Success Factors and Barriers to Innovation in Switzerland

Abstract: This paper presents the results of a brainstorming session that explored success factors and barriers to innovation in Switzerland. Using the Affinity Diagram methodology, the participants generated a weighted list of barriers to innovation. The resulting list as analyzed, which led to the following results: educational and cultural barriers dominate over political and regulatory ones; and innovators in Switzerland are poorly prepared and under-appreciated. The paper concludes by recommending that effort is better spent improving the public's and educational system's perception of innovation, rather than lobbying for political and regulatory change.

1. Introduction

2. Methodology

The moderators then divided the participants into two smaller groups, which worked on the question independently. The 'solution' to the question was arrived at using the following steps:

1. The participants individually generated large sets of possible responses to the question.
2. The group reviewed the responses and eliminated duplicates.
3. The group collected the responses into categories based on their affinity, a subjective assessment of the degree of relationship between responses. This step was performed until a consensus was reached.
4. The participants individually voted on the importance of each category. The voting system assigned numerical weights to each category.

The resulting solutions are the two weighted lists of categories. They represent success factors and barriers to innovation in Switzerland. The lists from the two groups have been combined and are summarized in the following section. In this particular case, they mainly identify barriers to innovation. The raw data from both groups, including the categories, category weightings and their associated individual responses are provided at http://www.softxs.ch/innovation/bavois.

3. Results

Each category has been assigned a Category Type that identifies it as a Success Factor, Cultural, Political, Educational or Size Issue. The selection and assignment of the Category Types was performed after the event while analyzing the data. The meanings of the Category Types are described below.

4. Analysis

A second observation is that the categories identified by the participants are perceived barriers to innovation, which may not be actual barriers. Perceived barriers, even if inaccurate, must also be overcome, since they are used to justify actual decisions about innovation and entrepreneurship.

Since the strategy used overcome a perceived barrier to innovation may be different from that used against an actual barrier, it is important to know whether a particular barrier to innovation is real. A topic for further research is to identify which issues represent actual barriers to innovation and which represent inaccurate but widely held beliefs.

Further observations can be made by calculating the total weight for each of the Category Types. The result is displayed in the following table.

Cultural issues dominate and were considered by the participants to be the largest barriers to innovation in Switzerland (37%). In second and third place are educational and political issues, whose combined importance is significantly larger than the cultural issues. The educational and political issues, when combined, comprise over half the total weight (54%). The remaining size issues and success factors make up less than 10% of the total weight.

The category types representing the barriers to innovation can be further divided into classes based on strategies that might be used to overcome them.

The tangible issues are those that can be directly overcome, in this case by changes to the legal, regulatory and educational systems. The intangible issues are cultural and social issues, which cannot be directly overcome by decree. Change in this instance requires changes to the values and morals, which collectively make up the Swiss culture. Such change is by nature difficult to achieve.

The immutable issues are those in which change is not possible. They are all size issues. Switzerland is a small country, with a small population and a small domestic market. Thankfully, the immutable issues have such a low weight (under 5%) that they can be ignored.

Given the high weight of the political and educational issues (over 50%), combined with the difficulty of implementing a strategy that can affect a desired cultural change, the most effective method for reducing barriers to innovation in Switzerland is to focus on the tangible issues.

In order to identify the most important tangible issues, all the political and educational issues were extracted from table 1. Similar categories were combined and the resulting list was ordered by weight, discarding the lowest ranking issues (those with a weight of less than 4%). Table 5 shows the result.

Table 5 shows that the two highest ranking tangible barriers to innovation are issues relating to 'Education and Role Models for Innovators'. Together these two issues have a combined weight of over 22%, which exceeds the weight of the top two cultural issues, Risk Aversion (10%) and Public Complacency (10%) from table 1. When the third ranked category from table 1, Innovation Is Not Highly Valued (9.7%), is considered, it leads to the conclusion:

The categories that lead to this statement have a combined weight of over 30%, or nearly one-third of the total barriers to innovation in Switzerland. Given this result, it is hardly surprising that Risk Aversion is the highest ranked barrier to innovation. An argument could be made that this is a direct consequence of innovators being poorly prepared and under-appreciated.

5. Recommendations

While legal, regulatory and financial issues were identified as being important, they were not considered to be major barriers to innovation. Stated bluntly, money is not the issue. The issue is improving the perception of entrepreneurship. Thus, promoting the importance of entrepreneurship to the educational system and general public is more important than lobbying for change in the government and financial institutions.

There is evidence that suggests that the outlook for innovators and entrepreneurs in Switzerland may not be as bleak as is indicated. When comparing the number of businesses created per capita in the year 2000 in Switzerland, against the number created in the United States, one finds that the number of businesses created per capita is actually higher in Switzerland (7) . While this comparison does not take into account the number of jobs created, the subsequent value of the companies or their likelihood of success, it does indicate that there is at least a dedicated minority of active innovators and entrepreneurs. This minority of entrepreneurs must be nurtured and their success communicated to the public.

Recommendations:

• Investigate which of the most important barriers to innovation are perceived vs. actual barriers.
• Interview local entrepreneurs and find out why they innovate in Switzerland as opposed to elsewhere.
• Promote the value of innovation to the public and the educational system.
• Publicly celebrate successful innovators.

The importance reducing barriers to innovation and creating an entrepreneur-friendly environment in Switzerland cannot be underestimated. All participants, without exception, agreed that without increased opportunities for entrepreneurs, the country will suffer economically.

Copyright 2002, Avenir-Suisse and MIT Endterpris Forum of Switzerland.

Notes

1. Dr. Xavier L. Comtesse. Founder and director Avenir Suisse. xavier.comtesse@avenir-suisse.ch.
2. Alan Hodgkinson. Co-Chairman MIT Enterprise Forum of Switzerland. alan.hodgkinson@alum.mit.edu.
3. Dr. Eva Krug. Founder and Co-Chairman MIT Enterprise Forum of Switzerland. eva.krug@alum.mit.edu.
4. Geneviève Morand. First Tuesday. gmorand@rezonance.ch.
5. Prof. Louis Balme. University of Grenoble. louis.balme@imag.fr.
6. Thierry Lombard. Bank Lombard Odier. www.lombardodier.ch
7. Source: US: National Chamber of Commerce. Switzerland: Bundesamt für Statistik.