National Innovation System

Introduction

Innovation is the process by which the inventions are transmitted into final goods and services that are readily available for consumer purchase. It can also be defined as commercialization of invention itself. The process of introducing new products, discovering new approaches, adding new sources of supply and operating new business in an industry in the country's business environment is called innovation.

This report talks about the National Innovation System in Switzerland and also briefly discusses the factors that influence and encourage the progress of innovation in different sectors of the industry. What difficulties the industries face while operating in this country has also been explained. Later in this report the focus moves to emphasize the challenges that the country's National Innovation System has to face.

Business Environment in Switzerland

Switzerland has made a perfect mark in driving growth in innovation systems. With annual growth higher than European Union Average in innovation performance Switzerland lie amongst the innovation leaders in Europe.

The freedom of trade and industry (guaranteed by Swiss Constitution) permits every individual to start up and operate business in this country. Unlike UK, Germany, France, or Italy, Swiss business regulation does not include much "red tape". Law of Switzerland undoubtedly defines the capital and partnership based companies as the two most significant commercial entities. Being a well-developed country with excellent transport and communication systems, it becomes very easy to do business here.

Switzerland crows two main international business cities- Zurich and Geneva, housing headquarters for number of banks (known for its strict secrecy), financial institutions (offering wide range of financial services) and global organisations (reputed internationally). Beside known for its successful banking sector, country with its skilled workforce has also established itself as a global financial hub and "Centre of Innovation".

National Innovation System

"A national system of innovation is the system of interacting private and public firms (either large or small), universities, and government agencies aiming at the production of science and technology within national borders. Interaction among these units may be technical, commercial, legal, social, and financial, in as much as the goal of the interaction is the development, protection, financing or regulation of new science and technology" (Niosi et al., 1993)

Since 1990 many policy makers have diverted their attention to National Innovation System theory. The NIS model started to emphasis more on relationships and procedures between several innovation and performers. The concept of innovation cluster