GENEVA Broadly confirming the findings of IMD’s World Competitiveness Report last May, the World Economic Forum’s latest global competitiveness report once again ranks Switzerland, for the fifth time in a row, at the head of the 148-country listing. But there is a serious caveat. One of the country’s biggest problems is to maintain this lead with a lack of qualified labour.
According to government figures, Switzerland has some 52,000 jobs in the hotel, watch, high tech and other industries vacant since the beginning of July. As some economic analysts maintain, part of this shortage is already the result of the 9 February 2014, vote to restrict migrant labour. International corporations have been cutting back on their activities for fear of not being able to perform because of new Swiss mass immigration regulations that could come into effect over the next three years.
Skilled foreign workers from both the European Union and elsewhere are thinking twice about coming to Switzerland. There is also growing nervousness about the perceptible rise in xenophobia and racism toward foreigners not only among ordinary Swiss, but politicians. Ignoring the fact that much of the country’s economic well-being is critically dependent on skilled foreign labour, particularly in the cantons of Geneva, Vaud, Zurich and Basel, many Swiss are reluctant to accept the need for greater diversity and immigration.
Much in line with the Greens and the Socialists, both Christophe Darbellay and Doris Leuthard of the Christian Democratic party warned last week that Switzerland needs to be extremely ‘supple’ in its interpretation of the right-wing inspired February vote restricting mass immigration. There has to be an “alliance of reasoning”, they proposed, on how Bern, which is legally obliged to abide by the referendum’s requirements, actually puts them into place.
However, as the Romand Business Federation (FED) warned last week, increasingly complicated labour regulations pose a “serious threat” to the Swiss economy. Geneva’s highly sophisticated watch industry, for example, is dependent on over 80% of foreign workers, mainly French frontaliers, while Switzerland’s hotel and restaurant industry would quite simply collapse, as one FED representative pointed out.
The 2013-2014 WEF report, whose global criteria are based on over 100 indicators, this year’s top 10 remain dominated by European countries, with Switzerland, Finland, Germany, Sweden, the Netherlands, and the United Kingdom in the lead. Three Asian countries also figure among this group, notably Singapore, which remains the second-most competitive economy in the world. Hong Kong and Japan are placed 7th and 9th. The report notes that a principal reason behind this competitiveness is the ability of most of these countries to focus on innovation supported by strong institutional frameworks.
The report further points out that Switzerland’s competitiveness is the result of strong across-the-board performance. The sophistication of the country’s business sector together with its top-notch scientific research institutions also help assure this competitiveness, it says. WEF maintains that Switzerland offers excellent employee training, plus its public institutions are considered to be among the most transparent in the world. At the same time, despite good bilateral working relations with the European Union, the report warns that Switzerland needs to avoid complacency, (an indirect reference to the migration issue), and to ensure greater involvement of women in its talent pool.