World champions in innovation, yet still holding back
Switzerland tops the innovation rankings, yet is only modernising its economy in tiny steps. This is particularly evident when it comes to the green transition: companies are simply adding to their business models rather than overhauling them. Anyone who wants to lead the way in this area cannot avoid having to rethink their own business model.
Leading position and small steps
Year after year, it’s the same story. Whenever international organisations assess where in the world the most innovation and development takes place, Switzerland ranks right at the top. In the Global Innovation Index, the country has consistently held a top position for over a decade. We’ve come to expect this by now.
However, a study by the ETH Economic Research Centre (KOF), in collaboration with the FHNW, EPFL and the University of St Gallen, puts this self-image into perspective somewhat. The Swiss economy is still innovating, but increasingly so in small steps. Improvements that are new only to the company itself occur around twice as often as genuine innovations for the market. Yet it is precisely these market innovations that offer the greatest potential for value creation.
Adapt rather than rebuild
Nowhere is this caution more evident than where the greatest need for change lies. When it comes to sustainability issues, most companies simply build on what they already have. Martin Wörter, one of the study’s authors, puts it matter-of-factly: there is room for improvement when it comes to resource-efficient modernisation. This assessment aligns with our internal observations at Nuovia regarding the market and from discussions with senior management at Swiss industrial firms. The study refers to this phenomenon as ‘path dependence’. Existing models are expanded to meet environmental requirements without questioning or departing from established routines. A material is replaced or a process optimised. The leap to new solutions is often not taken.
This is convenient, but it is becoming riskier. Whilst the US and China are channelling large sums into data centres, semiconductors and AI, Switzerland is fine-tuning what already exists. The 2023 Draghi Report on European competitiveness identifies the circular, resource-efficient economy as an area where Europe can build on its own strengths. For Switzerland, an export-oriented nation at the heart of Europe, this is both a benchmark and an opportunity. In a rapidly changing environment, those who play it safe stand to lose the most.
The bill is coming round
From a business perspective, one of the most important factors on the path to new, market-ready innovations is a viable ‘business case’. According to the KOF, this is often not apparent to many companies across all sectors. More than 40 per cent of those surveyed see costs as the main obstacle to green innovation. They focus on the effort involved and rarely consider the potential returns.
A white paper by the University of St Gallen on circular business models, based on discussions with numerous companies, concludes that the technical hurdles are minor or non-existent. What holds things back is often the (corporate) culture. The phrase ‘We’ve always done it this way’ ends up costing more than any missing piece of machinery.
No one can close the circle on their own
In discussions with clients, we like to explore the following question: What would you do differently today if you had to take back every product you’ve ever sold? The honest answer is usually: probably quite a lot. This is precisely where sustainable business model innovation begins. In our projects, this question quickly becomes the most exciting starting point for our discussions. This is where the initial ideas emerge, which we then pursue further together with the company.
A Swiss project in the clothing industry illustrates what such a solution might look like. Working with several partner companies, they developed workwear that can ultimately be completely melted down and re-woven. No mixed fibres, a uniform melting point, and a modular design from the outset. The clothing is rented out and taken back rather than sold. This was only made possible through collaboration with several companies, including former competitors. A traditional supply chain was transformed into a circular approach with a reimagined business model.
Where Switzerland can make a difference
The good news lies in the findings mentioned above. If the obstacle is cultural, we can start today. Switzerland has the research, the patents and the university-industry collaboration that others envy. What is lacking is rarely the ability, but rather the courage to rethink its own value proposition and revenue model.
For senior management, this means treating environmental renewal as a strategic issue rather than a mandatory task for a specialist department. Those who take the business model as their starting point shift the focus from the cost side to the value creation side. The first step is concrete: examine one’s own model in terms of value proposition, value creation and revenue to identify where a closed-loop system would generate returns that the current linear approach fails to deliver.
How we provide support
Many companies are reluctant to take the first step – reviewing their own business model – on their own. This is precisely where we at Nuovia come in. We work with senior management to treat environmental transition as a matter of business model. Together with you, we examine value propositions, value creation and revenue models, identify where a closed-loop system generates returns, and embed the findings in a strategy that is sustainable within the organisation and resonates with customers, investors and staff.
If you’d like to find out where your business model is currently leaving value on the table, do get in touch. An initial discussion will quickly clarify whether it’s worth taking a closer look.
Frequently Asked Questions
Business model innovation focuses on how a company creates, delivers and captures value, rather than simply on how it improves individual products or processes. Specifically: who pays for what, what is the return, and how does this generate environmental benefits? A sustainable model aligns economic returns with the conservation of resources.
Incremental innovation improves existing products or processes and is new only to the company itself – for example, a replacement material or an optimised process. Market-new innovation, by contrast, produces something that does not yet exist in the market in that form – such as a new revenue model or a new value proposition. According to a KOF study, incremental innovations occur in Switzerland around twice as frequently as market-new ones.
Because costs and benefits are not always aligned in time. Investments are visible immediately, whereas the returns – in the form of new revenue streams, higher margins or security of supply – may only materialise after several years. According to the KOF, over forty per cent of Swiss companies cite costs as the main obstacle. However, according to the findings of the University of St Gallen, the real hurdle is a cultural one.
A circular ecosystem is a network of independent companies that work together to ensure that a product or material returns to the cycle after use. Very few companies are able to effectively cover the entire process – from manufacture and use to take-back and recycling – on their own. It is only through a network of several independent companies, all working towards a shared value proposition, that a material can be kept in the cycle.
The most direct way to start is to ask: ‘What would I design or sell differently today if I had to take everything back?’ This reveals where the model is failing to capture value. Three steps serve as a guide: (1) assess the value chain for take-back potential, (2) identify potential partners for an ecosystem, and (3) launch a pilot in a defined product segment.
Sources
- KOF Insights (13.05.2026): «Bei der Digitalisierung und der Nachhaltigkeit gibt es Luft nach oben». https://kof.ethz.ch/publikationen/kof-insights/beitraege/2026/05/bei-der-digitalisierung-und-der-nachhaltigkeit-gibt-es-luft-nach-oben.html
- Barjak, F., Heimsch, F., Cornet, B., Foray, D., Wörter, M. & Schenckery, A. (2025): New innovation models in Switzerland. Report on behalf of SERI. https://www.sbfi.admin.ch/dam/de/sd-web/tgORLW6YIxXW/New_innovation_models_in_Switzerland_2025.pdf
- Takacs, F., Stechow, R. & Frankenberger, K. (2020): Circular Ecosystems: Business Model Innovation for the Circular Economy. White Paper, Universität St. Gallen. https://www.unisg.ch/fileadmin/user_upload/HSG_ROOT/_Kernauftritt_HSG/Forschung/Forschung_im_Fokus/Circular_Lab/__Business_Model_Innovation_for_the_Circular_Economy____Fabian_Takacs__Richard_Stechow__Karolin_Frankenberger__2020_.pdf
- brand eins (Thema Berater 2026): «Naturschutz, der sich rechnet». Interview mit Torsten Kurth (BCG). https://www.brandeins.de/magazine/brand-eins-thema/berater-2026/torsten-kurth-naturschutz-der-sich-rechnet
- Draghi, M. (2024): The future of European competitiveness. https://commission.europa.eu/topics/competitiveness/draghi-report_en
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