Increasingly Less Swiss Companies Invest in Research & Development (R&D)
Swiss companies are concentrating more on product enhancements than on investment in the research and development (R&D) of new, innovative products. The share of Swiss companies that invest in R&D has shrunk from a quarter in 2000 to the current 13.3%. This is demonstrated by ETH Zurich’s Institute for Business Cycle Research.
Investment Volume Increased Yet Distributed Across Less Companies
According to the 2016 innovation survey conducted by ETH Zurich’s Institute for Business Cycle Research, the total amount invested by Swiss companies in research and development (R&D) has risen compared to previous years. The number of companies that invest in R&D has shrunk, however. At the turn of century every fourth Swiss company was still involved in research and development, but today it is approximately every eighth that does so. Instead, more focus is being put on product enhancements. Factors behind the regression include lack of capital, long depreciation periods of investment costs, high market risk and the likelihood that an innovation might be copied. It is, above all, small and medium-sized business that are affected by funding problems. A major factor behind the decline is the high cost of research and development if done in Switzerland; therefore, the number of companies involved in domestic R&D has shrunk the most, whereas that of Swiss companies doing it abroad has remained stable.
Things Varying Depending on Company Size
The volume of R&D expenditure seems to depend on how big a company is: although at the turn of the century large concerns invested less, their expenditure has been growing since 2009 once again. On the side of small and medium-sized businesses, however, increasingly less has been spent for R&D since 2000. Fortunately, cooperation among research companies has virtually doubled. Cooperation with foreign partners has increased the most.
In a written innovation survey, ETH Zurich’s Institute for Business Cycle Research has examined the innovation activities of the Swiss economy over the period from 2014 to 2016. The survey comprised some 5600 private companies from the industry, construction and services sectors with more than five employees.
Source: Innovation of Swiss Private Companies. Results of the 2016 Innovation Survey by ETH Zurich’s Institute for Business Cycle Research
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