Switzerland Second Among the Best Economic Systems for Start-Ups
The annual Global Entrepreneurship Index ranks the Swiss economic system as the second best for start-ups. This is good news for our business hub and for motivated young people who are going to launch their own business. A closer look, however, reveals that there is still much potential for improvement.
Global Leaders
Every year the Global Entrepreneurship Index (GEI) compares the economic systems of 138 countries in terms of the prerequisites for the start-up environment. For 2018, Switzerland has ranked second. It is only preceded by the USA. Third to ten come Canada, the United Kingdom, Australia, Denmark, Iceland, Ireland, Sweden and France. It should be noted, however, that the gaps between all these countries are very small. Astonishingly, large EU countries are to be found in the middle. Namely, Germany, Spain and Italy have ranked 15th, 34th and 42nd, accordingly.
Index Evaluation
The reasons why Switzerland scores so well lie in how the GEI is evaluated. Specifically, the four reasons are as follows.
- The GEI evaluates the overall prerequisites of an economic system for start-ups. How proactively these possibilities are used carries less weight. Here Switzerland’s score would be markedly poorer.
- The GEI places particular emphasis on many smaller high-tech start-ups that tend to establish themselves in market niches. Individual start-ups that are very successful in well-established markets are thought to be not so important. This is a huge advantage for Switzerland, where it is particularly the medtech industry that could shine.
- Another reason for Switzerland’s good score is that the evaluation does not (particularly) take into account weaknesses of our economic systems. An example is high opportunity costs that should be expected by those starting a new business in Switzerland.
- The last reason behind Switzerland’s top ranking is that some factors seem to be evaluated too optimistically. This is the case, among other things, for the availability of venture capital.
Switzerland’s Potential for Improvement
Where Switzerland shows the highest potential for improvement depends on the cultural attitudes towards start-ups and young entrepreneurs. In this sub-category, Switzerland occupies merely the 11th place. This category measures the population’s general attitude towards young entrepreneurs and the risks involved in launching a start-up, as well as the recognition one can expect when succeeding as a young entrepreneur. A transformation in the society is needed for this to change.
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