Home » Economy » Can Switzerland’s amazing success story be exported?

Can Switzerland’s amazing success story be exported?

by John Brian Shannon | September 8, 2014

Subalpine lake in Switzerland

Sub-alpine lake in Switzerland

Let’s look at Switzerland today, a tiny nation of 8 million people. Historically a neutral country, Switzerland isn’t a member of the EU, nor of NATO, but it is a member of the EU’s common security and defence policy (CSDP) and it became a member of the UN on September 10, 2002.

Some other notable facts about Switzerland are that it is ruled by direct democracy where citizens can block any law or get a new proposal heard and voted on with only 50,000 signatures, and the country has proximity to the largest market in the world, the European Union.

It is also one of the most beautiful places on the planet.

Switzerland makes the best of its opportunities

Switzerland ranks in the top 5 places to live in the world, personal income ranks in the top 5 in the world, it ranks in the top 5 education systems and in the top 5 health care systems in the world. In many other measures Switzerland ranks among the top 10 globally.

How did little Switzerland with only 8 million people, few resources, and buried under a blanket of cold and snow for 6 months of the year, manage all of that and so much more?

As is often the case, the answer is good management!

  • With less than 2% of the world’s population Switzerland has attained 19th place (nominal GDP) and 36th place (PPP) out of 191 countries
  • It boasts one of the highest per capita incomes in the world at $137,094 median (PPP)
  • The country has the highest average wealth per adult in the world, at $540,000 (PPP)
  • Switzerland has low unemployment rates at 3.2% (2014 and 2013) and 2.9% (2012)
  • The Federal government not only runs a balanced budget, it often runs a tidy budget surplus
  • The public debt-to-GDP is a low 46.7% (2012)
  • Inflation ranged between .7% and .2% over the last 5 years
  • It is one of the world’s most stable economies
  • Noted as one of the most politically stable nations in the world
  • All the major credit rating agencies give Switzerland a AAA credit rating
  • Switzerland is the world’s 20th largest exporter at $308.3 billion dollars (CIA Factbook)
  • The Global Competitiveness Report by the World Economic Forum ranks Switzerland’s economy as the world’s most competitive
Labour productivity Europe 2012

Productivity in Europe 2012

Image by Monsieur Fou (Own work) [CC-BY-SA-3.0] via Wikimedia Commons

What time is it? It’s Swiss Time!

Rolex.com

Rolex.com The world’s finest Swiss timepieces

Historically covered by a thick blanket of snow for six or more months of the year, the Swiss had plenty of time on their hands. So they decided long ago to make some ultra-high quality clocks to mark time until the return of spring.

The Swiss clock and wristwatch industry exported $20 billion dollars worth of timepieces in 2011, making the Swiss #1 exporters of timepieces in the world. Exports of watches and clocks from Switzerland have been ticking upwards, some years showing a 14% increase compared to the previous year.

If you’d like to buy a piece of art that also displays time, you might recall some of these famous Swiss brand names; Rolex, TAG-Heuer, Hublot, Zenith, Swatch, International, and others.

Switzerland, where the world’s banks do their banking

Owing to long-standing Swiss neutrality and the careful management of Swiss national sovereignty, a stable environment for the banking sector evolved which was observed by many foreign nations and their central banks, hence most of the worlds central banks maintain offices and conduct business there.

The financial sector in Switzerland contributes approximately 12% of Switzerland’s GDP and employs 200,000 people. It is known internationally as the world’s banking capital and all banks cooperate with the Bank of International Settlements, based in Basel, Switzerland. The country’s banks processed a grand total of 5.4 trillion Swiss francs in 2009.

On top of that, foreign banks operating in the country manage almost another 1 trillion Swiss francs worth of assets per year.

Nothing but fresh air in all directions

Switzerland is #1 (2014) and #2 (2013) in the world when it comes to creating a progressively cleaner environment within the country’s geographical borders. And not only visionary policy, but tangible results too! As the Swiss work to cut total energy consumption levels in half by 2050, they are using cleaner fuels, more renewable energy, and in 2011 decided to begin the process of decommissioning all of their nuclear and coal powerplants, to be completed by 2045 at the latest. (OECD Swiss environmental link here)

Lucerne, Switzerland

Lucerne and Lucerne Lake, Switzerland. Image by Clare66 (Own work) [CC-BY-SA-3.0] via Wikimedia Commons

Simple, but effective changes have showed promising results. The large amount of household waste set out for curbside collection was tackled via pre-paid stickers that must be placed on each bag to be picked up at the curb. At nearly $8.00 per sticker, this has worked to dramatically reduce the amount of waste that must be processed.

A large number of complementary projects are underway in the country, which range from sustainable forestry practices (forests cover 31% of the country), to even more world-class transit systems (the spectacular views are complimentary), to the 2,000-Watt Society which aims to lower carbon footprints by cutting total energy consumption levels in half by 2050.

The 2000-watt society (2,000-Watt Society) is an environmental vision, first introduced in 1998 by the Swiss Federal Institute of Technology in Zürich, which pictures the average First World citizen reducing their overall average continuous energy usage to no more than 2,000 watts (48 kilowatt-hours per day) by the year 2050 – without lowering their standard of living.

