.5% from the last time such spending was measured by the Federal Statistical Officeexternal link in 2012. Companies accounted for nearly three quarters of the spending spree.
“Seen against the background of the fiscal and economic turbulence, the magnitude of this rise is astonishing,” the statistical office said in a statementexternal link.
The abandonment of the euro-franc peg by the Swiss National Bank in January 2015 caught many industries by surprise. Overnight, the franc soared in value against the euro and dollar, making Swiss produced goods uncompetitive in price and shrinking already slim margins for manufacturers.
The shock appears to have forced many Swiss firms back to the drawing board to rethink how to stay afloat in the hostile environment. Investment in basic research - the building blocks of new products rather than adjustments to existing best sellers – doubled between 2012 and 2015, the figures reveal.
Together with universities and technical colleges, companies increased the number of jobs in R&D by 7.9% in the same period. Switzerland’s R&D spending reached 3.4% of total economic output in 2015, behind just Israel and Japan in advanced economies.
Other academic research in recent years suggests that while R&D spending is growing in Switzerland, it is also concentrating more towards larger companies, particularly those in innovation heavy sectors such as chemicals and IT.
This theory was given further impetus earlier this year by a survey conducted by the KOF Swiss Economic Instituteexternal link that found smaller firms planned to put aside less funds for R&D than larger counterparts. This was particularly the case in industries more closely associated with innovation.