Swiss companies invest the most in R&D, according to a new survey17 August 2018
The new survey conducted by EY shows that Switzerland is leading the pack when it comes to investments in research and development globally. Swiss companies dedicate 6.6 percent of their turnover to R&D, almost twice as much as is the global average.
Switzerland leads the pack of investments in R&D ranking
The business survey was conducted by Ernst & Young (EY) and published on August 16. For the sake of the study as much as 500 top-selling companies were analyzed in terms of their investments in innovation. The survey checked how much of money in turnover, whether in CHF, EUR or USD, was invested in research and development. In the world the average is 3.8 percent of the turnover spent on expenses in R&D department. In Switzerland, the result is 6.6 percent. That is how much of turnover is spent on research and development by top Swiss companies. Generally, expenses in this sector are on the rise in Switzerland – they went up by 6 percent in 2017, hitting CHF 601 billion (EUR 532 billion). Two-thirds of companies increased their spending on R&D. The study checked 500 companies, out of which 11 were Swiss. Those 11 enterprises totally invested around EUR 23 billion in research and development. When it comes to countries’ ranking, behind Switzerland were placed: United States with an average of 5.9 percent of turnover spent on innovations, Sweden with 4.4 percent and Germany with 4.1 percent.
Digital companies are investing the most in innovation
Taking into the account branches, globally, digital sector is investing the most in innovation, which shouldn’t come as surprise. Digital companies need to come up with new solutions to survive and thrive on the market. The ranking was led by Amazon and Alphabet, the company standing behind Google, both of which are international tech giants form the US. When it comes to Europe, the leader turned out to be Volkswagen, who spend in 2017 EUR 11.6 billion on R&D. Volkswagen is the automotive company. The other sector that did very well in the ranking was pharmaceutical one. Merck & Co, Roche, Johnson and Johnsons were all included in the top 10 of the list.
Switzerland recognizes the importance of innovation
According to Marcel Stalder, CEO of EY Switzerland, the survey displayed that innovation and research and development are becoming more and more important for companies as technology is rapidly advancing. Technological progress results in, among others, shorter product cycles. Also, consumers’ need and demands are dynamically changing. In order to meet client’s expectations, use the technological novelties and take advantage of shorter product cycles, companies need to invest in research and development to come up with even better, faster, more efficient products and services. Those who don’t invest in innovation, don’t win the race. Switzerland has been long known as country of great banking services that care deeply about privacy. Its currency, Swiss Franc or CHF, is considered as one of the safe haven currency. Recently, the country is trying to become the hub for fintech, blockchain or cryptocurrencies’ startups in a bid to reinvent its global brand to adapt to new economic situation and technological progress. It turns out that, apart from all of that, Switzerland recognized long ago the importance of innovation and thus companies based here can now boast of the huge investments in R&D sector. Swiss companies have noticed early on that innovation will boost their competitiveness on the international market in the long term, so there is no point to spare money on research and development. Spending it now, will pay off later.
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