Languages generate one tenth of Swiss GDP

Economic analysis has failed to consider the role of languages

Switzerland's multilingual heritage gives it a competitive advantage worth SFr46 billion ($38.15 billion), says a study presented in Bern this week.

This is the first time the economic value of a country’s linguistic skills has been calculated, according to a Geneva University research team which looked at the role of languages in the economy.

The advantage is equivalent to nine per cent of gross domestic product (GDP).

Switzerland has four national languages: German is the most widely spoken, followed by French, Italian and then Romansh, an ancient Latin-based language spoken by just 0.5 per cent of the population. English has become the first foreign language taught in school in several cantons, particularly in German-speaking Switzerland.

But language has largely been ignored by economic analysis, said François Grin, professor of economics at Geneva University and head of the “Langues étrangères dans l’activité professionelle” (LEAP) project.

“I think we have confirmation here that language is a good investment from the perspective of the economy as a whole, rather than just for the individual or for the state,” he told swissinfo.

Financed by the Swiss National Research Programme, the LEAP project is an attempt to look at how Swiss firms deal with the country’s multilingual tradition and in particular how languages generate economic value and what impact they have on specific sectors and jobs.

“The results dovetail with comments made by members of the Swiss government about the attractiveness of Switzerland as a place to do business, linked to the fact that people speak many languages,” said Grin.

Collectively, people in organisations easily operate with three, four or five languages, he said, and the capacity to do that certainly contributes to value creation and the comparative advantage of Switzerland.

“The interesting thing I see here is a convergence between the economic result and our cultural, political and social concern about multilingualism in Switzerland. The notion that we need to take care of our national languages in addition to English and possibly to develop skills in further languages is something that makes sense not just politically and sociologically but also economically.”

Under appreciated

While SFr46 billion represents a sizeable result, Grin regrets the fact that some companies do not fully appreciate the true value of a multilingual working environment.

“It’s an extremely heterogeneous picture,” he said. “Some companies are aware and active and trying to do their utmost but others seem to neglect the issue completely”.

The LEAP project was built from information contained in several databases, including one covering 2,500 Swiss residents from different business sectors.

The questions addressed in the LEAP project are related to a study of European multilingualism and economic competitiveness (ELAN study) published by the European Commission in February 2007.

The ELAN study found that 11 per cent of European small and medium-sized enterprises (SMEs) were losing export business through lack of language skills and intercultural skills. It suggested that increasing investment to develop language skills across the EU would produce far-reaching economic benefits, especially in terms of a positive impact on SME productivity and export performance.

The EC report also confirmed the importance of English as the world business language, but found that other languages were used extensively as intermediary languages. In particular, the analysis revealed that there was a need for a range of other languages if business relationships were to be built successfully.

“There are many cases where English is not enough and you need more to get a competitive edge. It’s very useful to draw on a rich linguistic repertoire,” said Grin.

Linguistic intensity

The Geneva University researchers also presented another element of the study on Monday, which focuses on the role of languages in a company’s daily business.

Analysing replies by some 205 companies in both the French- and German-speaking areas of Switzerland, they found that the highest occurence of language skills was among directors and purchasing staff rather than sales personnel.

The researchers also found that bigger firms were better equipped in English language skills, compared with German or French. Small companies presented the opposite picture.

swissinfo, Simon Bradley

In brief

National languages:
German (63.7% of the population)
French (20.4%)
Italian (6.5%)
Romansh (0.5%).

Recent immigration has brought a large number of other languages to Switzerland: nine per cent of the population say their main language is not one of these four.

Switzerland currently spends some SFr2.5 billion on language learning, mostly taxpayers’ money, or 8.5 per cent of the annual education budget.

François Grin currently shares his time between the Education Research Unit of the Geneva authorities and the newly created chair in economics at the School of Translation and Interpretation at Geneva University.

The “Langues étrangères dans l’activité professionelle” (LEAP) project, financed by the Swiss National Research Programme, was led by Grin, together with François Vaillancourt from Montreal University and Claudio Freddo from Geneva University.

The complete economic impact results will be published on December 16 and a final report will be available in February 2009.