Essential investments in education, research and innovation

The education, research and innovation (ERI) sector is facing a financial squeeze: according to the Federal Council’s plans, fewer financial resources will be invested in the ERI sector in 2025 than in the current year 2024. It is the first time since the 1990s that universities and the organisations that fund research and innovation will have less federal funding than in the previous year. This will limit future-relevant investments in education, research and innovation. The Federal Council draft of its Dispatch on the promotion of education, research and innovation (ERI Dispatch) for the period 2025-2028 is proposing a cap of 29.2 billion Swiss francs. This spring, federal budget constraints have prompted the Federal Council to reduce the already scarce resources specified in the draft consultation document by a further 500 million francs. So instead of average annual growth of 2% in nominal terms, funding for the entire ERI sector will now only see average growth of 1.6%. Taking account of forecast inflation, funding growth in the coming period will be close to zero; in fact, the universities may even see their funding decrease in real terms.

Lack of planning security

Despite declining growth in financial resources, the ambitious goals and tasks that the Federal Council sets out for the ERI stakeholders in its Dispatch remain unchanged. There is a major discrepancy between funding growth and strategic goals. The ERI actors are thus faced with having to cut back the services they provide and to suspend projects that are of great importance to Switzerland’s economy and society. Moreover, the Federal Department of Finance has already announced further austerity measures for the coming years. It is likely that the ERI sector will once again be affected by such cuts. The expenditure cap set by the ERI Dispatch for the period 2025-2028 is therefore called into question. This uncertain investment policy for the ERI sector makes it difficult for the universities – as well as the research and innovation funding organisations – to have planning security.

Below-average growth in university finances

In this situation, the universities are under particularly heavy pressure: growth in their basic funding for the period 2025-2028 falls short of their expected financing needs in the light of developments in teaching and research. Based on the ERI Dispatch, nominal growth will come to 0.6% for the universities and 0.7% for the universities of applied sciences. This is below the expected inflation rate and does not take account of the continuing rise in student numbers. Moreover, the skills shortage implies that targeted support for young talent will in fact be needed. At the same time, the lack of planning security threatens to restrict the universities’ autonomy and scope for action, thus putting the quality of teaching and research at risk.

From 2025, the ETH Domain will face annual budget cuts of 100 million Swiss francs. In addition, there will be a one-off reduction by a further 100 million francs in 2025. In this area as well, the result is below-average annual growth of 1.2% in nominal terms. Consequently, the mission to be performed in the interests of Switzerland’s economy and society will be in jeopardy: the two Federal Institutes of Technology and the four ETH Domain research institutes will be forced to suspend or scale back projects and initiatives, such as those in the field of artificial intelligence (AI). Moreover, projects in the fields of sustainable agriculture, healthcare, advanced materials and digitisation will also have to be dropped.

Additional tasks in research funding

The institutions responsible for funding research – the Swiss National Science Foundation and the Swiss Academies of Arts and Sciences – are mentioned as priorities in the ERI Dispatch 2025-2028, but they too will see a decline in funding in 2025 compared to the previous year. The above-average growth at the SNSF (2.5% in nominal terms) is also due to the fact that it has been implementing special federal tasks since Switzerland was excluded from the EU’s framework programme for research and innovation (“Horizon Europe”). The nominal 5% growth in funds reported by the Academies of Arts and Sciences relates exclusively to two special mandates (Swiss Quantum Initiative, Data Coordination Centre for Personalised Medicine) that lie outside their basic mission. In fact, the Academies will have to implement more measures with fewer funds during the next ERI funding period, which will further erode their basic funding.

Parliament initiates consultation process

With this investment policy for education, research and innovation, the Federal Council risks forfeiting key factors for Switzerland’s future success. In the coming months, Parliament will deliberate on the ERI Dispatch for 2025-2028 and will have an opportunity to adjust the planned investments in Swiss education, research and innovation.