Switzerland's Innovation Lag: Missing Out on the Digital Revolution?
Timely adoption of disruptive technologies for sustained economic competitiveness and national innovation capacity
Regions early in adopting fast-improving technologies enjoy higher wages and a diverse array of skilled jobs.
Swiss-based innovations are concentrated mainly in rather slowly-improving technology domains (as characterized by Singh et al. 2021)
Swiss firms are deeply involved in fast-improving cutting-edge technologies but more abroad than within Switzerland.
Actionable recommendations for improving Swiss Innovation Capacity by concentrating on fast improving technologies
In the world of innovation, timing is everything. A recent analysis by Matthias Niggli and Christian Rutzer of University of Basel peels back the layers on how early adoption of disruptive technologies can pave the way for sustained economic growth and competitiveness for nations. Regions that were early players in groundbreaking tech not only boast higher wages today but also a richer mix of high-skilled jobs. This lasting impact underscores a broader trend: where innovation leads, prosperity follows.
Their study probes the currents shaping our technological landscape, particularly focusing on the fastest improving technologies. They ask which technologies are on the brink of transforming industries given their rate of improvement and how different nations stack up in this innovation race. While Switzerland has a rich history of precision and quality manufacturing, its capacity to innovate in the fast-evolving digital domain is not well-understood.
The digital revolution is bringing sweeping changes across all sectors, including conventional manufacturing, reshaping them from the ground up. Niggli and Rutzer, drawing on a vast dataset from a 2021 study led by TechNext founders (Singh et al. 2021), characterize Swiss Innovation Capacity. The TechNext methodology doesn't just count patents—it quantifies how fast a technology is advancing using the “improvement rates”. This lens reveals a startling diversity in the pace at which different technologies evolve, from incremental to lightning-fast. We currently cover tens of thousands of technologies and their improvement rates.
Niggli and Rutzer’s findings are a wake-up call for Switzerland. Despite its prowess in pharmaceuticals and machinery, the study reveals a gaping void in its engagement with rapidly advancing digital technologies. Compared to global leaders, Switzerland's innovations seem to crawl rather than sprint, especially in digital realms that are reshaping the economic landscape. This cautious approach might be prudent in some industries, but as digital innovations increasingly drive growth, lagging behind could mean missing out on the next big wave of economic benefits.
What's more, the study highlights that not all innovation is created equal. Patents linked to fast-improving technologies—particularly digital ones—are more likely to represent breakthrough innovations, as evidenced by their higher rate of forward citations. This correlation between a technology's improvement rate and its impact echoes through the corridors of industry, suggesting that the most dynamic sectors are also the most transformative.
For countries like Switzerland, the research presents both a challenge and an opportunity. Embracing faster-paced digital innovation could propel them to the forefront of global industries. However, the shift would require not just adopting new technologies but also integrating them into the core of their economic activities—a move that could redefine the Swiss innovation landscape.
In essence, Niggli and Rutzer's study isn't just about counting patents or tracking technological trends. It's a clarion call for strategic foresight in innovation policies. As the digital tide rises, the choice for countries and companies alike is clear: innovate swiftly or risk being left behind by the waves of change.
