Stability gains Swiss economy top ranking

Keystone

Switzerland has climbed from second to first position in the World Economic Forum's global competitiveness report 2009-2010, replacing the United States at the top.

In an achievement based on stability and consistently strong results across the 12 WEF categories, Switzerland overtook the US, which experienced a weakening in a number of areas, including its financial markets.

Singapore, Sweden and Denmark complete the top five. European economies did well in the survey, securing six positions in the top ten (see column).

“The Swiss economy continues to be characterised by an excellent capacity for innovation [ranked 2nd] and a very sophisticated business culture [ranked 3rd],” said the report from the Geneva-based organisation.

It also pointed out that Switzerland demonstrated high spending on research and development. Many multinationals base their R&D divisions in Switzerland.

“Switzerland’s scientific research institutions are among the world’s best and the strong collaboration between the academic and business sectors ensures that much of this research is translated into marketable products and processes.”

Select group

Local partner to the WEF in carrying out the report, the Executive School of St Gallen University was responsible for the selection of the Swiss companies to participate in the survey.

“It is important to get a reliable, proportionate selection that covers all sectors, the different regions and takes into account the size of the companies,” project leader Beat Bechtold told swissinfo.ch.

He said Switzerland’s particular strengths included a high level of patenting, excellent capacity for innovation and an efficient labour market (ranked 2nd).

“The flexible labour market means Swiss firms can react quickly to changes in demand. Hiring and firing is relatively straightforward and the system of short-time working [employees kept on at reduced hours with their income shortfall made up by unemployment insurance] works well when activity is low,” he said.

Switzerland’s public institutions are rated among the most effective and transparent in the world (ranked 7th), ensuring a level playing field and enhancing business confidence, according to the report.

“These include an independent judiciary, a strong rule of law and a highly accountable public sector,” it stated.

Useful tool

Switzerland has a good track record in economic ranking surveys but results naturally vary according to the criteria used.

In its annual assessment of world economies, published in May, Lausanne’s IMD business school ranked Switzerland fourth and said it had experienced a “serious drop in its attractiveness”.

Although it praised the “remarkable stability” of Switzerland’s fundamental economic, political and financial pillars, the Lausanne report questioned whether the country would be able to maintain its competitiveness in the medium term as it had entered into recession later than others.

Apart from enhancing Switzerland’s reputation as a centre of excellence, the latest WEF survey is also a useful reference tool for economic policymakers.

“Even though Switzerland is a top-performing country, it is important to know what strengths need to be maintained and what areas can be improved upon,” Bechtold said.
 

In brief

The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum (WEF) together with its network of partner institutes.

This year, more than 13,000 business leaders were polled in 133 economies.

The index is based on 12 pillars of competitiveness: Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication and Innovation.

Key facts

WEF World competitiveness ranking 2009-2010:
1. Switzerland
2. United States
3. Singapore
4. Sweden
5. Denmark
6. Finland
7. Germany
8. Japan
9. Canada
10. Netherlands
11. Hong Kong
12. Taiwan
13. Britain
14. Norway
15. Australia