As a neighboring country, Switzerland offers German companies access to innovative partners and executives, as well as attractive margins and loyal customers. But Switzerland is much more: As a trilingual country, it is the ideal test market for startups with international ambitions and also offers direct access to a very active VC scene. This neighboring country is a must, especially for startups in the healthcare and medtech sectors, as well as the IT industry.
Switzerland – a ‘glocal’ market
Even though Switzerland has many similarities with the local market from a German perspective, German companies should prepare their market entry well.
Startups with a B2B product that isn't simply sold but is linked to a consulting/service offering should consider establishing a local presence relatively quickly. Swiss companies prefer to work on a partnership-based, local level. A small team of employees fluent in Swiss German and French will greatly simplify sales and service activities and enable the German company to quickly build a loyal customer base. Higher margins can then be achieved compared to Germany.
The so-called "Röstigraben" should not be underestimated. This is not only a language barrier, but also the sales strategy, the sales cycle, and salaries can vary greatly. Even if it corresponds to many clichés: in the French-speaking Switzerland The crucial point – as in France – will be the shared lunch, in which Switzerland Things will initially be more formal. Bilingual cantons such as Bern or Fribourg can be an ideal compromise. Here, you'll find bilingual employees who are familiar with the customs of the other business culture and can adapt perfectly.
Furthermore, Switzerland offers direct access to international executives and high performers who have become aware of Switzerland through their studies at ETH, EPFL, IMD, or the University of St. Gallen. This diversity of talent has led technology giants such as Hewlett-Packard Enterprise, Google, Logitech, IBM, Cisco, and Kudelski to choose Switzerland as a hub for their R&D activities. Scaleups such as Scoutbee or Commerce tools from Bavaria have also found strategic managers in Switzerland and opened a location here.
For companies that operate globally, Switzerland is also the ideal location to establish international sales or purchasing hubs thanks to its neutrality, attractive tax system and many free trade agreements.
An active startup scene and VC landscape
Switzerland is one of the most attractive countries in the world when it comes to access to venture capital. In the coronavirus year of 2020, over CHF 2 billion was invested in Swiss startups alone. Biotech and ICT companies benefit most from access to VCs in the Alpine country. More information on VCs in Switzerland can be found in the brand new Swiss Venture Capital Report 2021, which is from startupticker.ch and the SECA (Swiss Private Equity & Corporate Finance Association) is published annually.
The newest Swiss unicorn comes from Lausanne. Nexthink, the provider of digital employee experience management software, announced a $180 million Series D funding round in early February. The company now has a $1.1 billion valuation and plans to continue growing.
Universities and colleges as startup hubs
Most Swiss startups are founded at local universities, which actively promote technology transfer between R&D and companies. EPFL Lausanne has set up a dedicated Innovation Park . It is home to 135 startups and 27 corporations, including Cisco, Logitech, and Siemens. Well-known spin-offs include Mindmaze, the Swiss unicorn in advanced neuroscience; AC Immune, a Nasdaq-listed biopharmaceutical company specializing in the treatment of Alzheimer's disease; and, most recently, Nexthink.
Trust Valley & Health Valley: Two strong clusters in Switzerland
Thanks to its political neutrality and its position as a high-tech location, Switzerland is the ideal place for companies operating in the field of digital trust. Since the end of 2020, the French-speaking part of Switzerland has been actively promoting a cluster, the Trust Valley Several companies, including ELCA, Cisco, SGS, Kudelski Security, Protonmail, and Wisekey, are already active there. In an effort to combat digital crime and build a safer and more secure global cyberspace, the World Economic Forum has also opened a Global Center for Cybersecurity in Geneva. International organizations are working with the research institute Idiap which has made an international name for itself in the field of biometric research and biometric testing.
Switzerland has long been an attractive location for pharmaceutical, biotech, and medtech companies. This is due, among other things, to the historical presence of companies such as Roche, Novartis, and Lonza, but also to two key factors: the cantons' proactive tax policies on R&D expenditures and an attractive patent system. High R&D expenditures are supported in Switzerland, thus promoting innovation. This leads to interesting partnerships between pharmaceutical companies and innovative biotech companies. Organizations such as the Cluster Bioalps or the Swiss Biotech Center actively support such collaborations. For example, the research and production partnership between the US biotech company Moderna and the Swiss giant Lonza was established in western Switzerland. Today, Lonza produces the coronavirus vaccine for Moderna in Visp, just a 30-minute drive from Zermatt and the impressive Matterhorn.
Quality of life – stability and nature
Beautiful, diverse landscapes, a low crime rate, an excellent healthcare system, and outstanding educational institutions make Switzerland a highly attractive country for international executives. Switzerland is also known far beyond its borders for its first-class infrastructure.
This is also reflected in the world-renowned "Quality of Life" indices. In the last Mercer Quality of Living Index, three Swiss cities were among the top 10: Zurich (#2), Geneva (#9), and Basel (#10).
