Multinational companies see Switzerland's location strengths eroding

(CONNECT) Although multinational companies account for only 6 percent of all firms based in Switzerland, they contribute 42 per cent to the country’s gross domestic product, explains McKinsey in a statement. The consulting firm conducted a study on Switzerland’s competitiveness in collaboration with the Swiss-American Chamber of Commerce. Seven out of ten multinational companies surveyed for the study perceive Switzerland as becoming less competitive compared with other global hubs in terms of key location factors.

The statement identifies regulation, taxation and infrastructure as key factors. In addition, while Switzerland is reportedly becoming more attractive for new business establishments in the research and development and technology sectors, the number of new establishments in the pharmaceutical and healthcare industries, as well as in the industrial sector, has declined.

According to Michael Steinmann, Managing Partner at McKinsey Switzerland, the question is not whether Switzerland stays attractive, “but whether it actively fosters the conditions that sustain it”. Steinmann explains that multinational companies serve as an early warning system in this regard, saying that when investment decisions increasingly favor other hubs, it is an important signal regarding the long-term quality of the location.

For the business leaders surveyed, it is not so much individual regulations as the cumulative effect of many small delays that is contributing to Switzerland’s declining competitiveness on the international stage. “Switzerland cannot outcompete larger economies in terms of market size or subsidies – but it can outperform them in terms of performance, speed, and reliability,” said Rahul Sahgal, CEO of the Swiss-American Chamber of Commerce. “We must once again make targeted use of this advantage.” ce/hs