The main resources
Agriculture and forestry employ 3.1% of the working population and will account for 0.6% of the Swiss economy's GDP in 2021. However, this rate can only be maintained thanks to federal protection and subsidies. Agriculture contributes to environmental protection by being directly integrated into rural life, landscapes and the tourist economy. Three-quarters of agricultural production comes from livestock farming, mainly cattle (which is highly symbolic of Switzerland!). A large proportion of milk is processed into by-products that are mainly exported - milk powder (Nestlé), chocolate (Suchard, Lindt, Cailler) or cheeses (Gruyère, Emmental). There will be 48,344 farms in 2022, with organic farming accounting for 16.2% of the total.
The industrial sector accounts for 22% of GDP and employs around 23% of the population. The pharmaceutical, chemical, mechanical engineering, microtechnology and watchmaking industries are Switzerland's main industrial hubs, along with the food industry (Nestlé). The industrial area around La Chaux-de-Fonds is particularly well known for its automotive and watchmaking brands and subcontractors. Watchmaking and the mastery of high-precision technologies can be discovered at the Musée International de l'Horlogerie in La Chaux-de-Fonds. These include luxury brands such as Breitling, Chopard, Patek Philippe, Rolex, Swatch and Vacheron Constantin, all of which generate considerable foreign currency for the country.
A leading pharmaceutical sector
Switzerland is one of the world's leading producers of pharmaceutical products. Biotech and other medical technologies are at the cutting edge, putting the country at the forefront of the international market. In almost twenty years, the number of employees has more than doubled (47,000 in 2020). The sector accounts for 5% of the country's GDP and ranks second in the country, just behind the machinery industry, which it is catching up with. As the locomotive of the Swiss economy, the pharmaceutical industry will account for over a third of Swiss GDP growth between 2010 and 2020. With this dazzling growth, the pharmaceutical industry has established itself as one of the main drivers of the Swiss export sector. The Basel region is the country's most important chemical and pharmaceutical hub, with the Roche, Novartis and Syngenta groups. But throughout Switzerland, innovation is a priority. In 2021, for example, a Neuchâtel-based company has developed a connected bracelet for continuous blood pressure measurement.
A highly developed tertiary sector
Most employees work in the service sector. 70% of gross domestic product comes from the service sector. Growth in this area is mainly due to the efficiency of the education system, the healthcare system, financial activities, insurance, transport and consultancy firms. The service sector accounts for 75% of the workforce and 74% of GDP. Alongside multinationals, which employ 10% of the workforce, the service sector manages to maintain over 4.3 million jobs (April 2023 figures).
An exceptional banking sector
The banking sector is an essential part of the country's economy. However, after experiencing significant growth in the 1980s and 1990s, it has had a difficult entry into the 21stcentury , and has had to cope with the global crisis since mid-2008.
In 2021, Switzerland is still one of the world's leading financial destinations, with 239 different banks to choose from. It is also exemplary when it comes to wealth management. The transparency law on banking secrecy that Berne signed when the OECD convention came into force in 2016 on mutual assistance in tax matters. It partially ended banking secrecy. Since 2018, banks have had to automatically inform the tax authorities of foreign customers' home countries of the existence of their accounts in Switzerland, to discourage tax evasion, a move that enabled the country to leave the European Union's list of tax havens. In March 2023, in a weakened Swiss financial center, Crédit Suisse, the country's second-largest bank in a state of near-bankruptcy, was rescued in extremis by its great rival UBS after intense pressure from the authorities. The takeover was finalized a few weeks later. The new banking giant now weighs in at 1.5 billion Swiss francs, twice the size of Switzerland's GDP! The Raiffeisen banks have the densest branch network, but have a special status in that they operate as cooperatives. Next in line are foreign banks and cantonal banks, as well as regional banks and savings banks. Finally, private bankers are among Switzerland's oldest establishments, specializing in wealth management for private and institutional clients. Since we're in the land of banks, it seems almost logical that department stores such as Migros and Coop should also offer banking services to their customers.
Innovation, a flourishing passion
Always on the lookout for new economic challenges, innovation is in full swing in Switzerland. In 2022, it topped the Global Innovation Index for the twelfth time. The state, public education and research, and private investment are all conducive to the development and emergence of new technologies and know-how. Numerous small sparks are flying in start-ups and development clusters such as the Campus Biotech in Geneva, the EPFL Innovation Park in Lausanne, the BioArk in Visp and Monthey, the Bio-Technopark in Zurich, the Biopôle in Lausanne and the Basel Technology Park. Promising examples include underwater WiFi for drones, and fly breeding for waste disposal. Every year, Swiss biotech start-ups multiply the number of creations that revolutionize the healthcare sector. For example, Cutiss, a biotech backed by the University of Zurich, has created the first machine capable of generating skin in large quantities from a patient sample.
