Home advantage benefits Nestlé

05 July 2012

VEVEY: Nestlé, the Swiss food group, believes it derives major benefits from allocating over 50% of R&D spending to its home market, advantages that can then be leveraged at the global level.

The company spends approximately €2bn per year on innovation, and Werner Bauer, its chief technology officer, reported that half of this outlay is allocated to its domestic units. 

Alongside the firm's headquarters, the firm has built eight of its 32 worldwide R&D centres in Switzerland, and will open three more sites this year, focusing on health science, clinical research and technology for lines like its Nespresso coffee machine.

"The most innovative companies embrace a culture of engagement, openness and sharing - within their own workplace and outside it. Their ability to do this very much depends on the external surroundings in which they operate," said Bauer.

"We are the world's leading fast moving consumer goods company, in part thanks to our roots in Switzerland, one of the world's most productive and stable environments for innovation."

In reflection of this, Switzerland was recently named as the number one country in the Global Innovation Index produced by the World Intellectual Property Organization, an arm of the United Nations, and INSEAD, the business school.

This study rated 141 countries around the world, based on various qualities, such as infrastructure, access to credit, investment levels, creative output and their research institutions.

"It's obvious to me there are a number of advantages to conducting research and development in Switzerland. Not least, it offers an attractive living and working environment to prospective employees and their families," said Bauer.

The country's other strengths include a strong talent pool, based on a dual general and vocational education system, and its leading universities, with Nestlé taking on 125 graduates last year.

Moreover, the "cluster thinking" between brand owners, service providers, financial institutions, universities and government bodies has a "significant impact", Bauer added.

As an example, Nestlé's Institute of Health Sciences at the Swiss Federal Institute of Technology is linked to the various life sciences activities throughout the university.

This enables "the kind of in-depth connectivity and networking that really helps drive our innovation forward," Bauer said. "For me, it is about creating the right environment for ideas to flourish."

Data sourced from Nestlé; additional content by Warc staff