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Research - 09.10.2019 - 00:00

Switzerland slips to 5th place among the most competitive countries in the world

Today, the World Economic Forum (WEF) has published the 2019 Global Competitiveness Report. In the Global Competitiveness Index 4.0 comprising the most competitive countries in the world, Switzerland is ranked 5th behind Singapore, the USA, Hong Kong and the Netherlands. The Executive School at the University of St.Gallen (ES-HSG) has once again carried out this year’s survey of business leaders of Swiss companies.

9 October 2019. After last year’s redesign and review of the Index, Switzerland now occupies fifth place. Against the background of the fourth industrial revolution, new focus was given to particular productivity factors. In future, competitiveness will mainly be determined by factors such as the spirit of innovation, corporate culture, openness and agility. Up until 2017 - before the restructuring of the Index’ - Switzerland had defended first place for nine years in a row as the most competitive country in the world.

Innovativeness, labour market, education system

The Swiss economy owes its fifth place to its consistently good rankings in the individual areas. In seven out of twelve categories, Switzerland is ranked among the top five. Switzerland is one of the most innovative countries in the world. This is seen above all in the above-average innovation potential of local think tanks and employment (ranked 3rd behind Germany and the USA), which is underlined, among other things, by the high number of patent notifications (ranked 4th), particularly with international co-inventors (ranked 1st), the above-average intensity of cooperation among a variety of stakeholders, such as universities, colleges and companies (ranked 4th), and the prevalence and quality of business clusters (ranked 6th). The close cooperation between industry and science enables the development of innovative products and processes for commercial use.

Moreover, Switzerland scores well being second highest in labour market efficiency (1st place went to Singapore), which is characterised by very good social partnerships, high flexibility and high-quality industrial relations.

The high quality of the education system (ranked 1st), which is mostly reflected in the best further education opportunities in the world (e.g. management schools, dual vocational training), in the highest level of training for school leavers, apprentices and university graduates, and in the best support opportunities for employees by their companies, meets an additional requirement for the high level of competitiveness.

Confidence in Switzerland strengthens business activity

In terms of quality, Switzerland is also ranked among the best institutions (ranked 6th), infrastructures (ranked 4th), financial systems (ranked 4th) and health systems (ranked 5th). The fact that its public institutions are among the most transparent, honest and most efficient in the world strengthens confidence for business activities. The country’s infrastructure elements are also of high quality, in particular the efficiency of the railway (ranked 3rd) and the quality of the roads (ranked 3rd). The financial system also performs very well internationally (ranked 4th). And finally, the macro-economic environment in Switzerland is also one of the most stable in the world, in particular its moderate level of debt (ranked 1st).

Problem areas: Openness, adoption of technology, entrepreneurship

Competitiveness in Switzerland has mainly weakened due to the restricted openness to trade, in particular due to the high level of non-tariff barriers and trade tariffs, where it performs worst below developed economies. In the complexity of trade tariffs, Switzerland performs worst worldwide. There is also great potential for improvement internationally in the area of entrepreneurship: The costs and time required to start a business are comparatively high, the risk and joy of adopting disruptive ideas is low and the insolvency process is rather slow. In addition, there is a need to catch up with the adoption of technology (e.g. with the number of mobile telephone and broadband subscriptions), where it ranks far behind the frontrunners South Korea. Finally, it lags behind in the area of e-governments and the low diversity of the workforce.

The Executive School at the University of St.Gallen (ES-HSG) has once again carried out this year’s survey of business leaders of Swiss companies as an official partner institute to the WEF. In addition to publicly accessible data, this survey is regarded as the most important part of the Global Competitiveness Report by the World Economic Forum and includes figures that turn the report into an annual representative standard for the international competitiveness of all countries worldwide.

You can find the full report at: https://wef.ch/gcr

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