EU procurement plans could shut Swiss innovators out of new funding

Swiss companies could lose access to a new stream of European public money just as Brussels tries to accelerate investment in emerging technology. The European Commission is preparing reforms for innovation-focused procurement, covering experimental products that public authorities want to buy before they are commercially available.

The proposal matters in Switzerland because the country’s research economy is deeply connected to European universities, laboratories and industrial partners. Yet the draft rules would generally prevent Swiss firms from bidding for the funds. The proposed preference would direct around 50% of the financing to the EU or countries with relevant agreements, such as members of the European Economic Area and several Balkan states. Switzerland currently has no agreement that would provide the same access.

The affected projects could include robots designed for hospitals or artificial intelligence software that helps municipal services manage rubbish collection. These are precisely the kinds of early contracts that can give a young technology company a reference customer, revenue and a route to wider markets.

The Commission says it wants to simplify procurement and strengthen Europe’s ability to develop key technologies. For Swiss start-ups, laboratories and established engineering companies, eligibility may determine whether they can compete at the point when public backing matters most.

Only €0.60 of every €100 spent on European public procurement currently goes to innovative projects. The European Commission wants to raise that level by making it easier for public authorities to commission technologies that remain experimental or have yet to reach the market.

Traditional procurement generally asks authorities to buy established products or services. Innovation procurement works earlier in the development cycle. A city, hospital network or public utility describes a problem, then works with companies to develop and test a solution. The arrangement can reduce risk for the buyer while giving a technology firm its first serious customer.

The Commission’s comparison underlines the scale of the challenge. It cites innovation spending of €0.60 per €100 in Europe, while presenting a United States comparison of 50 cents for every $7. The figures appear in different formats, so they should not be treated as a directly equivalent league table. They do show the Commission’s argument that European public buyers have room to invest more in new technology.

Brussels Commissioner Ekaterina Zareva has argued that key technologies are often too expensive for a single member state to develop alone. Cross-border procurement could spread costs and create larger markets. Excluding Swiss bidders would narrow that pool at the moment the EU is trying to expand it.

The proposed restriction follows a familiar European preference: public funds would favour suppliers inside the EU or linked to it through specific agreements. The draft approach would leave Switzerland outside the preferred group, despite its close economic and scientific ties with the bloc.

The list would include EEA countries and countries in the Balkans with relevant arrangements. Switzerland has access to parts of the European research landscape through separate agreements, but the Commission’s procurement proposal would not automatically treat that research cooperation as sufficient for eligibility.

That distinction creates a practical risk. A Swiss company might work with a French university, develop a product with German engineers and rely on European research infrastructure, yet still be unable to submit a bid for a publicly funded pilot. The rule would affect eligibility before officials assess the company’s technology, price or ability to deliver.

Brussels sources told Swissinfo that the position could change after Switzerland ratifies the Bilateral III agreements. Those accords are intended to clarify the country’s long-term relationship with the EU, but the political path remains difficult. A proposed cantonal majority requirement could raise the threshold for approval in a future referendum.

Until the legal relationship is settled, Swiss businesses must seek inclusion in the procurement rules through diplomacy and negotiations with European institutions.

Swiss industry groups say exclusion would weaken both sides of the relationship. Stefan Brubacher, director of Swissmem, the association representing Switzerland’s mechanical engineering, electrical and metalworking industries, described the proposal as damaging to Swiss companies and to European innovation capacity.

“This naturally harms Switzerland, but above all it harms the EU,” Brubacher said. He pointed to Swiss companies and universities as important partners for European research infrastructure, arguing that their expertise should remain available when public authorities develop new technologies.

Swiss manufacturers and engineering firms often operate across borders, with research, components and customers distributed among several countries. A procurement rule based mainly on legal status could complicate those partnerships. Companies might need to restructure bids around an eligible European subsidiary, find a qualifying partner or abandon a project altogether. Each option could add cost and delay to technology that public authorities are trying to test quickly.

The proposal also carries consequences for Swiss universities and applied research institutions. Publicly funded pilots can provide data, technical validation and a path from laboratory work to commercial production. Losing those opportunities would make it harder for Swiss researchers to turn promising systems into products deployed across Europe.

Brubacher’s message reflects the business community’s immediate task: persuade the EU to recognise Switzerland’s contribution before the procurement framework is finalised.

Switzerland now faces a narrow window to protect its role in Europe’s innovation economy. The European Commission intends to use procurement rules to build demand for technologies that governments and public enterprises have not previously been able to buy at scale. Swiss firms want access to that market before the conditions are locked in.

The immediate response will likely involve Swiss officials, industry associations and research institutions pressing for an eligibility arrangement. They will need to show that Swiss participation strengthens European supply chains, research capacity and deployment of new technologies. The Commission, meanwhile, is seeking rules that direct a significant share of public money toward European development and manufacturing.

The dispute also adds a business dimension to Switzerland’s debate over Bilateral III. Ratification could provide a route into the new procurement system, according to sources in Brussels. Without it, Swiss companies may remain dependent on case-by-case partnerships or on contracts outside the protected funding share.

No final exclusion has been reported, and the Commission’s proposal may change during the legislative process. Swiss authorities therefore have an opportunity to negotiate before the rules take effect. For companies developing medical robotics, artificial intelligence and other key technologies, the outcome will shape access to customers, test sites and capital across Europe.