R&D in AI is booming globally. The "Swiss AI Startup Map" shows Switzerland as a key hotspot. AI start-ups are popping up all over and the scene is growing rapidly. The reasons for this are diverse.
Text: Jörg Rothweiler, 10 October 2017
Robotics, Healthcare, Life Sciences, FinTech and InsurTech are the five most important sectors where Swiss AI start-ups are active. These five leaders are followed closely by Business Intelligence, Speech and Image Recognition and Machine Intelligence. This spread is no coincidence: Start-ups encounter ideal conditions in Switzerland and more importantly strong economic partners.
The secret to this boom is cooperation. Firstly, spin-off services provided by research institutes like the Swiss Federal Institute of Technology in Lausanne (EPFL) or the Swiss Federal Institute of Technology (ETH) in Zurich support start-ups and help prepare them for investors. Secondly, corporations help by entering into development partnerships. One example is Swisscom, who, as an active member of the AI-Community, is taking two directions: At university research level, Swisscom has its own AI lab at the EPFL in Lausanne. One example of a development in this lab is the "Intelligent Voice Browsing System", which Swisscom intends to showcase at the end of 2017. At start-up level, evidence of the involvement of Swisscom has existed at the PiratesHub in Zurich since autumn 2014. As part of the Digital Business Unit (DBU) at Swisscom, it acts as a hub for bringing together AI start-ups. The goal being to bundle strengths to achieve faster and more cost-effective innovations.
It's a recipe that works, explains Metin Zerman, Open Innovation Manager at the DBU. He publishes the quarterly "Swiss AI Startup Map", which presents an overview of around 100 of the most important Swiss AI start-ups, broken down by field of activity. Zerman knows exactly where, why and in what industries AI is booming in Switzerland.
He reveals: «Everywhere, where companies have universities and research institutes as direct neighbours who attract talent from all over the world and where leading research in AI is performed, is in upheaval. A good 60% of all start-ups on the "Swiss AI Startup Map" are based in Zurich, while 16% are in Lausanne and the remaining 7% in Geneva, Berne or Basel. A high density of accelerators, incubators and investors can be found concentrated in these metropolitan areas. They are also close to Germany and France, both of which are excellent and growing markets for AI start-ups.»
Switzerland offers ideal pre-conditions for the AI boom including a modern infrastructure made up of central enabler technologies such as cloud, open source, connectivity and real-time networking, political stability, pioneering spirit and an enthusiasm for investment, as well as traditional Swiss strengths such as engineering, precision mechanics and mechatronics. «Not just the latter is indispensable for robotics," emphasises Zerman.
Metin Zerman, Open Innovation Manager DBU
The large number of AI players in Switzerland is moreover altogether striking and besides Swisscom, includes banks, insurers, SBB, healthcare providers and even cities like Zurich. They have all recognised that partnership is the key to success. Research establishes the basis. The start-ups develop quickly and act with a high degree of flexibility. However, the greatest leverage is exercised by the large companies. They are the enablers who accompany start-ups, finance research and ultimately commercialise AI technologies. «It is this market success above all that transforms new ideas into innovations," states Zerman.
Zerman is critical of the commercialisation, though. Although the use and business cases the start-ups put forward are becoming more and more specific, not all start-up founders have understood the reason why successful commercialisation is of top priority. «The start-ups need to have more than just disruptive ideas and concepts. The goal has to be market success and the will to scale-up.»
Despite all the dynamics in the AI scene, Zerman also identifies structural challenges that have a braking effect: «Switzerland is moving too slowly and sometimes focusses too hard on just a few areas. Instead of inclusion and stability, what is needed is disruption and flexibility.» In particular, data protection places tight restrictions on AI solutions. Data-centric applications are as absolutely essential here as a general cultural change. Studies predict that automation and AI will produce around 270,000 new jobs in Switzerland by 2025. The technologies associated with this will revolutionise the entire planet, including Switzerland. And like every other country, Switzerland will urgently be looking for skilled workers. This is why a fundamental structural change is required in order to remain internationally competitive and not miss on out opportunities.
Economics, politics and research are required in equal portions. The international focus of interest that Switzerland has as an AI hotspot attracts AI players from all over the world, who compete with Swiss companies to attract university graduates and specialists, scout intelligence and skim off knowledge, or simply buy up whole start-ups.
More than anything else Switzerland now needs the will to become an AI pioneer and remain one too: «Switzerland should not shy away from the international scene and it doesn't need to either," emphasises Zerman. And it shouldn't simply copy methods from Silicon Valley as others do. Switzerland can beat a path to success just as well as any other country can, and often even better. This is why it should place its trust in its own identity and strengths.
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