Liechtenstein and Switzerland are both partners and rivals. The renewal of a cooperation agreement from 2016 is just one example of a mutually beneficial partnership. 

The governments of Liechtenstein and Switzerland have agreed to prolong a cooperation agreement that had been signed in 2016. The agreement is about the cooperation between Liechtenstein and Switzerland in innovation promotion and was initially only valid for four years ending in 2020. The Liechtenstein government and the Swiss Federal Council now concluded a new agreement on the promotion of science-based innovation.

The new agreement is again valid for four years. Based on the agreement, the existing cooperation with Innosuisse, the Swiss Agency for the Promotion of Innovation, will be continued and expanded to include startup coaching. The idea is to further strengthen Liechtenstein and the region as a location for business and innovation.

In order to implement the agreement, the government is asking the parliament for a commitment loan of 2.2 million Swiss francs which will go to national research institutions. Parliament is expected to consider the bill in its June session.

Friendship and rivalry

Cooperation between Switzerland and Liechtenstein is a cornerstone of regional development. Both countries are not part of the European Union (although Liechtenstein is part of the European Economic Area, Switzerland is not) and face similar challenges. Neither Switzerland nor Liechtenstein have large populations or vast natural resources. That’s why in the past, they have focused on creating a world-renowned financial center, and now they are focusing on creating a technology hub in the heart of Europe.

The prime example of these efforts is the so-called Crypto Valley. It includes parts of Switzerland, in particular, Zug and Zurich as well as Liechtenstein. The Crypto Valley has become home to blockchain and crypto companies and other tech startups that want to benefit from top-notch infrastructure, know-how, and progressive tech regulations.

What makes the relationship between Liechtenstein and Switzerland interesting is that the alpine nations are both partners and competitors. They have similar interests and face similar challenges, and there are many areas of cooperation, as the above examples show. However, there is also rivalry, especially when it comes to attracting the best companies and the brightest talents.

And both countries do that quite differently, playing their individual advantages. Switzerland is bigger than Liechtenstein, is home to more companies, and offers a more attractive ecosystem and better infrastructure. Liechtenstein is a smaller country, but it offers businesses easy access to the European Economic Area, meaning, for example, Liechtenstein-based securities issuers can passport their securities prospectus to European countries and sell all over Europe.

But in the end, Liechtenstein and Switzerland are in this together. They are affected by very similar growth drivers, and cooperation is the way forward. And nobody in either Liechtenstein or Switzerland has any serious doubts about that.

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