Switzerland lively life sciences ecosystem

Switzerland's Lively Life Sciences Ecosystem

Date 03 May 2011

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Colophon

Contact Jeannette de Lannoy T +31 088 602 10 83 [email protected] NL EVD Internationaal Juliana van Stolberglaan 148 | 2595 CL Den Haag P.O. Box 20105 | 2500 EC Den Haag

Author(s) Jasper Bouwsma

T +41 31 381 50 80 [email protected] Vujàdé Ltd. Gutenbergstrasse 9 | CH-3011 Bern | Switzerland P.O. Box 4 | CH-3257 Grossaffoltern | Switzerland Christoph Ditzler T +41 31 387 37 97 [email protected] reflecta ag Schwarztorstrasse 56 | Bern | Switzerland Postfach 530 | CH-3000 Bern 14 | Switzerland

©May 2011 The ministry of Economic Affairs, Agriculture and Innovation, NL EVD International. NL EVD International supplies this information for free. The content needs to be available for free for our clients, dutch companies. It is not allowed to multiply or publish anything out of this edition by photocopy, microfilm or on any other possible way, without previous notice of the publisher. In spite of all the care that is taken over this edition, the Ministry of Economic Affairs, Agriculture and Innovation cannot be held legally liable for possible inaccuracy.

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Executive Summary

During the past years, Switzerland has built a remarkable innovation ecosystem. It was built on the life science industry- coming out of the pharmaceutical industry, and the microtechnology industry – coming out of the watch industy. Both these clusters overlap in the medtech industry. In addition, both clusters have a strong interest in the nano-technology. Biotechnology and medtech are among the fastest growing fields in the Swiss industry today. They are also major contributor to the national R&D performance. Both fields are the outcome of a strong specialization process, which the Swiss manufacturing sector was undergoing during the recent past. A peculiarity of the Swiss R&D-system is the absence of a notable public R&D. Close to three-quarters of the national R&D expenditure (74.6%) is provided by private sources. The rest is provided by the academic institutions. Within the university system the two Swiss Federal Institutes of Technology at Zurich and Lausanne (ETHZ and EPFL) are dominating basic research. A number of universities in major Swiss towns, and a renewed system of cantonal/regional Universities of Applied Sciences is complementing them. On a national level, Switzerland has started a series of research initiatives based on national competence centres and national research programmes. There is a close link between these activities and the activities on the European Research Area (of which Switzerland is a non-EU full member). Despite the small area, Switzerland is a heterogeneous country. 3 official languages, different religious confessions, urban as well as rural areas are forming small, but distinct environments. The heterogeneity is fostered by a strict federalist political system, which is dominated by the cantons. In fact, the cantons are the sovereign element in the Swiss political landscape. This dominance of the cantons and the strong local orientation of Swiss policy have prevented a membership in the EU. Instead, the Swiss federal government in cooperation with the ruling bodies of the EU has opted for a series of bilateral agreements. As a result, today there is free movement of People between Switzerland and the EU. The manufacturing, construction, and service sector are full members of the European Economic Area. The agricultural sector instead remains highly protected. For Dutch Business there several possibilities to hook into the Swiss industry:

a) setting up a joint R&D-project within the European Framework Program, b) setting up a research program at a Swiss research unit which typically

requires the funding of 50% by the private partner while the cost of the research unit (the other half) will be supported by the state (provided the criteria are met),

c) setting up a business is Switzerland either as a joint-venture or as a subsidiary.

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Authors’ Notes

1. Life Science Industry: according to the authors, life sciences are a collection of traditional specialties that are currently converging and will merge even more in the near future. However, in this report we will focus on the following three industries separately

a. Biotechnology (including pharmaceuticals) b. Microtechnology (including medical technology) c. Nanotechnology

2. Practical Guide: In this report, the authors have used independent

governmental as well as dependent market statistics. In some cases they don’t match completely. Although not academically correct we wanted to provide some useful figures for you, the reader.

3. Complexity: Switzerland is a heterogeneous country with 3 official

languages and a unique historic federal system in which the 26 cantons play a more powerful role than the central government in Bern. It takes foreigners probably a decade to build a comprehensive understanding of the intricacies of Swiss policy making.

In order to provide you, the reader, with a useful guide, the authors need to distinguish between national and regional initiatives and clusters and we will indicate the prevalent language used in the context discussed.

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Index

Colophon 3 Executive Summary 5 Authors’ Notes 6 Figures & Tables 9

1 Introduction: Innovation and High-Tech in Switzerland 11 1.1 Fact & Figures 11

1.2 Swiss Innovation Ecosystem: How Innovation Is Organized In Switzerland 17

2 Life Sciences in Switzerland 27 2.1 Introduction 27 2.2 Biotechnology: 28 2.3 Microtechnology: 39 2.4 Nano-technology: 46 2.5 Opportunities for Dutch Business 54

3 How To Do Business in Switzerland 55 3.1 General 55 3.2 Culture, Cantons 56 3.3 Does & don’ts 57

4 Laws & Regulations 59 4.1 General 59 4.2 Swiss legal system 59 4.3 Tax system 61 4.4 Import & Export Regulations 63 4.5 Bilateral agreements with the EU 64 4.6 Employment regulations 65

5 References 67 5.1 Selected Reports 67 5.2 Useful Contacts 68

6 Annex 71

6.1 Comparison between Switzerland and The Netherlands: Selected Economic Indicators 71 6.2 Number of Companies and Employment in Swiss Biotechnology and Microtechnology Industry

2008 73 6.3 The Swiss Innovation Ecosystem: Innovation Policy Making 75 6.4 R&D Expenditures of Swiss Organizations 1996-2008 82 6.5 Import & Export Regulations 83 6.6 Bilateral Agreements With The EU 85 6.7 Employment Regulations and Social Security 87

Figures & Tables

Figures

FIGURE 01: Innovation Performance of European Countries 12 FIGURE 02: Relative Innovation Performance of European Countries: Switzerland 12 FIGURE 03: R&D Expenditures by Sector as Percent of GDP, 2008 13 FIGURE 04: Targeted R&D Fields by Support Measures by the Industry in Switzerland Compared to EU-27 14 FIGURE 05: Distribution of R&D-Intensive Industry Coverage According to Economic Sector and Country, International Comparison, 2005 16 FIGURE 06: Development of EUR – CHF Exchange Rate 1999 – 2011 17 FIGURE 07: Key Elements of the Swiss Innovation System 17 FIGURE 08: National Centres of Competence in Research (NCCR) (Overview) 19 FIGURE 09: The Universities of Applied Science in Switzerland 21 FIGURE 10: Venture Investments by Sector in Switzerland 2009 24 FIGURE 11: Number of Transactions in Venture Capital by Industry 25 FIGURE 12: Venture Capital Investments by Region and Industry 25 FIGURE 13: A Rough Sketch of the Swiss Industry Clusters based on Biotechnology and Microtechnology 28 FIGURE 14: Key Activities of Biotechnology Companies in Switzerland 29 FIGURE 15: Size of Biotechnology Companies in Switzerland 30 FIGURE 16: Foundation of Biotechnology Companies in Switzerland 1999-2009 31 FIGURE 17: Sources of New Company Foundations in Biotechnology 31 FIGURE 18: New Products in Pipeline of Swiss Biotechnology Companies 32 FIGURE 19: Swiss Medtech Industry: Manufacturer by Category 40 FIGURE 20: Swiss Medtech Industry: Suppliers by Category 40 FIGURE 21: Map of the Swiss Medical Technology Industry 42 FIGURE 22: Map of the Dutch Medtech Industry 42 FIGURE 23: Distribution of the nano-tera.ch Research Groups 47 FIGURE 24: Population Distribution: Agglomerations, Towns and Villages in Switzerland 55 FIGURE 25: The 25 Cantons of Switzerland 56 FIGURE 26: Languages in Switzerland 57 FIGURE 27: Average Tax-Rate in the Capital Towns of the Cantons 2009 58 FIGURE 28: Switzerland: EU, EFTA 64 FIGURE 29: The WEF Competitive Landscape 71 FIGURE 30: Graphic Representation of the Swiss Innovation System 75 FIGURE 31: Organization of the ETH-Domain 77

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Tables

TABLE 01: R&D Expenditures of Selected Swiss Companies 2010 15 TABLE 02: Promotion of Startups by the CTI 22 TABLE 03: Philanthropic Foundations and Competitions Supporting Startups 23 TABLE 04: Major Recent Biotech Ventures in Switzerland 24 TABLE 05: The Structure of Life Sciences Used in This Report 27 TABLE 06: Geographical Spread of the Biotechnology Industry in Switzerland Compared to The Netherlands 33 TABLE 07: Important Initiatives and Organizations in the Swiss Biotechnology Cluster 35 TABLE 08: R&D Spending of the Swiss Precision Industry 41 TABLE 09: Relevant Developments in Swiss Micro-technology Industry 42 TABLE 10: Relevant Developments in Swiss Nanotechnology Sector 48 TABLE 11: Overview of Selected Swiss Life Sciences Industries and Opportunities for Dutch Businesses 54 TABLE 12: Selected Reports on the Swiss Life Sciences Industries 67 TABLE 13: Selected Contacts in the Life Sciences Industries 68 TABLE 14: Selected Contacts for Economic Promotion 70 TABLE 15: Collection of Miscellaneous Rankings and Comparison Between Switzerland and The Netherlands 72 TABLE 16: Number of Enterprises and Employees According to Industry Divisions in 2008 73 TABLE 17: R&D Expenditures of Swiss Organizations intra- and extramuros 1996-2008 81 TABLE 18: Social Insurance Contribution Rates 2011 (Without Health Insurance) 87

1 Introduction: Innovation and High-Tech in Switzerland

This introduction chapter is meant to give you, the reader, and a general impression of the Swiss high-tech industry. We provide you with selected facts and figures and a short explanation of how high-tech and innovation is managed in Switzerland (i.e. the Swiss Innovation Ecosystem).

1.1 Fact & Figures

Switzerland is especially known and well renowned for its R&D, innovation and high-tech industries. However, the rational and impact of Switzerland’s emerging technologies is not easy to grasp. The authors have chosen to share 4 observations: 1: Ranking of Switzerland 2: R&D statistics 3: Relative size 4: Foreign trade

1.1.1 Observation No. 1: Ranking of Switzerland

Like The Netherlands, Switzerland is a small, but very successful country. In numerous studies and comparisons Switzerland maintains leading positions, often closely followed by The Netherlands (see Figure 01 as well as an overview of rankings in Annex A). At the beginning of this report we would like to focus on the Innovation Union Scoreboard published in 2010: “Switzerland is one of the innovation leaders with an above average performance. Relative strengths are in open, excellent and attractive research systems, intellectual assets, innovators and outputs. Relative weaknesses are in finance and support and linkages & entrepreneurship. High growth is observed for venture capital, community trademarks and sales of new products. A relatively strong decline is observed for SMEs (small and medium size enterprises) innovating in-house and innovative SMEs collaborate with others. Growth performance in finance and support, intellectual assets and outputs is above average. In the other dimensions it is below average.” (Source: innometrics, Innovation Union Scoreboard 2010, 01 February 2011. Link: http://ec.europa.eu/research/innovation-union/pdf/iu-scoreboard-2010_en.pdf )

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FIGURE 01: Innovation Performance of European Countries

Source: innometrics, Innovation Union Scoreboard 2010, 01 February 2011. Link: http://ec.europa.eu/research/innovation-union/pdf/iu-scoreboard-2010_en.pdf The top position of the Swiss innovation performance within Europe is primarily the effect of high output of the R&D system. Switzerland is especially strong in terms of scientific publications, patent applications, and license and patent revenues from abroad. The indicators with regard to innovation are pointing to some weaknesses in the marketing of the output of the research system. FIGURE 02: Relative Innovation Performance of European Countries: Switzerland

Source: innometrics, Innovation Union Scoreboard 2010, 01 February 2011. Link: http://ec.europa.eu/research/innovation-union/pdf/iu-scoreboard-2010_en.pdf

1.1.2 Observation No. 2: R&D Statistics

Switzerland is currently spending about 3% of the GDP in R&D (approximately CHF15 Billion). According to a 2008 statistic, Switzerland ranked 6th behind Israel, Sweden, Finland, Japan, and Korea, which is the result of a sharp absolute and relative increase of R&D spending from 2000 onwards. This development is in line with the increase of R&D spending in other technological leader countries such as those mentioned above but unlike the EU-27 average and the OECD average. In relative terms Switzerland shows a higher R&D spending than Germany and the US. The Swiss R&D spending is exclusively effectuated by the private and academic sector, i.e. the share of the public sector is almost negligible. This is unlike the OECD-countries, where public sector’s R&D spending amounts to an average of approx. 0.25% of the GDP. FIGURE 03: R&D Expenditures by Sector as Percent of GDP, 2008

Source: Bundesamt für Statistik (BFS), F+E der Schweiz 2008, 2010 (Swiss Federal Statistical Office, R&D in Switzerland 2008), based on data from the OECD. Link: http://www.bfs.admin.ch/bfs/portal/de/index/news/publikationen.html?publicationID=3960 This high relative R&D spending is especially due to high R&D investment of the private industry, which accounts for close to 75% of total R&D investment. Behind these overall figures, there are some specific developments to be looked at.

1.1.3 Observation No. 3: Relative Size

This observation shows that pharmaceuticals (life science industry, as they label themselves) and precision instruments represent a major specialized area within the

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Swiss manufacturing industries. We will illustrate this by taking A) an industry perspective, and B) a company perspective. A) Industry Perspective:

- The life science industry is the most important contributor to Switzerland’s R&D investments: 44% of the domestic intramuros R&D expenditures are spent by the chemicals and the pharmaceutical industry. By taking foreign intramuros and extramuros R&D into account, the share of this industry amounts to 57%.

- R&D expenditures of the producers of microtechnology products (i.e. high-technology instruments including office machines, medical equipment, optical devices, watches) nearly tripled, from CHF697 Million in 2004 to CHF2’018 Million in 2008.

- Other sectors slightly reduced their R&D expenditures (e.g. IT & telecommunication), hence showing a relative decline, whilst the machine builders reduced their expenditures in absolute terms.

The trends mentioned above can also be seen in the R&D fields targeted in Switzerland, where health, nano-sciences and nano-technologies as well as biotechnology and materials are clearly above, and ICT is considerably below the EU-average. FIGURE 04: Targeted R&D Fields by Support Measures by the Industry in Switzerland Compared to EU-27

Source: innometrics, Innovation Union Scoreboard 2010, 01 February 2011. Link: http://ec.europa.eu/research/innovation-union/pdf/iu-scoreboard-2010_en.pdf B) Company Perspective:

- Pharmaceutical’s Novartis and Roche are responsible for 30% of Switzerland’s R&D expenditure

- Switzerland has attracted many companies for locating R&D activities in Switzerland.

