Bern With last month’s unemployment figures at 3% – the lowest in 25 years according to Bern’s Secretary of State for Economy (SECO) – Switzerland’s good economic prospects are proving increasingly attractive to foreign companies despite the gloom of the 9 February anti-mass immigration vote.
Based on an Ernst & Young (which now calls itself EY) report published earlier this week, Switzerland remains a strong draw for investors by its ‘exceptional’ advantages. Roughly one quarter of 800 international companies surveyed by the Basel-based company said that they intended to invest in Switzerland, while only eight percent envisaged reducing their activities located on Swiss soil. For the bulk of these companies, Switzerland’s political, social and fiscal stability is considered the main reason. Further cited draws are the quality of skilled workers and low corporate taxes. EY notes that most companies expected Switzerland to remain attractive in 2020.
Some foreign business interests, according to recently interviewed financial sources, are currently based in France, but exploring Switzerland as an option because of what one Lyon-based entrepreneur described as “increasingly frustrating economic constraints.” These dissatisfied companies include ones located in the Rhone-Alp region bordering Switzerland.
According to one American CEO of a medium-sized business in Paris with a 10 million Euro annual turnover, “it simply is no longer worth investing in France. Not only are the administrative shenanigans so constraining and time-consuming, but social obligations just don’t make it worthwhile.” He is now exploring whether to move to Switzerland or Belgium.
The same message is being heard from numerous other French businesses, particularly young entrepreneurs, who are regard France as ‘hopeless,’ ‘stifling’ or ‘unimaginative’. Many have already re-located to places like London, Shanghai, Los Angeles and Singapore. Over one half of France’s top business graduates, including those from the prestigious ‘Grandes Ecoles’ which have produced most of France’s leaders and – as one commentator noted – “are the one’s responsible for France’s mess”, are reportedly leaving for overseas. “These are people Switzerland needs to attract,” noted a representative from the Canton of Vaud’s Economic Development Agency.
At the same time, key Swiss industries, notably the hospitality sector, continue to voice concern that depending on what happens over the next three years with the implementation of the 9 February vote, they might not receive the necessary qualified workers for Swiss hotels and restaurants. The IT industry, including companies located at EPFL’s Innovation Park, also stresses the need to ensure continued access to top graduates regardless whether from France or India. Lausanne now ranks alongside Silicon Valley as one of the world’s key innovation centres.
Not everyone, however, agrees with Bern’s just released employment figures. According to the Federal Statistics Office, which uses the International Labour Organization’s method of calculation, unemployment is higher than SECO’s figures, notably 4.8% for the first 2014 trimester compared to 4.6% for the same period last year. It is also 9.8% for under-25 year olds compared to 8.3% in early 2013.
SECO, however, maintains that May was still better than January’s 3.5%. It also says that the under-25 unemployment now stands at 2.7%. Switzerland, too, ranks far more favourably than most other European countries, including Germany, for the last quarter of 2013. Only Norway has a lower unemployment rate. Manpower, a Swiss-based employment agency, agrees that Switzerland’s situation is improving and argues that the work market is expected to improve even more based on its own surveys of client companies.