The importance of industry for the Swiss economy as a whole has declined since the 1970s. Looking back over the past 25 years, however, the picture is both stable and positive. The number of people employed in industry has remained unchanged at around 730,000, whereas value creation has risen sharply. Exports have doubled over the same period.
There is a discernible trend towards specialisation in a small group of high-added-value industrial sectors. Out of every ten francs of Swiss industrial revenue in 2019, four came from just two industries: pharmaceuticals, and watches and electronics – twice as much as in 1997.
Pronounced differences between regions and sectors
A new study by Avenir Suisse on Swiss industry looks at the pronounced differences between regions and sectors that lie behind the average figures. For example, the number of jobs in secondary sectors in the cantons of Jura and Neuchâtel has risen both in absolute terms and relative to overall employment. Contrary to the general trend in Switzerland and throughout Europe, the two cantons have in fact reindustrialised, with employment growth in secondary sectors outstripping that in services (25% between 2005 and 2018 in Neuchâtel, 27% in Jura). The pharmaceutical, watch and food industries have gained jobs as well as value across the entire country.
The border cantons have profited most of all from this growth. The paper and printing industry, meanwhile, has seen a downturn – especially in the canton of Zurich, which has shed 5,000 jobs in 13 years and is thus responsible for a quarter of the national decrease.
Positive structural change
The canton of Basel-Stadt is an excellent example of how structural change can be a highly positive factor. In just over a decade, 2,500 jobs have been lost in the chemical industry, but 5,000 new ones have been created in the pharmaceutical industry.
Instead of a rise in unemployment, there has been a shift in the job market. The widely held fear that Switzerland’s “workshop” would be outsourced to other countries has not been borne out. Industrial value creation is ever more dependent on services such as maintenance and digital solutions. In the wake of the COVID-19 crisis, these trends are likely to accelerate and intensify.
Where do we go from here?
Swiss industry has achieved these successes without an interventionist industrial policy like those of some of its neighbours. Costly and inefficient state intervention would thus be unwise as it would halt technological progress in our internationalised economy. Solid frameworks for all sectors, a focus on productivity, open and stable trading relationships with the EU and other trading partners, and access to highly qualified workers are the best guarantee for safeguarding existing jobs and creating new ones.
The unilateral abolition of tariffs on industrial goods, which the National Council decided on recently by a narrow margin, is helpful in this respect. In addition to this, however, Switzerland needs to simplify immigration for workers from outside Europe and create more efficient, digital links between the State and business. A centralised industrial policy is most definitely not desirable.