Magazine: Bigger, better, stronger – December 2023
Which factors trigger growth and which ones hinder it? The interdependencies are varied and difficult to grasp. Here is an overview of current facts and figures on the topic of growth.
Growth has many aspects
Global risk financing shrinks by 35% in 2022
In 2021, global risk financing still reached USD 681 billion. The decline of the stock market, mass redundancies in the technology sector and the collapse of cryptocurrencies led to a huge slump. According to an analysis by Crunchbase Inc, 2022 saw a 35% year-on-year drop to just 445bnUSD. However, start-ups can survive this trough by sharpening their focus and reducing their costs.
Are the unicorns dying out?
According to the American market research and analysis company CB Insights, there are currently 1,221 unicorns – private companies with a valuation of more than USD 1 billion (as at July 2023). But things are getting tougher for the former prodigies of the global economy. The unstable geopolitical situation, the central banks’ interest rate hikes and, last but not least, the collapse of the crypto exchange FTX at the end of 2022 are generating a climate of uncertainty. The era of cheap money is over – and with it the boom years for unicorns.
Start-ups popular with investors
Despite the mixed economic situation, investments in start-ups in 2022 increased by almost 30% compared to the previous year, according to the Swiss Venture Capital Report. The biggest winners are young companies in the cleantech sector, where the increase in investments amounted to 291%, the highest of the year. The information, communication and technology (ICT) sector also performed well in 2022, with a 72% increase in invested capital to CHF 1.16 billion. By contrast, the biotechnology sector recorded losses (-47%).
More and more companies are being founded
In the last ten years, an average of 43,838 new companies were registered per year. The year 2022 once again saw an increase with 49,398 new companies founded by 27 December 2022, equating to a rise of +12.6%, which is significantly higher than the average for the last 10 years. This was shown in the National Analysis of Swiss Incorporations 2022 conducted by the start-up support organisation IFJ. Compared to the record year 2021, there was only a slight decrease of 1.4%.
Crowdfunding in Switzerland drops for the first time (-16.4%)
The first crowdfunding platform was launched in Switzerland in 2008. Since then, there has been a continuous upwards trend until last year. Even though a fairly high volume of CHF 662.2 million was processed through crowdfunding platforms in 2022, the market recorded a drop for the first time compared to the previous year (-16.4%). The number of successful funding campaigns also fell by 6.2% to 4,661.
Are female founders less deserving of support?
In 2020, 36.1% of start-ups in Switzerland were initiated by women. Yet the gender gap in venture capital funding is much greater, according to a study on women’s entrepreneurship by Bern University of Applied Sciences. Only 1% of venture capital in Europe went to female founding teams in 2022, compared to 4% in Switzerland in 2021. There are various reasons for this. One of the most important – according to the financial platform for women ellexx – being that “The classic start-up investors, in other words predominantly male venture capitalists or business angels, are looking for tech start-ups that are aiming for infinite growth”. And these are founded almost exclusively by men.
Fintech in Switzerland back on track for growth
In 2021, the Swiss fintech sector, which had been accustomed to success, suffered a fall of around 5%. It now seems to be back on track for success. At the end of 2022, the sector had a total of 437 companies, equating to an increase of 14% compared to 2021. The product areas of investment management and banking infrastructure – where most fintech companies are generally found – were the big winners here. There’s also a trend towards sustainability. By the end of 2022, 7.3% of all Swiss fintech companies were strategically focusing on sustainable products and services.
Swiss job market looking positive
Swiss companies are still wanting to hire new staff, despite the uncertain economic outlook. The Swiss Job Market Index 2022 by the University of Zurich and the Adecco Group reports a pleasing upswing of 23%. This is in spite of inflation, the energy crisis and a weakening global economy. The only negative trend was among managerial staff, which was down 8%. The highest increase in demand was recorded in the occupational group of service and sales specialists, with a rise of 47%. Despite the prospect of a slight improvement in the economic situation, the forecasts for 2023 remain mixed in general.
The proportion of women in management positions is rising slowly but steadily
The Schilling Report, compiled by the Swiss executive search firm Guido Schilling AG, has been tracking the development of the gender composition at senior management level since 2006. In 2022, the proportion of women in management roles at the 100 largest Swiss companies rose by two percentage points to 19% year on year. Around a quarter of newly appointed executive board members in 2022 were female. The trend is progressing faster for boards of directors – while the proportion of female members stood at 23% in 2018, it’s already reached a pleasing 34% today.
