How Switzerland can go from research powerhouse to venture champion
Switzerland is one of the world’s leading research and innovation centres that is poised also to become a world class venture capital hub. Boosting domestic capital sources could hold the key to unlocking this potential.
Profily autorov
Key takeaways:
- Switzerland is one of the world’s premier research and innovation hubs, ranking top in the Global Innovation Index for 14 years in a row.
- It is comparable in terms of population, size of economy, presence of world class universities and patent filings per capita with the US state of Massachusetts, which is also recognised as a global innovation hub.
- However, despite the many similarities Massachusetts, especially within its capital, Boston, generates more than 8x more venture investment and has created 6x more unicorns since 2018.
- Notably, 85% of Massachusetts’s marquee (top 20) venture funding rounds include local venture investors, compared with 40% in Switzerland, meaning Swiss scale-ups are more reliant on foreign capital.
- Based on our research and taking Massachusetts as a benchmark, by boosting its local venture ecosystem Switzerland has the potential to increase its annual venture funding more than fourfold from CHF2.4bn to CHF11bn.
Switzerland is a global innovation powerhouse…
Europe is a formidable force in global research and innovation, with robust scientific output and significant investment in cutting-edge fields. Several countries and localised hubs are consistently near the top of global rankings, including the UK (London/Oxford/Cambridge), Germany (Munich) and France (Paris).
Within this strong landscape, Switzerland stands out. The country is widely and consistently recognised as a global research and innovation powerhouse, having ranked first in the Global Innovation Index (GII), a widely-cited annual assessment of national innovation prowess that is published by the World Intellectual Property Organization, for 14 consecutive years.
Switzerland tops Global Innovation Index for 14th consecutive year
GII Rank | Economy | Score | Region Rank |
|---|---|---|---|
1 | Switzerland | 67.5 | 1 |
2 | Sweden | 64.5 | 2 |
3 | United States of America | 62.4 | 1 |
4 | Singapore | 61.2 | 1 |
5 | United Kingdom | 61.0 | 3 |
6 | Republic of Korea | 60.9 | 2 |
7 | Finland | 59.4 | 4 |
8 | The Netherlands | 58.8 | 5 |
9 | Germany | 58.1 | 6 |
10 | Denmark | 57.1 | 7 |
Source: World Intellectual Property Association (WIPO), Global Innovation Index 2024. Region rank refers to each countries placement within their WIPO region. For the top ten countries the regions covered are: Europe (Switzerland, Sweden, UK, Finland, Netherlands, Germany and Denmark); North America (US); and South East Asia, East Asia and Oceania (Singapore and Republic of Korea).
This enduring leadership reflects a highly efficient ecosystem that turns high levels of innovation input – research and development (R&D) funding, development infrastructure and world-leading educational institutions – into innovation outputs, such as patents and high-tech exports.
Switzerland invests approximately 3.4% of its GDP into R&D, with a particular focus on life sciences and advanced technologies – well above the average expenditure of 2.7% reported by the OECD in 20231. It leads internationally in patents, scientific publications and high-tech exports per capita, and demonstrates one of the highest innovation efficiency ratios globally2.
Switzerland also benefits from its openness to global talent and international collaboration, and the fact that it is home to premier global higher education institutions such as ETH Zurich and EPFL, which are ranked among the top universities globally3.
… with the potential to become a world class venture hub
Venture capital deployment typically clusters around such innovation centres, providing funding for start-ups that turn high-quality ideas into disruptive and market-leading companies – and in the process generating potentially stellar returns for investors.
Switzerland clearly has many of the ingredients to be a world-leading venture hub, but has not yet realised its full potential. The undisputed national powerhouse in this regard is the US, which benefits from a number of key venture hubs in Silicon Valley, New York, Los Angeles, Austin and Boston. Of these Boston, and more broadly its home state of Massachusetts, is an instructive benchmark for comparison.
Like Switzerland, Massachusetts is also ranked as a top global research and innovation region4. Demographically and economically the two are also similar, with Massachusetts’ population of 7.1 million and $781 billion economy broadly comparable to Switzerland’s respective nine million and $937 billion5. Both regions are also similarly distinguished by a high concentration of world-class universities that are essential to their innovation ecosystems.
However, currently Massachusetts’ venture capital intensity is significantly higher than Switzerland, driven by its innovation cluster based around Boston and Cambridge, highlighting the opportunity ahead for Switzerland to grow as a start-up and scale-up investment centre.
On average over the past five years Massachusetts start-ups raised $25.1 billion annually, or approximately $3,500 per person. In contrast, ventures in Switzerland raised approximately $2.9 billion annually, or approximately $320 per person. This translates to a more than 8x difference on an absolute basis and 10x on a per-capita basis (see chart).
