SMEs as a Driving Force for Innovation
The KOF study by ETH Zurich (2025) shows:
SMEs are increasing their R&D investments, especially in riskier projects, but the innovative strength is unevenly distributed. Larger companies are contributing less and less to radical innovation.
👉 SMEs with 50–250 employees are increasingly showing a willingness to engage in high-risk innovations.
Switzerland’s innovative strength remains a pillar of stability despite global uncertainties.
Between 2020 and 2022, the innovation landscape presented a differentiated yet stable picture. Companies maintained a high level of market success with innovative products and services. However, there are developments that require economic policy attention, especially in relation to research and development (R&D), digital transformation, and barriers to innovation.
Concentration of R&D Activities
Small and medium-sized enterprises (SMEs) are the driving force behind Switzerland’s innovation landscape. Among companies with 50 to 250 employees, there has been a noticeable increase in willingness to invest in riskier R&D projects. However, R&D activities are increasingly concentrated among small enterprises (fewer than 50 employees), which could affect innovation dynamics in the long term.
Large corporations, on the other hand, are showing a declining depth of innovation. While they remain innovative, the proportion of radical innovations—true market novelties—is decreasing.
Innovations that are new to the company but not to the market (incremental innovations) have gained in importance. These incremental innovations help to stabilize market success. More than one-third of companies consistently generate around one-third of their revenue from innovative products and services. However, the market success of radical innovations—which often require more extensive R&D efforts—is declining, a trend that could impact competitiveness over the long term.