An export-oriented country
Switzerland also excels in exports, maintaining its reputation as an international player. Foreign trade is the main contributor to the country's GDP. In some sectors, over 90% of goods and services are exported. Switzerland's main export market is Europe, where watches, chocolate and cheese are the main products, along with chemicals and pharmaceuticals, which account for 60% of total exports.
Human resources
Human resources management is a new and highly competitive sector in the Swiss economy. In the absence of natural resources - with the exception of hydroelectric power - Switzerland's economic wealth depends above all on its human resources, based on the reputation of its skilled workforce, the contribution of foreign workers who occupy up to a quarter of jobs, social conditions characterized since 1937 by "labor peace" which avoids strikes, the financial context (banking secrecy) and political neutrality. Many international companies have set up their personnel management departments in Geneva. This change is due to the fact that Switzerland offers a stable social environment and a moderate tax rate. Swiss employment law may also appear more flexible to employers from the European Union.
The place of tourism
Switzerland is one of the pioneers of tourism. Situated in the heart of Europe, it is a land of millennia-old passageways with obvious natural potential. It has also benefited from excellent "publicity", with all the romantic authors who, especially in the 18th and 19th centuries, were lulled by its lake and mountain landscapes. As the Swiss are highly skilled at organization, this was all it took to make tourism one of the major sectors of the economy, in terms of jobs, revenue and foreign currency. Today, tourism is one of the country's most important economic sectors. Nevertheless, the sector is going through a serious crisis due to the very strong Swiss franc and exorbitant prices for non-Swiss visitors. As a result, 45% of tourists are... Swiss! Nearly 40% are European: primarily Germans, but also English and French, as well as Americans, Chinese and Japanese.
Switzerland today
Today, the Swiss Confederation is one of the most successful countries in the world. The Swiss economy continues to grow, and the Swiss franc continues to strengthen. With this incredible economic health, Switzerland is attracting many would-be immigrants who dream of finding a job, especially the growing number of French cross-border commuters. By 2023, resident foreigners will account for a third of the population, and the unemployment rate will be as low as ever (2%). Despite Switzerland's need for manpower to pursue its development, the mood is one of protectionism, and even conservatism. In recent years, Switzerland has passed a series of laws aimed at reducing immigration at its borders. The initiative "against mass immigration" was passed in February 2017.
Across all economic sectors, the country is turning more towards "sustainability", and the state is encouraging initiatives. In 2021, the Federal Council adopted the Sustainable Development Strategy 2030. The three priority themes are "sustainable consumption and production", "climate", "energy biodiversity" and "equal opportunities and social cohesion". This action plan will have an impact on Switzerland's economic development.
After the Covid-19 pandemic, which weakened the global economy, Switzerland is not to be pitied. The banking sector remains a factor of success in the global financial marketplace. Perhaps climate change will have an impact on the future of this Alpine country, as the potential for climate-related losses will increase and the risk of loss could be significant.
Whereas in the 2019 federal elections, the "green wave" had enabled the ecologist parties to achieve historic scores with 28 seats, or 13.2% of the vote, the October 22, 2023 ballot was marked by the strong comeback of the Swiss People's Party. Known for its anti-immigration and anti-European stance, the SVP won 28% of the National Council vote. The SP retained its position as the country's second political force, with 18.3% of the vote, thanks to votes from the major cities. The Greens fell back sharply with 9.8%.
Direct democracy
The distinctive feature of the Swiss political system is its direct democracy. Citizens are called upon to vote every three months on specific issues, such as a new law on immigration, social benefits and so on. Decrees are generally made by elected representatives, but anyone can contest these decisions and launch a popular referendum. In fact, in Switzerland, citizens have two instruments at their disposal that enable them to act on an act decided by the State: the optional or mandatory referendum. The optional referendum is used to debate a law passed by the Federal Assembly. To this end, 50,000 signatures must be collected within a period of one hundred days. A mandatory referendum, on the other hand, necessarily requires a popular consultation in the cases stipulated by the Federal Constitution. It requires a double majority of the population and the cantons. A popular initiative is the right of a fraction of the electorate to initiate a procedure enabling the adoption, revision or repeal of a constitutional provision, provided 100,000 signatures are collected.