Massachusetts generates 8x more annual venture funding than Switzerland
Source Pitchbook, 2025, as of July 22, 2025. Switzerland vs Boston venture capital invested. Deals above a minimum of $5m transaction size.
At the other end of the venture lifecycle, this higher level of venture capital investment in Massachusetts has historically been effective in creating a meaningfully higher number of venture success stories. Notably, Switzerland has been home to 10 ‘unicorns’ (venture-backed companies that reached a valuation of more than $1 billion) between 2018-2025, compared to 64 in Massachusetts.
Seizing the opportunity: Scaling home-grown venture capital
One potential reason for this current delta between the two regions is that Massachusetts has a more developed local venture capital ecosystem. As a result, local start-ups are able to raise more money from local investors.
Highlighting this, 85% of the top 20 largest venture capital funding rounds in Massachusetts during 2024, which raised a combined $5.3 billion, included local venture capital investors. In contrast, in Switzerland the top 20 largest venture capital funding rounds in 2024 amounted to a combined $1.8 billion, of which local investors featured in only 40%.
Based on a historical analysis of venture capital trends, there is a clear multiplier effect that links local fundraising to the total capital deployed in an ecosystem. A review of venture investments in Switzerland between 2018 and 2024 shows that the total capital deployed was roughly 4.2x the amount of capital raised by Swiss-based venture firms that primarily deploy in the DACH (Germany, Austria, Switzerland) region between 2016 and 2022. This demonstrates that a robust, home-grown investor base acts as a powerful catalyst, attracting a multiple of foreign investment and serving as the essential foundation for a world-class venture hub.
Multiplier effect: Venture capital deployed vs funds raised in Switzerland
Source: Pitchbook.
Attracting substantial capital from outside of a local region or country is positive – and in fact is a key ingredient to developing world class research centres into global venture hubs. But an over-reliance on outside capital can come with several implications.
Notably, a relative lack of local venture capital can introduce delays and hurdles. For example, the need to pitch more frequently to foreign venture firms in places like Silicon Valley and London for scale-up rounds entails significant time and travel, which can detract from product and business development. Furthermore, raising capital internationally might require relocating a start-up’s legal domicile or operations.
To unlock its full venture potential – and accelerate its venture investment intensity and long-term outcomes to reach the scale that its innovation capabilities would clearly support – we believe Switzerland would therefore benefit from a more balanced mix of local and international venture capital supply.
Growth potential: How Swiss annual venture funding could quadruple
Based on our research and taking Massachusetts as a benchmark, Switzerland has the potential to increase its annual venture funding more than fourfold from the current $2.9 billion (CHF2.4 billion – last-five-years average) to approximately $13.5 billion (CHF11 billion) annually. This would mean increasing the annual per capita venture funding from currently $320 per person to $1,500 per person.
Swiss venture funding could more than quadruple
Source: Pitchbook data, Schroders Capital forecasts. There is no guarantee forecasts will be realised. For illustrative purposes only.
This estimate is still conservative, as it assumes that Switzerland’s annual venture funding per capita would represent no more than 43% of Massachusetts’ annual per capita total. It looks all the more achievable in the context of Switzerland’s annual business spending on R&D, which, currently, is around 43% of the spending by businesses in Massachusetts6.
Conclusion: From research to venture powerhouse
Switzerland has all the necessary ingredients to be both a research powerhouse and a true global venture powerhouse – effectively the ‘Massachusetts of Europe’ when benchmarked against its US counterpart. Boosting the volume of capital from domestic investors is key to this and would bring a more balanced capital mix, which should in turn serve to further catalyse in-bound investment. We estimate that Switzerland’s annual venture capital funding has the potential to quadruple to CHF11 billion.
Boosting the local venture ecosystem in Switzerland should in turn feed into even further innovation investment, including additional R&D spending by Swiss businesses, which would further catalyse already impressive innovation activity and outputs that provide the venture opportunities of the future.
Read the full paper for our detailed analysis, including examples of Switzerland’s venture success stories and more information on how boosting local capital could boost the country’s innovation ecosystem.
1 Federal Statistical Office of Switzerland, Organisation for Economic Co-operation and Development.
2 Swiss Federal Department of Foreign Affairs, The Observatory of Economic Complexity.
3 QS World University Rankings.
4 Milkan Institute’s State Technology and Science Index, 2022.
5 US Census Bureau, US Bureau of Economic Analysis, Swiss Federal Statistical Offis, The World Bank.
6 Sources: OECD, NCSES.
Profily autorov
Témy