Research - 23.06.2022 - 00:00 

HSG successfully contributes to Federal Council decision for a Swiss innovation fund

On June 22, the Federal Council decided to initiate the launch of an agnostic, industry-neutral Swiss Innovation Fund in order to improve growth financing opportunities of Swiss startups and respond to developments in other countries. HSG successfully contributed to this decision through an international analysis of public funding programs.
Source: HSG Newsroom

23 June 2022. Startups operating in the context of decarbonization and digitalization will receive special attention by the national scheme. In this way, Switzerland should become significantly more attractive for growth-stage startups.

HSG, SECO, Swiss Economics

In August 2021, the Federal Council commissioned the Federal Department of Economic Affairs, Education and Research (EAER) to examine the advantages and disadvantages of a Swiss Innovation Fund, which is supposed to promote startups in the growth phase, and to define concrete design options of such a fund. As a result, the Chair of Entrepreneurship at the University of St.Gallen entered into a collaboration with the State Secretariat for Economic Affairs (SECO) and the Zurich-based agency Swiss Economics to answer the question of the forms of design. HSG, led by Prof. Dr. Dietmar Grichnik, was responsible for the international analysis of the project.

Other countries show the way

The Chair of Entrepreneurship analyzed the programs of a total of 12 countries whose financing situation of startups in recent years was similar to the current situation in Switzerland. Specifically, more than 30 public financing programs were identified and analyzed in order to derive relevant findings for the design of a possible Swiss Innovation Fund. The transparency created about the high number of foreign programs and their often considerable volumes played an important role in the decision-making process of the Federal Council. Just this February, for example, 18 European countries, led by Germany and France, launched the "European Tech Champions Initiative", through which a total of ten billion euros will be made available to finance technology-based scale-ups. "For Switzerland, this is a call to action to create equal conditions to keep its best entrepreneurial talent in the country and also to better involve Swiss investors in building the ecosystem," says Professor Grichnik.

Detailed design decisions must now be made

In a next step, a reflection of the specific design options of the fund has to take place under the guidance of EAER and rapid decisions in line with the political objectives have to be made by end of January 2023. In concrete, there are two basic options. On the one hand, direct investment in growth startups and, on the other hand, indirect investment in these startups via investments in venture capital funds. Furthermore, numerous other design variables, such as the volume, private investment share, responsibility of the management, and investment approach must be defined. The study "Fundamentals for the Introduction of a Swiss Innovation Fund" by Swiss Economics and the University of St.Gallen (HSG) offers a valuable analysis and outlines four concrete design and implementation options in the Swiss context.

The study «Grundlagen zur Einführung eines Schweizer Innovationsfonds» and an article by Volkswirtschaft can be found in the HSG Research platform Alexandria.

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