While the power of innovation is waning in many countries, Switzerland is forging ahead at full speed and was recently voted the most innovative country in the world for the 14th time in a row. What is the recipe for success?

Text: Matthias Kriegel

THE SUCCESS STORY CONTINUES: In 2024, Switzerland landed first place in the Global Innovation Index of the World published by the Intellectual Property Organization – and not for the 1st time, but for the 14th time in a row. Furthermore, no country scored higher on the European Commission’s 2024 European Innovation Scoreboard: The Confederation outperformed all 27 EU Member States with an innovation index of 152.2 points – 138.4% of the EU average. Of course, none of this happened by chance. Instead, it is the result of decades of development. Swiss success is based on the combination of tradition, innovation and stability.

One cornerstone is Swiss industry, which invests massively in the future and its own future viability. The private sector alone spends CHF 18 billion annually on research and development. Since 2021, companies have increased their spending in this area by 3.5 percent per year – and they do this out of conviction. Nine out of ten Swiss companies – large companies and SMEs alike – consider innovation to be crucial for making them stand out from the competition. This is the result of a survey of 2500 decision-makers conducted by the major bank UBS in collaboration with the market research institute Intervista. Fifty percent of respondents see the greatest potential for innovation in products and services. For companies in the industrial sector, 25 percent consider innovations in production processes to be relevant, while service providers are also interested in innovations in the areas of IT and digital processes (20 percent). And almost two thirds see the greatest potential for innovation among their employees. “No progress can be made without the initiative and creativity of employees at all levels,” says Christoph Plüss, CTO of UNITED MACHINING SOLUTIONS. “That’s why we invest a great deal in training and development.”

Another reason for the success of the Swiss industry is that the portfolio is broadly diversified. It ranges from the pharmaceutical, chemical and food industries to financial services and the tech industry. “For example, let’s think of watches with complex mechanisms that are extremely difficult to manufacture, or textile or machine tools,” adds Ivan Filisetti, member of the management board of UNITED MACHINING SOLUTIONS. “Swiss companies have historically been at the forefront of innovation in many industries. There is a centuries-old culture here that has always distinguished Switzerland.”

Here, Ivan Filisetti addresses another success factor of the Swiss economy: Continuity and tradition. It is embodied by countless companies that have been trading successfully for more than 100 years. STUDER, one of the world’s leading manufacturers of precision cylindrical grinding machines from Thun, was founded in 1912. LIECHTI, one of the global leaders in 5-axis milling solutions, was established as early as 1865. The fact that these and many other Swiss companies are still successful so long after their beginnings is also due to their innovative spirit. “Darwinian law also applies to long-established companies,” says Filisetti. “If they lose the ability to reinvent themselves and evolve, they are fated to disappear. We know this very well and have proven it time and again in our history by focusing on true innovation. For me, that means creating a product or process that didn't exist before.”

Equally important to Swiss success is the educational system that creates the minds behind made-in-Switzerland innovations. “Cooperation between universities and companies is essential to Switzerland’s innovative power,” explains Prof. Dr. Rudolf Minsch, Deputy Chairman of the management board of economiesuisse, the largest umbrella organization of the Swiss economy. “The Swiss Federal Institutes of Technology are the linchpin. It is no surprise that many large foreign companies also want to conduct their research in Switzerland: they want to be close to the institutes.” ETH Zurich and EPFL Lausanne are among the world’s leading technical universities. For instance, in 2024, ETH Zurich launched a remarkable 37 new spin-offs, continuing its long-term upward trend in establishing new companies based on its research. The increasing amounts invested in ETH spin-offs prove their future viability and worth. Almost CHF 425 million was invested in 2024 – an increase of 25 percent compared to the previous year. In the last ten years, the total value has increased by a factor of ten.

The Switzerland Innovation Foundation’s 16 nationwide innovation parks bring universities and business together. Since it was founded about eight years ago, it has led to the establishment of more than 300 companies. They focus on health and life sciences, mobility and transportation, energy, environment and natural resources, manufacture and production, and computer and data sciences. This strategic alignment with promising industries makes a significant contribution to Switzerland’s long-term competitiveness. “We also maintain very close relationships with university research institutions and universities of applied sciences and carry out suitable research projects,” says Christoph Plüss. “These are important sources of specialist staff and new employees.”