Foresight instead of caution

In the current ranking, Switzerland is at the top of the 137 countries surveyed for the ninth time in a row. According to the WEF index, Switzerland is the world leader in terms of innovative capacity, attractiveness as a business location and labour market flexibility - these are three of the twelve main criteria of the current "Global Competitiveness Report 2017-2018".

In other areas, such as education, infrastructure, national budget and technological development, the country is also in the top ranks.

Franz Jaeger, professor emeritus of economics at the University of St. Gallen, is convinced that "small economies have a number of advantages in international competition, because they are naturally more strongly oriented towards competition from abroad. To prove his point, the much-quoted professor points to the index of the world's most competitive countries, which the economic think tank of the Davos Economic Forum (WEF) has been publishing for over 30 years.

An overview that flatters Mr. and Mrs. Swiss. After all, the Swiss are the richest in the world, with net financial assets averaging around CHF 170,000 per capita, according to the Global Wealth Report just published by the Allianz Group. However, Switzerland's top position in the WEF index cannot be deduced beyond doubt. There are two fundamental problems with this:

Switzerland and individual municipalities, and ultimately also large and small businesses, are dependent on imported raw materials. In 2010, the transit trade in raw materials replaced the financial services of Swiss banks as the most important service export, and its share of GDP (over three percent) exceeded that of tourism (Source: Swiss Federal Council. 2013. commodities baseline report. Report of the interdepartmental platform on commodities to the Federal Council).

"After all, SMEs are also dependent on raw materials."

A well-known problem of value creation ratings is also the measurement method, which is often based on overly one-sided manager surveys. For example, it is not clear whether and how the positive ratings in the WEF index are related to economic policy. Does economic success really lead to a top position or is the causality exactly the opposite due to advertising?

The following is an overview of the concrete framework conditions that actually affect the Swiss workplace.

Three important pillars
A more productive and deliberately open economy, especially towards the EU, capable of mitigating economic shocks and ensuring sustainable prosperity: This is the aim of the growth policy adopted by the Federal Council in June 2016. Labour productivity is the priority pillar of this 2016-2019 strategy.

Half of the 14 measures mentioned in the report are linked to this. The term productivity is understood by the Federal Council in a broad sense: It includes the opening up of the economy, the dismantling of trade barriers and the ever further expansion of markets and sales opportunities for companies.

"The goal is to avoid inequality."

Against this backdrop, the continuation of bilateral relations with the EU is considered essential, especially to enable companies to continue to recruit the skilled workers they need. However, Switzerland's growth policy also provides for measures for SMEs oriented towards the domestic market.

The aim is to avoid an imbalance between companies operating in competitive export sectors and those that are limited to domestic demand and have structurally higher costs. The recent economic turbulence, particularly since the lifting of the exchange rate floor between the euro and the Swiss franc, has prompted the Federal Council to strengthen the resilience of the economy, including the ability of its players to absorb shocks. This is the second pillar of its "Growth Policy 2016-2019".

The third aims at sustainable growth with as few negative side effects as possible.

Important conditions
In order to boost the Swiss economy, the federal government has adopted a comprehensive growth policy. A selection of the measures of the "Swiss Growth Policy 2016-2019", which have companies in particular in their sights:

• Preservation and further development of the bilateral path with the EU

The bilateral agreements should be maintained and renewed, giving companies continued access to skilled workers and the legal certainty needed for the negotiation of the bilateral agreements should be maintained and renewed, giving companies continued access to skilled workers and the legal certainty needed for the negotiation of the bilateral agreements should be maintained and renewed, giving companies continued access to skilled workers and the legal certainty needed for the negotiation of the bilateral agreements should be maintained and renewed, giving companies continued access to skilled workers and the legal certainty needed for the negotiation of the bilateral agreements should be maintained and renewed.

• Expansion of market access for Swiss companies

The aim here is to promote foreign trade and competitiveness by strengthening existing free trade agreements and concluding new ones, particularly within the framework of the WTO.

• Development of appropriate framework and competitive conditions in the digital economy

Digitalisation is seen as a source of business opportunities and growth. The Federal Council would like to create framework conditions that enable innovation and the further development of solutions by companies, but also the further training of employees.

• Liberalisation of the electricity market and regulation of the gas market

Full opening - so far decided for electricity and not yet for gas - is expected to reduce energy prices and thus benefit companies in the form of increased competitiveness. Opening up to competition should also enable an improvement in the quality of supply.

"One problem with value-added ratings is the method of measurement."

• Administrative relief and better regulation for businesses

The existing measures to reduce the administrative burden will be continued and expanded.

• Strengthening competition in the internal market by facilitating
  of imports

The simplification of customs procedures brings direct savings for the companies consuming intermediate products and indirect savings by reducing the administrative burden. VAT on imports could be simplified.

• Agricultural policy 2022-2025: consistent further development of agricultural policy

The current agricultural policy is not being called into question, but reforms, particularly in the form of targeted incentives, are being announced for the period 2022-2025, which should generate an increase of CHF 400 to 600 million and have a positive impact on de-tail trade, tourism and gastronomy.

• Second package of measures of the Energy Strategy 2050

Incentive taxes are planned for electricity and fuels, which should contribute to a reduction in energy consumption and consequently greenhouse gas emissions. However, relief is planned for companies whose operations or production require a lot of energy.

• More efficient use and targeted expansion of transport infrastructures

Measures are planned to improve road and rail transport and traffic flow, which should have a positive impact on the competitiveness of businesses by reducing the costs associated with accidents and congestion.

• Climate legislation after 2020

In order to reduce greenhouse gas emissions, the CO2 incentive tax on fuels is to be retained. Here too, however, exceptions apply for CO2-intensive companies.