When Google looked to set up its European engineering headquarters, it turned to Zurich, and Yahoo followed suit. The U.S. tech giants liked Zurich's robust broadband infrastructure, but the real appeal is the local talent: Switzerland is the No. 1 country in the world in patents as a percentage of GDP. The Swiss government has multiple programs for investing in small businesses, and the effort seems to be paying off. Zurich is home to hundreds of startups, including calendar software maker Doodle and Wuala, a cloud storage company.
CEO Mark Zuckerberg would like to reach the country's 513 million Internet users. Too bad local entrepreneurs have beaten him to the punch.