Multinationals fear for Swiss innovation

Nestlé's CEO admitted that the company was reinforcing its research activities abroad after the February 2014 vote to limit EU workers Keystone

Multinational companies based in Switzerland, above all those in the chemical, pharmaceutical and biotechnology sectors, see Switzerland’s top position in the international innovation rankings in danger.

 Economiesuisse, the Swiss business federation, is also concerned. Together with the associations Swiss Holdings and Swiss Industries, economiesuisse on Thursday published the results of a study by the University of St Gallen.

 The study, “Research and Innovation Activities of Multinationals in Switzerland”, said the 20 multinationals which spend the most on research generate around 4.7% of gross domestic product (GDP) and create 80,000 jobs in Switzerland.

 Furthermore, the multinationals contribute around 70% of the total investment in research.

 The Basel-based pharma giants Roche and Novartis also belong to the top 20 companies in the world with the largest research budgets.

 The authors say this reinforces the fact that Switzerland’s top position is “directly linked to the innovation strength of the multinationals”.

 “Switzerland submitted 958 patents per million residents in 2014 compared to 224 in the US and 168 in the EU,” said study author Olivier Gassmann.

 He also added that multinationals’ partnership with small and medium-sized enterprises, research and educational institutions and university spin-offs promotes Swiss innovation.

 Initiative threat

 But this position in in jeopardy, according to the study. More and more companies are forced to carry out research and innovation in other countries. Switzerland is no longer just in competition with western countries such as the United States or Germany. Asian countries are increasingly attractive for research. 

Switzerland should therefore look after its research conditions, the authors conclude, seeing a danger in the 2014 mass immigration initiative, in which 50.3% of Swiss agreed with setting limits on the number of EU workers allowed into the country. 

“It is particularly important that when the initiative is implemented, a solution is found that is agreeable for the research and innovation sector,” they said, stressing that the companies must be able to satisfy their need for skilled foreign staff.