A youth unemployment rate in the single digits; scientific innovation highlighted by the European Organization for Nuclear Research (CERN); a health care system regularly named among the best; and a happy and prosperous population.
Switzerland has become a global model for what to do right in fixing our global economy and preparing a workforce for emerging economic models of the 21st century. To find out more behind the Swiss success story, Diplomatic Courier sat down with Switzerland’s Ambassador to the United States Manuel Sager.
HE Manuel Sager was appointed Ambassador of Switzerland to the United States of America in October 2010. Previously, he headed the Political Affairs Division in the Federal Department of Foreign Affairs (FDFA) responsible for coordinating thematic foreign policy from 2008 to 2010, and worked as Executive Director at the European Bank for Reconstruction and Development in London from 2005 to 2008. He earned a Ph.D. from the Law School of the University of Zurich and earned a Master of Laws and Letters (LLM) degree at Duke University Law School.
[Diplomatic Courier:] Switzerland has been named several times as a top nation for innovation. In 2008, it boasted the highest number of worldwide patents filed (except for Japan), and in 2009 was ranked at the top of the European Innovation Scoreboard. What role do you see patents playing in innovation, and what can the U.S. learn from Switzerland’s model?
[Ambassador Manuel Sager:] Actually, for a number of years now, Switzerland has topped the World Economic Forum’s ranking as the most innovative and competitive country in the world. Success in the field of innovation is the result of a combination of factors. Switzerland invests heavily in education and research. Equally important, our universities and their researchers enjoy considerable autonomy, which fosters healthy competition for access to public funds. That said, the importance of the private sector’s commitment to innovation cannot be stressed enough: industry and SMEs account for approximately 68 percent of R&D investments in Switzerland; the federal and cantonal governments for about 23 percent.
[DC:] Switzerland boasts a number of regional cluster initiatives, including a ‘biovalley’ cluster in Basel and a nanocluster in Bodensee. What effect do these industry clusters have on innovation?
[MS:] The roots of what today is called the life science cluster in the Basel area reach back to the 18th century. The foundation of the University of Basel goes back to the 16th century. The cluster has grown bottom-up and has mainly been driven by the private sector. Governments have been contributing to this development through a strong financial commitment to the University, which, in turn, contributes enormously to the vibrancy of the business and cultural communities of the region.
[DC:] What is the feeling within Switzerland about the federal government providing more support (such as through public-private partnerships), but also more regulation to these industry clusters?
[MS:] Switzerland has the most liberal economy in Europe according to the Heritage Foundation’s Economic Freedom Index and is, therefore, a very attractive place to do business. Startups and other new enterprises find a highly stable economy as well as business friendly regulations. It is easy to set up a business in Switzerland. Our excellent infrastructure, first-class education and healthcare, high quality of life and competitive tax system are among the reasons why companies settle in Switzerland.
For SMEs, Switzerland Global Enterprise, a nonprofit organization established by the Swiss government, hosts the promotion of exports, FDI, and imports under one roof. It provides support to Swiss SMEs interested in exporting and links companies, experts and organizations around the world. It informs, advises and guides SMEs from Switzerland and Liechtenstein in their international business ventures.
[DC:] Switching to education, nearly two-thirds of Swiss youth do not go on to get a college degree, opting instead to get a vocational degree. What effect does this have on the economy and employment rates?
[MS:] We have a comparatively low youth unemployment rate of about 3.5 percent. This shows that, adequate alternatives provided, a college education is not the only path to a successful professional career.
Our educational system offers careers for all kinds of talents. Switzerland always scores high at the World Skills Competition. Students with an education in a specific profession, let’s say as a nurse or a graphic designer or an auto mechanic, are easily employable after graduating. Our system of vocational training is industry-driven, which leads to a workforce that is adapted to the needs of our private sector. The result is high productivity and economic growth. Let me illustrate this with an example. If you would like to become a qualified laboratory assistant in our strong pharmaceutical sector, instead of going to college, you would undergo four years of vocational training in a company and, in addition, attend mandatory classroom education in topics such as history, accounting, foreign languages etc. You graduate with a well-rounded background and are ready to hit the professional ground running. The doors are open to you for further education and higher degrees. This vocational track is highly respected in Switzerland.
[DC:] Nearly 30 percent of immigrant youth leave school without a secondary degree or vocational degree, compared to 10 percent of native Swiss youth. What is being done to address this gap?
[MS:] Keep in mind that the educational and immigration systems of our two countries are different. Of our residents, 23 percent are foreign born; in the U.S. the equivalent number is 14 percent.
About 90 percent of our youth, including foreign born residents and children of immigrants born in Switzerland, are successfully obtaining a higher secondary degree. Given the importance of vocational education and training in our country, secondary-level school degrees as well as vocational degrees are included in this figure. For the individuals you are referring to, numerous institutions offer a variety of programs to assist integration into the workforce.
[DC:] Switzerland has been noted for its acceptance of foreign workers. From 2000 to 2005, 58 percent of GDP growth came from labor productivity from highly skilled immigrants, while today foreign workers make up 27 percent of Switzerland’s workforce. What suggestions do you have for U.S. immigration reform?
[MS:] The Swiss economy has significantly benefitted from the immigration of highly-skilled workers who are attracted by the high living standard and the good working conditions in a stimulating and diverse atmosphere. It is important to note, however, that Swiss immigration policy is very closely linked to its integration into the common market of the European Union. Bilateral treaties allow citizens of European Union Member States to move to Switzerland and work there almost without any restrictions.
[DC:] In 2013, Switzerland was ranked number one in the World Economic Forum’s Human Capital Index, ranking first in “Health and Wellness” and “Workforce and Employment”, second in Enabling Environment, and fourth on Education. What do you believe contributed to your country’s high ranking in this?
[MS:] The Swiss people are fortunate to enjoy an exceptionally high quality of life and to live in a politically and socio-economically stable society. Our health care system is one of the best in the world; basic health care coverage is mandatory for every person living in Switzerland. Our high environmental standards enjoy a broad consensus in our population. We have a vast selection of quality foods to choose from. Switzerland has breathtaking landscapes and clean air.
Thanks to our resilient economy, our unemployment rate has traditionally been low, currently around three percent. Thus, capable and well-educated people find plenty of opportunities to use and further develop their skills.
We take a certain pride in our efficient and reliable public transportation system, which gives great mobility to our population. Modern technologies such as mobile phones and internet access are available throughout the country and used by a majority of our people. There is intense collaboration among universities, between universities and businesses, and across industry sectors, which contributes to innovation and capacity building. The Swiss are pragmatic people. This is reflected in our legal framework: doing business in Switzerland is relatively easy. Usually, authorities are approachable and cooperative. Labor laws are liberal, but strictly enforced, and an adequate social safety net contributes to social stability.
[DC:] What areas do you believe Switzerland could still improve in? And what areas do you believe you can offer suggestions for greater global innovation and productivity?
[MS:] There is always room for improvement. Since Switzerland has virtually no natural resources, we will have to make sure that our focus on brainpower continues to provide the highly qualified workforce we need for our advanced economy.
Innovation, productivity and economic growth are only possible in an environment of stability, security, and respect for the rule of law. Safeguarding our independence while contributing to global security is a fundamental objective for Switzerland. Our foreign policy promotes peace, human rights and security, and economic development.
This article was originally published in the Diplomatic Courier’s January/February 2014 print edition.