01. The Swiss recipe for becoming one of the most efficient countries in the world

Switzerland leads the major international rankings in terms of economic prosperity, competitiveness, government efficiency and political stability. Switzerland has found the formula to stay on the podium and go one step further: it is a country that attracts and retains an essential ingredient, talent.

There is nothing like a good recipe, a step-by-step plan that leads to the completion of a successful dish. Good recipes require analysis and knowledge, and above all, experience and rehearsal in order to find the finest raw materials and the right timings to ensure success. When it comes to countries, Switzerland seems to have found that master formula which has placed the nation at the top of the international rankings: Switzerland has well-being and quality of life, a competitive and prosperous economy, and levels of innovation that are widely admired and valued all over the world.

These ingredients stand out in this recipe:

• The Swiss brand, a hallmark of quality and excellence
• The strength of its institutions, its currency and its economy.
• Strong, sustained growth over time
• Political stability and social cohesion
• Leader in innovation and competitiveness at a global level
• Commitment to sustainability and environmental protection
• High quality of life (investment in health, education and talent)
• Digital transformation and a high level of investment in R&D and new technologies.

We can see the evidence that Switzerland has found this optimum position in international reports. The results of the IMD World Competitiveness Ranking, published annually by the World Competitiveness Centre (WCC), rank Switzerland in third place – out of 64 national economies analysed – in the creation and maintenance of a competitive ecosystem. In other words, it indicates a high level of growth, productivity and potential to attract and retain investment.

Below, we explain the keys to this good recipe through three main areas:

Economy: a financial strength and investment hub

One of Switzerland’s hallmarks is its strong economy and currency, the Swiss franc, which is highly valued in times of uncertainty and is considered a safe haven currency par excellence.

 Switzerland is one of the world’s leading financial centres. Its 235 banking institutions managed a total of CHF 7,847 billion worth of funds in 2022, nearly half coming from abroad. And in terms of business efficiency, it is ranked 7th out of the 64 economies audited by WCC, mainly thanks to its productivity levels and the development and sophistication of its financial sector.

 The strength and sophistication of its banking sector is also a pole of attraction for international investors, who benefit from its secure protocols and the stability of macroeconomic indicators such as inflation, currently below 2%, and interest rates.

It is worth noting that its GDP, which reached over 800 billion dollars in 2022, grants its citizens – the population exceeds just over 8.8 million people – one of the highest GDP per capita ratios in the world, at 87,427 dollars per person. High salaries are another of Switzerland’s hallmarks, as its residents enjoy some of the highest average salaries in the world. In 2022 it was 100,413 per year, or 8,368 euros per month in 12 payments per year.

 But if there is one area in which Switzerland has been undisputed for years, it is the capacity to attract and retain talent, a key element for companies to generate value in the long term. The IMD’s World Talent Ranking and The Global Talent Competitiveness Index confirm this.

 

Innovation: digital transformation and crypto universe

Switzerland invests more than 3.15% of its GDP in research and development and thus remains among the world leaders. It has been able to leverage its full potential in digital transformation and new technologies to head up some of the most promising developments.

 Proof of this is the fact it has become the European epicenter of the crypto ecosystem: its custody services are a benchmark, Switzerland played a key role in the birth of Ethereum and it has created Crypto Valley, a global network of companies dedicated to cryptocurrencies and blockchain.

 A pioneer in implementing e-government, it offers increasingly advanced services in the ICT sector and stands out for the qualifications of its workforce, boasting a high percentage of science graduates. The fact is clear: 61 % of young people opt for a university or federal institute of technology.

 This context of innovation and technological training, coupled with a high standard of living, employee motivation and high salaries, has made the Swiss Confederation a magnet for talent to tackle the existing labor shortage. What’s more, Switzerland is well-known throughout Europe for having almost no unemployment, at 4.1% by the end of 2023.

Quality of life: stability, confidence and sustainability

When we talk about quality of life in Switzerland, we are referring not only to its economic wealth, but also to a high degree to its social welfare. Starting with its medical facilities and healthcare expenditure, which accounted for 59,987,285,756 million euros in 2022 (more than 11 % of total public expenditure), i.e. 7.8 % of GDP. As a result, the life expectancy of a Swiss person at birth is 84 years.

Furthermore, Switzerland is one of the countries that invests the most in education, with 5.7% of its GDP. As a result of this effort over the past decades, almost 90 % of the adult population has completed upper secondary education.

Environmental care is another of its strong points, with continuous improvements in the efficient use of resources, legislative developments that are committed to sustainability and the reduction of emissions. In fact, the country aims to achieve climate neutrality by 2050, a goal approved by its citizens at elections in June 2023.

This is a clear example of Switzerland’s sense of community. Its organization as a federal state, organized by cantons – 26 in total – and a direct democracy political system encourages citizen participation and decision-making. Indeed, public confidence in the government is higher in Switzerland than in any other OECD country. This stability and social cohesion, based on direct democracy, has been working like clockwork for decades. According to WCC survey data, Switzerland has ranked at the top of government efficiency in 2022 and 2023.