Opinions - 03.01.2014 - 00:00 

The Swiss economy in 2014

How will the Swiss economy do in the new year? The country has to deliver excellence in education and innovation to produce wealth for coming generations, writes Christian Keuschnigg, HSG economist and director of the Institute of Advanced Studies in Vienna.


6 January 2014. How will Switzerland perform economically in 2014? If it does well, many opportunities will be created. Companies can expect growing sales and profits, pay employees well, create jobs and invest in their business. For their part, employees can expect strong pay increases and career advancement, while young people can look forward to a successful launch of their careers. Moreover, if inflation stays low, consumers will have more disposable income and wealth will increase. Paying taxes will be easier, and the state will be able to finance its expenses securely.

Yes, the economy will do well in 2014. The latest forecasts call for economic growth of more than 2%, unemployment to stay at a low 3% and the inflation rate to fluctuate by half a percentage point. The franc is rock-hard as ever. In view of what is happening all around it, the Swiss economy is a steadfast bulwark in Europe. Problems like tax disputes with other countries, budget tightening in the cantons, and the trouble with banks and immigration appear quite solvable in comparison.

Innovation and education

However, looking only at 2014 provides a limited view. Parents who bring children into the world and companies that develop major innovations must look ahead 10 years or even much longer. That calls for sustainability on all levels. Switzerland must achieve excellence in education and innovation so it remains a steadfast bulwark for coming generations and creates more wealth than other countries.

The education system must not waste any talent and Swiss universities must generate more knowledge than elsewhere. Companies have to invest in new and better products so they are well positioned in constantly changing marketplaces. High-quality products remain in demand even in a crisis. If Swiss companies also have sufficient risk-bearing equity capital, they can weather hard times without endangering jobs. Innovation also requires employees to be continuously ready for change and open to life-long learning.

The state should serve its citizens
It is vital that the state steadily fulfills its duties and stays close to its citizens. Federalism, tax competition between cantons and direct democracy will help assure that politicians perform with fiscal prudence and keep taxpayer costs within limits, meaning the state serves the citizen and not the other way around.

The welfare state’s role is to offer security and, at the same time, allow change and flexibility, without which innovation is impossible. Such sustainability in politics, business and society is the best way to ensure that the economic outlook is good for 2014 and beyond, so that Switzerland continues to be a bulwark and a magnet in Europe for the coming generation.

Picture: Photocase/ Ellijot

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