Companies ignore Switzerland: these are the dangers for the location This is the man who started burning Korans in Sweden

Anyone who eats at a Burger King in Europe sends part of the money to Switzerland: the parent company RBI has its European headquarters in Zug. Anyone who receives an injection from Moderna strengthens the European headquarters in Basel. And the more ads Google sells, the more employees the American group employs in Zurich, its largest location outside the US.

These are not isolated examples: the Swiss economy is more international than almost any other in Europe. The multinational companies at home and abroad are essential to prosperity: although they make up only five percent of the companies, they employ 26 percent of the working population. They contribute 36 percent to gross domestic product (GDP) and nearly half of corporate tax revenues at the federal level.

But Switzerland is losing ground, according to a new study by consultancy Bearingpoint. Switzerland has managed to attract fewer new head offices in recent years than the Netherlands, Luxembourg or the UK. It is true that many research centers of international companies are opening in this country. However, the share of global or regional headquarters and financial holding companies among new entrants is declining.

If a company decides against Switzerland, it rarely communicates this actively. Cases like that of outdoor outfitter Black Diamond, who moved to Austria a few years ago, are well known. Switzerland also had no luck with Apple: the group recently decided to open its European center for chip design in Munich.

Why is the settlement engine stuttering? The authors see several reasons:

The shortage of skills

Adecco’s Skill Shortage Index shows that the shortage of skilled labor is on the rise. New role models could help: there are still too few women in the MINT subjects (mathematics, computer science, natural sciences, engineering).

The demographics

Many baby boomers are retiring. In 2050, people over 65 will make up 25.6 percent of the population, compared to 18.9 percent today. The proportion of the working age population is expected to fall from 61.2 to 55.1 percent. “This will negatively impact not only pensions, but also economic performance and prosperity,” the authors said. Strategies are needed to counter this.

Digital skills are lacking

Switzerland performs well in the competitiveness ranking, but is no longer reliably number one. In the “World Digital Competitiveness Ranking”, which shows how well a country has mastered digitalisation, Switzerland comes behind Denmark, Singapore and Sweden. “There is a risk that Switzerland will become less attractive to the fast-growing technology market,” the experts say. However, the authors also point out that Switzerland still tops many rankings of how well-educated its workforce is and how attractive a country is to foreign talent.

Tax advantages disappear

Since the financial crisis in 2008, fewer investment projects by foreign companies have been counted in Switzerland. Last year there were 75, compared to 136 in 2006. According to Bearingpoint, this is also because Switzerland is losing its fiscal attractiveness compared to other countries. The OECD minimum tax should accelerate this trend. How Switzerland responds to this is crucial, especially when it comes to finding research and development jobs. Countries like Ireland, Great Britain, the Netherlands, Germany, Spain or Singapore would invest a lot of money to promote similar industries.

No new clusters, little innovation

The existing clusters – ie places where many companies and institutions from the same industry as the pharmaceutical industry are located in Basel – are safe, but hardly any new ones are being added. Innovation is limited to existing clusters. The authors also mention the fact that Switzerland can no longer participate in the EU research program Horizon as a problem.

Energy security problems

The local infrastructure is still top notch. According to the authors, however, it is unclear whether energy security is guaranteed with the planned closure of nuclear power plants.

The problems with the EU

Thanks to its purchasing power and the great diversity of its population, Switzerland serves as a test market for many companies. But because there is a lot of uncertainty in relations with the main trading partner, the EU, many companies could decide to take a seat in the Union in the future. A current survey of corporate executives shows that many expect poorer market access to the EU.

The Swiss Franc

If the Swiss franc becomes even more expensive and at the same time the tax advantages disappear, the costs for a Swiss location will be even higher in comparison.

Job market

The flexibility speaks for the local labor market. But relatively new arrangements such as quotas for third country experts or the bureaucracy associated with obtaining work permits are a problem.

But how seriously should the warnings be taken in the face of a booming economy, low unemployment and high immigration? The authors use a drastic image to answer this question: If a frog is thrown into hot water, it will jump out. But when the water gets warmer and warmer, he doesn’t notice and dies in the heat. (aargauerzeitung.ch)