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Abonner Swiss-American Chamber of Commerce & The Boston Consulting Group

Swiss-American Chamber of Commerce & The Boston Consulting Group

Switzerland Faces Fierce Competition for Multinational Companies

Zurich (ots)

One third of the Swiss GDP is at stake in the
international competition around business locations. For Switzerland,
five key measures are crucial to win the battle.
Multinational companies, accounting for 34% of the total GDP, are
very important to the Swiss economy. The Swiss-American Chamber of
Commerce and The Boston Consulting Group have published a study - the
second of a three year program - that shows two trends, heading in
opposite directions: The contribution of foreign Multinationals to
the Swiss GDP grew significantly within the last ten years. But the
contribution of Swiss Multinationals to Swiss GDP showed a negative
trend. Due to global competition, they have been moving low-cost
functions to more attractive and less expensive countries.
Therefore, Switzerland is under pressure from two sides: It must
keep attracting foreign companies, but at the same time and through
further improvement of its attractiveness as prime business location,
it needs as well to motivate the Swiss Multinationals to keep their
important operations in Switzerland. The trend of Swiss
Multinationals to shift their higher-value-added positions such as
R&D functions is especially worrying in this context. The following
five measures will be crucial in Switzerland's battle in order to
become the best place worldwide for international business: Taxes,
simplification of immigration for skilled foreign labor, clear and
consistent communication of the highly attractive business location
Switzerland, improvement of critical infrastructure capabilities, as
well as close collaboration and coordination between all the involved
entities.
Multinational companies play a pivotal role in Switzerland's
domestic economy, accounting for about a third of the total Swiss
GDP: Of that, 10 percent is contributed by foreign Multinationals
located in Switzerland, whereas 24 percent of GDP is derived from
Swiss Multinationals with more than 25 percent of international
revenues and more than 25 percent of total staff abroad. Their impact
on the Swiss GDP though differs considerably. In the last couple of
years Swiss multinationals moved parts of their functions away from
Switzerland, due to global competition. This shift of functions has
already resulted in a negative development of Swiss Multinational's
contribution to the Swiss GDP. On the other hand, the contribution of
foreign Multinationals to the Swiss GDP grew significantly, as shown
by "Internationals Companies in Switzerland: The Forgotten Sector"
(joint study by the Swiss-American Chamber of Commerce and The Boston
Consulting Group, published in 2006).
This year's study is based on profound and intensive analytical
research, a survey among more than 100 multinationally active
companies and extensive interviews with the CEOs of these companies.
By extending the focus to Swiss Multinationals takes the discussion
regarding the optimal business location to a new and up to now not
yet discussed level: It is not just about retaining the considerable
contribution of foreign Multinationals to the domestic GDP and
further attracting these companies. It is at least equally important
to set the perfect stage for Swiss Multinationals for them to retain
their key functions in Switzerland. This applies to
higher-value-added positions in particular, because other countries
are competing very hard to attract Swiss Multinationals at the same
time as Switzerland is competing to attract foreign Multinationals.
In the battle for foreign Multinationals, Switzerland has large
advantages. But competition is highly dynamic and has become even
fiercer within the last years. Other countries can respond more
quickly and more focused to this development as the structure of
their political systems are far less complicated. If Switzerland
wants to retain and extend its excellent position, many additional
efforts will be necessary.
The study provides a reliable basis for a five-step plan to help
Switzerland ensure long-term attractiveness for Multinational
companies:
1. Taxes: at least holding up current tax situation in
Switzerland; in certain fiscal issues, additional initiatives will be
necessary to remain competitive.
2. Skilled and specialized labor: Strengthening of the education
system, facilitating immigration process for highly qualified people
(from non-EU countries as well) in order to let Switzerland become
the leading know-how pool. A number of measures to achieve this goal
are proposed  in the study, including work permits secured by
companies.
3. Keeping amenities and infrastructure on a par with the
international state of the art, for example airline connections, IT
infrastructure and international schooling.
4. National cooperation: Developing collaboration among cantons
and providing a consistent Swiss interface, especially to foreign
Multinationals.
5. Communication: Massive improvement in selling Switzerland as
"The Best Place to Do Business", in addition to promoting Switzerland
as a great place for Heidi Land tourism.
34% of the Swiss GDP is subject to the global race for business
locations. It is in the hands of decision makers in parliament and
government to put our largest economic sector at stake, or to take
advantage of Switzerland's enormous potential and steadily drive the
country towards sustained economic growth.
The study is available online on the websites of the authors.

Contact:

Swiss-American Chamber of Commerce
Martin Naville
CEO
Tel.: +41/43/443'72'01
E-Mail: martin.naville@amcham.ch
Internet: http://www.amcham.ch

The Boston Consulting Group
Dr. Adrian Walti
Partner
Phone: +41/44/388'86'53
E-Mail: walti.adrian@bcg.com
Internet: http://www.bcg.com