Interview Stephan Mumenthaler: success factors to boost R&D

Deloitte interview with Stephan Mumenthaler on the success factors for promoting research and development and digital innovation in Switzerland.

Deloitte: R&D has been identified in Deloitte’s Power Up Switzerland report as a crucial element to ensure ongoing Swiss competitiveness and prosperity. What do you think are the optimal support conditions and framework to boost R&D in Switzerland?

Stephan Mumenthaler: The current framework conditions for R&D in Switzerland are very good – for example – the liberal environment, networks and institutions, general availability of talent, sufficient public/private funding and spin-off opportunities. From a company perspective, liberal corporation tax and global market access also play an important role. It is key for all framework conditions to work together to create optimal conditions for R&D.

However, there are some concerns. Not being fully associated to the largest international research cooperation programme Horizon Europe anymore will impact the attractiveness of Switzerland as a future R&D location. Global competition for R&D talent is tough and without participating in collaborative programmes such as Horizon Europe, Switzerland will find it even more difficult to attract top R&D talent which will be drawn rather towards locations that can offer better growth opportunities. Additionally, Swiss multinationals that have a global and diversified R&D footprint may choose to set-up or expand their R&D capabilities in locations other than Switzerland. Another concern is that Switzerland is also lagging specifically in the digitalisation of the health care sector. The digital infrastructure, data systems and capabilities in this sector are still in their infancy, by global comparison.

Overall, however, there is still reason for optimism when considering Switzerland as an R&D location – especially in the area of new products and new business models. This potential is evidenced, for example, by the fact that Zurich continues to remain an R&D location for Google.

Deloitte: Attracting and developing the right talent to drive research is crucial. What are your views on the current R&D talent pool in Switzerland?

Stephan Mumenthaler: R&D specialists are in short supply – especially those with expertise in IT/digitalisation. The demand for these specialists is growing faster than the supply. It will be important for Switzerland to keep its borders open for R&D talent and in this regard, disrupted participation in Horizon Europe has certainly not helped. While for now R&D specialists still come to Switzerland, this could very well change in the future.

There are also both quantitative and qualitative challenges with STEM (science, technology, engineering, and mathematics) talent. In response to this, ten years ago scienceindustries founded its own foundation called SimplyScience – an initiative aimed at promoting the understanding of science among young people and informing them about possible training and career opportunities. However, much more needs to be done.

While the talent output at ETH/EPFL is excellent, it is not enough – talent often needs to be recruited outside of Switzerland. Regulations should also change to more easily allow foreign students who graduated in Switzerland, to stay and work here. In certain industries, such as the pharmaceutical and chemical industries, the skills sets that are required are also changing – as more data is used and analysed, new data-centered capabilities are increasingly needed and should be nurtured.

Even though pharmaceutical companies remain very attractive as employers – many STEM talents are more drawn towards IT/technology companies such as Google, Amazon etc. The potentially attractive and interesting mix of both health and technology/digital data needs to be emphasised more, in a bid to attract talent to the health sector.

Deloitte: Establishing an innovation culture is one the most important success factors to achieve excellence in R&D. How are you fostering an enabling environment for innovation and R&D?

Stephan Mumenthaler: A successful innovation culture is made up of several factors. These include an international set-up/orientation with cooperation across many locations, a well-coordinated team effort and fostering an open environment where innovation is embedded in the company culture – to name just a few.

Exchanges on a company level are also important. Work permits need to be accessible to enable moving people and fewer borders/regulations make a location more attractive. Less regulation will also support the sharing of data and IP across multiple locations to further encourage successful innovation.

Collaboration is also key – not just internally, but also with external partners like universities, suppliers, customers or other companies. For example – there should be much more collaboration between the pharmaceutical and chemical industries and technology companies, to build the digital talent pool for innovation in Switzerland.

Deloitte: Some observers say that Switzerland is losing its competitive edge globally, because the country is not known for taking risks or failing forward when it comes to innovation. What is your view on this topic?

Stephan Mumenthaler: While there may be some truth in the statement that Switzerland is not really known for taking too many risks and that some innovation processes take a bit longer, Swiss innovation is also well known for being very precise, exact, reliable, and taking its time – symbolized by the successful Swiss watch industry. This careful and considered approach can also be a great asset that supports a solid production hub and feeds back into R&D, prototyping etc.

In many Swiss multinationals and large companies, R&D teams are now anyway increasingly global and part of an ‘international innovation culture’ that displays the desired attributes of risk taking, precision, reliability etc. – all within the same team. Switzerland benefits from being part of this global approach to R&D.

Read more interviews on the success factors of R&D in Switzerland at Deloitte.