Especially the pharmaceutical giants Roche and Novartis, play a crucial role in Swiss R&D. According to Booz & Company, Roche was the number R&D spending company with a total of USD 9 Billion (i.e. 20.1% of sales). Novartis (#6) is spending USD 7.5 Billion. Extracting the R&D budgets spent by these companies in Switzerland you will find that approximately one third of the overall R&D expenditure in Switzerland can be led back to three companies. TABLE 01: R&D Expenditures of Selected Swiss Companies 2010

Worldwide In Switzerland % R&D in Switzerland

Roche USD 9.120 Billion (1)

CHF 9.050 Billion (2)

CHF 1.220 Billion

(2)

13%

Novartis USD 7.469 Billion (1)


38%

Nestlé CHF 1.980 Billion (4)


24%

Total CHF 5.009 Billion 33% Sources: (1) http://www.booz.com/media/file/sb61_10408-R.pdf and

http://www.booz.com/global/home/what_we_think/featured_content/innovation_1000_2010), (2) http://www.roche.com/research_and_development/r_d_overview/facts_and_figures.htm (3) http://www.novartis.com/downloads/newsroom/corporate-publications/NovartisPass_EN.pdf (4) http://www.nestle.com/Common/NestleDocuments/Documents/Library/Documents/About_Us/Nestle-in-Switzerland-

EN.pdf

International companies have recognized the significance of R&D in Switzerland too. Since 1956, IBM operates one of their Research Centers in Rüschlikon which has provided IBM with 4 out of its 5 Nobel Laureates. (Source: http://www.zurich.ibm.com/pdf/ZRL_Leaflet_24082010.pdf ). In spring 2011 IBM will open its USD 90 Million and 6’000m2 Nanotechnology Center there, which will find a private public usage in collaboration with the ETHZ (The Swiss Federal Institute of Technology, Zurich). The operation of the center is based on a cost sharing scheme between IBM and the ETHZ. Although, the share of expenditures in the ICT market is lower on average compared to EU-27, Switzerland has experienced a keen interest of US companies to open R&D labs:

- Google (Zurich) - Microsoft (Zurich) - Disney Labs (Zurich)

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- SAP (St. Gallen) - Nokia (Lausanne)

1.1.4 Observation No. 4: Foreign Trade

Switzerland is known for its big share of exports in high technology products. The share of exports in total national demand (GDP+Imports) of 37% indicates Switzerland’s high dependency on foreign demand. Exports of Germany for example contribute 25% of its total demand. This must mainly be attributed to pharmaceuticals, as (by the statistical definition of the OECD) this is the only Swiss high-technology industry. In fact, the trade balance of the other high-technology industries by the definition used by the OECD (computers, electronics, aerospace) is negative. Looking at the ratio of exports to imports of pharmaceuticals, Switzerland is number two behind Sweden and number one in the instruments industry in the OECD. FIGURE 05: Distribution of R&D-Intensive Industry Coverage According to Economic Sector and Country, International Comparison, 2005

Source: Federal Department of Home Affairs/Federal Statistical Office, Science and technology (S&T) Indicators in Switzerland, 2008, based on OECD, MISTI database, November 2007. Link: http://www.bfs.admin.ch/bfs/portal/en/index/themen/15/22/lexi.html Overall Switzerland shows a significant trend to specialization in pharmaceuticals (life science) and microtechnology/precision instruments (including medical instruments). This fast developing specialization is partly the effect of the ongoing strength of the Swiss Franc. It must be clear that the appreciation of the Swiss Franc is developing in scoops which temporarily create heavy pressure on the competitiveness of Swiss export goods.

FIGURE 06: Development of EUR – CHF Exchange Rate 1999 – 2011

1.2 Swiss Innovation Ecosystem: How Innovation Is Organized In

Switzerland

The relative independence of the private and academic sector in terms of financing R&D expenditures does not mean that there is a lack of coordination between the actors in the Swiss innovation system. The actors within the Swiss Innovation Ecosystem will be discussed in the next paragraph. FIGURE 07: Key Elements of the Swiss Innovation System

- Policy makers - Academia - Startups - Investors (Business Angels, Venture Capital and Private Equity)

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- Industry

1.2.1 Innovation Policy

A number of different bodies are involved in the definition of the innovation policy at the federal level:

- SER: State Secretariat For Education and Research - OPET: Federal Office for Professional Education and Technology - ETH Board which presides over the ETH-Domain which includes the two Swiss Federal Institutes of Technology at Zurich, and Lausanne respectively

- SSTC: The Swiss Science and Technology Council - SNSF: The Swiss National Science Foundation - CTI: The Commission for Technology and Innovation - CRUS: Rector’s Conference of the Swiss Universities

All these institutions are involved in the preparation of the message concerning the promotion of education, research, and innovation (ERT-message) presented to the Swiss Parliament for approval every fourth year. The next 4-year message is currently being prepared for the period 2013-2016(1). An important part of the preparation process of this message (and all the political messages in general, the so called “Vernehmlassungsverfahren” / “procédure de consultation”) is the issue of a first draft for public consultation, where all interested bodies (political parties, cantons, industry associations, unions, etc.) are invited to comment on the proposal. These comments form the basis for the finalization of the message that will be submitted to the Swiss Parliament by the Federal Counsel. The ERT-message is the key document of the national innovation policy. It forms the strategic and financial framework for the actions taken by the SER, the ETH-Board, the SNSF, and the CTI. See also: http://www.proinno-europe.eu/page/innovation-and-innovation-policy-switzerland or http://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.content&topicID=619&parentID=44&countryCode=CH Whilst most funding of the SNSF is not thematically bound, it differentiates between two measures to fund thematic research. “National Research Programmes” (NRP) analyze urgent problems of national significance while “National Centers of Competence in R9esearch” (NCCR) support long-term research projects in areas of vital strategic importance. The thematic priorities are adjusted continuously. Currently, calls for NRPs are open in the following areas: gender equality policy, sustainable water management, smart materials, stem cells and regenerative medicine, opportunities and risks of nano-materials and the new urban intensity.

(1) A special ERT-message for 2012 is currently in preparation. It will bridge the ERT-message for the period 2008-2011 and

the ERT-message for the period 2013-2017. This intermediate step has been introduced to bring the ERT-periods in line with the legislative periods.

Each NCCR has a maximum duration of twelve years. The Swiss National Science Foundation provides financing for NCCR for the first stage of up to four years. Further funding is determined on the basis of a formal application for an extension of financing and the outcome of an interim evaluation. The program presently includes 27 NCCRs. Some 14 of these NCCRs started up in 2001, six in 2005, and another eight in 2010. The call for proposals for a forth series of National Centres of Competence in Research will be launched in 2011. FIGURE 08: National Centres of Competence in Research (NCCR) (Overview)

Source: SNSF. Link: http://www.snf.ch/nfp/nccr/E/nccrdetail/current/Pages/default.aspx A comprehensive Guide to the National Centres of Competence in Research is published every year by the SNSF. The 2011 guide is available under the following link: http://www.snf.ch/SiteCollectionDocuments/nccr_guide_11.pdf The funding agency for innovation projects is the CTI. It mainly supports technology transfer by funding universities that find private partners who fund at least half of the project. Furthermore, the CTI has enlarged its programme to support start-ups. “CTI start-up” offers start-ups coaching services and labels promising ones. “CTI entrepreneurship” promotes the entrepreneurial spirit by offering courses to potential and prospective entrepreneurs. “CTI invest” is a networking platform that stages regular events where young entrepreneurs present their ideas to business angels and venture capital firms. “CTI Discovery Projects” directly funds projects that are highly risky but have the potential to result in radical innovations. Internationalisation, which is an important aspect in the ERT-message, is fostered by the measure “CTI-Asia” which promotes co-operations in applied R&D with universities and firms from Asia. The engagement in different ERA-NETs fosters the internationalisation of the national innovation system. The engagement in different ERA-NETs (European Networks for the coordination of the different sectors of the EU Framework Programmes in Research) fosters the internationalization of the national innovation system. The activities are coordinated by the SNSF (see also: http://www.snf.ch/E/international/europe/Pages/era-net.aspx ).

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1.2.2 Academia

Switzerland has a number of high quality public universities and universities of applied sciences (CH: “Fachhochschule” / “Haute école spécialisée”, NL: “HBO”). Below you will find a short overview of the different institutes. A) Universities Within the group of the universities one must distinguish between A.1) the Swiss Federal Institutes of Technology at Zurich, and Lausanne respectively, and A.2) the other public universities and A.3) the Universities of Applied Science: A.1) Swiss Federal Institutes of Technology at Zurich, and Lausanne respectively Especially the two Federal Institutes of Technology (Eidgenössische Technische Hochschule, ETHZ, Zurich and École Polytechnique Fédérale, EPFL, Lausanne) play a prominent role in the Swiss academic landscape. Both institutes are world-renowned for its research, and attract foreign researchers as a result. Furthermore, the universities are a main source for innovative start-ups (see: for example a study by the transfer office of the ETHZ on “The performance of Spin-off companies at the Swiss Federal Institute of Technology Zurich” http://www.vpf.ethz.ch/transfer/ETH_Zurich_spin-offs.pdf). The two technical universities are the pillars of the so-called ETH-Domain, which also includes four additional research institutes:

- PSI: Paul Scherrer Institute - EMPA: Swiss Federal Laboratories for Materials Testing and Research - EAWAG: Aquatic Research - WSL: Swiss Federal Institute for Forest, Snow and Landscape Research

A brief overview over the ETH-Domain is given in http://www.ethrat.ch/download/Der_ETH-Bereich_in_Kürze_2010_E.pdf . A.2) Cantonal Universities In addition to the 2 federal (technical) universities, there are cantonal universities covering in principle the whole spectrum of scientific research and teaching:

- Basel - Bern - Fribourg - Geneva - Lausanne - Lucerne - Neuchâtel - St. Gall - Zurich

A.3) Universities of Applied Science During the recent years, the landscape of the universities of applied sciences has changed from a cantonal focus to a regional focus. This development was spurred by the Bologna-Reform and lead to a tremendous modernization of the infrastructure. The universities of applied sciences also contribute significantly to innovation promotion and knowledge transfer. They provide management staff and young entrepreneurs with education and are committed to applied research and development. In the innovation process these universities act in a bridging role, linking science, the economy and society. FIGURE 09: The Universities of Applied Science in Switzerland

Source: http://www.bbt.admin.ch/themen/hochschulen/index.html?lang=en

1.2.3 Startups

In recent years there has been an influential mix of public and private promotion and support of entrepreneurship in Switzerland. As a result there is an active, healthy and successful startup scene in Switzerland as for example the lists of the RedHerring 100 Europe Winner 2009 and 2010 show. A) The Activities of the CTI (The Commission for Technology and Innovation) The CTI is the most important Swiss public institution for funding startups. The following activities of the CTI are of special interest:

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TABLE 02: Promotion of Startups by the CTI CTI Activity Description Link CTI

As the Confederation’s innovation promotion agency, CTI lends support to R&D projects, to entrepreneurship as well as to the development of start-up companies. CTI helps to optimise knowledge and technology transfer through the use of thematic and regional networks and platforms.

http://www.kti.admin.ch/?lang=de

VentureLab

Financed by CTI, VentureLab promotes the entrepreneurial spirit by offering free-of-charge courses to potential and prospective entrepreneurs. → Focus on early stage

http://venturelab.ch/

CTI Startup

CTI start-up offers start-ups coaching services and labels promising ones. → Focus on mid to late stage

http://www.ctistartup.ch/htm/home.htm

CTI Label

The „CTI Label“ is a label for Swiss start-ups and well recognized by Swiss investors as a quality label. → focus on mid to stage to maturity

http://www.ctistartup.ch/htm/home_label_companies.htm

CTI Invest

“CTI invest” is a networking platform that stages regular events where young entrepreneurs present their ideas to business angels and venture capital firms. → focus from mid-stage onwards.

http://www.cti-invest.ch/

In addition, almost every canton has its own startup support and economic development program that coach, promote, and facilitate startups. B) Private Support of Startups B.1) Technoparks and Startup facilities Throughout Switzerland you will find an extensive number of startup parks and facilities creating innovation hot-zones and/or local clusters. Startups can rent space and benefit from facility services and cross-pollination. The Biotechnopark in Schlieren (Zurich) for example provides fully equipped laboratories to life sciences startups. Notable is the fact, that in general the Technoparks are privately funded.

B.2) Philanthropic Foundations and Competitions There are a great number of Swiss philanthropic foundations that support innovation and entrepreneurship. Many startups make use of these possibilities to obtain coaching and develop their business plan and/or obtain seed funding through competitions. TABLE 03: Philanthropic Foundations and Competitions Supporting Startups Competition Description Link Venture – Companies for tomorrow

Since 1996, McKinsey in collaboration with the ETHZ and since 2009 CTI, organizes the bi-yearly start-up competition “Venture – Companies for tomorrow”, where project groups obtain free-of-charge coaching in the development of their business plan. The winner of the competition is awarded CHF60’000. The platform has proved to be an effective marketing and fund-raising tool as the track-record shows.

http://www.venture.ch/default_e.asp http://www.venture.ch/teams_2010_phase2_e.asp

venturekick

Where the Venture competition attracts project groups, “venturekick” facilitates early-stage entrepreneurs with coaching and an impressive opportunity for obtaining CHF130’000 seed-funding. In three rounds entrepreneurs pitch their start-up to a diverse jury consisting out of a representative number of people from the Swiss Innovation ecosystem (entrepreneurs, industry, investors etc.). Between the start in 2007 and the end of 2010, venturekick has distributed an impressive CHF5.7 Million in awards, financed by four Swiss foundations (Gebert Rüf, Ernst Göner, OPO Stiftung, and Avina Stiftung).

http://www.venturekick.com/

1.2.4 Investors

For a healthy and sustainable startup environment it is imminent that the ecosystem has sufficient risk capital to finance the innovative endeavors. In addition, it is also important that risk capital is available for each growth stage from seed to expansion; a missing link in the financing chain dramatically reduces the probability of success. In an extensive study by SECA (Swiss Private Equity & Corporate Finance Association), the Swiss Venture Capital Market has been studied between 1999 and 2009 (link: http://www.seca.ch/sec/files/newsletter/pdf-news222/Booklet_3_Venture_Capital_in_der_Schweiz_A5.pdf ). In 2007, 0.09% of GDP was invested in venture capital in Switzerland; in the same year the USA

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invested 0.19%. Nevertheless, Switzerland has seen between 80 and 150 VC transactions a year. In monetary terms, the life science industry dominates the venture capital market in Switzerland with over 80% of total capital invested. This domination can easily be explained based on the capital-intensive nature of the life sciences companies in comparison with investments in e.g. information and communication technology startups, which are in general much less capital intensive. To illustrate, in a presentation on the Swiss Life Sciences Statistics 2009-2010 by biotechgate.com the five largest therapeutic biotech financing rounds are listed, accumulating to well over CHF 300Million or 15% of total venture capital invested in 2009 in Switzerland. TABLE 04: Major Recent Biotech Ventures in Switzerland

Company Date Currency Amount (M) Type ESBATech AG 14.09.2009 USD 150 Million Other NovImmune 12.05.2009 CHF 63 Million Equity –

Later Stage Molecular Partners AG

15.12.2009 CHF 46 Million Equity – Second Stage

AC IMMUNE SA 26.01.2009 CHF 40 Million Equity – Later Stage

Endosense SA 01.09.2009 USD 36 Million Equity – First Stage

Source: www.biotech.com FIGURE 10: Venture Investments by Sector in Switzerland 2009

Source: European Private Equity Statistics for Switzerland 2010 (http://www.seca.ch/sec/files/statistiks/Switzerland_2010.pdf )

FIGURE 11: Number of Transactions in Venture Capital by Industry

New Value WWZ Swiss Venture Capital Transaction Monitoring 1999-2009

Explanation Number of Venture Capital Transactions in Switzerland per industry per

year. The category ”andere” (other) includes agriculture, chemical, financial

services, and energy & environment.

