Swiss economic success: diversity as capital

A photograph portrait of Caesar Ritz displayed in the Swiss village of Niederwald, the birthplace of the master hotelier
Niederwald, July 2018: Banner portrait of world-famous hotelier Caesar Ritz (1850-1918) in an anniversary display in his native Swiss village (source: dpa)
  • More than 99 percent of the total number of Swiss enterprises are small- and medium-sized firms
  • The Swiss view heterogeneity as a form of capital
  • Swiss regulators opt for superintendence applied to the general framework of activities, not specific sectors, industries or technologies
  • The country’s political system is consensus-oriented and professional politicians do not dominate it

In 2018, the Swiss economy grew 2.5 percent. For 2019, the Federal Expert Group for economic forecast expects it to expand by 1.5 percent. Switzerland’s gross domestic product (GDP) has been increasing by between 1 and 3 percent yearly for nearly a decade. Turmoil in the European Union, the “trade war” between the United States and China as well as a strong Swiss franc do not seem to stop the prosperity of the country’s economy. What is its formula for success? And, will it last?

Switzerland is commonly associated with its banks and watches. Facts, however, tell a different story. Only about 9 percent of Swiss GDP is traceable to financial services. Manufacturing makes up around 18 percent, retail almost 15 percent; the most significant part of GDP, some 31 percent, is generated in other services. While it is also true that every year more than 25 million watches and clocks are produced in Switzerland, they only account for 9 percent of Swiss exports. Chemical and pharmaceutical products make up more than 44 percent of the country’s total exports; machinery and electronics over 14 percent. By the way: Switzerland manufactures and exports twice as much coffee- and tobacco-based products than chocolate- and cheese-based ones.

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