. /.WORLD TRADE
ORGANIZATIONG/SCM/Q2/CHE/15
27 August 2003
(03-4463)
Committee on Subsidies
and Countervailing MeasuresOriginal:  French
SUBSIDIES
Replies to Questions from CHINESE TAIPEI1 Regarding the New
and Full Notification of SWITZERLAND2
Question
In connection with the programme entitled "Assistance for zones which are under
economic renewal", Switzerland mentioned that, in order to qualify for financial support under
this programme, the project has to be innovative:  the product and the manufacturing process
have to be technologically up-to-date and give  the company an increased ability to compete
through a national and international market presence.
Please clarify whether there is any review standard or process for the qualification of
the above-mentioned project.  If there is, please provide us with a copy for reference.
Reply
Criteria for evaluating the "innovation" aspect
Innovativeness is one of the most important criteria governing support for an investment
project on the basis of a federal decree.  The degree of innovation must be clearly demonstrated by the
applicant for financial assistance.
The following criteria serve as reference and, if they are met cumulatively, support the
conclusion that a project is innovative:
1. The project must be creative and show evidence of originality.  Novelty connotes being one
of a kind and, in order to market it, promoters must show their ability to bear risks.
2. The project must serve to stimulate growth and open a new strategic field in terms of products
and clients (either as part of an organic process within an existing enterprise or as a new entity or
venture).  The enterprise undertaking the project must be in the start-up, structural development or
expansion phase.  The "seed" phase (idea, basic concept and product and prototype development)must have been completed by the time the support is granted.  In the case of an SME, the project must
allow for the development and establishment of a network of partners (suppliers, clients, etc.) in
foreign countries.
3. The project must reflect a clear vision of the future.  Management support must be intensive
and show awareness of the risks to be borne.  The risks must be clearly recognized andcomprehensively managed.
                                                     
1 G/SCM/Q2/CHE/13.
2 G/SCM/N/95/CHE.G/SCM/Q2/CHE/15
Page 2
4. Project funding must include a high percentage of private equity capital.
5. So as not to distort competition, the project and financial support must not be perceived in a
negative light by competing firms in the economic zone.  Competition benefits directly or indirectly
from the spin-off from the project, which gives momentum to development in the economic zone.
6. The project may help to keep a firm at its cu rrent location.  In the event of location abroad,
the site must be carefully evaluated in order to maximize its contribution to the durability of the
project.
The following indicators may also show that a project is particularly innovative:
(a) Marked increase in productivity;
(b) increase in added value and corporate performance (intrinsic worth and output);
(c) in the event of a technological breakthrough, cooperation with external network
partners (subcontractors, institutes of higher education, intangible rights lawyers,
etc.).
The opinion of an external expert may be required, if necessary, to gauge the innovativeness
of a project.
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