October Review
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Irresponsible?
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The Role and Perception of Swiss Entrepreneurship in Times of Upheaval
Marco Salvi et al.
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Lifelong Learning also Applies to Educational Institutions
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Corona Will Cost the World 24.4 Trillion USD
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Women Do Not Need to Have a Lower Pension
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Focus of the Month
Switzerland Should Embrace Business, Not Suspect It
Big companies are crucial to the country’s prosperity
by Haig Simonian, our external editor
Weary Swiss voters face another call to the polls in November, as the Konzernverantwortungsinitiative (responsible business initiative) reaches the ballot box.
An attempt to oblige all companies based in Switzerland to incorporate Swiss legal standards for human rights and the environment into all their activities, including those abroad, the plan’s supporters say such legally binding due diligence is essential in identifying potential risks to people and the environment.
Critics like Avenir Suisse, by contrast, contend the measure will burden business with impossible regulatory responsibilities, particularly when it comes to policing distant foreign activities and supply chains. And they note that acceptance would put Swiss enterprises at a serious competitive disadvantage to foreign rivals carrying no such responsibilities.
Less love
Fear and suspicion of multinationals in Europe is nothing new – and fodder for the political Left. Pharmaceuticals, financials, food, energy and construction have all been in the firing line. The spread of such concerns to the mainstream is, however, worrying, particularly for Switzerland, whose economy depends so much on commerce, finance and the giant companies behind them. With just eight and a half million people, the country has a disproportionate number of multinationals: Nestle dominates industrial foods; Roche and Novartis feature among the world’s top 10 drugs companies; while UBS and Credit Suisse are two of the top banks. Not even then Netherlands, with a somewhat similar economic structure, compares.
Has prosperity led the Swiss to forget how important business, and especially the country’s big exporters, are? Surveys show people have greater trust in smaller companies and co-operatives than in their quoted rivals.
Probably so, argues Marco Salvi from Avenir Suisse. In a new study
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coinciding with the think tank’s twentieth anniversary. Salvi and his colleagues take pains to remind readers about just how dependent Switzerland is on business. While SMEs are depicted regularly as the drivers of the economy, they are in fact dwarfed by their quoted counterparts in terms of their contribution to national wellbeing.
Big Swiss companies have a justified reputation for reliable, quality and innovative products. They are also important, and generally reliable, sources of labor, and offer relatively high levels of job security. Switzerland’s labor participation rate is about 80 percent – the second highest level in the OECD group of industrialized countries. Over the past 15 years almost 1.5 million new jobs have been created domestically, with companies employing more than 250 people disproportionately represented. Switzerland’s big companies have even taken over some responsibilities from the state, such as by operating the occupational pension schemes which are the central pillar of the nation’s three tier pension system.
Backbones of the economy
Matters don’t end there. Big business is, understandably, a prime source of tax revenue for federal, cantonal and local administrations. They even assist the public administration, for example by collecting value added tax contributions.
They are also a core component of Switzerland’s widely admired social glue: opportunities for on the job training are essential to the country’s revered apprenticeship system, providing a well educated and well trained workforce. Large organizations have, moreover, traditionally been pioneers in social terms: long before paternity leave came into force nationally, it was a reality for employees of many Swiss multinationals. Avenir Suisse’s new publication
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shows countless cases of how business has boosted social mobility and even advanced gender equality.
However, more needs to be done to raise awareness of business’s contribution, argue Salvi and his colleagues: Swiss politicians should probably do more to highlight the contribution of the large companies that are so important to the economy. And companies themselves should probably be less reticent about blowing their own trumpets.
Our latest Publications
Irresponsible? The Role and Perception of Swiss Entrepreneurship in Times of Upheaval
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Free Movement of Persons
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Sustainable Powertrain Technologies
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Avenir Suisse is the leading Swiss think tank which promotes open-market ideas in economics, politics and society at large. Although continuing to publish on Switzerland’s domestic politics, the think tank aims to address Switzerland’s growing importance in the international community and global economy. Avenir Suisse’s English-language monthly newsletter aims to reunite people and institutions interested in obtaining regular valuable insights on Switzerland, useful in international discussions and as a source of comparisons.
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