Source: Pascal Gantenbein, Maurice Pedergana, Jens Engelhardt: Venture Capital in der Schweiz, Wichtigste Ergebnisse aus den Jahren 1999 bis 2009, SECA 2010 (Link: http://www.seca.ch/sec/files/newsletter/pdf-news222/Booklet_3_Venture_Capital_in_der_Schweiz_A5.pdf) FIGURE 12: Venture Capital Investments by Region and Industry

Source: Pascal Gantenbein, Maurice Pedergana, Jens Engelhardt: Venture Capital in der Schweiz, Wichtigste Ergebnisse aus den Jahren 1999 bis 2009, SECA 2010 (Link: http://www.seca.ch/sec/files/newsletter/pdf-news222/Booklet_3_Venture_Capital_in_der_Schweiz_A5.pdf )

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(For more in-depth information on the financial aspects of the emerging biotech sector in Switzerland, see Thomas Heimann, Yann C. Crozat: Biotech als Assetklasse, SECA Booklet Nr. 5, 2010 (Link: http://seca.ch/default.asp?V_ITEM_ID=306 ), available only in German).

1.2.5 Industry

The importance of the pharmaceutical and life sciences industry in Switzerland has already been discussed above. In addition to the contribution of Roche and Novartis to the R&D investments in Switzerland, it is also important to mention the role of these and other companies as potential investors and/or exit opportunity. Both Roche and Novartis maintain both a very active venture fund both with headquarter in Basle, Switzerland. As a consequence of the close geographical proximity, these funds have invested in multiple life sciences companies in Switzerland. (For more information see: http://www.venturefund.roche.com/ http://www.venturefund.novartis.com/ and http://www.venturefund.novartis.com//assets/files/VentureFundReport2010.pdf ).

2 Life Sciences in Switzerland

2.1 Introduction

Life sciences consist out of single, as well as the interdisciplinary combination of disciplines and industries. On the one hand the authors have observed the ongoing converging of disciplines into life sciences. On the other hand many of the disciplines are also positioned and reported upon in statistics separately. The authors felt that for this report to provide a practical usage for the reader we had to structure the life sciences industry and focus on selected disciplines. The focus of the report on hand is to cover the fields of bio, medical, and nanotechnology. The authors have integrated pharmaceuticals into biotechnology due to the practical reason that in most (Swiss) statistics and reports pharmaceuticals are part of biotechnology. Furthermore, the authors have included medical technology into microtechnology due to similar reasons as aforementioned. Finally, the authors would like to make a quick note on the historic development into these leading Swiss sectors. Switzerland has a long-standing tradition in the precision industry, starting out with the watch industry for which Switzerland is well known. On the other hand the chemical industry around Basel, which started out with the production of synthetic dyes, led to the pharmaceutical industry. Nano-technology as a base technology is rapidly affecting a vast number of diverse industries. Although not all of the industries mentioned are directly part of life sciences in the narrow sense of the word, it provides an insight into why Switzerland almost naturally developed into a life sciences cluster in a broader sense of the word. TABLE 05: The Structure of Life Sciences Used in This Report. Chapter 2A Chapter 2B Chapter 2C biotechnology (incl. pharmaceuticals)

microtechnology (incl. medical-technology)

Nano-technology

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FIGURE 13: A Rough Sketch of the Swiss Industry Clusters based on Biotechnology and Microtechnology

Source: Vujàdé Ltd & reflecta ag

2.2 Biotechnology:

In this chapter we will provide you with key insights into the Swiss biotechnology industry by providing you with an overview of the subsectors and a number of statistics. In addition we will present a number of recent developments, and will provide you with the opportunities for Dutch companies.

2.2.1 Subsectors

Due to differences in the definitions of the biotechnology industry, it is difficult to provide exact figures. Nevertheless, the different sources give a good approximation. According to official statistics (Bundesamt für Statistik/Office fédéral de la statistique), Switzerland housed 229 biotechnology companies in 2008, 159 of which counted as core biotech companies undertaking R&D-activities. The total number of employees amounted to 17.993. According to the Life Sciences Statistics 2009-2010 Report 287 biotech companies are based in Switzerland, employing over 32’000 employees, of which more than are 1000 R&D related (source: www.biotechgate.com ). The biggest sub-sectors are diagnostics and analytics, contract research, and therapeutics.

FIGURE 14: Key Activities of Biotechnology Companies in Switzerland

Source: www.Biotechgate.com

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2.2.2 Fact & Figures

In the Swiss Biotechnology sector 72% of the companies are small enterprises employing less than 50 employees FIGURE 15: Size of Biotechnology Companies in Switzerland

Source: www.Biotechgate.com Since the 2008, when the financial crises hit the world economy, the Swiss biotechnology sector experienced a steady decline in the number of new company ventures. Therapeutic products and services have become the main driver for new companies.

FIGURE 16: Foundation of Biotechnology Companies in Switzerland 1999-2009

Source: www.Biotechgate.com 25% of the companies are university spin-offs, 44% are independent (“standard”) foundations. Only 6% are company spin-offs. FIGURE 17: Sources of New Company Foundations in Biotechnology


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Presently, the bulk of the products are in the discovery and preclinical phase. FIGURE 18: New Products in Pipeline of Swiss Biotechnology Companies


2.2.3 Geographical Spread

The Swiss Biotechnology scene has split into 4 regional areas: Basel Area (BioValley), Zurich Area (Greater Zurich Area), Western Switzerland (BioAlps), and Ticino (Biopolo). TABLE 06: Geographical Spread of the Biotechnology Industry in Switzerland Compared to The Netherlands

Switzerland The Netherlands

Biotech –Therapeutics

Biotech / R&D Services

Biotech - other

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Switzerland The Netherlands

Pharma

Other (Note: due to the high amount of the “other” category, the maps can only be used in an indicative way).

Source: http://www.swisslifesciences.com/swisslifesciences/map/map.php and http://www.dutchbiotech.com/dut/map/map.phpr

2.2.4 Relevant Developments

The is a number of initiatives and organizations in the Swiss Biotechnology cluster, which – together with the entrepreneurs themselves – foster the economic development.

TABLE 07: Important Initiatives and Organizations in the Swiss Biotechnology Cluster Case Description Source A. National Research Initiatives

SystemsX.ch is currently the biggest research initiative underway in Switzerland with the mandate to promote Systems Biology. It is a consortium with nine universities and three research institutions as partners. SystemsX.ch is funded with a federal budget of CHF 100 Mio for the period of 2008 - 2011. This sum is only available if matched by the same amount by the partners receiving funds. This way the total investment in Systems Biology will be at least CHF 200 Mio for 2008 - 2011, supplemented by third-party funds by industry and other funding agencies. The Swiss National Science Foundation (SNSF) supervises and safeguards the quality of the research and the initiative as a whole.

http://www.systemsx.ch/

The National Centre of Competence in Research (NCCR) Frontiers in Genetics, a network of 250 scientists from different universities and institutes of Switzerland, is part of a program created in 2001 by the Swiss National Science Foundation. Frontiers in Genetics aims at understanding the function and regulation of certain genes during development, as well as their role in maintaining health or favouring the emergence of pathology. The NCCR is based on 3 research programs (work packages) and individual contributions. Partnership with industry is encouraged, in order to exploit potential discoveries in the field of medical therapies.

http://www.frontiers-in-genetics.org/page.php?id=profile_en

The National Center of Competence in Research (NCCR) in Molecular Oncology is a swiss network research program in the field of cancer research. The program is led by the Swiss Institute for Experimental Cancer Research at the EPFL in Lausanne in close collaboration with several partner institutes. The program is funded by the Swiss National Science Foundation.

http://www.nccr-oncology.ch/

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Case Description Source

The SSCN is a non-profit group of scientists, which was designed to: - Foster interactions among scientists and between scientists and society - Advance the discovery of basic molecular, cellular and organismic mechanisms of embryonic and adult stem cell functions in human and all model systems - Encourage and support young scientists, minorities and women in science - Provide the public at large with an informed and first hand view of current stem cell research - Discuss important scientific and ethical issues arising from stem cell research The SSCN does not support reproductive cloning.

http://www.unige.ch/sciences/biologie/biani/sscn/ http://www.sscn.unige.ch/documents/flyer/english.pdf

The SVRI is driven by the common goal of international initiatives promoted at a political, corporate and academic level to reduce or eliminate suffering and death due to infectious diseases and cancer. The SVRI will contribute to this goal through exploration, scientific discovery and translation of the discoveries into effective preventive vaccine strategies and therapeutic vaccine interventions for infectious diseases and for cancer.

http://www.swissvaccineresearchinstitute.ch/

The Friedrich Miescher Institute is devoted to fundamental biomedical research aimed at understanding the basic molecular mechanisms of health and disease. We communicate and patent our findings to enable their translation into medical application. The institute focuses on the fields of - Epigenetics - Signaling & Cancer - Neurobiology In these fields, it has gained international recognition as a centre of excellence in innovative biomedical research.

http://www.fmi.ch

B. European Research Projects

Health-TIES is a consortium that gathers four of Europe’s top regions in biosciences, medical technology and health entrepreneurship: Medical Delta (West of the Netherlands), Oxford and Thames Valley (United Kingdom), Canton of Zurich (Switzerland), Biocat (Catalonia), and the mentoring region of Észak-Alföld in Hungary. The consortium is baked by European Commission.

http://www.healthties.eu/


C. Cantonal Initiatives

Life Science Zurich is a joint venture initiated by the University of Zurich and the ETH Zurich to promote Zurich as an international centre for cutting-edge research, first class education and economic innovation in the field of the life sciences. Life Science Zurich establishes cooperation networks that bring together the major stakeholders in academia, industry and the public sector. LSZ supports a strong and modern life science curriculum in primary and secondary education. LSZ aims to offer one of the best doctoral schools worldwide in the field of the life sciences and to prepare young researchers to develop into tomorrow's leaders in life science research, industry and society. In addition LSZ stimulates dialogue between academia, the broad public and the industry and creates an atmosphere of mutual understanding, respect and trust.

http://www.lifescience-zurich.ch/index.php?id=16&L=1

The BIO-TECHNOPARK® Schlieren-Zurich, in close collaboration with its network partners, offers professional support for life science companies in the setting up and expansion of business activities in the Greater Zurich area.

http://www.bio-technopark.ch/ Companies at the Bio-Technoparks: http://www.bio-technopark.ch/index.php?id=351&L=1

For young start-ups, the biotop provides in-house ready-equipped laboratory, office and warehousing space. Available for joint usage: laundry, refrigeration, storage facilities and seminar rooms, as well as diverse laboratory equipment.

BioValley Basel aims at: - promoting the north-western part of Switzerland - particularly the Basel area - as prime location for Life Science companies: as best location to settle down and extend their network - encouraging and supporting Life Science entrepreneurs who wish to set up their businesses in the Basel area

http://www.biovalley.ch/content.cfm?nav=1&content=2

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Case Description Source - sponsoring communication and networking among representatives from science, economy, politics and the general public regarding Life Sciences - fostering contact among BioValley members from all countries and enhancing mutual support among them

The Greater Zurich Area is Switzerland’s economic engine and a central business location for Europe. Nearly half the Swiss population lives in the Greater Zurich Area. The business region in and around the world-famous financial center of Zürich employs a workforce of some 1.5 million multilingual, international workers in a good 150'000 companies. Per capita GDP is around CHF 65'000. In recent years, the Greater Zurich Area has become a fast-growing center for the life sciences. Famous international companies like Amgen, Baxter, Ecolab, Nobel Biocare, Novo Nordisk, Pfizer, Phonak, Synthes, Zimmer and many more, along with numerous startups in biotechnology, medical technology and the pharmaceuticals industry, have chosen to set up a branch or even their international headquarters in the Greater Zurich Area.

http://www.greaterzuricharea.ch/content/02/02_002en.asp

The aim is to promote Western Switzerland as a world class centre for the life sciences, and to foster the growth of this specific industrial sector. The role goes well beyond the promotion of excellence in the sector as it exists today. It also accompanies, supports, encourages and stimulates both performance and innovation by creating the conditions which enable the development of companies.

http://www.bioalps.org

Biopolo Ticino is an association representing the value chain of the life sciences in Ticino. Members represent government and financial agencies, academic institutions and industry. Its mission is to foster the development of life sciences research and industry in southern Switzerland.

http://www.biopolo.ch/index.php

It must be clear that this list is not exhaustive and that the sector is moving fast. However, the authors are confident that this list provides you, the reader, with some important anchor points in Swiss Biotechnology industry.

2.3 Microtechnology:

In this chapter we will provide you with key insights into the Swiss microtechnology industry by providing you with an overview of the subsectors and a number of statistics. In addition we will present a number of recent developments, and will provide you with the opportunities for Dutch businesses.

