OVERVIEW
Switzerland has created incentive programs in an effort to promote economic
growth. The ICT sector has benefited from Switzerland’s incentive programs
in effect since 1986. The programs offers a 10-year, no tax program that
is aimed at spurring development in some of the less developed areas of
the country. Additionally, private/public partnerships are also promoting
investments.1
R&D FINANCING
Business Facilities, a source for corporate site selectors, reports that
the “FDI footprint is increasingly benefiting not only the major metropolitan
areas but also increasingly finding its way into second and third tier regions
and cities.”2 The clusters of
research institutes and university centers located throughout the country
also support the IT geography. The Business Facilities also reports that
there are roughly 665 North American projects in Switzerland with an estimated
value of $40billion.
The STI Scoreboard compiled by the OECD finds that in 1999, the business
sector provided 60% of the funding for domestic research and development
in OECD countries.3 During this
same time period, Switzerland had a similar trend with 60% of its R&D
expenditures being financed by business enterprises. The business sector
also plays an integral role in the performance of research and development.
Business was responsible for performing about 60% of the research and development
in the country. 4
Another notable trend in R&D financing is the decline in government
spending during the 1990s. Government was responsible for less than 5% of
R&D funding in Switzerland. Higher education institutions were responsible
for roughly 25% of financing.5
Given the number of research institutes and the enabling environment that
public/private partnerships are trying to create, this number is not surprising.
R&D is being undertaking not only to increase the knowledge base and
spur innovation, but to also find commercial applications for their research.
An example of Switzerland effort in this area is the ecademy (www.ecademy.ch).
The ecademy is described as “ an association bringing together the expertise
of all centers of the competence at the Universities of Applied Sciences
in collaboration with their partner companies.”
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VENTURE CAPITAL
The STI Scoreboard has found that venture capital is small percentage
of a nation’s GDP, however, venture capital has been responsible for the
majority of investments in technology firms. However, the report also found
that in Switzerland, venture capital was most likely spent financing health
and biotechnology firms. For 1999, venture capital represented less than
.2% of the Switzerland’s total GDP. For the four-year period, 1995-1999
information technology held slightly more than a 20% share of the total
venture capital and communication held roughly 10%.