Crises follow one after the other, yet Switzerland demonstrates extraordinary resilience. The subprime crisis in 2008, the floor rate in 2015, the pandemic in 2020, how does the country manage – despite the ill-winds – to remain in pole position in the race for GDP per capita? And where does it find the resources needed to start up again when there’s a glitch in the machine? Let’s go over the keys to Swiss success.

The plusses of functional taxation

Some will say: “Taxation, that’s the State”. In any event, it forms the basis thereof. Indeed, without tax, how would the public structures be able to meet the population’s most basic needs? In Switzerland, the question is not asked because taxation is entirely functional in the country. In actual fact, the system is structured in such a way as to ensure the establishment of an environment which is particularly efficient for citizens and businesses. The latter also benefit from a flexible regulatory framework and an attractive regime.

Education at the basis of development

The level of public education is also a fundamental element since Switzerland can offer solid training to its youth. What is more, the country is home to famous universities. Five of them are listed in the top 100 in 2021 according to the independent firm Shanghai Ranking Consultancy. At the same time, Switzerland offers a unique learning system which allows teens who are unable to access studies to learn a trade through doing and to be accompanied by recognised professionals with the aim of obtaining a high quality certification.

A privileged position for investors

For their part, foreign investments play a large role in the economic growth and prosperity of Switzerland. The political security of the country, its sense of innovation, its technological environment and the quality of life on offer are criteria often put forward in terms of its attractiveness. Another key point is that the country is perceived as being averse to corruption. Notably it is one of the top 10 least corrupt countries according to a survey from the Organisation Transparency International.

A closer look at the economy

The Country is careful to safeguard the interests of the national economy and contributes, with the private sector, to the prosperity and economic security of the nation. This principle is also inscribed in the Federal Constitution (Article 94 of the Constitution). The structure of the economic landscape also contributes to this positive dynamic. Within this context, even if the services industry constitutes more than two thirds of the Swiss GDP, almost 25% comes from industry where the large majority comprises small and medium enterprises employing fewer than 250 people.

The strong franc, a double-edged sword

Profiting from a favourable environment, Swiss businesses must nevertheless deal with a certain number of stumbling blocks, including a major one: the robustness of the national currency. A disadvantage within a context based on the export industry. Nevertheless, for over 10 years Switzerland has had a trade surplus; by delving into mechanics which has allowed it to maintain this surplus balance and one element has been at the centre of this success: the resilience of its industries.

The floor rate: an exemplar of resilience

To convince ourselves of this, we just need to look at the period which followed the abandoning of the EUR/CHF floor rate in 2015 so as to understand it. In actual fact, overnight, the price of export goods increased by 20%. With the situation being predicted to last, the business managers immediately reacted by implementing various strategies in order to deal with change and continue with their growth sustainably.

• Retention and acquisition of clients thanks to a consistent quality and a cutting-edge industry.
• Increase in automatisation in order to reduce labour costs, but also to reduce errors and waste thanks to low levels of debt.
• Development and expansion across new geographical markets thanks to a greater investment capacity in foreign currencies.
• Development of new services linked to industrial products offering higher margins depending on the specific needs of the international markets.
• Innovation and development of new value added offers.
• External growth generated by mergers/acquisitions achieved thanks to profits linked to sales in foreign currencies.

Diversification at the heart of the growth

The Swiss economy is characterised by its diversification, but also by its excellence in various sectors. In the world there are very few economies which can rely on competitive companies in so many different sectors thus offering a definite competitive advantage.

Whilst in the majority of countries across the world, one, two, or three large strong industrial companies create the wealth of the nation, the competitiveness of the Swiss economic fabric relies on thousands of SMEs. With these enterprises being very competitive, they offer a particularly fertile ground for investment.

Strengthened by a long history of stability and economic resilience, Switzerland is home to a diversified range of industries which offer numerous opportunities to investors. With its renowned education system, its low rate of corruption, its favourable and competitive commercial environment as well as its strong export industry, Switzerland is an ideal location for those who are looking to make a long-term investment.