2.3.1 Subsectors

The Swiss Microtechnology has its roots in the watch industry as the mother-of-all of industrialized precision products. Like modern watch industry, precision instruments and Medtech products incorporate small scale mechanical components sensors, actuators, energy sources, mechanical elements and intelligence. Microtechnology has been described as standing at the crossroads of mechanical engineering, electronics, materials science and computer science, microengineering gives a panoramic view of engineering disciplines (see http://bachelor.epfl.ch/page-5835-en.html). The Swiss Medtech industry forms a strong cluster which incorporates not only the manufacturers and their suppliers, but also the university hospitals and specific initiatives on a national level: CTI Medtech Initiative, CCMT – Competence Center for Medical Technology, and the Medical Cluster. A key institution in the field of the microtechnology is the CSEM (Centre Suisse d’éléctronique et de microtechnique) at Neuchâtel. It is a private applied research and development company, having micro- and nanotechnologies, microelectronics, systems engineering , microrobotics, photonics, information and communication technologies as its current main fields. 20% of the shares of CSEM are held by EPFL – Swiss Polytechnic at Lausanne, hence being the largest shareholder. Since January 2009, the EPFL – Swiss Polytechnic at Lausanne has an Institute for Micro-engineering with laboratories at Lausanne and Neuchâtel. It is based on three central pillars: micro- and nanotechnologies, optics, robotics (see: http://sti.epfl.ch/page-1674-en.html ).

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FIGURE 19: Swiss Medtech Industry: Manufacturer by Category

Source: Swiss Medtech Report 2010 (link: http://www.medtech-switzerland.com/en/index.php?section=downloads&cmd=1&category=2 ) FIGURE 20: Swiss Medtech Industry: Suppliers by Category

Source: Swiss Medtech Report 2010 (link: http://www.medtech-switzerland.com/en/index.php?section=downloads&cmd=1&category=2 )

2.3.2 Fact & Figures

Today, there are approximately 800 companies in Switzerland working in the field of manufacture of irradiation, electromedical and electrotherapeutic equipment, and manufacture of medical instruments and supplies. They employ about 35.000 people. Most remarkable is the fact, that R&D spending of the manufacturers of precision instruments (which includes manufacture of medical technology, office machinery and equipment including computers, and manufacture of watches and clocks) has quadrupled since 2000: TABLE 08: R&D Spending of the Swiss Precision Industry 2000 2008 Domestic intramuros R&D 395 mio. CHF 701 mio. CHF Foreign intramuros R&D 32 mio. CHF (2004) 750 mio. CHF Extramuros R&D of domestic organizations

120 mio. CHF (2004) 568 mio. CHF

Total 547 mio. CHF 2’019 mio. CHF Source: Bundesamt für Statistik (BFS), Forschung und Entwicklung in der schweizerischen Privatwirtschaft 2008, 2010 (Link: http://www.bfs.admin.ch/bfs/portal/de/index/themen/04/01/new/nip_detail.html?gnpID=2010-716 ) There are several factors behind these figures:

- Some big international companies building new or enlarging existing R&D facilities in Switzerland: IBM at Rüeschlikon, Google and Walt Disney at Zürich, Nokia at Lausanne;

- Growing R&D demand of the domestic companies in order to benefit from latest technological advances.

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2.3.3 Geographical spread

FIGURE 21: Map of the Swiss Medical Technology Industry

Source: Swiss Medtech Report 2010 (link: http://www.medtech-switzerland.com/en/index.php?section=downloads&cmd=1&category=2 ) FIGURE 22: Map of the Dutch Medtechnology Industry

Source: http://www.dutchbiotech.com/dut/map/map.php

2.3.4 Relevant developments

TABLE 09: Relevant Developments in Swiss Microtechnology Industry Case Description Source A. National Research Initiatives

The Cluster précision offers a platform for firms, component suppliers, institutions offering eduction and research which are active in the field of the precision industry and microtechnology. The organisation supports the members in the acquisition of customers and networking by means of regular cluster-events and joint marketing efforts.

http://www.cluster-precision.ch/index.php?page=89

The Medical Cluster brings together manufacturers, suppliers, service providers and research and development firms along the medtech value-added chain from throughout Switzerland. Today, the association has more than 280 members from all over Switzerland, from Germany and the US. The focus is on the following fields: - Supporting the innovation process throughout the value-added chain, from research through production to market. - Optimising the transfer of knowledge and technology. - Expanding the opportunities for initial and continuing education in the medtech sector. -Providing support for innovative young enterprises.

http://www.medical-cluster.ch/index.php?setLang=2

The FSRM - Fondation Suisse pour la recherche en microtechnique lends itself to the promotion of microtechnologies and applications.

http://www.fsrm.ch/?lang=e

On the 1st January, 2009 the Institute of Microengineering of the University of Neuchâtel was officially attached to the EPFL. This was an initiative of the Secretary of State for Education and Research, mandated by the Board of Swiss Federal Institutes of Technology, whereby the Swiss Confederation and Republic and Canton of Neuchâtel decided in October 2007 to integrate the Microengineering Institute of the University of Neuchâtel within the EPFL, while maintaining it in Neuchâtel. If the first stage consisted of integrating existing strucures, it is a real expansion which is being envisaged with the creation of new chairs in the next few years, particularly on the Neuchâtel site, a key

http://sti.epfl.ch/page-1725-en.html

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Case Description Source project being the creation of a new building. The result will be a unique institute and a common policy, bearing the slogan "one institute, two sites", with the broad outlines of "Green manufacturing" at Neuchâtel and "Biomedical technologies" at Lausanne. There are many new technologies to develop to meet current challenges, across the domains of health and environment. The Neuchâtel branch of the EPFL will have a mandate distinguished by research quality and industrial relations.

The Competence Center for Medical Technology (CCMT) serves as a link between hospitals, research and industry. Acting as an independend hub, the CCMT fosters the establishment of new contacts between various promoters and brings together potential partners.

http://www.ccmedtech.ch

The CTI Medtech initiative sees itself as an information platform and hub that links interested economic and scientific partners through working groups and joint projects. The immediate or short-term goal is to improve products and production processes. The longer term objective is to integrate new technologies with the products, thus obtaining the optimal advantage in the global competitive market. It pursues the following main goals: - To promote the innovation and competitiveness of Swiss medical technology - To stimulate the expertise transfer between research and medtech firms, new start-ups and small and medium-sized companies (SMEs) Since the CTI Medtech initiative was launched in 1997, CTI has sponsored over 150 medtech projects with federal grants in the amount of over 50 million CHF. For every franc spent by the Confederation, business partners invest an additional 1.50 CHF, which results in research funds of over 120 million CHF.

http://www.kti.admin.ch/netzwerke/00067/00070/index.html?lang=en

Case Description Source B. Cantonal/regional initiatives

Micronarc is a communication platform created by the governments of the seven cantons that constitute Western Switzerland (Berne, Fribourg, Geneva, Jura, Neuchâtel, Valais and Vaud). Its mission is to contribute towards: - Developing and promoting the regional scientific, industrial and economic base in the sectors of micro and nanotechnology, as well as its educational structures, R&D facilities, technology transfer, inward investment and its enterprises - Encouraging seamless interaction between all participants - Attracting other creative and innovative forces, generating jobs and ensuring future generations of a qualified workforce - Acting as a permanent source of reliable and accessible information, serving as an instrument for the dissemination and exchange of knowledge, both professional and public.

http://www.micronarc.ch/index-en.php

CSEM, Centre Suisse d' Electronique et de Microtechnique (Swiss Center for Electronics and Microtechnology), founded in 1984, is a private applied research and development center specializing in micro and nanotechnology, system engineering microelectronics and communications technologies. It offers its customers and industry partners custom-made innovative solutions based on its knowledge of the market and technological expertise derived from applied research.

http://www.csem.ch/site

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2.4 Nano-technology:

2.4.1 Subsectors / Fact & Figures

Nano-technology as a new fundamental science helps to create new or improve existing products and processes, rather than to create a new industry. In Switzerland the core of the R&D in nano-technology is the National Research Programme NRP 64: Opportunities and Risks of Nanomaterials. Its focus is divided into three major topics:

- Biomedical research: New nanomaterials can indeed lead to pioneering developments in pharmacology, medical testing and medical equipment The biomedical module deals with the potential health effects of the use of nanomaterials.

- Environmental research: Nanoparticles can be released into the water, air or earth either deliberately – for instance when plant protection products are used in farming – or unintentionally in the course of manufacturing, use or disposal. The projects of the environmental research module assess the effects of nanoparticles on the environment and on ecological systems.

- Other Fields : This module contains two projects examining the development and use of innovative nanomaterials, nanocomposites and novel building materials. In addition, they evaluate the potential health hazards and environmental risks associated with these materials throughout their life cycle.

- (Link: http://www.nfp64.ch/E/portrait/Pages/mainresearchtopics.aspx ) The program started in December 2010 and it will end in 2016. The total budget covering all 5 years is 12 Million Swiss Francs. The steering committee is made up of an international group of specialists. The program aims at a close cooperation within the EU Research Framework programmes. In the case of nanotechnology this works within the ERA-NET EuroNanoMed (see link: http://www.euronanomed.net ). The research activities are coordinated via the nano-tera.ch network.

2.4.2 Geographical Spread

FIGURE 23: Distribution of the nano-tera.ch Research Groups

Source: www.nanotera.ch

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2.4.3 Relevant Developments

TABLE 10: Relevat Developments in Swiss Nanotechnology Sector Case Description Source A. National Research Initiatives

Swiss National Research Program NRP64 financed by the Swiss National Science Foundation. It concentrates on biomedical research, environmental research and other fields.

http://www.nfp64.ch/E/Pages/home.aspx http://www.nfp64.ch/SiteCollectionDocuments/nfp64_programmportraet_e.pdf

MaNEP – Matériaux aux proprieties électroniques exceptionnelles is a long term research programme focusing on new electronic materials which are at the forefront of our future technological environment. It gathers a network of 250 scientists from Swiss universities and industry.

http://www.manep.ch/index2_en.html

The Swiss Nanoscience Institute (SNI) developed from the National Center of Competence in Research (NCCR) “Nanoscale Science” and constitutes a priority program of the University of Basel. It combines basic science with application-orientated research. In various projects researchers focus on nanoscale structures and aim at providing new impact and ideas to the life sciences, to the sustainable use of resources, and to information and communication technologies. The University of Basel as the leading house coordinates the NCCR network of the involved universities, federal research institutes, industrial partners and the Argovia-network, which is financed by the Swiss Canton of Aargau. The various research groups focus on the following seven subject areas: - Nanobiology - Quantum Computing and Quantum Coherence - Atomic and Molecular Nanosystems - Molecular Electronics - Functional Materials by Hierarchical Self-Assembly - Applied Projects in Nanoscience and Nanotechnology - Nanoethics

http://www.nanoscience.ch/nccr/


As a cooperation programme between the Swiss National Science Foundation (SNSF) and the Innovation Promotion Agency (CTI), the National Research Programme "Smart Materials" (NRP 62) is committed to the development of new intelligent materials and advancing promising projects to the R&D stage. NRP 62 will operate with CHF 11 million for a research duration of five years

http://www.nfp62.ch/E/Pages/home.aspx

Nano-Tera is a Swiss federal program funding 19 four-year research projects (RTD), 15 focused projects (NTF) and 9 projects of education and dissemination (ED). The total consolidated budget is over CHF 120 million, of which 50% is funded by Nano-Tera and 50% participants' own contributions. The Nano-Tera initiative aims to bring Switzerland to the forefront of a new technological revolution, using engineering and information technology to improve the health and security of humans and the environment in the 21st century.

http://www.nano-tera.ch

B. European Research Projects

The EuroNanoMed ERA-NET initiative comprises 24 partners from 18 countries/regions. EuroNanoMed aims at fostering the competitiveness of European nanomedicine players through the support of trans-national collaborative and multidisciplinary Research and Technology Development (RTD) projects with participants from academia, clinical/public health communities, and industry (particularly small and medium-sized enterprises).

http://www.euronanomed.net

C. National Research Institutions

The Micro and Nano Science Platform is a network of researchers within ETH Zurich with the goal to promote research and education as well as technology development and transfer in the field of micro and nano sciences.

http://www.micronano.ethz.ch/

The Materials Research Center is a platform for all materials-related research at ETH Zurich.

http://www.mrc.ethz.ch

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Materials research at EPFL encompasses essentially all classes of solid materials aimed at a wide array of applications that span from modern microelectronic devices over hot blades of aircraft turbines to biomedical devices. Laboratories active in Materials comprise, in addition to the laboratories of EPFL's Institute of Materials also many laboratories within other research Institutes of the EPFL.

http://phd.epfl.ch/page-19769-en.html

On the 1st January, 2009 the Institute of Microengineering of the University of Neuchâtel was officially attached to the EPFL. This was an initiative of the Secretary of State for Education and Research, mandated by the Board of Swiss Federal Institutes of Technology, whereby the Swiss Confederation and Republic and Canton of Neuchâtel decided in October 2007 to integrate the Microengineering Institute of the University of Neuchâtel within the EPFL, while maintaining it in Neuchâtel. If the first stage consisted of integrating existing strucures, it is a real expansion which is being envisaged with the creation of new chairs in the next few years, particularly on the Neuchâtel site, a key project being the creation of a new building. The result will be a unique institute and a common policy, bearing the slogan "one institute, two sites", with the broad outlines of "Green manufacturing" at Neuchâtel and "Biomedical technologies" at Lausanne. There are many new technologies to develop to meet current challenges, across the domains of health and environment. The Neuchâtel branch of the EPFL will have a mandate distinguished by research quality and industrial relations.

http://sti.epfl.ch/page-1725-en.html

Competence Centre for

CCMX federates the strengths of four ETH Domain institutions (EPFL, ETH Zurich, EMPA, PSI) and of CSEM, and involves the active participation of partners from industry, from industrial associations and from Swiss universities. The Centre is headed by a Steering Committee comprising members from EPFL (chair), ETH Zurich, PSI, Empa, CSEM and industry. At the core of the Centre’s activities are ERUs – Education and Research Units – and an Analytical Platform. The ERUs offer programmes of research and education, including technology transfer, in targeted fields of activity identified together with the Swiss industry: - Surface, coatings and particles engineering (SPERU) - Materials for the life sciences (MatLife) - Metallurgy (MERU)

http://www.ccmx.ch


The section 125 of EMPA, "Nanoscale Materials Science", addresses scientific questions and technological problems in surface science and -technology, magnetism, nanoscience and –technology. Our interest ranges from the study of atomic and molecular nanosystems by means of advanced scanning probe microscopy, the fabrication of hard coatings, coatings for medical applications, magnetic thin films and devices, magnetic shape memory alloys, to surface analysis services by TOF-SIMS, XPS and scanning Auger. The section 125 is organized in five research groups and has a strong link to the NCCR on Nanoscale Science at the University of Basel, Switzerland, and SwissProbe AG. The five research groups profit from staff with a background in solid state physics, chemistry, mechanical and electrical engineering and perform projects ranging from basic science to application oriented development including problem solving and analytical services for industry. For more detailed information follow the group links.

http://www.empa.ch/plugin/template/empa/941/*/---/l=2

Section 127 nanotech@surfaces of EMPA understands itself as a classical research laboratory, with activities in fundamental and applied research in the field of nanostructures on surfaces. The principal aim of the laboratory is the transfer of results from basic research via applied research projects to industry. With our actual priorities "Electron Emission from Carbon Nanotubes" and "Molecular Electronics" we satisfy this target perfectly. In the topic "Electron Emission from Carbon Nanotubes" we have a number of projects with industrial partners around the world running or in preparation. These applied research projects are mainly focused on the development of prototype devices using carbon nanotubes in a key function. The second set up priority "Molecular Electronics" is an activity in classical basic research and with a long term perspective regarding applications with are thinkable in 10 or more years.

http://www.empa.ch/plugin/template/empa/848/*/---/l=1

The Paul Scherrer Institute, PSI, is the largest research centre for natural and engineering sciences within Switzerland, with its research activities concentrated on three main subject areas: Structure of Matter, Energy and the Environment, and Health. The PSI develops, construct and operate complex large-scale research facilities. Every year, more than 2000 scientists from Switzerland and other countries travel

http://www.psi.ch

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Case Description Source to PSI in order to perform experiments at our unique facilities. PSI has about 1400 staff, with an annual budget of approximately CHF 300 million, and is primarily financed by the Swiss Confederation. PSI is part of the ETH Domain, with the other members being the two Swiss Federal Institutes of Technology, ETH Zurich and EPFL Lausanne, as well as the Swiss Federal Laboratories for Materials Science & Technology, Empa, the Swiss Federal Institute of Aquatic Science and Technology, Eawag, and the Swiss Federal Institute for Forest, Snow and Landscape Research, WSL. The Institute is located on both sides of the River Aare, in the Villigen and Würenlingen municipal areas, in the Canton of Aargau. PSI operates large scientific research facilities, such as the SINQ neutron source, the Swiss Light Source (SLS) and the SµS muon source, which offer out-of-the-ordinary insights into the processes taking place in the interior of different substances and materials. These are the only such facilities within Switzerland, and some are the only ones in the world.

