Amgen put off by Swiss complexity

Amgen's international HQ is based in Zug Keystone

Switzerland must make it easier for foreign companies to set up shop by simplifying its unwieldy procedures, a competition expert tells swissinfo.

Professor Stéphane Garelli of IMD in Lausanne believes the Swiss can learn from Ireland’s one-stop advice system that helped persuade United States biotech giant Amgen to set up production there rather than in Switzerland.

Amgen was also put off by opposition to its plans to build a SFr1.55-billion biotech plant on a greenfield site in Galmiz, canton Fribourg, Garelli thinks.

Environmentalists attacked the plans and some 2,000 protesters marched to vent their feelings against the site in March last year.

swissinfo: Why did the Swiss bid fail to attract Amgen?

Stéphane Garelli: Ireland made a really big concerted effort to attract Amgen and they have an uncomplicated process for facilitating such a move.

Ireland has developed a one-stop system that allows their Industrial Development Agency to advise companies about all the different rules and regulations.

In Ireland companies deal with one authority, but in Switzerland you end up discussing things with 20 different people and you still don’t know who you should be dealing with.

Amgen were also probably put off by the weight of local opposition to their development plans and by the complexity of investing in Switzerland.

swissinfo: But many other international companies have set up successfully in Switzerland.

S.G.: It is fairly straightforward to set up a holding or a head office in Switzerland [Amgen has its international headquarters in Zug], but a manufacturing operation like Amgen’s is a different story.

But you should not take one case to show that everything is wrong in Switzerland. There are many advantages on paper, such as low taxes and the security of intellectual property, that are very important to multinationals.

Switzerland has a number of cards to play and hopefully we have learned something from the Amgen situation so we can strengthen our hand in future.

swissinfo: What should Switzerland do to become more attractive?

S.G.: Switzerland should adopt a one-stop system and have a single authority that can negotiate on behalf of everyone to let companies know what is going on.

A company from California will find it hard to understand the subtleties of the system in different regions. A Swiss company will understand how the system works and will consequently have more patience.

But time is money to companies like Amgen, and they need more time to grasp the regulations, so it is no surprise that they lost patience.

swissinfo: Have any steps already been taken to ease these problems?

S.G.: The federal authorities have tried to simplify things to become a portal for investments. The State Secretariat for Economic Affairs went as far as they could go, but they could not give preference to one canton or they would have been accused of anti-competitive bias.

The cantons are largely competing with one another and set their own regulations. Some cantons do work together, such as Development Economic Western Switzerland [alliance of cantons Vaud, Valais, Neuchatel and Jura to attract investment], but many boundaries still exist.

swissinfo: But it is still easy for small groups to throw a spanner in the works?

S.G.: Direct democracy allows individual organisations, like environmental groups, to block planning proposals by gathering a few signatures.

A big company making a large investment wants to be up and running within a year and a half, but nobody can guarantee that in Switzerland.

swissinfo-interview: Matthew Allen

Key facts

Amgen is based in Thousand Oaks, California.
Its international headquarters are located in Zug, central Switzerland. The group employs over 14,000 people worldwide.
Total revenue in 2004: $10.6 billion.

In brief

Last November, parliament approved a credit of SFr9.8 million for the next two years to encourage foreign investment in Switzerland.

Location Switzerland was set up in 1996 to assist foreign companies interested in setting up operations in the country.

The credit is limited until 2008 when the government is expected to restructure the various state-controlled organisations promoting Switzerland abroad and place them all under one roof.