On June 19th, the “Silicon Wadi” meets Switzerland conference aimed to bring entrepreneurs, business managers, and high-tech experts from Switzerland and Israel together. It was insightful to compare views and experiences.

Israel is a country that’s only 60 years old with a population of 7.1 million and has few natural resources – quite similar to Switzerland.

Yet, it produces more start-up companies than further advanced nations like the US, UK, Japan, India, South Korea, China, and Canada. And much more than Switzerland. Also the investments per year in startups is around 3-4 billion $ per year, far higher compared to our record of 0.9 billion $ from 2016. Also the exit volume in Israel is impressive and unique for the European continent.

For the rest of the world, Israel is a case study by itself. Dan Senor, author of Start-up Nation: The Story of Israel’s Economic Miracle calls this the “Israel Effect”.

“In a world where economies as diverse as IrelandSingapore and Dubai have tried to re-create the “Israel effect”, there are entrepreneurial lessons well worth noting.”

The Strength of Israel

Companies, global investors, and many others are beating a path to Israel’s door – to find a unique combination of audacity, creativity, drive, resourcefulness, and commitment. Israel has more companies listed on the NASDAQ than any other country in the world (except US) – and that includes India, China, Korea, or Singapore. Israel also happens to be a leader in terms of percentage of GDP spent on R&D. Following arguments makes the country extremely well positioned:

  • Israel specializes in high-growth companies that transform entire global industries. They think global, international. They are from day one very ambitious and want to conquer the entire globe.
  • Israel is radical, unique, and hungry. More than 75% of university graduates in Israel want to work for a start-up.
  • A strong military, culture, open immigration policies and an international vision (Israel’s government and businesses are outward focused looking for partnerships with the rest of the world) fundamentally give Israel its strength
  • The government plays a very important role, especially 15 years ago by starting the Yozma program, but still today for example with their Chief Scientist Officer within the government.
  • The unique mix of entrepreneurs, investors, engineers, scientists, business managers, and marketers make the ecosystem very strong and successful on a level not so far away from the Silicon Valley.

A few weeks back, we posted another blogpost on this unique traits in Israel.

Chances for Switzerland

All in all , the big question is this: Can Switzerland create the “Israel effect”? Or even better, the “Swiss effect”?

Switzerland might not be Israel and it’ll probably never have the same characteristics and success in the same way, but it has very strong assets it needs to transform into more successful ventures.

What Switzerland does have are the following three strengths:

  • Education: Switzerland has some of the strongest and powerful universities in the world with focus on business and technology, among others. The talent pool in Switzerland is of high caliber and this number will only increase with time. ETH and EPFL are worldwide in the Top Ten of best Polytechnic universities, also our Universities are top ranked. However, we need to invest in Education of the 21st century.
  • Corporate Network: Switzerland has a way to bridge the corporate divide. Swiss companies reach out to partners elsewhere while many international corporates find Switzerland as the perfect home for locating their headquarters. The corporate density in the country is amazingly high. Also the corporates have a lot to win by cooperating with innovative startups and embrace new business models within their organisation.
  • Focused, Niche Hubs: Switzerland is a contender for creating competent hubs and strong ecosystems in niche areas. We cannot do everything and pretend to become Number one worldwide. We need to focus on a few topics and develop them quickly. We have already some focus on what we also call “deep tech”: blockchain, cybersecurity, data centers, robotics, internet of things, artificial intelligence, virtual reality.

Switzerland has tremendous potential with the increased involvement of the government, possible relaxation of immigration laws for talented people, favorable tax rates for start-ups and businesses, increased spending on education, and the continued availability of high-caliber talent.

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Author Nicolas Bürer

Managing Director @digitalswitzerland

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