The concept addresses not only personal or household energy use, but the total for the whole society, divided by the population.

Two thousand watts is approximately the current world average rate of total energy use. This compares to averages of around 6,000 watts in western Europe, 12,000 watts in the United States, 1,500 watts in China, 1,000 watts in India, 500 watts in South Africa and only 300 watts in Bangladesh. Switzerland itself, currently using an average of around 5,000 watts, was last a 2000-watt society in the 1960s.

It is further envisaged that the use of carbon based fuels would be ultimately cut to no more than 500 watts per person within 50 to 100 years.

The vision was developed in response to concerns about climate change, energy security, and the future availability of energy supplies. It is supported by the Swiss Federal Office of Energy, the Association of Swiss Architects and Engineers, and other bodies. — Wikipedia

Swiss Army Knife stats

The UN DESA list says Swiss citizens have the second-highest life expectancy in the world. Switzerland is also ranked #1 (tied) on the Bribe Payers Index indicating very low levels of business corruption. For the last five years the country has been ranked #1 in economic and tourist competitiveness according to the Global Competitiveness Report and the Travel and Tourism Competitiveness Report respectively, both developed by the World Economic Forum.

Zürich and Geneva have been ranked among the top cities with the highest quality of life in the world. Switzerland has very low tax rates as compared to other western nations. More Swiss citizens have won Nobel Prizes, than any other single country’s citizens.

Flag of the Red Cross

The monochromatically reversed Swiss flag became the symbol of the Red Cross Movement, founded in 1863 by Henri Dunant.

The Red Cross and Red Crescent, the United Nations (the UN Palace of Nations is the 2nd-largest UN facility in the world), the World Health Organization (WHO), the International Labour Organization (ILO), the International Telecommunication Union (ITU), the United Nations High Commissioner for Refugees (UNHCR) and about 200 other international organisations, including the World Trade Organization and the World Economic Forum in Davos all have their headquarters in Switzerland.

Furthermore, many sport federations and organisations are located throughout the country, such as the International Basketball Federation in Geneva, the Union of European Football Associations (UEFA) in Nyon, the International Federation of Association Football (FIFA) and the International Ice Hockey Federation both in Zürich, the International Cycling Union in Aigle, and the International Olympic Committee in Lausanne.

There is a world-class scientific community that also thrives within the country, some of it centred around the CERN particle accelerator (the largest such device in the world) which is what recently confirmed the presence of the (up-till-then-theoretical) Higgs Bosun. Also, the World Wide Web began as a CERN project called ENQUIRE, initiated by Tim Berners-Lee in 1989.

The largest Swiss companies by revenue are Glencore, Gunvor, Nestlé, Novartis, Hoffmann-La Roche, ABB, Mercuria Energy Group and Adecco.

Also, notable are UBS AG, Zurich Financial Services, Credit Suisse, Barry Callebaut, Swiss Re, Tetra Pak, The Swatch Group and Swiss International Airlines. Switzerland is ranked as having one of the most powerful economies in the world.– Wikipedia

Healthcare in Switzerland

All Swiss citizens are required by law to carry private health insurance and the healthcare insurance companies are required to accept every citizen-applicant. It is an expensive system, but with high wages and even high-minimum-wages in Switzerland it is an affordable system for the Swiss. As noted above, citizens enjoy the 2nd highest life expectancy in the world and even that statistic continues to improve.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries has ranked Switzerland #2 in the world for overall healthcare outcomes.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries

Seen about town

To give you the best idea of how relaxed and civilized Switzerland is, the President of Switzerland, Mr. Didier Burkhalter, takes the train to work just like other citizens and was photographed yesterday at the train station waiting for the train.

That’s the way it is in Switzerland. The President of the country goes to the train station to catch the train like everyone else. He stands on the platform waiting for the train and texting on his SmartPhone and nobody there thinks a thing about it… yet in North America this is seen as a novel act and it goes viral on Twitter in only 8 minutes.

Summary

With only a tiny land mass (much of it steep mountains and glaciers) no sea access, a small population, minimal natural resources (compared to the U.S.A., Canada, Australia, Brazil or Argentina, for just a few examples) and long winters combined with fragile ecosystems, Switzerland has created a special and thriving society and a very pure form of democracy — from little else than pure ingenuity. No wonder the Swiss citizens have been awarded more Nobel Prizes than any other nation!

This isn’t even half of tiny Switzerland’s achievements and all of this and a whole lot more is happening on only 15,940 square miles of land, most of it covered with the Swiss Alps and glaciers!


4 Comments

  1. Fred Washburn says:

    THIS IS WHAT CANADA SHOULD BE LIKE JOHN!!!

    • Thanks Fred! (And, I agree)

      We have a trillion times the resources here, 4 times the manpower, and we have over 3 million square miles of territory vs. Switzerland’s 15,940 square miles of territory — there is no reason good enough, that Canada couldn’t do much better than Switzerland!

      Best regards, JBS

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