Innosuisse leaders linked to millions in funding awards

Swiss broadcaster SRF reported, citing an investigation by RTS, that several senior figures at Innosuisse, Switzerland’s federal innovation agency, have directly or indirectly benefited from public funding.

One case involves a member of Innosuisse’s Innovation Council who runs several companies that received a total of about 1 million Swiss francs in funding in 2021. According to the federal Aramis database, around 20 public funding payments went to companies linked to people serving on Innosuisse’s governing bodies.

Innosuisse said such arrangements were possible because Innovation Council members were recruited from the innovation sector for their practical experience. It also said some funding was paid not directly to companies but to research partners such as universities involved in projects with them.

The agency’s rules require anyone connected to an application to disclose the connection, recuse themselves and take no part in the assessment or decision. However, documents obtained by RTS under Switzerland’s Freedom of Information Act showed that funding decisions were often made by groups of only three to five people.

RTS identified cases in which members advised each other on funding applications. In one instance, a council member repeatedly attended meetings deciding on projects submitted by another member, who recused themselves. The roles were later reversed.

Innosuisse said its conflict-of-interest rules also applied in such situations. It stressed that decisions were not made by individuals but by at least three members of a governing body.

Yves Gingras, a sociologist at the University of Quebec in Montreal who specialises in research evaluation, told RTS that these safeguards might not be sufficient. Allowing three to five people to decide on funding applications was “the worst solution”, he said, especially when members of such groups were simultaneously applying for funding for their own companies.

Innosuisse is overseen by the Federal Department of Economic Affairs, Education and Research, which appoints its board and sets its strategic objectives. The department told RTS it was not responsible for the agency’s operational oversight and said that responsibility lay with Innosuisse itself. Innosuisse partly referred to the Swiss Federal Audit Office, which said it only checked whether the relevant control systems existed.

Another case involves Innosuisse President André Kudelski, who also chairs the board of Montreux Media Ventures. The company received 440,000 Swiss francs in funding from Innosuisse.

Innosuisse said the funding decision did not represent a conflict of interest because applications were decided by the Innovation Council rather than the board. Corporate governance expert Dominique Freymond disagreed, saying there was a conflict if money went directly to a company whose board was chaired by Kudelski. He said the case should therefore have been handled separately.

Other organisations use different procedures. Under the European Union’s Horizon Europe programme, the European Commission supports evaluations and monitors the process’s independence. Geneva foundation Fondetec leaves funding decisions to political representatives, while the Swiss National Science Foundation sometimes decides between equally ranked applications by drawing lots.

Innosuisse supports companies, start-ups and research projects with public money and has an annual budget of around 300 million Swiss francs.