Jörg Müller-Ganz, Chairman of the Board of Zürcher Kantonalbank, discusses the importance of research and innovation for Zurich as a business location, the bank’s engagement, and the impetus that foundations can provide through their funding work.
Zürcher Kantonalbank (ZKB) supports research and innovation, which are not typical banking activities – why do you do this?
ZKB is fully owned by the population of Zurich. The law that lays down ZKB’s activities states that the bank’s purpose is to operate as a universal bank, but it also states that it should contribute to solutions for economic and social issues in the canton.
How does ZKB fulfil this purpose in terms of research and innovation?
In specific terms, we are involved in four areas. The basis of our strategy is our support for the four universities in Zurich with substantial financial sums. We are the main sponsor of the seven innovation and technoparks in the canton. Additionally, we support various institutions, such as gruenden.ch, which help start-ups find their way into the economy. And last but not least, we are Switzerland’s largest investor in start-ups. Nobody does more than us. At present, about 100 innovative young entrepreneurs have equity that has been provided by ZKB. Our growth fund has also been offering institutional investors the opportunity to invest directly in start-ups for the last three years.
ZKB is closely connected to Zurich as a business location. What role does the quality of research institutes in the region play for the bank as the basis for its success?
The teaching and research institutes are of course relevant in the recruitment of specialist staff, and the projects we implement with universities are key sources of expertise. If we broaden our perspective for a moment, the concentration of world-leading research contributes to the fact that Zurich is one of the most prosperous regions worldwide. This was not the case when ZKB was founded 150 years ago. Our success as a bank with the highest market share in the canton of Zurich is directly related to the canton’s economic prosperity – and this is the result of innovation, research and development.
ZKB supports top-flight research through, for example, the Excellence Foundation, and it is also involved in the Zurich Job Fair.
The dual education system is a balanced model. What’s the point of high-end engineering if the skills for product-specific implementation are lacking? Thanks to the dual education model, Switzerland produces workers with above-average qualifications at all levels. Maintenance and development of human capital are value creation drivers in our country.
“Building tomorrow’s welfare with innovation.“ Jörg Müller-Ganz
You are the Chairman of the bank’s Board of Directors and a trustee, and you used to be a lecturer. You know the importance of research and education for Switzerland from all angles. What would you say about the interaction of the various stakeholders?
Human capital is our country’s most important commodity. And it’s a commodity we need to develop on a constant basis. Our liberal state plays a key role in ensuring we can get as much as possible from our human capital: we have a system that’s shaped by mobility, not elitism. Compared with other countries, education at our universities is high quality and accessibly priced. In the US, students at private universities pay fees far in excess of the CHF 1,000 or so a semester that students pay here.
And the system works well?
For it to work, three stakeholder groups have to work together: science and research, business, and politics. That works really well. In other countries, such as Israel, they work even more closely together: we are doing well, but we could do even better.
What role can foundations play?
In our country, universities are financed primarily by the state, with companies funding operational research and development. Alongside this, foundations play a supplementary role for both universities and companies.
Why is that?
The state has limited funds at its disposal, and there are more ideas for research and innovation than could receive public funding. As a result, funding from a foundation can push forward new ideas and concepts quicker and help them see the light of day. I see this with the ETH Foundation, which can fund riskier projects. Even in the start-up scene, numerous foundations offer direct funding to early-stage companies that are in line with their purpose. Financing of research and innovation is not the principal task of foundations in Switzerland, but they can play an important additional role.
The uncertain relationship with the EU also places participation in Horizon 2020 at risk. Can foundations step into the breach?
Until now, Horizon 2020 has been important for our country as a fully associated member of the programme. Since 2003, the EU has spent billions of euros on research in Switzerland. This support brings leverage, as it can trigger additional funding from companies. Foundations cannot compensate for this.
So, does foundation funding work as a supplement to state funds?
State funding guarantees the very high level of education in our schools, vocational colleges and universities. Nevertheless, support from private individuals and foundations is on the rise, facilitating projects that would not otherwise be funded. For example, ZKB is involved, via the ETH Foundation, in the Zurich Information Security and Privacy Center, where it works with other companies to help make the internet safer. A start-up recently emerged from this research, which has already reached a substantial size, developing innovations in the field of security. Without the contributions from foundations and private individuals, it would not have gained this strength – this adds value for society as a whole.
Critics think that private financing puts universities’ independence at risk.
Of course, every university needs to ensure that a clear line is drawn between corporate cash and influence on research: that’s a core tenet in our country.
