UBS study Cantonal Competitiveness Indicator 2018: Swiss high-tech industry as a key factor in competitiveness

Zurich, 28 August 2018 - The Cantonal Competitiveness Indicator (CCI) 2018 published by the UBS Chief Investment Office GWM provides information about the long-term growth potential of Swiss cantons. Zug, Zurich and Basel City are Switzerland's three most competitive cantons. Aargau, Schwyz, Lucerne and Vaud also have above-average growth potential.

Solid growth prospects are evident in a dense group of 11 cantons, with Nidwalden at the top and Obwalden bringing up the rear. The places in between are occupied by cantons from Eastern Switzerland and Espace Mittelland as well as Basel Country and Geneva. The alpine cantons of Graubünden and Valais, as well as the canton of Jura, fall into the group with low relative competitiveness.

Industry with improved competitive positioning

Competitiveness does not change overnight. The position of 14 cantons has not shifted since the last edition of the CCI in 2016. But relative growth prospects have improved for Schwyz and Schaffhausen, both of which have made up three places. Bern and Ticino have both improved by two positions. The cantons of Obwalden, Nidwalden, Freiburg and Appenzell Innerrhoden have fallen by two or more places.

The positive prospects in the Swiss high-tech industry have led to a shift in the relative strength of the economic structure: one of the key factors in competitiveness. Industrial cantons with above-average diversity, such as Schaffhausen, Thurgau and Solothurn, have benefited from this in particular.

Tax Proposal 17 reshuffling the deck

Relative location costs for companies are much the same as they were in 2016. But altered cantonal tax rates on profits in the context of Tax Proposal 17 should result in changes. According to current data, Geneva and Vaud would become considerably more attractive from a tax perspective, while the relative competitiveness of Zurich and Aargau would fall. In any case, cost factors such as office rents, energy prices, wages and taxes for natural persons should become more important. The losers would be those Central Switzerland cantons that have lured companies to settle in them with aggressive low-tax policies. St. Gallen and Thurgau in Eastern Switzerland and Solothurn and Ticino would benefit from the cost factors that will become the new focus. They would be among the winners.