Swiss innovation agency faces conflict-of-interest questions over start-up grants

More than CHF13 million in grants now sit at the centre of a widening credibility test for Switzerland’s innovation system. An investigation by Swiss public broadcaster RTS has identified at least 20 projects linked to companies associated, directly or indirectly, with members of Innosuisse’s governing bodies—the very institution responsible for distributing public support to start-ups and research-driven businesses.

The sums are significant. Innosuisse operates with an annual budget of roughly CHF300 million, making it one of the central engines of Switzerland’s effort to turn scientific expertise into commercial success. Its funding helps promising companies bridge the notoriously difficult gap between laboratory breakthroughs and scalable businesses.

But the investigation raises a blunt question: can the agency’s safeguards command public confidence when some decision-makers have professional links to grant recipients?

One case involves M*, a member of the Innovation Council, which selects companies for subsidies. Companies managed by M* received around CHF1 million in 2021. One was later selected for a flagship programme in 2024, making it eligible for a grant of up to CHF2.5 million.

Innosuisse insists that conflict-of-interest procedures apply. Yet the scrutiny is intensifying now, as taxpayers and start-ups examine not only whether rules were followed, but whether the system looks fair.

One council member’s business links have become the investigation’s most striking example. M*, an Innovation Council member, also manages several companies that received approximately CHF1 million from Innosuisse in 2021. The connection does not by itself prove wrongdoing, and the source does not allege that the grants were improperly awarded. It does, however, expose the tension at the heart of a specialist funding agency.

Innosuisse says council members are selected precisely because they possess recognised innovation records and practical knowledge of business realities. That expertise can strengthen decisions. It can also create overlapping networks in a country where universities, laboratories, investors and start-ups frequently collaborate across institutional boundaries.

The stakes rose further in 2024, when one company linked to M* entered one of Innosuisse’s flagship programmes, with potential support of up to CHF2.5 million. That figure alone exceeds the annual budgets of many early-stage Swiss ventures and underlines why grant decisions attract intense scrutiny.

Innosuisse also stresses that some support flows to research partners—such as university researchers working for the benefit of companies—rather than directly into corporate accounts. That distinction matters financially, but it does not erase the central governance question: how should public agencies manage influence when professional relationships and funding decisions overlap?

In some cases, just three to five people hold the power to decide where public money goes. RTS reached that conclusion after examining around ten documents obtained under Switzerland’s transparency law. The concentration is legal under Innosuisse’s procedures, but it creates a narrow decision-making funnel—and a potentially damaging perception of insider access.

The investigation describes a revealing pattern involving two Innovation Council members, identified as X* and Y*. Each recused themselves when the other’s projects came before the group. Yet X participated three times in sessions concerning Y’s projects, while Y participated three times in sessions concerning X’s. The grants were awarded on every occasion.

The overlap went further: for two applications, X was responsible for Y’s file, and later Y was responsible for X’s. Innosuisse says these are not individual decisions. It says a subgroup of at least three people takes the final decision, following declarations of interests, prior checks and recusals.

That defence addresses formal procedure. It does not settle the appearance problem. When the same small circle repeatedly handles one another’s files, even a documented recusal can leave outsiders asking whether independence is sufficiently visible—or merely assumed.

A recusal can remove one person from a vote, but it cannot automatically remove influence from the room. That is the core concern raised by Yves Gingras, a sociology professor at the University of Quebec in Montreal who specialises in research evaluation and peer review. He describes allowing a group of only three to five people to decide as “the worst possible situation”.

Gingras’s warning becomes sharper when council members apply for support for their own businesses. In that circumstance, he says, “we’re in the worst-case scenario in terms of the appearance of a conflict of interest” and adds that organisations he knows would generally avoid such arrangements.

The distinction between an actual conflict and the appearance of one is critical for a public agency. Switzerland has built a global reputation for innovation, backed by universities, research institutes and a dense network of technology companies. That ecosystem depends on trust as much as capital. Start-ups must believe that applications are judged on technical promise and economic potential—not proximity to decision-makers.

Innosuisse’s existing rules may prevent direct participation by conflicted members. The investigation nevertheless points to a broader governance challenge: whether the agency should widen decision-making panels, publish more detailed recusal records or introduce stronger independent review when governing-body members are connected to applicants.

The next battle is over transparency—not simply eligibility. Innosuisse now faces pressure to show Swiss taxpayers and entrepreneurs how it prevents concentrated networks from shaping the country’s innovation priorities. The agency says its safeguards are strict: members must declare links, undergo prior verification and withdraw from evaluation and decision-making when a project directly concerns a connected company.

Those measures are the baseline. The investigation suggests that public confidence may require more. Publishing fuller records of recusals, identifying the composition of decision-making subgroups and commissioning independent reviews of applications linked to council members could make the system easier to audit. Whether such reforms are adopted will determine how Switzerland balances specialist expertise with visible impartiality.

The issue extends beyond one member, one company or one grant. At least 20 projects and more than CHF13 million have come into focus, while Innosuisse manages roughly CHF300 million a year. Every franc must support credible innovation—and every decision must withstand scrutiny from competitors who were not selected.

Switzerland’s start-up economy needs bold public investment. It also needs rules that are strong enough to reassure those left outside the funding circle. The agency’s immediate challenge is clear: prove that expertise opens the door to better decisions, not privileged access to public money.