Interview with Dr. Daniel Risch, Deputy Prime Minister of Liechtenstein, Ministry for Infrastructure, Economic Affairs and Sport.
CEO Insight: What makes Liechtenstein such a unique location for companies and businesses?
Daniel Risch: Liechtenstein is one of the most highly industrialised economies in the world, has a broadly diversified economy and is home to several globally active companies. Industry and manufacturing make up roughly 40% of Liechtenstein’s gross value added, while 25% comes from financial services and around a third from general services, including agriculture. All in all there are around 4,700 companies in Liechtenstein active in a wide variety of sectors – from IT services to crafts, trades and high-tech manufacturing.
As a business location, Liechtenstein is special because of its central location in Europe and free access to two economic areas. This is made possible by, on the one hand, Liechtenstein’s membership of the European Economic Area (EEA) and, on the other hand, its close ties with Switzerland, with which Liechtenstein shares a customs and currency union.
Other strengths of Liechtenstein as a business location are its liberal economic system, compact size, minimal bureaucracy, competitive tax regime and high level of education. With a population of around 38,000 inhabitants, Liechtenstein has more than 38,000 jobs and maintains a low unemployment rate.
CEO Insight: What insight can you share on the role of innovation within the Infrastructure, Economic Affairs and Sport development and investment roadmaps?
Daniel Risch: Liechtenstein has always been a hub of innovation and research with global market leaders in high-tech niche sectors. According to the latest figures, more than 9% of our GDP is invested in research and development.
Strong entrepreneurial spirit as well as a high level of innovation make Liechtenstein economically attractive and are based on close cooperation between business, science and education. Liechtenstein’s success as a business location can be traced back to its ability to change constantly and to continuously innovate and compete.
“We are convinced that in order to stay competitive as a business location in the long run, Liechtenstein must remain innovative.”
The state provides the necessary framework conditions for this and removes obstacles to innovation. There is no direct state investment. Instead, from a state perspective, the focus is on creating and maintaining an attractive, business-friendly environment which makes it interesting for companies and investors to operate in Liechtenstein.
We are convinced that in order to stay competitive as a business location in the long run, Liechtenstein must remain innovative. That is why there are numerous instruments and measures along what is known as the “innovation funnel”. These include the Idea Channel, the Business Plan Competition and the Chair for Entrepreneurship at the University of Liechtenstein as well as the activities of the Liechtenstein Investment Market association and Impuls Liechtenstein.
Last year, a cooperation with the Technopark Liechtenstein was launched aimed at supporting and promoting start-ups. Innovation is also driven through specifically targeted instruments like our Innovation Cheques. We are also planning on introducing Digital Cheques with the aim of supporting SMEs in implementing the latest digital technologies, including training measures for employees.
“Liechtenstein is constantly monitoring the latest developments and will take the necessary legal measures in order to be able to continue to make the existing attractive framework conditions available to businesses in the country.”
When it comes to research and development, Liechtenstein research institutions can participate fully in Innosuisse projects thanks to an agreement with Switzerland. Innosuisse is the Swiss Innovation Agency. Its mission is to promote science-based innovation in the interest of business and society.
CEO Insight: How is the Ministry collaborating to assure the digital ecosystem in Liechtenstein and support not only those companies coming from abroad, but also national businesses and citizens in general from a digitisation perspective?
Daniel Risch: Digital change opens up numerous opportunities for Liechtenstein to act using its economic strength and the political stability I have already mentioned as well as its compact size, international networks and above-average innovative power. This opens up growth opportunities for companies already operating in Liechtenstein, including the emergence of new business models and technologies, the expansion of niche segments, and the further development of business processes.
Liechtenstein is constantly monitoring the latest developments and will take the necessary legal measures in order to be able to continue to make the existing attractive framework conditions available to businesses in the country. In this context, we strive to achieve close cooperation between society, business, science, education and administration. Back in 2017 the digital-liechtenstein.li platform was launched to facilitate networking and an exchange of know-how. This platform addresses and expands the topic of digitisation through a wide range of different formats.
CEO Insight: Dependant on maturity and readiness, different countries in Europe and the wider world are prioritising investments into various initiatives, programs and schemes to support their nation’s growth. Commonalities seem to exist around ‘Digital Growth Strategy’ with focus on technological advancements in a diversified range of verticals including: wireless and mobile technology, AI, robotics, software development, data science and smart city frameworks.
Does the government have any plans to step up support for technology driven industry and what technologies excite you the most for both their applications and the way they will positively change society?
Daniel Risch: The state cooperates with relevant institutions in order to help companies based in Liechtenstein access national and international research programs. In 2012, the RhySearch research and innovation centre was established in cooperation with the Swiss canton of St. Gallen.
In addition to important clusters such as optical coating and precision manufacturing, the institute has also addressed the topic of Industry 4.0 and has integrated a new field of focus with its project Workshop 4.0. This involves the automation and digitalisation of production, which is summarised under the keyword Industry 4.0.
“The digitisation of business processes possible today opens up new opportunities for flexible medium-sized companies in particular to expand their customer base or even their product range and to increase internal efficiency.”
The University of Liechtenstein offers support with the development of new business models suitable for Industry 4.0. ETH Zurich is one of RhySearch’s cooperation partners. Liechtenstein research institutions also have the opportunity to participate fully in the projects of Innosuisse, the Swiss Innovation Agency. In January 2019 the first purely Liechtenstein-based Innosuisse project was launched with the University of Liechtenstein as a research partner.