Education seen as key to economic revival

economiesuisse wants students to be fit for the workplace Keystone

The Swiss business community has urged the government to renew its efforts to get the economy back on track, with education at the forefront.

The Swiss Business Federation, economiesuisse, predicts gross domestic product (GDP) to shrink by 2.1 per cent by the end of the year but recover slightly in 2010 to grow by 0.7 per cent if conditions do not deteriorate.

In common with many forecasters, economiesuisse expects the domestic market – which has propped up the economy during the darkest days – to suffer as unemployment rises to a predicted 4.9 per cent next year. It is currently 4.1 per cent.

Recovery would be led by export-oriented sectors, particularly pharmaceuticals, health, food and medical equipment. The textiles and tourism industries, along with business consultancy, have been tipped to lag behind the pick-up.

economiesuisse demanded on Monday an end to popular attacks on executive pay levels and called for extra effort from the government to shore up Switzerland’s supply of energy and thrash out more free trade agreements with key economies such as China and India.

It also warned of the global dangers presented by protectionism, the attack of Switzerland’s tax system, stronger financial regulations, state intervention and highly fluctuating currency rates.

Protests misguided

The federation’s director, Pascal Gentinetta, also urged more competition between universities and called for increased emphasis on producing students fit for the workplace.

The Swiss higher education system has already signed up to the Bologna reforms aimed at creating a unified standard of education throughout Europe. Last week, many students launched anti-Bologna protests, complaining that it diluted the quality of their education.

But Gentinetta failed to sympathise with the sit-in protesters. “Bologna provides better international mobility and comparability between universities,” he told swissinfo.ch. “It is more transparent – you can see which universities are good and which are not so good.”

He also warned that another set of proposed reforms, aimed at coordinating higher education within Switzerland, were in danger of setting off on the wrong foot.

“The incentives are not correct. They state that the more students you have, the more money you get for your university. We say that could be dangerous. We should have other criteria: the capacity of students to find jobs after graduating,” he said.

Study for jobs

economiesuisse is concerned that the business community is not getting enough say in educational reform. It believes that education should be more closely linked to the economy so that future demands on the workforce are met.

Before the recession, the Swiss machinery and engineering sectors were forced to plug holes in their workforce with more overseas recruits. Fears are now spreading that not enough students are choosing to study vocational science degrees.

Around 70 per cent of students still opt for vocational apprenticeship courses after compulsory education, but pressure is building to get more youngsters into universities to pick up the rate of academic degrees.

But Gentinetta believes this could lead to economic problems in Switzerland.

“If you go to university for fun and do not find a job, then I don’t see the purpose. It is in the interests of students to find work after studying,” he said. “We have a low unemployment rate among young people in international comparison. There is a correlation between this and the high apprenticeship rate.”

Matthew Allen, swissinfo.ch

Economiesuisse forecasts

The Swiss Business Federation predicts the economy to shrink by 2.1% this year and grow by 0.7% in 2010.

However, the domestic economy is tipped to wobble next year with private consumption contracting by 0.2% and the rate of public consumption to fall to 0.8% (from 1.9% this year) as government stimulus packages grind to a halt.

On top of that, building investments are expected to fall by 2.3% , accompanied by a 4.7% drop in cash spent by companies to re-stock with machines and other equipment.

Underpinning the poor domestic figures is an expected increase in the rate of unemployment, to 4.9% by the end of 2010.

However, exports (that will lag 10.6% by the end of 2009) are expected to pick up by 0.7% next year. Imports, too, are tipped to show positive gains next year (1.6%).