Switzerland’s global business stature has fallen for years

The collapse of Credit Suisse and its regulator-orchestrated purchase by UBS has many questioning Switzerland’s future as a global financial capital. But two recent reports suggest the country in fact has been losing its edge as a center for international business for at least the past decade.

A McKinsey analysis of Switzerland’s attractiveness to multinational companies suggests that while the country remains an important corporate hub, it has lost relevance to Singapore and Dubai.

Meanwhile, the Global Financial Centers Index, jointly published by the China Development Institute in Shenzhen and Z/Yen Partners in London, shows Zurich slipping in the rankings of 110 locations examined.

Factors used in the Global Financial Centers Index model are grouped into five broad areas of competitiveness: business environment, human capital, infrastructure, financial sector development, and reputation.

New York took the number one spot in the most recent analysis, though its change in rating fell slightly from the year before. Centers with notable increases in their ratings include Shanghai, Guangzhou, Amsterdam, Doha, Vienna, Milan, and Mexico City.

Missing out on high-growth

Switzerland also apparently is losing attractiveness as a corporate hub.

Between 2009 and 2013, it captured 27% of worldwide or regional headquarters relocations, new R&D centers or operational centers, or financial holding companies that moved to one of five major European business hubs, according to the McKinsey study. Switzerland’s share was tied with Ireland’s, and ahead of the UK, Netherlands, and Luxembourg.

But among relocations from 2014 to 2018, Switzerland captured just a 19% share, dropping it to third place behind Ireland and the Netherlands.

The report suggests Switzerland has missed opportunities arising from relocations by major multinationals such as Apple, Amazon, Alibaba, Facebook, Netflix, LinkedIn, Airbnb, Starbucks, Tesla, and Uber. Meanwhile, only 5% of the top 250 Chinese companies chose Switzerland over other European locations for their headquarters.

The exception is Google, which added an R&D center in Switzerland in 2016. Oracle Labs and Facebook also built small-scale R&D centers.

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