Other countries wishing to stimulate innovation could do well to emulate this nexus between government, business, and academia that has been so successful in Switzerland. Certainly, none of these actors can succeed in isolation, and the effectiveness of the public and private sectors, together with other institutions and civil society, will depend on how well they operate together as complementary players.
In principle, governments can help to absorb initial risks as businesses grow. Emerging technologies often require immense upfront capital, and public funding can make a huge difference, particularly in early-stage research and infrastructure.
Governments can also support innovation procurement. Take NASA, which often acts as a first customer for unproven technology. Or CERN, an international physics laboratory at the French-Swiss border, which functions as a critical market adopter with pre-commercial procurement models. In some sectors, private companies are increasingly taking on roles once played by governments, particularly where they have the heft to move quickly from innovation to deployment, as in the case of SpaceX, which has recently undergone a high-profile initial public offering. Regulatory flexibility is also key, as demonstrated by Switzerland’s FINMA fintech sandbox, which allows blockchain and digital asset start-ups to test financial innovations without a formal banking license.