Introduction

During the past few years, “Entrepreneurship” have been became the most influence
keyword and trend of business in the world. During the past few years,
“Entrepreneurship” has been becoming the most influence keyword and trend of
business in the world. In this globalization period, many fresh entrepreneurs try to run
their own business with endless passion and enthusiasm, but the fact that nearly 8 out
of 10 businesses fail in the first 3 years [ CITATION Sea19 \l 1033 ]. Therefore, it
is very important for startups to ascertain the right direction and the influence factors
of the market on their businesses in order to find a firm foothold in the chaotic startup
market. According to the World Economic Forum’s (WEF) Global Competitiveness
Report, Sweden ranked 4th in the top 10 most competitive economies in the world in
2018, which means that it is very feasible for entrepreneurs to start a business in
Sweden [ CITATION Min18 \l 1033 ]. By application of the 12 pillars of Global
Competitiveness Index for PEST analysis in Global Entrepreneurship Research
Project, this report will analyze the pertinent facts of Switzerland and the influencing
as well as supporting factors for high entrepreneurial activities in this country, thereby
making recommendations for global businesses when they want to start a business in
Switzerland.
I. Switzerland’s pertinent facts
To start a business in any country in the world, the first aspect that a young
entrepreneur needs to consider about is the country's pertinent facts. In Switzerland,
these pertinent facts related to GDP, poverty and cost of living, demographics, easy of
doing business and comparative advantages could support high entrepreneurial
activities of this country. According to the Global Entrepreneurship Monitor 2017/18:
Report on Switzerland, the GDP of a country is an important factor that helps in
classifying whether the country is "Entrepreneurship" or not [ CITATION Bal18 \l
1033 ]. Switzerland's GDP per capita in 2018 was $ 82,589 ranked 20th in the world,
proving high purchasing power [ CITATION Swi19 \l 1033 ] . Compared to the last
10 years, the Swiss GDP has grown steadily, fluctuating at an average of 1.7% over 10
years, according to Global Competitiveness Index 2019 - 2019. This proves that
Switzerland has a Stable Market, suitable for the appearance and development of
Startup businesses. Furthermore, Switzerland invests 3% of GDP in research and
development, a potential beneficial feature for technology startups or creative startups.
The poverty rate in Switzerland is significantly lower than in neighboring European
countries, but 6.6% of the Swiss population still lives in poverty. High living expenses
must be compensated for by citizens of Switzerland; food prices and housing costs
make the daily financial needs very high [ CITATION Mar19 \l 1033 ]. This is a
great opportunity for entrepreneurs because residents of Switzerland have a high
standard of living as well as low poverty rates, they tend to be willing to try new
things and pay high costs. In terms of demographics, according to the Global
Entrepreneurship Monitor 2018, the rate of women entrepreneurs is growing rapidly
year by year, promoting startups with female entrepreneurs with an equal woman to
man ratio. Swiss is a multicultural country, with four official languages such as
French, Italian, German and Romansh as well as diverse religions, and a huge
proportion of foreigner residents. Swiss is a multicultural country, with four official
languages such as French, Italian, German and Romansh as well as different religions,
and large proportion of foreigner residents (Global Entrepreneurship Monitor Report,
2018). It is convenient for startups from other countries to develop in Switzerland.
Switzerland has competitive regulation and tax system for startup companies.
Switzerland is ranked 33rd out of 190 country in the world in the World Bank's latest
Ease of Doing Business Index (the World Bank, 2019).
II. Influential factors to high entrepreneurial activities
Next, startups need to consider Factors that have been most influential high
entrepreneurial activities when starting a business in Switzerland. The Report will be
based on 12 pillars of Global Competitiveness Index for PEST analysis. Switzerland is
the leading country ranked five in the ranking of the Global Competitiveness Index
2018-2019. Despite falling to the 5th position in 2019 compared to the place in 2018,
for Political/Governmental factor, Switzerland still holds high rankings in Institutions
pillar with the 6th position (78 points). In terms of Economic factor, Switzerland
achieved an absolute score on the Macroeconomic stability pillar along with a well-
functioning labor market. Besides, Switzerland is always one of the countries with the
most developed and stable financial markets, it holds the 4th position in this pillar
with 89.7 points. About Social and Cultural factor, The performance of Switzerland in
areas of human capital always outstanding. Switzerland boasts the fifth-longest
healthy life expectancy in the world and it ranks first on the Skills pillar. Regarding
Infrastructure, Switzerland also achieved an almost absolute score of 93 and ranked
fourth. The health advantage, skills of workers combined with well-invested
infrastructure are great support for high entrepreneurial activities in Switzerland. Next
in terms of the Technological factor, Switzerland is one of the top three innovators in
the world, ranking third (81.2) in the pillar of Innovation ability behind Germany and
the United States (Global Innovation Index, 2019).
III. Potential factors that support high entrepreneurial activities in the future
Factors that have potential to support high entrepreneurial activities (higher TEA) in
the future may include Economic factor and Technological factor. First, with
Economic factor The two areas with the most opportunities for improvement in the
future and helping entrepreneurs are market efficiency pillar and business dynamism.
Market efficiency pillar is only ranked 25th due to the impact of major trade barriers,
but Switzerland is gradually opening trade to encourage more foreign businesses in
2019. Next on Technology, ICT Switzerland's adoption is only 17th in 2019, but with
new technology applications being developed, the Technological factor of Switzerland
will become a Potential factors for startups entering this country market.
IV. Recommendations for global entrepreneurs
After analyzing pertinent facts of Switzerland and the influencing as well as
supporting factors for high entrepreneurial activities, the report makes the following
recommendations to help contribute to the successful establishment of global venture
start-up in the Sweden. Firstly, for Political / Governmental factor, startups from
abroad should especially find out information about Swedish Politics, especially tax
issues because the country ranks 141st and last for the complexity of Switzerland’s
tariff regime [ CITATION Thi19 \l 1033 ]. Next about Social and Cultural factor,
businesses need to take full advantage of Switzerland's competitive advantages to
develop. Switzerland is the greatest country in the world for graduate employability
and vocational and on-the-job training. It is an advantage for businesses if they hire
high quality workers in Switzerland. For Potential factors such as technology or
economics, businesses should be prepared before entering the Swiss market. For
example, the preparation of advanced technology machines from abroad.
Conclusion
Around the world, Entrepreneurship still holds a certain importance to the economy,
even though the number of startups fails every year. Switzerland has always been
famous as an entrepreneur friendly country, but the development or failure depends
largely on the business itself. This report is based on information from the Global
Entrepreneurship Monitor (GEM), World Bank's Global Competitive Index (GCI) and
other reference sources to provide pertinent facts of Switzerland and the influencing as
well as supporting factors for high entrepreneurial activities in Switzerland. With the
recommendations mentioned in the report, it is expected to assist businesses in
analyzing the Swiss market and developing successful business orientations.
(1246 words)
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