“It is a slow but dangerous erosion”, explained Martin Vetterli, President of the Swiss Federal Institute of Technology in Lausanne (EPFL). In Switzerland, the number of testimonials from entrepreneurs and start-ups packing their bags is increasing. And the brains trained in the best universities and schools too. All of them are attracted to the European Union, motivated to leave their country in reaction to its unsatisfactory policy of supporting young innovative companies, the opportunities for international deployment being hampered, and access to capital.
However, 2022 was an exceptional year for Switzerland and venture capital.
“It takes years to ship material with border controls in place, paying VAT is quite damaging, and now you have problems losing access to EU grants and research consortia”decried a company co-founder who wished to remain anonymous in a survey of the site Sifted. Both research and the private sector are therefore in search of exile, and the trend risks becoming a problem on the scale of the national economy.
The beginnings of this observation appeared after the pandemic, between Switzerland and European subsidy programs for innovation. Swiss start-ups were not welcome in the Horizon Europe program (with a budget of 95 billion euros), launched to “strengthening the scientific and technological base in Europe before 2027”. The same goes for one of the acceleration schemes of the European Innovation Council (EIC), supposed to support disruptive ideas in their first commercialization and increase their attractiveness in the eyes of investors.
Depending on their maturity, startups do not complain for the same reasons. The youngest are especially frustrated by the gap between the possibilities of support for EU programs and those of Switzerland, while the oldest regret the barriers linked to borders. There are a few common points, however: a sector of activity regularly stemming from medical devices and life sciences, with significant research and development needs, and long “valleys of death” (period between dependence on capital from investors and profitability).
Exile does not imply going very far. The investigation of Sifted notes above all an exodus towards the European Union and cross-border countries to Switzerland. Among the examples cited, production relocated to Spain, two departures of start-ups from the Geneva Foundation for Technological Innovation (Fongit) in April alone, or even three start-ups (including one in quantum) which have chosen France for set up their research and development center to take advantage of the coveted subsidies from the EU and the country.
The partial or total departure of the startup generally depends on its size and its financing capacity. The most mature and with significant capacities set up subsidiaries, when the youngest move completely. “To get access to European startup funding, one possible route here is to register a branch/subsidiary in the EU as a startup. But unfortunately, this is only a viable option for more mature startups with the necessary know-how and resources. Early-stage startups are at a disadvantage”lamented Angelina Rau, interim CEO of Swiss Healthcare Startups.
Brain drain: why do Swiss researchers follow startups?
As a result, like the exodus of European brains to the United States and Silicon Valley, Switzerland sees its researchers and young graduates increasingly crossing the border. The Swiss cost of living among the highest in the world should not help, and European research consortia are much more attractive to be able to get help and to be able to serve as an interface between the university and private sectors. THE programme Horizon Europein addition to being important for startups, is also important for researchers, as it is the largest support program dedicated to research in the world.
Without reaching an agreement with Brussels, Bern no longer allows its scientists to be able to stay in the country and benefit from funds. “We cannot say precisely how many researchers have left Switzerland, but we have, after a year and a half away from European programs, a body of evidence that very clearly demonstrates this trend”, explained at the beginning of the year Luciana Vaccaro, rector of the University of Applied Sciences of Western Switzerland (HES-SO), to the media The weather.
Switzerland is not cut off from the world either, bridges and agreements exist on this point (notably with France and Italy), but the survey by Sifted mentioned the pessimistic mood of university officials, seeing it as an erosion on the one hand and a loss of the aura of Switzerland for foreign brains on the other. Without change for both of them, Switzerland is no longer a top destination, and their morale is at half mast.
