Photos: Désirée Good

‘A foun­da­tion can fund riskier projects’

Humankapital als Wertschöpfungstreiber

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.

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