Although there is a significant difference in population size and topography, Switzerland stands head and shoulders above many of its competitors when it comes to lucrative trade ties with the economic powerhouse that is the US. Switzerland has worked hard to construct a large economic footprint in the US and the two nations enjoy a healthy relationship based on trust and respect. Official government data shows the pair exchange goods and services worth at least $100 billion per year, making Switzerland the seventh largest foreign investor in the US, with more than $224 billion in cumulative direct investment.
Potent transatlantic trade
Among the key Swiss goods moving across the Atlantic are pharmaceuticals, medical and optical instruments, gold and precious stones, clocks and watches, machinery and agricultural items. Switzerland is also the biggest overseas investor in research and development (R&D) in the US, with Swiss firms focused on high-value sectors like pharmaceuticals and medical goods. Indeed, such high-tech enterprises are among the hundreds of Swiss companies that operate out of thousands of sites across the US. Together, the 500 companies employ about 500,000 people. “About 20% of Swiss FDI goes to the US. Furthermore, no other country invests as much in R&D in the US as Switzerland,” explains the Swiss- American Chamber of Commerce CEO, Martin Naville. “Switzerland has very well-established companies in the US, most of them have been there longer than their foreign competitors. The US may sometimes be protectionist but if a company invests in the US it is treated the same as an American firm. “US companies do not come to Switzerland for large markets or cheap manufacturing resources,” Naville adds. “They come for Switzerland’s innovation strength, high political stability, business-friendly environment, international population, excellent infrastructure, highly-educated workforce and many other advantages. “These are some of the reasons for Google’s largest development site outside of the US, IBM’s leading-edge laboratories with its globally top nanotech center, Biogen’s newest manufacturing plant, Proctor & Gamble’s European headquarters, and many more to be located in Switzerland.”
Powerful partnerships are key
With innovation lying at the very core of Switzerland’s DNA, it was only a matter of time before the government and the private sector combined knowledge and resources to develop an alliance. The result is Switzerland Innovation, a platform launched at the start of 2016, that enables the country’s researchers, companies, start-ups and entrepreneurs to work together in a cohesive way. Under the initiative, five state-of-the-art innovation parks are providing leading universities and companies with tremendous networking opportunities that are allowing them to flourish. “We are selling three things on an international level,” states Switzerland Innovation CEO Raymond Cron. “The first is academic excellence, which is linked to our universities, in combination with the fact that we attract the best talents from all over the world. “Secondly, you will find a vibrant start-up ecosystem, an important precondition for innovation to develop and flourish. “The third element is the presence of strong industry partners. We have a substantial number of large international corporations in Switzerland that are doing research and operating R&D centers in the country.” As the Swiss economy has expanded robustly in a comprehensive range of sectors, so has the number of public and private entities dedicated to maintaining and fueling this growth. One of the entities is Economiesuisse, which aims to act as a conduit between politics, business and society, and represents approximately 100,000 companies from all Swiss business sectors and regions. “Switzerland is in a good position and highly attractive for global investment,” states Jan Atteslander, executive board member of Economiesuisse. “This is reflected in all the clusters that have mushroomed: med-tech, high-tech, nano-tech, biotech hubs and so on.”
Innovation valleys emerge from below the mountains
Switzerland’s rich tapestry of diversity is not limited to its landscapes, as each canton excels in its own style and way
Switzerland’s crystal-clear lakes and snow-capped mountains are always at the top of tourists’ itineraries, but behind this eye-catching image is a hard-working and innovative society that is competitive and highly focused on education. Companies headquartered in Switzerland enjoy a vast array of bilateral treaties with the US, excellent infrastructure and a politically and socially stable environment. Such factors give balance to the higher production and operational costs that they sometimes face. Supported by aggressive and attractive fiscal policies, as well as a determination to achieve the most ambitious goals, Switzerland’s cantons compete hard to secure international investment. The country’s cities and rural areas are very diverse, with four official languages and very different cultures that can make you feel you are in another country. The 26 cantons hold a high degree of autonomy: healthcare, education and culture are among the political areas where they have a great deal of influence. Each canton also handles its own business development with specialists in certain areas. This fierce — but healthy — competition to win investors’ hearts and minds includes fiscal incentives and competitive tax rates, attractive and safe environments, and unbeatable connectivity with the rest of Europe. Such impressive connectivity is one reason why a large health-technology cluster has become well established in the central canton of Schwyz. Part of the greater Zurich area, Schwyz is now home to around 250 health-tech members who benefit from numerous connections to other health-tech clusters throughout Europe. Characterized by its modesty, Schwyz also offers investors direct access to key decision makers, meaning officials are on hand for discussions on any issues. “Just as Switzerland is independent and internationally well-connected, the canton of Schwyz has proven itself an autonomous and resilient industrial base,” says Andreas Barraud, head of the Department for Economic Affairs in the canton Schwyz. Among the major companies to have chosen Schwyz as a base for key operations are Estee Lauder, Victorinox, Kuehn+Nagel and Garaventa. “Our strategy of low taxation, combined with our excellent location and large land availability, has enabled tremendous growth and evolution,” states Kaspar Michel, head of finance in the canton Schwyz. “We are a very stable and safe canton with great conditions, good schools, and a healthy and open society that is supported by a liberal government open to innovation and investment.” Many other cantons have also caught the eye of international companies and investors. They include Vaud, home to the second largest economic zone and Geneva’s international airport. The canton offers a vibrant, intensely international atmosphere, with its range of innovative companies and advanced research institutes. Vaud has a diversified, technology-driven economy, notably in micro-nanotechnologies, food, nutrition and information/communication technologies. Zug is home to the country’s Crypto Valley, while Lucerne hosts global Swiss firms like Schindler and Emmi, and boasts the lowest corporate tax rate in the whole of Switzerland.
