Activities, challenges and strategies of Swiss energy sector start-ups

A new working paper by Devon Wemyss  and Yann Blumer, Center for Innovation & Entrepreneurship, ZHAW School of Management and Law, covers the progress to date in developing an understanding of the activities, challenges and strategies of start-ups in the Swiss energy sector. The study, has compiled a list of 77 active start-ups in the heat and electricity fields who are contributing to four distinct challenges relevant to the national Energy Strategy 2050 goals: increasing renewable energy production, reducing energy demand, decreasing system complexity, ensuring availability of energy.

So far, 14 interviews were held with selected start-ups in order to cover all of the four areas and varying customer segments, from within the energy business to end users. These interviews were conducted to specifically qualify the value proposition and current activities of the firms, as well as internal and external challenges that they faced during their development.

The analysis shows that there is a large number of energy start-ups in Switzerland that all address a direct or indirect challenge of the ES2050. The variety of their activities reflects both the extent of the ongoing transition of the Swiss energy system, as well as the need for innovation, caused by regulatory changes, dwindling profit margins in the traditional energy value chains and new emerging markets. That said, the number of energy sector start-ups is still much lower than those active in other sectors, such as ICT, Medtech & Diagnostics, or Biotech & Pharma. One reason might be that many Swiss energy companies are only slowly adapting their traditional business models and any innovation activities they pursue are purely internal. This may discourage a considerable number of potential entrepreneurs to start a venture in the energy sector.

Nine distinct challenges were identified that are specifically relevant to the energy sector. These, e.g., refer to customer awareness, possible channels for acquisition, access to finance and building legitimacy as a new entrant. Furthermore, the working paper also presents ten strategies that helped these start-ups to overcome the stated challenges. The report concludes with a number of recommendations for future research on energy entrepreneurship and to promote entrepreneurial activities in the Swiss energy sector.

The paper can be downloaded from the website of ZHAW.