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Study urges Switzerland to stay on its toes

Lovely locations may not be enough to attract multinationals, warns the report Keystone

Switzerland must improve conditions for multinational companies (MNCs) if it is to maintain its leading position in international competitiveness, a study says.

This content was published on April 14, 2007 - 10:31

Entitled "Multinational Companies on the Move: How Switzerland will win the Battle", it puts forward five key measures that the authors feel are crucial in the global race to attract and keep multinationals.

Produced by the Swiss-American Chamber of Commerce and the Boston Consulting Group, the report notes that MNCs play no small part in the Swiss economy, accounting for 34 per cent of gross domestic product (GDP).

Other countries are aggressively enticing MNCs with attractive tax schemes and relevant infrastructure, a development which is challenging Switzerland's leading position, it comments.

A number of studies comparing the attractiveness of countries show the gap between top players has become smaller and that Switzerland - although in the leading spot according to the World Economic Forum – has "some clear and evident weaknesses".

The present survey, published on Friday, suggests that Switzerland remains competitive on the tax front, as this is a crucial factor when multinationals first go looking for a location.

However, Switzerland's tax system is favourable but not the most attractive, it points out.

It also says Swiss authorities must make it easier for skilled foreign labour to work in Switzerland. Finding a differentiated approach that addresses economic and humanitarian immigration will be key, it adds.

Consistent image

The study also says that coordination among the cantons has to be developed so as to provide a "consistent Swiss interface" to the world.

Multinationals should not be confronted with a multitude of inconsistent messages, but encouraged to use the decentralised and highly personalised services offered by the cantons.

Other suggestions are providing better infrastructure for multinationals in terms of better airline connections from the three major Swiss airports, better public IT infrastructure, low administrative hurdles and greater access to international schools.

The study also advocates a refocusing of communications on the "business location" Switzerland.

This should promote the country as the "Best Place to do Business" instead of the traditional "Heidi Land" image and competition among the cantons.

More than 100 multinationals took part in the survey, which also included in-depth interviews with more than 20 chief executives and senior managers of the leading MNCs in Switzerland.

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The findings

The study notes that competitive pressure forces multinationals to continuously optimise their location mix and that new technology, market and political developments increasingly enable them to do so.

More than ever, it believes, MNCs are on the move for the best locations.

It adds that for Switzerland's international economy it is "crucial" for it to gain the upper hand over other locations.

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Publishers

The Swiss-American Chamber of Commerce, which has 2,500 members, promotes and facilitates business relations between Switzerland and the United States.

It says it takes a proactive approach to determine the right strategies and have them implemented in a "timely fashion".

The Boston Consulting Group, founded in 1963, focuses on helping clients achieve a competitive advantage.

It has 63 offices in 37 countries and serves companies in all industries and markets.

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