D. Regional initiatives

The Fribourg Center for Nano-Materials FriMat, hosted by the Fribourg University, is incorporated as an interdisciplinary research institute into the Faculty of Sciences of the University. In partnership with the Adolphe Merkle Institute and local industries, the new institute FriMat will conduct materials oriented research and development of new advanced functional materials. Such materials are relevant to the sustained economic growth of Switzerland as a knowledge-based economy. FriMat stands for interdisciplinary cutting edge research and a knowledge pool that offers teams of scientists for problem solutions. FriMat is represented in the Scientific and Technology Platforms of Fribourg, e. g. the „Réseau Plasturgie“, „Réseau Nanotechnology“, etc

http://frimat.unifr.ch

The Adolphe Merkle Institute (AMI) is a recently established independent center of competence at the University of Fribourg, which focuses on research in the area of soft nano- and materials science. It is located in the heart of Western Switzerland, in the bilingual canton of Fribourg. In the landscape of Switzerland’s research institutions, AMI is in many aspects unique. Its focus on soft nanomaterials is unmatched in Switzerland and beyond. AMI prides

http://www.am-institute.ch/en

Case Description Source itself with an unusual blend of fundamental and application-oriented research within a multidisciplinary setting.

The Nano-Cluster Bodensee is a regional initiative focusing on - Promotion of the commercialisation of nano- and microtechnology research results. - Enhancement of innovation and competitiveness of companies in the area of the "Lake of Constance" and maintenance respectively creation of jobs.

http://www.ncb.ch/en/index.html

IBM has maintained a research laboratory in Switzerland since 1956, located on its own campus in Rüschlikon near Zurich since 1962. As the European branch of IBM Research, the mission of the IBM Research - Zurich lab — in addition to pursuing cutting-edge research for tomorrow’s information technology — is to cultivate close relationships with academic and industrial partners, be one of the premier places to work for world-class researchers, to promote women in IT and science, and to help drive Europe’s innovation agenda. The Nanotechnology Center will be a unique facility for exploratory research. It will not be a production or a pilot line with fixed processes or wafer sizes. Rather, it will be a state-of-the-art exploratory cleanroom fabrication facility combined with "noise-free" labs shielded against external vibrations, acoustic noise, electromagnetic fields and temperature fluctuations. Some of the research fields to be pursued at the Nanotechnology Center: - MEMS/NEMS - Spintronics/magnetism - Nanowires - Carbon-based devices - Functional materials - Directed self-assembly - Electronic packaging - Thermal management - 3D integration - Optical interconnects - Photonics - Simulation and theory

http://www.zurich.ibm.com/nanocenter

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2.5 Opportunities for Dutch Business

In all the fields described above, there is a strong R&D-focus. However, due to the individual characteristics of the three fields, the approach to find a collaboration or directly doing business in Switzerland must be different:

TABLE 11: Overview of Selected Swiss Life Sciences Industries and Opportunities for Dutch Businesses Biotechnology Microtechnology &

medical technology Nano-technology

Strategic approach Entrepreneurial driven Strategic/Business driven

Research Driven

Governance Biotechnology market is clustered around 4 areas (see above)

Micro and medical-technology companies are in general small sized enterprises scattered all across Switzerland. They are well organized in a cluster.

Nano-technology is strongly research driven. Each Canton/ University has its own specialty.

Opportunities for Dutch Businesses

Collaboration (research and/or business) Fundraising (Note: Swiss presence advisable) Acquisitions/ Investments

Joint Ventures Supplier and/or Manufacturing relationships

Joint Research (CH-EU-NL) Collaboration

Strategy Dutch Businesses should explore the different areas based their specific needs and choose the region with most synergies and network effects

Dutch Businesses interested in this industry can contact the cluster organizations as a first point of contact and identify potential companies.

Dutch specialist can collaborate directly with suitable partners and make use of existing research collaborations (e.g. EU-EP7)

Most likely interested audience

Academics Innovative SME Entrepreneurs (Corporate) Investors

CEO / Mgt Teams (Corporate) Investors

PhD Candidates Universities (Corporate) R&D

First contacts: Representatives of the Biotechnology regional organisations

Industrial cluster organizations

NCCR’s

3 How To Do Business in Switzerland

3.1 General

With 7.8Million inhabitants on 41’285km2, Switzerland inhibits half the population of the Netherlands on an almost equal area (41’848km2). However, due to the picturesque Alps, a large part of the Swiss area cannot be build upon for housing purposes. Switzerland only has 16 towns with more than 30’000 inhabitants with the agglomerations of Zurich (1.15Million), Geneva, and Basel (each 500’000) being the biggest. FIGURE 24: Population Distribution: Agglomerations, Towns and Villages in Switzerland

Source: http://www.bfs.admin.ch/bfs/portal/de/index/regionen/thematische_karten/maps/bevoelkerung/bevoelkerungsstand/0/bevoelkerungsstand.NewWindow.parsys.0003.4.Preview.html

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3.2 Culture, Cantons

Switzerland is a heterogeneous country. People are living in different habitats (cities, urban areas, and mountain regions), they speak 4 different national languages (of which German, French, and Italian are the official languages), and they adhere to different religious confessions. Politically, Switzerland is made up of 26 cantons and ca. 2.600 local authorities. FIGURE 25: The 25 Cantons of Switzerland with Their Capital Towns

Source: http://www.bfs.admin.ch/bfs/portal/de/index/regionen/thematische_karten/maps/raumgliederung/institutionelle_gliederungen.NewWindow.parsys.0002.2.Preview.html The official languages are German, French, and Italian, while German forms with 64% the majority. While the official German language which is taught at school is the standard written language (according to Duden with some minor Swiss specialities mentioned in the Duden), the Swiss of the German-speaking part of Switzerland actually speak a peculiar Southern-German dialect in some cases with borrowings from the French vocabulary. To make things worse, these dialects differ widely from canton to canton and even between villages and are spoken with pride. Being confronted with other mother-tongues in their home country, Swiss People typically have a basic understanding of a second national language (which is provided at school). In a business environment English is generally accepted as common language without hesitation.

FIGURE 26: Languages in Switzerland

Source: http://www.bfs.admin.ch/bfs/portal/de/index/regionen/thematische_karten/maps/bevoelkerung/sprachen_religionen.NewWindow.parsys.0002.3.Preview.html As a foreigner in Switzerland you will soon recognize that there is an amount of rivalry between the German-speaking, the French-speaking, and the Italian-speaking parts of Switzerland. The Swiss sometimes speak ironically of the “Röstigraben/rideau de Röschti”, i.e. the trench of the Röschti (Röschti is an excellent Swiss national dish). Foreigners, having lived on both sides of Röschtigraben, will indicate a certain difference in the mentality which is sometimes reflected in the voting behavior. In addition the cultural bonds of the different regions to Germany, France, and Italy respectively can be felt.

3.3 Does & don’ts

Swiss are highly professional and reliable and expect their partners to act in the same way. Coming on time and keeping to the schedule is of great importance in Switzerland. During office hours one should keep in mind that lunchtime (anywhere between 11:30 - 13:30) is not working time, and you should not be surprised if you reach the voicemail. Many Swiss know the Dutch for their lunch consisting out of a sandwich and a glass of milk and certainly do not understand how to live on something like that. Switzerland has an excellent public transport network. Due to the reliability and in-train facilities for businessmen and –women, you can turn travelling and commuting

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time by train into effective working time. The trains are running according to a regular interval timetable with a high frequency all over Switzerland. Switzerland has signed a series of bilateral agreements with the EU and agreed to the free movement of persons as is known within the European Union. As a result Dutch citizens can work and live in Switzerland under the pre-requisites that one has to have a valid working contract or be self-employed. As such it is a myth that it is impossible to live in Switzerland. This is obviously proven by the fact that 21.9% of the Swiss population is of foreign origin, giving Switzerland one of highest foreigner-to-total-population ratio in Europe. As a foreign-resident you are clearly expected to integrate and speak at least one of the national official languages. As a business partner you will find that the Swiss adapt themselves to their foreign partner in a very similar way as the Dutch. Furthermore, due to the academic nature of the life-sciences industry you will find in general a very cosmopolitan audience with many non-Swiss.

4 Laws & Regulations

4.1 General

All federal levels, i.e. the confederation, the cantons, and the local authorities, have their own responsibilities and levy their own taxes. It is the status of the cantons which gives the federal system of Switzerland its peculiarity. The cantons have a permanent constitutional status and a high degree of independence. Under the Federal Constitution, all cantons are equal in status. Each canton has its own constitution, parliament, government, and courts. However, there are considerable differences between the individual cantons, most particularly in terms of number of population, physical geography, economic structure, and political tradition. The character of each canton is largely determined by its geographical location, its predominant culture including language and confession, and its dominant industry. In relation to almost all state activities, certain duties and powers are allocated to both, the confederation and the cantons, by the Federal Constitution. This system is based on thre fundamental principles: 1) the cantons are autonomous (sovereign) unless a federal law is limiting the autonomy; 2) the cantons are competent for any task that is not explicitly allocated to the confederation by the Federal Constitution (subsidiarity); 3) the cantons are extensively contributing to the federal decision-making. Health care, education including universities and the universities of applied sciences, promotion of trade and industry, environment and spatial planning, as well as culture are among the policy areas in which the cantons enjoy a large degree of latitude. Inter-cantonal co-operation is institutionalized in government and administrative conferences and is supported by a dense network of inter-cantonal accords. The local authorities form the third federal level of the state. Their autonomy and their tasks are defined by the respective cantonal law. They are political entities with their own legal personality, making their own decisions, and structuring their own internal organization. Their responsibilities are mainly related to schools, social services, spatial planning, and public utilities. In order to fulfill their tasks, they manage their own budget and levy their own taxes. Link: http://www.ch.ch/private/index.html?lang=en

4.2 Swiss legal system

The legal foundation of the confederation is the Federal Constitution. It contains the general rule for the functioning of the state. It regulates the basic rights of the people and the participation of the citizens in the political process. The Federal Constitution distributes the tasks between the confederation and the cantons. (An

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English version is provided by the Swiss federal government: http://www.admin.ch/ch/e/rs/1/101.en.pdf). Switzerland has a civil law legal system. Enacted or written law is the primary source of jurisdiction. Civil law is divided into public and private law. Public law governs the organization of the state, and the relationship between the state and private persons/entities. Private law governs the relationship between private persons/entities. It is divided into the Swiss Civil Code (which governs the status of individuals, family law, inheritance law, and property law), and the Swiss Code of Obligations (Swiss contract law and company law). All these laws are published in the three official languages of Switzerland. The Swiss-American Chamber of Commerce publishes an inofficial English translation of the most important federal laws (see link: http://www.amcham.ch/publications). Each canton publishes its laws and regulations on their website. The links are given in the appendix. The Swiss court system has a pyramidal structure. The civil, criminal and administrative courts of first and second instance form the lower half of the pyramid in the cantons (typically there are several court districts within a canton which cover a number of communities). The Federal Supreme Court forms the top. A new single Federal Code of Civil Procedure was introduced in January 2011 which unifies the civil procedure in Switzerland especially among the cantons to a large extent and. The Federal Supreme Court as the court of last instance has the power to decide on appeals from cantonal courts. In order to avoid any appeals against laws that the people of Switzerland had previously adopted by way of a referendum, federal laws are not subject to any judicial review under the Constitution. There are four federal courts:

1. The Federal Supreme Court (Bundesgericht / Tribunal fédéral) at Lausanne, 2. The Federal Criminal Court (Bundesstrafgericht / Tribunal pénal fédéral) at

Bellinzona, 3. The Federal Insurance Court (Eidgenössisches Versicherungsgericht /

Tribunal fédéral des assurances) at Lucerne; 4. The Federal Administrative Court (Bundesverwaltungsgericht / Tribunal

administratif fédéral) at Berne and from 2012 onwards at Saint-Gall. The Swiss court system is known for its efficiency. Cases are normally dealt within a short period of time in an international comparison. In addition, arbitration plays a important role in handling business disputes. In particular, the Chambers of Commerce in Basel, Berne, Geneva, Lausanne, Lugano and Zurich offer international arbitration under the Swiss Rules. (see: http://www.arbitration-ch.org/arbitration-in-switzerland/ ). Switzerland has signed the European Convention of Human Rights. Despite the Swiss refusal to enter the European Economic Space in 1992, the principle of “euro-compatibility” is a major concern of the Swiss federal government. It has chosen to directly implement a number of EU directives into federal statutes, many of them in the field of consumer law.

In addition, Switzerland has concluded a number of bilateral agreements with the European Union (see below).

