Swiss Economics Minister Johnann Schneider-Ammann says he has secured up CHF 300 million ($313 million) in private funds for a new initiative to support Swiss start-ups. The aim is to stop young entrepreneurs fleeing to the United States.
On Friday 15 big names from banking, insurance, foundations and business signed a declaration to support the Swiss Entrepreneurs Foundation, the NZZ am Sonntag reportedexternal link.
“Credit Suisse, UBS and Mobiliar have offered the prospect of CHF200-300 million for the funds”, the ministerexternal link said in an interview.
Other companies and individuals are considering the proposal.
The overall target is CHF500 million, according to the NZZ am Sonntag. The foundation is expected to be operational from 2018.
No California dreaming
The funds are necessarily to counter the lack of venture capital in Switzerland, Schneider-Ammann explained.
“I don’t want good ideas that are developed in Switzerland to be exported to California, and create jobs there. I want them here, with us.”
There is more investment in start-ups in the European Union, the newspaper pointed out. Was this due to lack of capital or not having the right framework conditions?
Innovation-wise, Swiss firms were at the top of their game, the minister answered. But where they fell down was bringing their ideas to the market. This means investors often go abroad, to larger markets. The start-up culture could also be improved.
Culture of failure, risk
A change of mentality was needed for start-ups, he added. In the US, business failure is greeted with a “better luck next time”. But not so in Switzerland. “If you fail with your business idea here everyone points the finger at you. You are branded a looser,” said Schneider-Ammann, who himself has a successful business background.
“This stifles entrepreneurship – and we want to change this. We want to create an environment in which young people are prepared to take risks. We want to breed entrepreneurs.”
In terms of where he expects success from projects supported by the funds, the minister said that in biotechnology, a key area in Switzerland, only two out of ten projects were successful. In IT, it was a bit higher. Most of the ideas did not come to fruition. This shouldn’t put off investors though, said Schneider-Ammann.
The minister said that he had taken on the role as patron of the project with “great joy and conviction”.
The funds are not, he warned, a charity. The money would give a start-up venture capital to create opportunities.
“If a start-up seizes its opportunity, part of the profits will go back into the funds, as an investor,” said Schneider-Ammann.
Start-ups in figures
87% of investment in Swiss start-ups comes from abroad. This means that the chance of the firms moving abroad is higher.
There were 88 foreign investment projects in Switzerland in 2016, according to a study by consultants EY. This was slightly less than in 2015. In Europe, foreign direct investment went up by 16%.
There were 892 patent application per million inhabitants for Switzerland at the European Patent Office in 2016. This is the highest density in the world, the NZZ am Sonntag said, citing an article by swissinfo.ch.
Source: NZZ am Sonntag