The Swiss offer the second-most competitive business environment in the world, according to the latest global ranking from the IMD World Competitveness Center. But despite the good outcome, concerns remain over the country’s labour market and relations with the European Union.
The index of 60 countries put Switzerland in between the United States – which held the top spot – and Singapore at number three. Switzerland also came in second place last year.
Switzerland, along with Singapore and Hong Kong, which held position four, continued to prosper thanks to exports, business, efficiency and innovation, an IMD statement said.
Compared to the difficulties facing the recovering eurozone, Switzerland reinforced its image as a competitive and resilient nation, said the IMD.
From the perspective of Swiss business leaders, its strengths such as quality of life and resilience of the economy remained unchanged. The country was also found to offer an environment that stimulates businesses.
But the strength of the Swiss franc continues to hinder competitiveness of enterprises, and the country faces a decline in attractiveness due to a drop in foreign investment flows and “a trend towards the unpredictability of its laws”.
EU question pervades
With Switzerland awaiting the consequences of the February vote to limit immigration from the EU, leading Swiss executives remained optimistic about the labour market, believing motivation was very high and international experience significant. IMD also praised the Swiss dual educational system – where students choose apprenticeship or studies – and said it met the needs of firms.
But there were concerns over future relations with the EU, especially whether Swiss labour regulations would prevent companies from employing highly-skilled migrants (the country fell from 5th to 16th in this criterion in 2014) and whether talent could be retained.
“The country has strong assets that enable it to maintain its economic competitive advantages over its trade partners. Nevertheless, Switzerland will remain an island of competitiveness only if it is able to manage effectively its political influence when facing larger economies,” concluded the IMD.
"The overall competitiveness story for 2014 is one of continued success in the US, partial recovery in Europe, and struggles for some large emerging markets," said Professor Arturo Bris, director of the IMD World Competitiveness Center.
"There is no single recipe for a country to climb the competitiveness rankings, and much depends on the local context."
Swiss neighbour Germany rose three places to sixth in the ranking, but Italy fell to 46th. France came in at position 27.
The annual survey by the Lausanne-based research institution is based on data up to the end of 2013 and the opinions of global executives collected during the first quarter of 2014.
swissinfo.ch and agencies