Report on Company Foundations March 2020: Collapse in the number of company foundations
After two strong initial months, the number of newly founded companies dropped in March 2020. In comparison to February 2020, a decrease of 5.48% has been recorded. Compared to March 2019 there was a decline of 5.51% in the number of newly founded firms. This development occurred undoubtedly as a result of the federal measures to fight the coronavirus.
Decline in the number of foundations
With 3957 newly founded companies the February 2020 was the February with the utmost new firms since STARTUPS.CH began its recordings. This makes the decline in March 2020 by 217 start-ups or 5.48% all the more noticeable. Compared to March of the previous year, a decrease of 218 foundations or 5.51% can be recorded. This sharp decline can be explained by the federal measures to fight the coronavirus, which have almost brought public life in Switzerland to a standstill. The number of newly founded firms has also flattened considerably in the various language regions. In German-speaking Switzerland, 2468 new companies were founded, 4.01% fewer than in February 2020 and 5.69% fewer than in March of the previous year. In the french-speaking part of the country, the decrease is 4.37% compared to the previous month and 0.53% compared to March 2019. The decline is most noticeable in Ticino. With a decrease of 63 new business foundations compared to February 2020 as well as March 2019, a drop of a whopping 28.77% was recorded.
Cantons with a usually high foundation rate are particularly affected
The cantons which are usually preferred for business foundations are particularly affected by the crisis. Compared to February 2020, the number of newly founded companies has fallen in the cantons of Zurich (-8 start-ups or -1.15%), Lucerne (-22 start-ups or 11.96%), Bern (-50 start-ups or -15.97%), Geneva (-54 start-ups or -14.63%) and Ticino (-63 or -28.77%). Only the canton of Vaud recorded an increase of 38 new businesses or 10.19% compared to the previous month. Some of the smaller cantons have not yet felt the restrictions on public life either. In particular, the cantons of Schwyz with an additional 29 newly founded companies (+28.71%) and Appenzell Ausserrhoden with 7 new companies (+38.89%) compared to February 2020 show a positive result.
The corona-related decline in the number of new businesses is even more noticeable in comparison with March 2019, with the strongest changes in the cantons of Zug (-19 start-ups or -9.5%), St.Gallen (-24 start-ups or -11.54%), Ticino (-63 start-ups or -28.77%) and Bern (-64 start-ups or -19.57%). Of the cantons which usually have a high foundation rate, only the canton of Vaud was able to record a positive result with 20 additional foundations compared to the previous year, an increase of 5.12%. It will be interesting to see how these numbers will develop in April 2020. Due to the continuing “exceptional situation” to fight the coronavirus, the number of new companies is expected to fall further next month.
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