4.3 Tax system

In line with the federal structure of the Swiss state, the confederation, the cantons, and the communities decide on their own budgets and levy their own taxes. The right of the communities to levy taxes is vested in the cantons by cantonal law. The cantons (and, subject to the respective cantonal law, the communities) remain free to set their tax rates or establish new taxes, except for tax objects already taxed under federal law. Inter-cantonal double taxation is prohibited. In addition, the federal law for the harmonization of direct taxes formulates the principles for the direct taxes levied in the cantons. As a result of this system the tax burden for individuals as well as legal entities depends on where one lives or incorporated. FIGURE 27: Average Tax-Rate in the Capital Towns of the Cantons 2009

Source: BFS, Steuerbelastung in der Schweiz, 2009; own calculations

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The Federal Constitution regulates the taxes of the federal government. Direct taxes are limited to a maximum of 11.5 percent on the income of private individuals, and to a maximum of 8.5 percent of the net profit of legal entities. The value added tax on the supply of goods, on services (including goods and services for personal use) and on imports, amounts to a standard rate of a maximum of 8 percent. A number of special consumption taxes are levied on tobacco and tobacco products, distilled spirits, beer, automobiles and their parts, petroleum and other mineral oils, natural gas and products obtained by refining these resources, as well as on motor fuels. In addition the confederation levies a stamp duty on securities, on receipts for insurance premiums and on other commercial deeds except those relating to property and mortgage transactions, a withholding tax (Verrechnungssteuer / impôt anticipé) on income from moveable capital assets, on lottery winnings and on insurance benefits, and customs duties. According to the federal law for the harmonization of the direct taxes of the cantons and the communities, the cantons levy the following direct taxes: income and property tax from private individuals, a profit and capital tax from legal persons, a withholding tax from specified natural and legal persons and a tax on the value of properties sold. The law regulates all formal aspects of the calculation and collection of the taxes, and the tax-related criminal law. It does however not regulate the tax rates. Hence, they vary from canton to canton and among the communities. In addition, almost all cantons levy an inheritance and/or gift tax. Amendments to the Federal Constitution and hence to the regulations concerning the principles governing the federal taxes must put to the vote of the people and the cantons (mandatory referendum). This principle also applies to all cantonal constitutions. As a result of Swiss federalism, the tax rates between communities and cantons vary considerably. In addition to the mandatory referendum, the inter-cantonal and inter-communal competition between the different locations is putting an efficient check on plans for a tax increase. (In addition, there is a strong negative dependence between tax rates and prices and rents for housing in the respective cantons/communities).

4.4 Import & Export Regulations

In addition to the EFTA Convention and the Free Trade Agreement with the European Union (EU) of 1972, Switzerland currently has a network of 24 Free Trade Agreements (FTAs) with 33 partners outside the European Union (EU). Switzerland normally concludes its FTAs together with its partners Norway, Iceland and Liechtenstein, in the framework of the European Free Trade Association (EFTA). Nevertheless, Switzerland also has the possibility to enter into FTAs outside the EFTA framework, as it has been the case of Japan and the Faroe Islands. (General link: http://www.seco.admin.ch/themen/00513/00600/00601/index.html?lang=en) The Mutual Recognition Agreement on technical barriers to trade with the EU aims at dismantling technical barriers to trade calls for the mutual recognition of conformity tests for most industrial products. The agreement defines the areas where Swiss legislation is considered equivalent to EU law. In these areas, a single conformity test is sufficient for the product to be marketed in both Switzerland and the EU. Conformity tests carried out in accordance with Swiss law on products covered by the agreement allow manufacturers to export their products directly to the EU with the required EC label. In the fields covered in this report, the Mutual Recognition Agreement between the EU and Switzerland covers medical devices (chapter 4), good laboratory practice (GLP) (chapter 14), and medicinal products, good manufacturing practice (GMP), inspection and batch certification (chapter 15). Recently, the coverage of the sectoral annex on GMP, inspection and batch certification (chapter 15) has been enlarged to include also active pharmaceutical ingredients and advanced therapy medicinal products. Nonetheless, in accordance with the Swiss law on therapeutic products, companies that produce medicinal products or trade them must obtain an establishment license (authorization) from Swissmedic. The license is linked to a list of requirements that are controlled by Swissmedic through inspections at the firms and laboratories. Switzerland is a member of all the export control regimes and is actively involved in promoting targeted checks on the export of goods and technology (know-how) which could be used in the production of weapons offer mass destruction or the proliferation of conventional arms. Whilst Switzerland is following a open approach to industrial products, it is extremely protective of its agricultural industry. High tariffs and extensive domestic subsidies encourage domestic production, which currently produces about 60% of the food consumed in the country.

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4.5 Bilateral agreements with the EU

In 1992 Switzerland submitted an application for accession to the EU. However, in a referendum in the same year the people rejected a membership of the EEA (European Economic Area). In a 2001 referendum the Swiss were again asked whether or not to apply for a full EU membership, was rejected with one of the clearest outcomes of 76.8%. The federal concept of the European Community based on sovereign national states poses a problem to Switzerland since the Swiss federal concept relies on the cantons as the prime place of sovereignty. FIGURE 28: Switzerland: EU, EFTA (Iceland, Liechtenstein, Norway and Switzerland)

Source: http://eeas.europa.eu/delegations/switzerland/press_corner/focus/focus_items/20100818_de.htm There has not been any convincing solution to this problem so far and this fact has inhibited a serious discussion about a EU-membership in Switzerland. Switzerland, with the consent of the ruling bodies of the EU, therefore opted for a pragmatic approach based on selective agreements and for directly implementing a number of EU directives into federal statutes. The process started with the Free Trade Agreement of 1972. In the bilateral agreements of 1999 two, for this report very relevant issues were agreed upon:

- Free Movement of Persons Agreement effective since 01 June 2002 (with amendments effective since 01 April 2006, and 01 June 2009 respectively): The labour markets are to be opened gradually. Following transitional periods, Swiss and EU citizens will be able to take up residence in any of the partner countries and will enjoy the same employment rights. The prerequisites are to have a valid employment contract, to be self-employed or to have sufficient independent means, and to have health insurance. Fully free movement of persons between Switzerland and the whole of the EU (27 countries) is planned to begin by mid 2019.

- Research Agreement effective since 01 June 2002: Swiss researchers as well as companies may participate in the EU reseach framework programmes.

Switzerland has also signed the Schengen Treaty. One of the main current challenges of the bilateral way between Switzerland and the EU concerns the adjustment of existing agreements to new legal developments. The EU is increasingly demanding that Switzerland automatically adopts developments in EU laws that are relevant to the bilateral agreements. In defense of its national sovereignty, Switzerland has declined any form of automatism while at the same time signalling its readiness for future negociations on such matters.

4.6 Employment regulations

The employment contract is regulated in the Contractual law (Obligationenrecht / Code des obligations) in chapter 10. The employment contract between employer and employee sets down the working relationship in writing. The law does not foresee any special form for this contract, but there are a few important points of an employment contract:

- the trial period may not exceed 3 months, - the employment contract contain any ‘immoral’ or illegal tasks, - the period of notice must be clearly stated.

An unlimited employment contract (the duration of which is not fixed) may be terminated by one of the two parties taking account of the period of notice stipulated in the contract and the date of giving such notice. The notice period is 7 days during the 3-months trial period, then one month. After 1 year, the notice period becomes 2 months. After 5 years, it becomes 3 months. If requested, the party giving notice has to give written reasons for his decision. A temporary employment contract, with a duration defined by both contracting parties, expires at the end of the period agreed. Generally, this type of contract cannot be terminated in advance. The General Labour Agreement (GLA) is a contract between employer(s) or their representatives and employees’ federations or trade unions and governs employment relationships. A GLA is relevant if employees and employers belong to an affiliated federation or trade union or if its applicability has been agreed in some other way. If the GLA was declared as generally binding by the competent authority, it is applied for the relevant branch irrespective of federation or trade union membership. Only provisions that are more favourable for the employee may be included in the individual employment contract. The list of the approved GLAs can be found under http://www.seco.admin.ch/themen/00385/00420/00430/index.html?lang=de . A statutory minimum wage does not exist in Switzerland, though some GLA’s stipulate minimum wages for certain sectors. According to the law, employees are

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entitled to specially indexed remuneration for night or weekend work, as well as work on public holidays. The Swiss social security system is based on three pillars:

- The first pillar – old age, survivors’ and invalidity insurance – is a general compulsory insurance for everyone. Its aim is to cover basic living costs.

- The second pillar is the occupational benefit plan. Together with the first pillar, it aims to ensure that the insured person maintains his previous standard of living in an appropriate way.

- The third pillar consists of voluntary individual provident measures.

5 References

5.1 Selected Reports

TABLE 12: Selected Reports on the Swiss Life Sciences Industries Swiss Biotech Report 2010

Swiss Nanotech Report 2010

Swiss Medtech Report 2010

http://www.swissbiotech.org/Php5/aa2/UserFiles/File/pdf/swissbiotechreport/Swiss_Biotech_Report_2010.pdf

http://www.sbf.admin.ch/htm/dokumentation/publikationen/forschung/Swiss_Nanotech_Report_2010.pdf

http://www.medtech-switzerland.com/en/index.php?section=downloads&cmd=1&category=2

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5.2 Useful Contacts

TABLE 13: Selected Contacts in the Life Sciences Industries

Organization Link Some Comments

Lake Geneva Life Science Cluster

http://www.bioalps.org/ Life science-cluster in Western Switzerland

biopolo Ticino http://www.biopolo.ch Life science-cluster in Southern Switzerland

BioValley Basel

http://www.biovalley.ch/ Life science-cluster of the Basel Area

life science Zurich

http://www.lifescience-zurich.ch/index.php?id=16&L=1

Life science-cluster of the Zurich Area

Swiss Biotech Organization

http://www.swissbiotech.org/home

BIO-TECHNOPARK® Schlieren-Zurich

http://www.bio-technopark.ch/

The biggest Biotechnology-Technopark in Switzerland

Swiss Life Sciences Database

http://www.swisslifesciences.com/swisslifesciences/db/index.php

Directory and information platform for Swiss companies in the field of Life Sciences and Biotechnology

Dutch Life Sciences Database

http://www.dutchbiotech.com/dut/db/index.php

Directory and information platform for Dutch companies in the field of Life Sciences and Biotechnology

Biotechgate – The Global Biotech

http://www.venturevaluation.com/vv_web/%C3%

Provided by the Venture Valuation AG, a private


Database

BCber-biotechgate.html database and company valuation service

micronarc

http://www.micronarc.ch/

Micro-nanotech Cluster of Western Switzerland

medical cluster

http://www.medical-cluster.ch/

Cluster organization of the Medtech Industry

Präzisionscluster – Cluster de précision

http://www.cluster-precision.ch/

Cluster organization of the Precision Technology Industry

nano-tera.ch

http://www.nano-tera.ch Broadly based Swiss iniative for supporting research in nanotechnology

Nano-Cluster Bodensee

http://www.ncb.ch/en/index.html

International Nanotech-cluster of the area of the Lake of Constance

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TABLE 14: Selected Contacts for Economic Promotion


Swiss National Organisation for Economic Promotion

http://www.osec.ch/internet/osec/en/home/import.html

Swiss Business Network: The programme has five main goals: - To inform the Swiss and European import economy about new

- market sources - To strengthen trade institutions and business sector associations

- in the trade promotion process

- To increase the competitiveness of SMEs in selected partner

- countries - To develop the manufacturing and exporting skills of SMEs in

- selected partner countries - To establish qualified trade contacts between SMEs from

- emerging markets and markets in transition and the Swiss and

European import economy

Basel Area Economic Promotion

http://www.baselarea.ch/en.html

Organisation for Economic Promotion of the Basle Area

Berne Area Economic Promotion

http://www.berneinvest.com/3297/3512/3513.asp

Organisation for Economic Promotion of the Berne Area

Zurich Area Economic Promotion

http://www.greaterzuricharea.ch/content/01/01_001de.asp

Organisation for Economic Promotion of the Zurich Area

Economic Promotion of Western Switzerland

http://www.ggba-switzerland.ch

Organisation for Economic Promotion of Western Switzerland

6 Annex

6.1 Comparison between Switzerland and The Netherlands: Selected

Economic Indicators

FIGURE 29: The WEF Competitive Landscape Competitive Landscape of Switzerland

Competitive Landscape of The Netherlands

Source: WEF, The Global Competitiveness Report 2010-2011 (http://www.weforum.org/issues/global-competitiveness )

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TABLE 15: Collection of Miscellaneous Rankings and Comparison Between Switzerland and The Netherlands

Source Switzerland The Netherlands Link

WEF Global Competitiveness Report 2010-2011

- Overall Index #1/139 #8/139

- Basic requirements #2/139 #9/139

- Efficiency enhancers #4/139 #8/139

- Innovation and sophistication factors

#2/139 #8/139

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

innometrics, Innovation Union Scoreboard 2010, 01 February 2011

#1/34 #9/34 http://ec.europa.eu/research/innovation-union/pdf/iu-scoreboard-2010_en.pdf

IMD: Overall Competitiveness 2010

#4/58 #12/58

- Economic Performance #10/58 #14/58

- Government Efficiency #3/58 #17/58

- Business Efficiency #7/58 #715/58

https://www.worldcompetitiveness.com/OnLine/App/Index.htm

Environmental Performance Index 2010

#2/163 #47/163 http://epi.yale.edu/Countries

City Mayors 2010 Zurich #2 Geneva #3 Bern #9

Amsterdam #13 http://www.citymayors.com/features/quality_survey.html

Country Brand Index 2009 #11 n.a. http://www.futurebrand.com/think/reports-studies/cbi/2009/overview

Red Herring 100 Europe Winners

2009 14 winners 4 winners http://www.herring100.com/RHE2010/pastwinners/RHE2009/RHE2009html.html

2010 3 winners 4 winners http://www.herring100.com/RHE2010/rhe2010winners/rhe2010winners.html

Times Higher Education-QS World University Rankings 2009: TOP 200 WORLD UNIVERSITIES

ETHZ #20 EPFL #42

Geneva #72 Zürich #92 Basle #108

UvA #49 Leiden #60 Utrecht #70 Delft #83

Erasmus #108

http://www.timeshighereducation.co.uk/Rankings2009-Top200.html

6.2 Number of Companies and Employment in Swiss Biotechnology

and Microtechnology Industry 2008

There were 229 biotechnology companies in Switzerland, 159 of which counted as core biotech companies undertaking R&D-activities. The total number of employees amounted to 17.993. The industry’s share in the total chemical industry (including coke, refined petroleum, chemicals and pharmaceuticals) was approx. 25%. In the microtechnology sector (watch- and related industries, the manufacture of medical equipment and instruments), Switzerland counted 1.473 companies with 83.084 employees, amounting to approx. 60% of the manufacture of computer, electronic and optical products (sector 26 acc. to NACE rev. 2)

TABLE 16: Number of Enterprises and Employees According to Industry Divisions in 2008

Number of companies with … employees (full-time equivalents)

Total companies

Total employees

NOGA 2008 (NACE rev. 2)

Sector, industry division

0-9 10-49 50-249

>249 n.a.

