Neuchâtel, in the French-speaking part of Switzerland, was one of the first Swiss cantons to actively seek foreign investment. The Economic Promotion Office opened 15 years ago and has provided a model for many other cantons across the country.

Neuchâtel started to woo foreign investment in earnest in the wake of the crisis in Switzerland's watchmaking industry, which struck some 25 years ago, with the introduction of quartz technology.

Long reliant on watchmaking and other precision industries, the canton suddenly saw its major businesses threatened by Japanese and other foreign imports.

It responded by setting up its economic promotion office in an effort to diversify investment within the region.

Pierre Comte, managing director of the promotion office, told swissinfo that the shift was a long, difficult process, but ultimately successful.

"In the past 25 years the canton has diversified its industry," explained Comte. "We went from making only watches to a wide range of luxury products, from precision machines to Microsystems, and we also have a strong medical devices sector."

Precision engineering

The canton relies heavily on its reputation for precision engineering to attract new investors, and as part of that process the Economic Promotion Office helps companies interested in moving to the canton to find premises, staff and equipment.

Like many other cantons, Neuchâtel focuses on attracting high-tech and manufacturing firms, emphasising that although costs are high so is productivity.

"When we consider social charges and of course the productivity of the Swiss workforce we see that Switzerland is an attractive spot for manufacturing companies," said Comte.

"Basically what we sell is the micro-technique environment, the multi-cultural skills of the workforce and a sense for innovation in the region," he added.

Paul Phillips, managing director of a United States-based hearing technology group called Starkey told swissinfo that the economic incentives offered by the canton were what attracted his firm back in 1986.

Famous for micro-electronics

"The area of Neuchâtel and the surrounding communities are world famous for their skilled labour in micro-electronics, low power circuit design and also the manufacturing of very small component type products," said Phillips.

"We found those skills very attractive for us when we started here and they've continued to be helpful."

His is one of 400 firms that the Economic Promotion Office has brought to the region in the past 15 years.

The canton has not been immune to the global economic slowdown. At the end of July, the US group Silicon Graphics announced it was to close its Neuchatel plant with the loss of 300 jobs.

Pierre Comte admits the firm's departure is a blow, but says there's a positive side as well. "They have left very well trained employees in the canton and have helped us to attract more companies."

For his part, Paul Phillips of Starkey is happy and intends to stay. "From my office I can see several mountains and Lake Neuchâtel and I have to say it's a beautiful scenery, the weather is fantastic all year round and the people have been very accommodating."

by Tom O'Brien

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