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From domestic to export markets

For many cleantech companies the Swiss market is too small. They have to market their products and services abroad. How great is the market potential? How well-positioned are cleantech products and services on export markets? How large is the domestic market? A short analysis of the situation is presented here.
Production facility for the manufacture of thin-film silicon solar cells, made in Switzerland (Oerikon Solar)
It is estimated that the global market volume for cleantech applications will have reached CHF 3.35 trillion by 2020. State-sponsored incentive programmes are increasing the demand for cleantech solutions. To give a few examples: the US government has allocated USD 11 billion of its economic stimulus package to the cleantech sector; the Chinese government will be allocating CHF 150 billion to cleantech over the next three years; and the EU has set aside CHF 15 billion to cleantech in its economic programme. The Cleantech Switzerland Export Platform was therefore established to help Swiss SMEs to break into cleantech export markets.

Switzerland well-positioned for export markets

Within the framework of the SCMP, the Fraunhofer Institute for Systems and Innovation Research (ISI) analysed Swiss cleantech exports to determine how successful they were on the world cleantech market. As foreign trade statistics show, cleantech exports rose markedly between 1996 and 2008. However, they increased to a lesser extent than Swiss exports overall. On average, only about 15% of all Swiss exports during the period under review were cleantech-related. Switzerland’s share of world trade in cleantech between 1996 and 2008 declined to a greater extent than Switzerland’s overall share, from about 2.3% to 1.4%. Up until 2008, Swiss cleantech products enjoyed a slightly higher share of the world market than Swiss exports in general, an advantage which has since been lost.

Diagram 3: Switzerland’s share of world cleantech market (1996 -2008)
Source: Fraunhofer (ISI) calculations (2010)

Switzerland’s foreign trade position is particularly strong in energy storage, waste management and resource efficiency, environmental technologies and energy efficiency; export surpluses in these areas are significantly higher than in export goods overall.

Size of the domestic market

Before companies begin to export their products and services, they often introduce them onto the domestic market first. The environment in a company’s “home country” is a very significant factor in the development of innovations. On the one hand, general economic conditions influence the extent to which companies can be innovative. In Switzerland, these conditions are generally considered to be good.
At the same time, state regulations such as legal limits, bans, rulings and incentive systems may encourage or hinder innovation, especially in the cleantech sector. However, in Switzerland there is currently no overview of the applicable regulations, nor have impact studies been conducted thus far.

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