Switzerland invests 3% of its GDP in research and development (R&D). One-third comes from the public sector, which often turns to the university ecosystem. This is where groundbreaking research and startups emerge in sectors such as pharmaceuticals, medicine, and finance.
For years, Switzerland has been striving to rank among the leading countries in innovation and development. Advances in technology and other sectors stimulate the local economy and enhance national competitiveness. These advances are powered by significant levels of investment.
According to the Greater Geneva Bern area (GGBa), the investment promotion agency for Western Switzerland, the country is one of the most active globally in this field, allocating more than 3% of its GDP to R&D activities. This corresponds to a total of 23 billion Swiss francs, with approximately 7.5 billion coming from the public sector.
Many public institutions focus their funding efforts on universities, fostering academic ecosystems that birth numerous startups capable of transforming sectors like medicine, pharmaceuticals, and finance.
Investment in startups: before and after entering the market
The Swiss federal government promotes research and innovation through Innosuisse (Swiss Agency for the Promotion of Innovation). This agency, through its various programs, supports, promotes, and assists small and medium-sized enterprises (SMEs) and science-based startups before, during, and after they enter the market.
The results for 2022 provide insight into the impact of this agency on new initiatives: 80% of projects are sustained over time, 43% of innovations are launched into the market or within an organization three years after the project's completion, and 58% of the startups advised have applied for or had their patents approved.
One of the main goals of this agency is to put university-generated knowledge into practice: 54% of the startups participating in coaching programs are directly based on research originating from these institutions. According to Innosuisse, these startups contribute to the rapid transfer of knowledge and expertise, fostering the creation of new jobs and added value.
Alongside Innosuisse, the Swiss government supports R&D through the National Science Foundation (SNSF). This institution promotes research across all scientific disciplines, from physics and medicine to sociology. By the end of 2022, the SNSF was funding 5,500 projects involving more than 20,000 researchers, and throughout its history, it has funded numerous startups originating from universities.
Case studies
According to the study Contributions of Innosuisse and SNSF funding to the emergence and development of science-based startups, a high percentage of the startups financed by Innosuisse and SNSF come from universities and are focused on scientific and technological objectives. These startups contribute with radical and disruptive innovations and are generally geared towards a global market.
There are many examples of Swiss startups focused on sectors such as pharmaceutical, medical, and financial technology, supported by public funds. One such example is AlveoliX, a project aimed at replicating how the lung functions inside the human body. This initiative is backed by a group of researchers from the Swiss Institute for Translational and Entrepreneurial Medicine, part of the University of Bern, who are striving to develop technology that has a positive impact on society.
When researchers need to develop a drug or study a lung-related disease, they often rely on models based on in vitro experiments or animal tests. However, these methods frequently yield limited results, reducing success rates.
Over the past few years, AlveoliX has been working on recreating a lung on a chip. “Inside the chip, we simulate the microenvironment of the lung, including respiratory movement. This allows us to create an environment that helps the cells growing inside the device maintain their properties and behave as they do in the human body,” explains Janick Stucki, co-CEO of the startup.
“With our technology, drug development will be more efficient, safer, and personalized, as different human cells can be tested inside the chips. In the future, this will also reduce costs and the need for animal experiments,” adds Stucki.
Alongside AlveoliX, many other startups supported by Innosuisse and SNSF are working to bring their products to market. These include Dagsmejan, which develops smart clothing to improve sleep quality, and Rea, a startup creating a medical device to monitor the health of women at risk of premature birth.
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