Ticino “needs to fight” to attract companies

The new Acer headquarters near Lugano is set to look like this Acer

While leading computer company the Acer Group builds its new European headquarters in Ticino, experts warn the canton still needs to do more to attract businesses.

They argue that although the Italian-speaking canton in southern Switzerland has many advantages, it is being left behind by other cantons when it comes to wooing companies.

The Taiwanese Acer Group – second worldwide in the personal computer market – officially laid the foundation stone for its new European headquarters in September last year. The site, at Bioggio, near Lugano, is expected to open in early 2012.

Acer, which already employs  around 140 people in Ticino, has decided to host all executive functions, finance and logistics in the canton. Around 100 new jobs are expected as a result.

“Canton Ticino in particular has been selected for its geographical strategic position that allows the optimum in communication and business exchanges between the European head offices; it guarantees a clear and precise legal system in matters of work law which is rigorous and strict.

Furthermore, the industry sustainability of tax burden fosters the competitiveness in a global market,” said Acer, which chose the site back in 2003, in a statement.

“Best solution”

Walter Deppeler, Deputy President of Acer EMEA (Europe, Middle East, Africa), said the company wanted to extend its international presence.

“Ticino ended up being the best solution in terms of political stability, framework conditions, security and being able to attract and hire quickly a qualified workforce from the rest of the continent,” Deppeler explained.

“The quality of life is also excellent: it’s not a huge urban area, but there are international schools and efficient services, not forgetting Milan and its international airport close by.”

Deppeler said that the company needed a site which retained employees. “This is why places like Ireland were less popular than Switzerland, whose multicultural and multilingual approach was very much appreciated.”

In addition, Acer can draw on its proximity to the Swiss National Computing Centre and the Faculty of Informatics at Lugano University, as well as benefit from know-how from nearby Italy, such as in design. 

Good, but…

Other international companies present in the canton include Gucci, Zegna, North Face and Fiat. But Ticino should not rest on its laurels, argues Stefano Modenini, director of the Association for Industry in Ticino.

“In the past years the canton has been carrying out its Copernico economic promotion programme but now the approach needs to be modified to include all parties interested in encouraging new companies into the region,” Modenini said.

The canton should be more active in promoting itself, especially to Italy, he added.

Modenini says that his organisation often receives information requests from Italian companies interested in setting up in Ticino. It is therefore key to have a precise map showing available zones but it is not yet available in an “ideal form”.

Collaboration with Russian companies could also be encouraged. “In September a Ticino economic and political delegation went to Moscow to make contacts and sound out the market. Now we’re starting to get requests from Russia for information and visits,” the expert said.

“We have to decide how we proceed with this. Having a person totally dedicated to this issue would certainly be an advantage.”

Cantonal competition

Tough competition from other cantons is also a reason to act, added Modenini. “One example is Valais which has clearly defined the areas available for business activities, created a promotional infrastructure with other cantons and visits places to invite potential investors. This doesn’t happen in Ticino.”

Ticino is good at welcoming companies, but could improve its strategy for attracting them, he said. Few companies choose Ticino independently, most use channels like recruitment firms.

European Union pressure over Switzerland’s low cantonal corporate tax rates, which it deems unfair, is another factor adding to uncertainties in Ticino. So what does the canton have to do to be attractive for companies in the future?

“Apart from tax, its geographical position and good transport links… there’s also regulatory stability even if there is political change, security, and being able to hire people from abroad,” Modenini said.

“Many entrepreneurs, especially Italian ones, say that here… it’s much easier to be an entrepreneur.”

Ticino’s economy

The canton’s Gross Domestic Product is around SFr12 billion ($12.5 billion) and represents 3.8% of the national GDP. For a population of 317,000, the per capita GDP is SFr40,000.

The economy of the Ticino consists of around 20,000 of mostly small and medium-sized businesses with slightly less than 160,000 work places. Seventy per cent of the workforce is employed in the tertiary sector, 28% in the secondary sector, and 2% in the primary sector. Around 47% of the work force is made up of foreigners and almost half of them are cross-border commuters.

The industrial sector generates 21% of  cantonal GDP; the financial sector including insurance companies 17.5%, the wholesale and retail business 11.2%, self-employed and other services 10%, transportation and communication 6.9%, and construction 6.6%. Tourism contributes approximately 10.5% to the cantonal GDP. 

Export of Ticino goods and services amounts to more than €3.2 billion (SFr4.1 billion) per year; 68% of exports go to EU countries.

Economic “ambassador”

The lawyer Michele Rossi has been appointed delegate for external relations in Bern and Milan for Ticino business interests, representing various authorities and associations.

He took up his post on January 1, 2011.

His main task will be to build up a network of contacts in Bern and Milan to help solve any  problems encountered by Ticino companies and to ensure that general issues of relevance to Ticino businesses are identified quickly.

(Translated from Italian by Isobel Leybold-Johnson)