Swiss Competitiveness Declining Due to Trade War and Technology, Warns Professor

Switzerland's competitive edge is under severe threat, potentially leading to a long-term decline, according to Arturo Bris, a finance professor at the International Institute for Management Development (IMD) in Lausanne. Bris, who annually ranks the competitiveness of 70 countries based on 172 criteria, warns that Switzerland is ill-equipped to navigate the evolving global landscape.

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The trade war has triggered a tsunami in the Swiss economy.

Bris identifies the ongoing global trade war, initiated by U.S. tariffs, as a primary catalyst for this precarious situation. He describes its impact as a "tsunami" on the Swiss economy, disrupting established supply chains and prompting international companies to shift production abroad. This disruption has significantly lowered expectations for future economic growth in Switzerland, contributing to a fall in its ranking from first to third place in the latest IMD competitiveness index, with its economic performance score dropping to a record low of 37th.

Adding to these economic challenges is the accelerating pace of technological change. Bris highlights artificial intelligence as a key driver of job losses, noting that automation is increasingly capable of performing tasks in both the industrial and service sectors. This technological shift, combined with the fragmentation of the global economy, undermines the traditional "Made in Switzerland" model, which has long been a hallmark of the country's economic success.

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The traditional 'Made in Switzerland' model no longer works.

Bris challenges the notion of full employment in Switzerland, citing figures from the International Labour Organization (ILO) that include long-term unemployed individuals. These numbers suggest an unemployment rate closer to 5 percent, significantly higher than official government figures and notably higher than in Germany. This situation, he argues, is a direct consequence of both technological disruption and the broader economic downturn, leaving Switzerland in a vulnerable position.

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Definitely. There are two forces for rising unemployment. One is technology: artificial intelligence leads to job losses, many activities in industry, but also in the service sector, can be automated.