Sector 2 57.649 12.290 2.640 485 0 73.064 1.063.231

thereof: Manufacturing (10-33) 26.765 6.024 1.779 412 0 34.980 711.373

19-20 Manufacture of coke and refined petroleum products; Manufacture of chemicals and chemical products

370 161 83 28 0 642 36.420

21 Manufacture of basic pharmaceutical products and pharmaceutical preparations

91 53 38 24 0 206 35.248

Total Manufacture of coke, refined petroleum, chemicals, and pharmaceutical products

461 214 121 52 0 848 71.668

thereof:(1)(2)

19-21

Biotechnology companies: - Core biotech companies - Total biotech companies

92

73

64

159 229

17.993

Manufacture of computer, electronic and optical products

1.318 537 283 74 0 2.212 115.593 26

thereof:

2660

325001

Manufacture of irradiation, electromedical and electrotherapeutic equipment; Manufacture of medical instruments and supplies(3)

459 180 63 29 56 787 34.249

Manufacture of watches and

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Number of companies with … employees (full-time equivalents)

Total companies

Total employees

NOGA 2008 (NACE rev. 2)

Sector, industry division

0-9 10-49 50-249

>249 n.a.

microtechnical products(4) 232 238 176 40 686 48.835

Sources and annotations: BFS, Marktwirtschaftliche Unternehmen nach Wirtschaftsabteilungen und Grössenklasse - NOGA 2008 (1) Swiss Biotech Report 2010, data supplied by Ernst & Young, p. 35. (2) Dr. Patrick Frei, The Swiss Phama Biotech Landscape, May 2009. The distribution by size of the companies is reported as

follows: 1-10 employees 40%, 11-50 employees 32%, >50 employees 28%, based on a total number of 312 thereof 71 core companies. Further informations on www.swisslifesciences.com. The data used in the table above are taken from Swiss Biotech Report 2010, see (2).

(3) FASMED, Wirtschaftliche Bedeutung der Medizintechnik in der Schweiz, Schlussbericht 2010. The data are based on NOGA 2002 and NACE rev. 1.1 respectively. The share of „Manufacture of medical instruments and supplies” (325001) and therefore not included in the division 26 according to NACE rev. 2 accounts for approx. 15% of the volume.

(4) Recensement du personnel et des entreprises des industries horlogère et microtechnique suisse au 28 Septembre 2008

6.3 The Swiss Innovation Ecosystem: Innovation Policy Making

FIGURE 30: Graphic Representation of the Swiss Innovation System

Source: http://www.bbt.admin.ch/themen/00416/00418/index.html?lang=en SER: State Secretariat For Education and Research (Staatssekretariat für

Bildung und Forschung SBF, Secrétariat d'Etat à l'éducation et à la

recherche SER): The State Secretariat for Education and Research SER, as part of the Federal Department of Home Affairs, is the federal government's specialised agency for national and international matters including general and university education, research and space. The SER has 100 members of staff and controls an annual budget of approx. 2.3 billion CHF. Link: http://www.sbf.admin.ch/htm/sbf/sbf_en.html OPTET: Federal Office for Professional Education and Technology

(Bundesamt für Berufsbildung und Technologie BBT, Office fédéral de la

formation professionnelle et de la technologie OFFT): The OPTET is the federal government’s competence centre for vocational education and training. Link: http://www.bbt.admin.ch/index.html?lang=en

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A major issue is the coordination and harmonzation of the cantonal/regional Universities of Applied Sciences (UAS). According to the Federal Constitution, the Confederation and the Cantons are jointly responsible for ensuring the competitiveness and quality of Switzerland’s higher education sector, which comprises the federal institutes of technology, the cantonal universities, the universities of applied sciences, the universities of teacher education and other tertiary A level institutions. The legal basis for this will be firmly established once the Higher Education Bill is approved by the Federal Parliament, which will probably be the case in the first semester of 2011. The creation of the universities of applied sciences in the 1990s led to a new type of university that, in a short time, has become firmly established as part of Switzerland's educational system. These universities offer practical university-level education and training and are in great demand by both students and employers. The foundation of these universities increased the status of vocational training, as they provide already qualified people with the opportunity to continue their studies at university level. The universities of applied sciences also contribute significantly to innovation promotion and knowledge transfer. They provide management staff and young entrepreneurs with education and are committed to applied research and development. In the innovation process these universities act in a bridging role, linking science, the economy and society. The federal government and the cantons cooperatively steer the system of the universities of applied sciences. Both federal levels are committed to maintaining the high quality of teaching and research at these universities and to providing further development of the system with optimal conditions. The universities of applied sciences are currently faced with a number of challenges, e.g. the continuation of the reform process caused by the Bologna Declaration, the positioning of the universities of applied sciences in Switzerland’s higher education landscape, and, in an international context, an increasing applied research and development as well as a closer networking with the traditional universities and the Federal Institutes of Technology. Furthermore, courses in fields like technology, economics, design, health, social work and arts will be reorganised to better meet today’s needs.

See FIGURE 09: The Universities of Applied Science in Switzerland (page 20) A brief overview over the system and the different institutions is given in http://www.bbt.admin.ch/themen/hochschulen/index.html?lang=en . ETH Board which presides over the ETH-Domain (ETH-Rat, Conseil des EPF): With some 600 professors, 16.000 staff (13.000 full-time equivalents) and 20.000 undergraduate and post-graduate students, the Swiss Federal Institutes of Technology in Zurich and Lausanne and the four application-oriented research institutes – the Paul Scherrer Institute (PSI), the Swiss Federal Institute for Forest, Snow and Landscape Research (WSL), the Materials Science and Technology Research Institution (EMPA) and the Swiss Federal Institute of Aquatic Science and Technology (Eawag) – produce highly acknowledged scientific achievements. Together they constitute the ETH Domain under the strategic leadership of the ETH Board as the supervisory body (ETH Act, Article 4). Appointed by the Swiss Federal Council, the ETH Board allocates funds, within the guidelines set by the government, to the six institutions, and administers their real-estate holdings on a fiduciary basis. FIGURE 31: Organization of the ETH-Domain

Source: http://www.empa.ch/plugin/template/empa/678/5044/---/l=2/changeLang=true/lartid=5044/orga=/type=/theme=/bestellbar=/new_abt=/uacc= Link: http://www.ethrat.ch/content/home.php?language=en

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CRUS: Rector’s Conference of the Swiss Universities (Rektorenkonferenz

der Schweizer Universitäten, Conférence des Recteurs des Universités

Suisses): In addition to the 2 federal (technical) universities, there are cantonal universities covering in principle the whole spectrum of scientific research and teaching:

- Basel - Bern - Fribourg - Geneva - Lausanne - Lucerne - Neuchâtel - St. Gallen - Zurich

The CRUS serves as an information and coordination platform among these universities. A major concern is the international cooperation. The CRUS is responsible for the realiziation of the Bologna-Declaration in the Swiss universities. Link: http://www.crus.ch/homenavigation/home.html?L=2

CSEC: Committees for Science, Education and Culture (Kommissionen für

Wissenschaft, Bildung und Kultur WBK, Commissions de la science, de

l'éducation et de la culture CSEC): The Committee for Science, Education and Culture of the National Council and the one of the Council of States (Staatssekretäre, secrétaires d’état) deal with matters and issues concerning science, science policy, education (vocational training, universities), research and the promotion of research, research facilities and research institutes, technology assessment, languages, culture and the fostering of culture, cultural institutions (museums, institutes, foundations, libraries), cinema, sports, youth issues, women’s issues, and the protection of animals. Link:http://www.parlament.ch/e/organemitglieder/kommissionen/legislativkommissionen/kommissionen-wbk/pages/default.aspx SSTC: The Swiss Science and Technology Council (Schweizerischer

Wissenschafts- und Technologierat SWTR, Conseil suisse de la science et de

la technologie CSST): The Swiss Science and Technology Council (SSTC) is the advisory body to the Federal Council for issues related to science, higher education, research and technology policy. Acting as the voice of the scientific community, the SSTC formulates overarching concepts for the benefit of the Federal Council and proposes implementing measures. The goal of the SSTC, aligned with its role as an independent consultative body, is to promote the excellence of all scientific disciplines in Switzerland on an ongoing basis. It also supports the structures of these disciplines and the institutions which

represent them. The SSTC is appointed by the Federal Council. Its members include leading figures in science, education and research. Administratively, the SSTC is attached to the State Secretariat for Education and Research (SER) in the Federal Department of Home Affairs. It has the status of an independent extra-parliamentary commission. Link: http://www.swtr.ch/index.php?lang=en SNSF: The Swiss National Science Foundation (Schweizerischer

Nationalfonds SNF, Fonds national suisse FNS): The Swiss National Science Foundation SNSF is Switzerland’s leading provider of scientific research funding. The SNSF annually supports approx. 7200 researchers, almost 80 percent of whom are aged 35 years or younger. With its federal mandate, the SNSF supports basic research in all disciplines, from philosophy and biology to the nano-sciences and medicine. It also invests in applied research within various scientific fields. The focus of SNSF’s activities is the scientific endorsement of projects submitted by researchers. The SNSF supports the best applicants with an annual total amount of approx. 700 million CHF. Established in 1952 as a foundation under private law, the SNSF has the autonomy it needs to promote independent scientific research. The SNSF is committed to promoting young scientists and works to ensure that scientific research in Switzerland has the most favourable conditions for developing internationally. It also encourages dialogue between scientists and representatives in society, politics and the economy. The SNSF provides a wide range of funding programmes, most of which are related to research projects. It also supports innovative ideas in new areas through funding free or open-ended research. The SNSF also supports junior researchers through bursaries and fellowships (individual fellowships and grants). Junior researchers can apply for financial support through these funding programmes for anything from producing their dissertations to sponsorships for an assistant professorship. The SNSF also supports applied research through the National Research Programmes (NRP) which aim to solve current problems facing Switzerland. The National Centres of Competence in Research (NCCR) focuse on areas underpinning existing research structures and reinforcing the position of the country in strategically important areas such as nano-sciences or climate research. In addition, the SNSF supports several joint programmes designed to reinforce international collaboration with key partner countries. Link: http://www.snf.ch/E/about-us/Pages/default.aspx

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CTI: The Commission for Technology and Innovation CTI (Kommission für

Technologie und Innovation KTI, Commission pour la technologie et

l’innovation CTI): The CTI supports: - Market-oriented R&D projects; - The creation and development of start-up companies; - Knowledge and technology transfer.

Support is generally available to R&D projects related to scientific innovations in all disciplines. Project proposals are submitted using the bottom-up principle and are mainly selected on the basis of their innovativeness and market potential. CTI's Venturelab programme offers made-to-measure training modules for up-and-coming entrepreneurs. These training modules provide knowledge, skills and methodology needed to establish a new company and successfully transform promising business ideas into marketable products and services. Young entrepreneurs can also benefit from professional coaching. New knowledge-focused and technology-based companies with considerable market potential are eligible. The CTI supports the transfer of knowledge and technology between higher education institutions and industry in a targeted and result-oriented manner. Professionally run R&D and WTT networks offer SMEs services by channelling technology know-how through higher education institutions and by providing solutions for business-specific needs. In addition, innovative Swiss businesses and researchers should have development opportunities through access to international programmes and networks such as EUREKA, ERANet and EU-FP7, or European Technology Platforms (ETP). Link: http://www.kti.admin.ch/index.html?lang=en Whilst most funding of the SNSF is not thematically bound, it differentiates between two measures that fund thematic research. “National Research Programmes” (NRP) analyze urgent problems of national significance while “National Centers of Competence in Research” (NCCR) support long-term research projects in areas of vital strategic importance. The thematic priorities are adjusted continuously. Currently, calls for NRPs are open in the following areas: gender equality policy, sustainable water management, smart materials, stem cells and regenerative medicine, opportunities and risks of nano-materials and the new urban intensity are open. The thematic foci of the prospective NCCRs are in the political process. The funding agency for innovation projects is the CTI. It mainly supports technology transfer by funding universities that find private partners who fund at least half of the project. Furthermore, the CTI has enlarged its programme to support start-ups. “CTI start-up” offers start-ups coaching services and labels promising ones. “CTI entrepreneurship” promotes the entrepreneurial spirit by offering courses to potential and prospective entrepreneurs. “CTI invest” is a networking platform that stages regular events where young entrepreneurs present their ideas to business angels and venture capital firms. “CTI Discovery Projects” directly funds projects that are highly risky but have the potential to result in radical innovations. Internationalisation, which is an important aspect in the ERT-message, is fostered by the measure “CTI-Asia” which promotes co-operations in applied R&D with

universities and firms from Asia. The engagement in different ERA-NETs fosters the internationalisation of the national innovation system. See also: http://www.proinno-europe.eu/page/innovation-and-innovation-policy-switzerland or http://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.content&topicID=619&parentID=44&countryCode=CH

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6.4 R&D Expenditures of Swiss Organizations 1996-2008

TABLE 17: R&D Expenditures of Swiss Organizations intra- and extramuros 1996-2008

Domestic intramuros R&D Foreign intramuros R&D Extramuros R&D of domestic

organizations

1996 2000 2004 2008 1996 2000 2004 2008 1996 2000 2004 2008

Private economy

Chemicals & Pharmaceuticals

Machines (mechanical and electrical)

Precision instruments(1)

IT & Telecommunication (production and software)

Research and Development

Other(2)

Total

7.060

2.475

2.010

395

1.085

875

1.050

7.890

4.251

1.575

545

1.205

1.372

712

9.660

5.271

1.378

701

1.552

1.129

1.949

11.980

8.060

9.788

7.361

293

32

218

618

1.081

9.603

11.276

232

750

341

376

2.794

15.769

1.105

1.789

3.150

120

120

120

200

376

4.046

1.183

155

568

128

240

928

3.202

Federal government 250 140 140 120

Academic sector 2.430 2.440 3.000 3.940

Private NPO’s, other

institutions

250

205

300

260

Total domestic sectors 9.990 10.675 13.100 16.300

Foreign institutions

(financed by domestic

Swiss organizations)

590 1.370 2.880 2.700

Total 10.580 12.045 15.980 19.000

Sources and annotations: BFS, Forschung und Entwicklung in der schweizerischen Privatwirtschaft 2004 and 2008

(http://www.bfs.admin.ch/bfs/portal/de/index/themen/04/01/new/nip_detail.html?gnpID=2010-716 ) (1) This group includes office machinery and equipment (excl. Computers, etc.), manufacture of watches and clocks,

manufacture of irradiation, electromedical and electrotherapeutic equipment, manufacture of optical instruments and photographic equipment

(2) This position includes all sectors not mentioned and the sector “Others”, i.e. non specified. The domestic intra-muros R&D expenditures of non-specified sectors amount to 1.167 mio. CHF, the foreign intramuros R&D expenditures to 2.465mio. CHF, and the extramuros R&D to 812 mio. CHF.

