SHARE
COPY LINK

ECONOMY

Switzerland tops global competition stakes

Switzerland still leads the world in competitiveness because of innovation and labour market efficiency, the World Economic Forum (WEF) said on Wednesday.

Singapore came second and Sweden third.

The WEF published its findings from a survey the day after the Swiss central bank stunned financial markets by setting a minimum rate for the Swiss franc against the euro.  

This was to hold down the Swiss currency against an inflow of funds seeking shelter from the eurozone debt crisis, and the franc plunged by about 10.0 percent..  

This rush had pushed up the franc by about 20.0 percent, endangering the competitive position of exporting industries and tourism and raising a spectre of a sudden slowing of growth.  

The WEF said: “Switzerland’s scientific research institutions are among the worlds best, and the strong collaboration between its academic and business sectors, combined with high company spending on R&D, ensures that much of this research is translated into marketable products and processes.”  

Switzerland, hitherto relatively unscathed by the financial crisis, has low unemployment and debt levels.  

The country of eight million people also benefits from effective public institutions, good public infrastructure and highly developed financial markets, the WEF said in its 2011-2012 Global Competitiveness report.  

The United States ranked fifth, falling for the third year in a row.  

“While many structural features that make its economy extremely productive, a number of escalating weaknesses have lowered the US ranking over the past two years,” it said.  

The United States has good universities, is strong in research and development and has a big economy and a flexible workforce, the WEF found.  

But it said that “the business community continues to be critical toward public and private institutions. 

“In particular, its trust in politicians is not strong, and it considers that the government spends its resources relatively wastefully,” the WEF said.  

However, “a lack of macroeconomic stability continues to be the United States greatest area of weakness,” it said, adding that high levels of public indebtedness were likely to undermine the country’s growth.  

The study was based on publicly available data and a survey of 14,000 business leaders in 142 countries.

ECONOMY

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic

Despite the pandemic, 220 foreign businesses set up their offices in Switzerland in 2020.

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic
Switzerland is a magnet for foreign companies. Photo by Valeriano de Domenico/AFP

While this number is 9 percent lower than in the previous year, these companies have created 11 percent more new jobs — a total of 1,168 — than in 2019. Most of the new jobs were created by companies from China, the United States and Germany.

About 3,600 more positions are expected to be offered by these enterprises in the next three years, according to data from SRF, Switzerland’s public broadcaster.

In fact, Switzerland is one of the very few countries that have been able to attract international companies to its shores in 2020, a notoriously bad year for the global economy.

READ MORE: Why Switzerland’s economy is on the up despite the coronavirus pandemic

Experts believe this is due to the country’s strengths, including political, economic and financial conditions.

“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

There are also other reasons that had prompted foreign companies to come to Switzerland in 2020, despite the economic uncertainty and travel restrictions.

“Protection of legal rights, freedom, and personal responsibility are stronger in Switzerland than in many other countries, even in times of pandemic”, said SGE’s co-president Walter Schönholzer.

Switzerland’s attractiveness is also boosted by studies showing the country’s economy remains the strongest in the world.

Even though the health crisis plunged Switzerland’s economic activity into a “historic” 8.2-percent slump in the second quarter of  2020, the country still boasts the world’s most resilient economy, according to research by an insurance and reinsurance company Swiss Re. 

The International Monetary Fund (IMF) expects a 3.5-percent rebound in Switzerland’s gross domestic product (GDP) in 2021.

It said Switzerland’s economy absorbed the shock of the pandemic better than other European countries and it “has navigated the Covid-19 pandemic well”.

IMF added that Switzerland’s “early, strong, and sustained public health and economic policy response has helped contain the contraction of activity relative to other European countries”.

SHOW COMMENTS