Zurich and Lausanne as the heart of Switzerland’s entrepreneurial power

19.12.2014 08:18

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Inspired by the report “The Start-up Landscape of Switzerland - First Insights from the Swiss Start-up Monitor” published at the beginning of 2014, the Start-up Monitor conducted a follow-up analysis of the entrepreneurial ecosystem in Switzerland. The main focus lied on the role of the two federal institutes ETHZ (Eidgenössische Technische Hochschule Zürich) and EPFL (École polytechnique fédérale de Lausanne) as central actors and nuclei within the entrepreneurial ecosystem.

Start-ups are a key source of economic and social progress for any economy. However, not only the start-ups, but also the interactions of multiple actors that constitute entrepreneurial ecosystems are responsible for the next steps in economic and societal development. Dietmar Grichnik, professor at the chair for entrepreneurship and scientific leader of the Swiss Start-up Monitor, sees a well-functioning ecosystem as a key to entrepreneurial success: "An innovative idea requires optimal conditions in order to turn the idea into a successful product or service. The complex interaction of all actors and factors within a geographical region that constitutes an ecosystem must be observed and understood in order to contribute to its development“.

One of these actors in the entrepreneurial ecosystem are universities. Entrepreneurial activities are often promoted indirectly through universities. This form of promotion is one of the most successful ways to transform scientific discoveries into products and services. The geographical distribution of start-ups registered in the SSM underlines the importance of this kind of knowledge transfer showing that 50% of the start-ups mapped in the SSM are located in the cantons of Zurich and Vaud around the two federal institutes ETHZ and EPFL.

In order to gain a deeper understanding of the relationship between the spin-offs and their university, we analyzed the geographical distance of 268 ETHZ and 211 EPFL spin-offs from each registered company office to its affiliated university and calculated the mean distance for each founding year (1989-2014). We calculated an overall trimmed mean of 19.9 km for start-ups affiliated to EPFL and 16.5 km for ETHZ affiliated ventures. This is a very short distances for a period of more than 20 years.

A more detailed analysis of the 268 start-ups affiliated to ETHZ also shows that older start-ups (founded between 1989 and 1999) have an average geographical distance of 21 kilometers to the ETHZ, whereas the younger start-ups (founded between 2010 and 2014) are located within a radius of 13 kilometers. A similar picture emerges for the 211 examined EPFL affiliated start-ups founded during the last 4 years: These start-ups are located on average only 18 kilometers away from the university. This short distance might be partially explained by the Technopark Zürich and the Parc Scientific de EPFL.

The choice of location is an important strategic decision for entrepreneurs. This geographical proximity lets us assume that the university–spin-off relationship appears to be strong and indicates that there must be a relevant added value for the decision of start-ups to stay or move close to the university. University spin-offs often build a local community of practice with the respective university, which involves a close interaction and allows start-ups to keep their fingers on the pulse of progress.

A further reason for remaining close to the university may be the possible access to the university’s infrastructure as well as a higher chance to get in touch with potential new employees or team members. Nevertheless, the distance to the university increases with the age of the start-up as the affordable office space near the university is limited. Overall, the development of the choice of location points to a self-contained and growing startup ecosystem in which small distances are considered to be highly relevant. The survival rate of over 80 percent of the ETHZ and EPFL start-ups accentuate the successful knowledge transfer from the federal universities to the market.

About Swiss Start-up Monitor
The Swiss Start-up Monitor is a joint research initiative of the University of St.Gallen, ETH Zurich and University of Basel supported by the Commission of Technology and Innovation (CTI), Gebert Rüf Stiftung and AVINA Stiftung. The main goal is to build up an exclusive panel of Swiss start-ups in order to foster entrepreneurship on a micro- and on a macro-economic level.

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