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Canton is not an economic backwater

Lugano is one of Switzerland's top banking sectors

(Keystone)

A 2008 report by BAK Basel Economics was one of the first comparative studies analysing the development of the Ticino economy.

Commissioned by leading politicians, economists and businessmen in Ticino, the study shows that the canton is well positioned for growth.

The 60-page report focussed on the development in the canton over the past two decades (1986-2006), and its prospects up to 2020.

Even though Ticino's economic productivity is six per cent lower than the Swiss average, the authors found that it is 20 per cent above Italy's and about the same as Germany's.

Most productive are Ticino's financial and industrial sectors - especially export-focussed firms, while sectors such as forestry and agriculture were singled out, as was the construction and the hotel and restaurant business for dragging down the canton's performance.

And its location on the Swiss periphery was not only a disadvantage - as has often been claimed - but has also brought benefits. Even though Ticino continues to experience a brain drain, many highly qualified professionals are drawn to the canton by good pay and high living standards.

BAK director, Urs Müller, said Ticino had to become more aggressive in promoting its unique qualities, and could not be accused of profiting only from Italy's political and financial turmoil.

Product niches

Interviewed by the Neue Zürcher Zeitung newspaper, Müller said Ticino lacked an "industrial flagship but had numerous players in interesting product niches".

The study found that Ticino has an "ability to innovate". It based this on several factors: the private sector investing an above average amount of funds in research and development, the presence of a dynamic university sector, initiatives in the areas of technology transfer and the promotion of start-ups.

However, emeritus economics professor Angelo Rossi said the rate of change in Ticino was still slow due to the region's "Catholic-rural mentality".

Ticinesi are proficient at using the latest communication technology to trade on the New York stock exchange, Rossi explained, but at heart they are still farmers defending their chestnut trees. This is the reason many risk-taking entrepreneurs choose to start their businesses elsewhere.

Rossi believes that anyone wishing to start a new company is confronted by barriers that do not exist outside the canton. These include sociological factors such as tradition, insider relationships and nepotism.

The authors predicted the annual rate of productivity to grow from around one per cent to 1.5 per cent over the next few years but companies would have to increase the use of their capital since slowing population growth would dry up the labour supply.

The financial sector has the greatest potential for growth along with manufacturers of specialised electrical and mechanical goods such as in the field of medical technology.

swissinfo, based on a study by BAK Basel Economics and a Neue Zürcher Zeitung article

BAK Basel Economics study

The study was commissioned by Social Democratic politician, Pietro Martinelli, emeritus economics professor, Angelo Rossi, financier Tito Tettamanti und Claudio Generali, the former chairman of the board of the bank, Banca del Gottardo.

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