Is it beneficial if support comes via a foundation, such as the ETH Foundation?
The ETH Foundation can take on a supplementary role. It can guarantee the separation between the university and the donor, so that the interests of the university and the company are not compromised and the foundation’s purpose is fulfilled. In its coordinating function, it can balance out the interests of all parties. University funding foundations have precisely this function of supporting research facilities.
Is the support provided by the foundation just financial support, or does the foundation also provide other kinds of support via its network and the expertise of its trustees?
Its main purpose is financial in nature. We do not need to tell researchers what to research, but the ETH Foundation’s Board of Trustees is full of prominent representatives of the business world, and they can open doors.
About Jörg Müller-Ganz (Dr. oec. HSG) started his career at a large bank, before working for 20 years as a consultant in corporate finance and as managing co-owner of the international Helbling Group. He has been Chairman of the Board of Zürcher Kantonalbank since 2011. As a trustee of the ETH Foundation, Innovation Park Zurich and Technopark Zurich, he is deeply committed to research and innovation in Zurich. The Board of Directors of Zürcher Kantonalbank is elected by the Cantonal Parliament. It has 13 members, including three full-time members of the Committee of the Board. The Board of Directors is entrusted with the overall management of the bank and the overall supervision of the executives.
Stiftung Technopark Zurich and ZKB present the Pioneer Award (Pionierpreis). How important is it to ZKB to support pioneering work and start-ups?
Let me share with you an example that left its mark on me: in 1887, Charles Brown and Walter Boveri had an idea for a company, but they were not able to find funding. In 1890, Walter Boveri met Victoire Baumann, who later became his wife. Her father was a successful silk manufacturer from Zurich. Walter’s future father-in-law trusted him and gave the two men the resources to fund their idea. We know how the story ends: ABB is now one of the biggest companies in Switzerland. And this case illustrates something else, too: today, the silk industry is no longer important, but ABB represents a forward-looking industry, combining electrification, robotics, automation and drive technology with software. The example shows that innovation can generate prosperity and added value for the future. And since we do not all have wealthy fathers-in-law to fund our good ideas, investors like us step in. ZKB provides start-ups with more venture capital than any other bank in Switzerland.
And how does the Pioneer Award (Pionierpreis) fit in?
The award is given to projects as they transition from an innovative idea to marketability. At this point in time, the start-ups are a long way from selling a product, and it’s hard to obtain money in this phase. The award supports young businesses on two levels: first, it comes with start-up capital of CHF 100,000 and, second, it generates a huge amount of attention, with a lot of publicity in print and in social media. In addition, about 500 people take part in the awards ceremony, including private individuals interested in making a direct investment. In turn, that can give rise to other funding opportunities.
What impact has the award had over the last 20 years?
Winners of the award have created thousands of jobs in Switzerland.
ZKB could run an award like this on its own. What are the advantages of working with a foundation?
Nowadays, start-ups are “everybody’s darling”: people cannot give them enough money! It was a very different situation 30 years ago. Technopark Zurich was founded in 1990, and back then most people, whether the general public or companies, did not know what a start-up was. The Technopark was created in an industrial wasteland in Zurich West. It was a brave step to build something there – and now it’s home to 300 early-stage companies. The Technopark is a beacon for the promotion of innovation in our country, and presenting an award in collaboration with it has a major impact.
Have you been impressed in particular by a specific start-up?
GetYourGuide is an ETH spin-off. It offers global travel services, such as booking a personal guide. It was ETH’s first unicorn, which is what we call a start-up valued at more than USD 1 billion. It was unable to find funding at the start, but a ZKB employee encouraged them not to give up and organised the financing. For me, it remains a shining example of a technology company that became successful from within Switzerland.
What’s your personal motivation to work as a trustee with research and innovation?
Es hat viel mit meinem eigenen Werdegang zu tun. Ich war Partner und Miteigentümer eines Unternehmens, das Beratungs- und Entwicklungsdienstleistungen anbietet. In dieser Zeit lernte ich die Stimmung von Innovation und Industrie kennen. Genau das finde ich spannend. Heute noch gehe ich gerne in produzierende Unternehmen. Ich habe Freude an Technologie und Innovation, insbesondere wenn unser Land weltmarktführende Unternehmen in verschiedenen Sektoren hervorbringt. Ich habe das Glück, dieses Feuer und diese Freude mit dem Zweck der Bank verbinden zu dürfen. Das ist ganz persönlich befriedigend.