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IMD World Competitiveness Yearbook 2008: Switzerland in the top league and gaining 2 ranks!


In international comparison, Switzerland remains one of the most competitive nations. The country has risen to the 4th position in the IMD 2008 overall ranking: gaining 2 ranks this year (6th in 2007)!

By positioning itself behind the United States (1st), Singapore (2nd) and Hong Kong (3rd), it shows stability and dynamism.

How does Switzerland manage to maintain such a high degree of competitiveness?
Economic performance in excellent health
The country boasts a vigorous economic climate: A GDP growth rate of 3.1% in 2007 (2.6% in the Euro area), a high GDP per capita (4th), the world’s 3rd largest current account surplus (16.8% of the GDP) and an increase in inward direct investment flows. The great force of Switzerland also lies in a high level of employment (58.6% of the population, 3.6% unemployment) and it enjoys weak inflation (0.7%). These tendencies are not new, but compared with the other countries covered by the Yearbook, are major assets. Household consumption continues to support the economy (3rd, per capita). Moreover, the Swiss people have a strong capacity to adapt to economic cycles (3rd)! The other side of the coin shows a high cost of living (50th) thus decreasing the real purchasing power of its inhabitants.

The government efficiency confirmed by survey results

The introduction of the federal “debt brake” rule reassures: the management of public finances should improve over the next 2 years (14th) and attractiveness of the fiscal policy continues (2nd). Swiss executives perceive corporate tax rates as not discouraging entrepreneurial activity (Switzerland appears in 5th position in this survey criterion). They are also convinced that the legal and regulatory framework encourages the competitiveness of enterprises (4th). Investment incentives are considered to be attractive to foreign investors (3rd). The ease of doing business is supported by regulations (6th) and the creation of firms is not hindered by legislation (9th). However, the ageing of society - a possible obstacle to economic development – is becoming a concern (18th). Moreover, one statistical indicator illustrates the weak representation of women in leading government and business positions (47th).

The Swiss market: a talented labor force … but a decrease in entrepreneurship of managers

The economic stability and policies of Switzerland remain strong points in our cross-country analysis. The job market reflects this: labor relations are generally productive (2nd), workers are highly motivated (2nd) and there is a high rate of part-time employment (27% ranking Switzerland 5th). The availability of skilled and specialized labor, having competencies in finance and international experience, complete this positive picture. Given that entrepreneurship is not particularly widespread (27th compared to 6th last year), one can ask the question: are the Swiss less ready to take risks this year? This possibility could fall within the context of increasing fears about the impact of globalization (financial crisis with its uncertain repercussions).

Unique infrastructure in all fields

The quality of basic infrastructure, including its maintenance and development, remains a force of the country. Health infrastructure and the educational system continue to top the rankings. The Swiss are conscious of being able to benefit from an excellent quality of life (1st)! Languages skills are meeting the needs of enterprises (1st) and knowledge transfer between companies and universities obtains the 3rd rank.

To learn more about Swiss competitiveness and why Geneva in particular represents a great business location in this country, please read through our "Why Geneva" magazine that offers in each issue an overview of a specific business sector or a specific strength developed in Geneva:

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