6.5 Import & Export Regulations

In addition to the EFTA Convention and the Free Trade Agreement with the European Union (EU) of 1972, Switzerland currently has a network of 24 Free Trade Agreements (FTAs) with 33 partners outside the European Union (EU). Switzerland normally concludes its FTAs together with its partners Norway, Iceland and Liechtenstein, in the framework of the European Free Trade Association (EFTA). Nevertheless, Switzerland also has the possibility to enter into FTAs outside the EFTA framework, as it has been the case of Japan and the Faroe Islands. The Mutual Recognition Agreement on technical barriers to trade with the EU aims at dismantling technical barriers to trade calls for the mutual recognition of conformity tests for most industrial products. The agreement defines the areas where Swiss legislation is considered equivalent to EU law. In these areas, a single conformity test is sufficient for the product to be marketed in both Switzerland and the EU. Conformity tests carried out in accordance with Swiss law on products covered by the agreement allow manufacturers to export their products directly to the EU with the required EC label. Of special importance to the biotechnology and life science industries is the fact that the Mutual Recognition Agreement between the EU and Switzerland is covering medical devices (chapter 4), good laboratory practice (GLP) (chapter 14), and medicinal products, good manufacturing practice (GMP), inspection and batch certification (chapter 15). Recently, the coverage of the sectoral annex on GMP, inspection and batch certification (chapter 15) has been enlarged to include also active pharmaceutical ingredients and advanced therapy medicinal products. Nonetheless, in accordance with the law on therapeutic products, companies that produce medicinal products or trade them must obtain an establishment license (authorization) from Swissmedic. The license is linked to a list of requirements that are controlled by Swissmedic through inspections at the firms and laboratories: - Establishment licencies: Firms that manufacture or distribute medicinal or

transplant products in Switzerland, including for import, wholesale, export and commercialisation abroad, require an establishment licence granted by Swissmedic. The licences are granted following successful inspections.

- Notification of clinical trials: Clinical trials with medicines, transplant products and certain medical devices must only be carried out in Switzerland once they have been approved by the relevant Cantonal Ethics Committee and once Swissmedic has issued the relevant notification. During the trial, all adverse drug reactions and discrepancies must be reported to the Ethics Committee and/or Swissmedic.

- Special licences: Swissmedic grants special licences, on application, to medical professionals for the importation and use of medicinal products that are not authorised in Switzerland.

- Pharmacopoeia: The pharmacopoeia valid in Switzerland consists of the European Pharmacopoeia (Ph. Eur.) and the Swiss pharmacopoeia (Ph. Helv.). The quality regulations contained therein (general notices, test methods and specific monographs) constitute the fundamental basis of a standardised, harmonised quality assurance for important medicines. They are legally binding

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and thus constitute a significant prerequisite for guaranteeing that all therapeutic products are of high quality.

- Narcotics: Firms and individuals that cultivate, produce, process or market narcotics, psychotropic substances and precursor chemicals (including import / export) require an operating license from Swissmedic. The licenses are granted following successful inspections. Swissmedic must be notified of every delivery of narcotics within Switzerland. All narcotics must be entered into a registration system. The import and export of narcotics, psychotropic substances and precursor chemicals require a separate license granted by Swissmedic.

- Blood and labile blood products: Blood obtained from the donor system and the labile blood products produced from it are classified as medicines in accordance with the Therapeutic Products Act. Activities such as collecting blood, manufacturing labile blood products or distributing labile blood products require a permit granted by Swissmedic. In addition, a Cantonal permit is required if the activity concerns the storage of blood products alone. The Swiss blood donor system is supervised by the Inspectorates Department and is based on inspections, permits, market monitoring and standardization processes.

- Laboratory (OMCL): The laboratory, which has ISO 17025 certification, is responsible for the official batch release of stable blood products and vaccines, and provides support to all Swissmedic divisions in terms of laboratory analysis, method developments, method assessments and medicines.

- Transplant products: The Transplant Unit is responsible for the control of transplant products. These products from somatic cell therapy, tissue engineering and ex vivo gene therapy are, in accordance with the Federal Act on Transplants (TxG, SR 810.21), considered as medicines and are thus governed by the Therapeutic Products Act. The provisions of the said law regarding establishment licencies, clinical trials, operating permits, advertising, vigilance and administrative measures therefore apply accordingly. As mandated by the Federal Office of Public Health, inspections are moreover carried out at firms and institutions that work with cells, tissue and organs.

Link: http://www.swissmedic.ch/bewilligungen/index.html?lang=en) Switzerland is a member of all the export control regimes and is actively involved in promoting targeted checks on the export of goods and technology (know-how) which could be used in the production of weapons offer mass destruction or the proliferation of conventional arms. Whilst Switzerland is following a open approach to industrial products, it is extremely protective of its agricultural industry. High tariffs and extensive domestic subsidies encourage domestic production, which currently produces about 60% of the food consumed in the country. (General link: http://www.seco.admin.ch/themen/00513/00600/00601/index.html?lang=en)

6.6 Bilateral Agreements With The EU

Free Trade Agreement effective since 01 January 1973: The 1972 Free Trade Agreement (FTA) between Switzerland and the European Community created a free trade zone for industrial products originating in the states parties to the agreement. The agreement also prohibits the setting of limits on the volume of goods that can be traded (quotas) as well as of tariffs and measures that would have the same effect. The FTA exclusively relates to industrial products. Agricultural products are excluded. Insurance Agreement effective since 01 January 1993: Switzerland and the European Community concluded a bilateral agreement on the partial opening of insurance markets in 1989. This agreement guarantees the right of establishment on the basis of reciprocity. Customs Facilitation and Security Agreement effective since 01 July 1991,

Amended Agreement effective since 01 July 2009: The Agreement on the Carriage of Goods of 1990 sets out the controls and formalities applying to goods traffic between Switzerland and EU countries. The aim is to simplify the customs procedures for goods traffic as much as possible and to co-ordinate co-operation at border posts. With the amendment to the Community Customs Code, the EU introduced security measures for goods traffic to and from (EU) third countries on 1 July 2009. Bilateral Agreements I (1999) - Free Movement of Persons Agreement effective since 01 June 2002 (with

amendments effective since 01 April 2006, and 01 June 2009 respectively): The labour markets are to be opened gradually. Following transitional periods, Swiss and EU citizens will be able to take up residence in any of the partner countries and will enjoy the same employment rights. The prerequisites are to have a valid employment contract, to be self-employed or to have sufficient independent means, and to have health insurance. Fully free movement of persons between Switzerland and the whole of the EU (27 countries) is planned to begin by mid 2019.

- Technical Barriers to Trade Agreement effective since 01 June 2002: This agreement simplifies the admission of products. Testing and admission for the entire European market is now the responsibility of a single certification authority, either in Switzerland or in the EU.

- Public Procurement Markets Agreement effective since 01 June 2002: The obligation to invite tenders in the context of procurements and construction in accordance with WTO rules is to be extended to the level of municipality and to the procurement activities of public and specific private sector companies in particular sectors such as rail transportation and energy.

- Agriculture Agreement effective since 01 June 2002: Trade in agricultural products has been simplified in certain areas (cheese, processed dairy products), partly through the dismantling of tariffs and partly by the mutual recognition of the validity of regulations in the areas of veterinary medicine, plant protection and biological agriculture.

- Research Agreement effective since 01 June 2002: Swiss researchers as well as companies may participate in the EU reseach framework programmes.

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- Civil Aviation Agreement effective since 01 June 2002: The agreement gives airlines gradual access to each other's markets.

- Overland Transport Agreement effective since 01 June 2002: The markets for road and rail transport will gradually be opened to competition, and Switzerland's transport policy based on road-to-rail transfer is anchored in a European framework.

Bilateral Agreements II (2004) - Schengen/Dublin Agreement effective since 12 December 2008: The

elimination of the systematic control of individual movements facilitates cross-border traffic. At the same time, controls at the Schengen external borders and international co-operation between police authorities and justice systems are strengthened in efforts to combat crime. The Dublin rules on jurisdiction and the Eurodac fingerprint database help to avoid multiple requests for asylum, lessening the burden on the national asylum systems.

- Taxation of Savings effective since 01 January 2005: Switzerland collects a withholding tax on interest on behalf of the EU states on natural persons whose residency for tax purposes is in the EU.

- Processed Agricultural Products Agreement (Amendment to the Free Trade Agreement of 1972) effective since 30 March 2005: Tariffs and export subsidies are abolished for a large number of food industry products (e.g. chocolage, bisquits, pasta).

- MEDIA Agreement effective since 01 August 2010: Swiss filmmakers have full and equal access to EU promotional programmes in this area.

- Environment Agreement effective since 01 April 2006: Switzerland becomes a member of the European Environment Agency, a most important instrument of European co-operation in the environmental field.

- Statistics Agreement effective since 01 January 2007: The collection of statistical data is harmonised between the partners, thus ensuring access to a wide range of comparable data of considerable importance for political and economic decision-making.

- Fight Against Fraud Agreement effective since 08 April 2009 (not yet ratified in all EU coutries): Co-operation is extended to combat smuggling and other offences in the area of indirect tax (customs duties, value added tax, tax on consumption), in the area of subsidies and in public procurement markets.

- Pensions Agreement effective since 31 May 2005: Retired EU officials living in Switzerland will no longer be subject to double taxation.

- Education, Vocational Training, Youth Agreement effective since 01 January 2011: Participation of Switzerland in the EU education programmes.

- Europol Agreement effective since 01 March 2006, Enlargement effective since 01 Januar 2008: Improvement of the co-operation between Switzerland and the European Police Office (Europol).

- Eurojust Agreement , Message to the Parliament on 04 December 2009: Strengthening of cross-border co-operation between national judicial authorities in combating serious crime. Judicial co-operation between Switzerland and the EU countries and the necessary ground rules for it are to be formally established and institutionalized.

(General link: http://www.europa.admin.ch/themen/00500/index.html?lang=en )

6.7 Employment Regulations and Social Security

The employment contract is regulated in the Contractual law (Obligationenrecht / Code des obligations) in chapter 10. The employment contract between employer and employee sets down the working relationship in writing. The law does not foresee any special form for this contract, but there are a few important points of an employment contract: - the trial period may not exceed 3 months, - the employment contract contain any ‘immoral’ or illegal tasks, - the period of notice must be clearly stated. An unlimited employment contract (the duration of which is not fixed) may be terminated by one of the two parties taking account of the period of notice stipulated in the contract and the date of giving such notice. The notice period is 7 days during the 3-months trial period, then one month. After 1 year, the notice period becomes 2 months. After 5 years, it becomes 3 months. If requested, the party giving notice has to give written reasons for his decision. A temporary employment contract, with a duration defined by both contracting parties, expires at the end of the period agreed. Generally, this type of contract cannot be terminated in advance. The General Labour Agreement (GLA) is a contract between employer(s) or their representatives and employees’ federations or trade unions and governs employment relationships. A GLA is relevant if employees and employers belong to an affiliated federation or trade union or if its applicability has been agreed in some other way. If the GLA was declared as generally binding by the competent authority, it is applied for the relevant branch irrespective of federation or trade union membership. Only provisions that are more favourable for the employee may be included in the individual employment contract. The list of the approved GLAs can be found under http://www.seco.admin.ch/themen/00385/00420/00430/index.html?lang=de . A statutory minimum wage does not exist in Switzerland, though some GLA’s stipulate minimum wages for certain sectors. According to the law, employees are entitled to specially indexed remuneration for night or weekend work, as well as work on public holidays. The Swiss social security system is based on three pillars:

- The first pillar – old age, survivors’ and invalidity insurance – is a general compulsory insurance for everyone. Its aim is to cover basic living costs.

- The second pillar is the occupational benefit plan. Together with the first pillar, it aims to ensure that the insured person maintains his previous standard of living in an appropriate way.

- The third pillar consists of voluntary individual provident measures.

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TABLE 18: Social Insurance Contribution Rates 2011 (Without Health Insurance) Contributions as percentage of earned income Contributions in favour of the

employee Contributions by

the self-employed

Social insurance sector

Employee Employer Total Old age insurance 4.20% 4.20% 8.40% 4.200% -

7.800%(1) Invalidity insurance 0.70% 0.70% 1.40% 0.754% -

1.400%(1) Ergänzungsleistungen 0.25% 0.25% 0.50% 0.269% -

0.500%(1) Unemployment insurance

1.10% 1.10% 2.20% -

Accident insurance (occupational accidents)(2)

- 0.89% 0.89% (3)

Accident insurance (non-occupational accidents)(2)/(4)

1.56% - 1.56% (3)

Contribution to the compulsory pension fund(5)

4.00% -13.00%

4.00% -14.00%

and more

ca. 17.40%

(3)

Family allowances(6) -(7) between 0.1% and 4.0%(6)

between 0.1% and 4.0%(6)

(6)

Sources and annotations: Federal Social Insurance Office (http://www.bsv.admin.ch/dokumentation/zahlen/00093/00422/index.html?lang=en ) (1) The contribution rate depends on the level of earned income. The first rate applies to an income level up to and including

CHF 9,200, the second for an income of at least CHF 54,800 (a "degressive contribution scale" is applied to intermediate income levels).

(2) Maximum insured income: CHF 126,000 per annum. Unemployment Insurance (UI): A UI contribution of 1.0% is applied to salary incomes between CHF 126,000 and CHF 315,000. Occupational Accidents and Non-Occupational Accidents: average gross premium rate (2008). Premiums calculated according to the risk. Separate rules apply to part-time workers.

(3) Self-employed may also contribute to this voluntary insurance scheme. (4) Individuals who are employed for less than 8 hours per week are not insured against non-occupational accidents. For the

unemployed, the contribution rate is 2.91%. (5) Estimated (based on pension fund statistics, 2005) in % of the insured salary (max. CHF 820,800). Contributions are set

by the pension funds. (6) Regulations vary across cantons. (7) Valais is the only canton where it is compulsory for employees to pay 0.3% (since 1st January 2002).

A comprehensive description of the Swiss Social Security System is given by the Federal Social Insurance Office, Overview of Swiss Social Security - as of 1.4.2011 (link: http://www.bsv.admin.ch/themen/ueberblick/00003/index.html?lang=en

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