Switzerland among the ten best start-up nations

Author: Stefan Kyora

04.01.2016 13:39

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Global Entreperneurship Index

The Global Entrepreneurship Index (GEI) measures the quality and dynamics of entrepreneurship ecosystems at a national and regional level. Switzerland ranks eighth. The report shows also the strengths and weaknesses of the Swiss start-up ecosystem.

In the last years we have seen a massive roll out of new accelerators, educational programs and policy experimentation – all powered by a sincere interest in creating the strongest possible local enabling environments. With such increased investment comes a more somber responsibility to determine empirically what works and what does not in supporting a nation’s entrepreneurs. This need has been behind the creation of the 160-country strong Global Entrepreneurship Network (GEN) and its platform of programs and initiatives that help any citizen to unleash his or her ideas and turn them into promising new ventures.

The network’s Global Entrepreneurship Index (GEI) sheds light on the level of efficiency of national startup ecosystems through an analysis of 34 essential individual and institutional variables. The methodology links countries’ entrepreneurial framework conditions with individual-level entrepreneurial attitudes, abilities, and aspirations.

The top ten countries for 2016 show a pattern similar to last year’s—high-income, mostly European nations. Because the scores in the highest range are so close, small changes in score from one year to the next can produce a relatively large shift in ranks among the top ten.

Top Ten Countries in the GEI

Country

Rank 2016

Rank 2015

United States

1

1

Canada

2

2

Australia

3

3

Denmark

4

6

Sweden

5

5

Taiwan

6

8

Iceland

7

7

Switzerland

8

9

United Kingdom

9

4

France

10

12

Singapore

11  

Ireland

12

 

Netherlands

13

 

Germany

14

 

Austria

15

 

 

 

Italy

48

 

 

Strengths and weaknesses of Switzerland
According to the report, Switzerland performs better with respect to the institutional environment than with respect to the capabilities and goals of the entrepreneurs.

Particular strengths of Switzerland are:

  • High percentage of start-ups with innovative products
  • High percentage of start-ups with products in niche markets with a not too competitive environment
  • Early internationalisation
  • Availability of a highly qualified work force
  • Availability of formal and informal venture capital
  • Risk acceptance by the founders

Particular weaknesses:

  • Low share of founders planning to have more than ten employees
  • High share of entrepreneurs lacking entrepreneurial skills
  • Low share of entrepreneurs recognizing valuable business opportunities
  • Reason for starting a business is usually not a business opportunity

According to the report, Swiss start-ups are innovative, active in attractive niche markets and are going international early. Compared to the best start-up ecosystems however only relatively few founders aim for strong growth. Quite a lot of entrepreneurs start their business not because of a business opportunity but because they want to develop innovative products.

The good performance regarding the risk acceptance and the availability of venture capital is surprising. However, one reason for the risk acceptance could be that the goals of the founders are not very ambitious. They accept the risk of failure because the risk is comparatively low. The reason for the strong performance regarding venture capital is presumably caused by the strengths of the life sciences in industry in Switzerland. This means that it is only true for life sciences start-ups but not for ICT companies.  

Global entrepreneurship index

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