St. Gallen’s world-class education system optimizes students’ talents
Nestled between the Swiss Alps and beautiful Lake Constance, the city of St. Gallen lends its name to the surrounding canton and boasts one of the highest proportions of young people in the country. As a leading education and IT hub, the region is a highly attractive place to live, study and work. The first-rate education system equips students with the knowledge and skills to thrive in 21st century workplaces. “From primary schools to university, we are extremely successful,” says head of education at canton St. Gallen, Stefan Kölliker. “It is a great place to bring up families and for companies looking to succeed — because they need good employees and we produce fantastic employees.” Among the leading educational establishments is public facility the University of St. Gallen. Characterized by a practical approach and an integrative viewpoint, the business university has 30 affiliated research institutes. They are managed by academics but run independently as businesses. This is where the University of St. Gallen trains many junior research staff, allowing them to fully understand the professional world and encouraging them to launch spin-off firms. The award-winning university has five schools, focused on management, humanities and social sciences, law, finance, and economics and political science. “We train future leaders in business, society and politics, who know that they are operating in an environment which is influenced by technological developments, which affect social perspectives, cultural changes and political changes,” explains its rector, Professor Thomas Bieger. “These future leaders need to understand the whole context to take the right decisions. We have roughly 9,000 students and offer executive education from full-time MBAs to executive MBAs, and open enrollment programs for over 5,000 participants annually.”
A strong cultural diversity
From generous tax benefits to quick access to some of the world’s best health and education systems, the 26 cantons work hard to entice investors and professionals with a myriad of opportunities and competitive advantages
Without doubt one of the most famous towns in the country — if not the world — the Alpine resort of Davos is best known for its annual hosting of global leaders and power brokers at the World Economic Forum (WEF). However, to concentrate purely on that prestigious event would be to overlook the many opportunities and business advantages the beautiful canton of Graubünden has to offer. The largest canton in the country by size, but the least populated with less than 200,000 residents, Graubünden’s stunning mountainous scenery draws millions of people each year. The vast majority of tourists flock to its incredible array of slopes for popular winter sports like skiing and snowboarding, but the views under the summer sun are just as breathtaking. The region is also host to three UNESCO World Heritage sites: the Monastery of St. John in Müstair, the Albula and Bernina lines of the Rhaetian Railway and the Sardona Tectonic Arena. As Switzerland’s only tri-lingual canton, Graubünden is a place of economic, cultural and political diversity. The Romansh language and culture is an important part of Graubünden’s character, notes the local administration. “A moderate tax burden, optimally trained professional staff, high labor productivity and a fine-meshed infrastructure offer locational advantages not only to internationally operating firms, but also to SMEs,” officials note. Turning to the core pillar of tourism, they add: “The cultural diversity, the beautiful countryside and the effective infrastructure with hospitable hotels, mountain railways, baths, spas and sports facilities are decisive factors in making Graubünden a leading vacation destination, both in winter and in summer. “Graubünden lives on tourism and the revenues from tourism provide half of the jobs and incomes in the canton. Every year, 11 million visitors spend the night in 170,000 beds.”
Alpine trains thrill tourists
The most popular tourism attraction in the country, the instantly recognizable Rhaetian Railway carries nearly 10 million people each year, with its distinguished red trains considered a regional and national icon. Experiences to be enjoyed on the route — which comprise nearly 400 kilometers of singletrack lines, 617 viaducts/bridges and 115 tunnels — include the panoramic Bernina Express and the Glacier Express. “The UNESCO World Heritage status helps us in terms of image and reputation,” explains Rhaetian Railway CEO, Renato Fasciati. “There are only three railways in the world with this label. Our trains are also widely known around the world and have a large fan base. We offer a combination of landscapes, bridges and sceneries that is quite unique. We are a very popular attraction for tourists from the US because we bring not only culture but also sceneries.” Meanwhile, the technology and R&D canton of Switzerland is Aargau, with twice as many people working in R&D compared to the national average. With a privileged location between the bustling cities of Zurich, Basel and Berne, Aargau also benefits from its proximity to Zurich’s international airport. The canton offers outstanding research and training institutes and comprehensive know-how in fields like medtech/pharmaceuticals, energy technology, machine and metal industries, and ICT. An economic powerhouse responsible for creating over a fifth of GDP, Zurich is the hub of choice for many multinationals. Consistently rated one of the best cities in the world, Zurich boasts top universities like ETH Zurich, the University of Zurich, the Zurich University of Applied Science and R&D centers from Google to IBM Research. Zurich also offers a balanced mix of innovation-driven industry clusters such as finance, ICT, life sciences and cleantech. The thriving life-sciences cluster also features a high share of medical enterprises and university spin-off activities.