And what can we learn from it? In this next interview with Martin Dahinden, Ambassador of Switzerland to the United States of America, we learn about some of the factors behind the Swiss economy (think: innovation and research) along with how Swiss companies support and contribute to the American economy.
What makes one economy better than another? A high enough employment rate. The circulation of money. Improvements to products or services. Trading across industries, consumers and borders.
Perhaps one of the more interesting assets for any country is its ability to innovate. This factor alone accounts for businesses change, growth, competition--or why some grow tired and outdated before fading away. So, where is most of our world’s innovation today? Where can we look to grow our economy?
The short answer is Switzerland.
This geographically small country--one that I have admired for years--has consistently ranked as one of the most innovative economies in the world. Their top education system and research industry have born, raised or sheltered 47 Nobel Prize winners, resulting in a per capita rate of Nobel Prize wins far above that of the U.S., the U.K. or a Scandinavian country.
I have watched this nation foster generations of world-class entrepreneurs and academics alike since my first tour there as a young fellow of the American Swiss Foundation. Years later, representing for nine consecutive years, the Network For Teaching Entrepreneurship (www.NFTE.org) at the World Economic Forum in Davos, I met, heard ideas exchanged, and participated in discussions that changed my life forever. From Bono to Michael Dell and Mark Zuckerberg, from Reid Hoffman to Michael Douglas and Sharon Stone, from Vladimir Putin Bill Clinton and Bill Gates, a day at Davos was like a year of intellectual joy.
Over the years, more and more people have taken notice of the Swiss’s economic dynamism. Today, Switzerland is the sixth largest investor in the U.S. economy. Recently, I have had the pleasure to learn from a Swiss leader himself, Ambassador Martin Dahinden about some of the factors behind their success and how we might replicate it around the world.
Steve Mariotti: What is the trade relationship between Switzerland and the U.S.? Ambassador Dahinden: Switzerland and the United States are important economic partners, both in trade and investment. We have highly successful economic relations, particularly when we look at the Swiss economic footprint in the U.S. Our investment rivals that of other major foreign investors with much larger populations and economies. This is remarkable.
Our bilateral trade in goods and services amounted to more than $100 billion in 2015.
With $258 billion in cumulative direct investment, Switzerland is the 6th largest foreign investor in the United States, providing close to half a million direct jobs here.
That is mainly thanks to the more than 500 Swiss companies and their 3,500 affiliates in the United States.
Our two countries not only share a common belief in entrepreneurship, innovation and a free market, but also have closely and successfully interlinked economies.
Top countries in Average Salaries in the U.S.
It is striking when you look at the U.S. states individually. The state of New York exports as much to Switzerland as to Germany, Belgium and France combined. We are New York’s top European export market. This is not common knowledge yet—but we’re working on it.
SM: What U.S. markets are the Swiss particularly active and strong in? Amb. D: Swiss companies are active investors in the manufacturing, wholesale, retail, and services sectors of the American economy. And Swiss affiliates are especially powerful contributors in pharmaceuticals, medicines and food manufacturing.
Swiss Direct investment by Industry
And Swiss firms spent more than $10 billion on research and development (R&D) in the United States, supporting 24,000 R&D-related jobs in the U.S.
Top Countries in R&D, Performed by Foreign Affiliates
SM: How do you explain the specific strength of Switzerland in the area of Research & Development? Amb. D: First, our high-quality educational system: Switzerland has outstanding universities which not only teach the next generation, but inspire them to conduct research and development on their own terms, supporting Swiss entrepreneurship. Second: the Swiss have the crucial ability to innovate.
The Global Innovation Index ranked Switzerland No. 1 in innovation again last year. Our country’s lack of natural resources forces us to rely on brain power. Education and skills development are vital to our economic success and have made us highly competitive. But we also have an openness to public-private partnerships, entrepreneurship and academic institutions.
SM: Are there any cultural factors that contribute to the Swiss propensity toward innovation?
Amb. D: Certainly. We tend to be very accurate, almost finicky when working on something. We want to get it right and not just about right, but as perfect as it gets. This, for example, also shows in our strong suit, punctuality. We don’t just think it’s rude to let somebody wait when meeting up with them, but our goal of being on time has led to one of the most punctual public transportation systems in the world. You could observe those values recently when the Gotthard Base Tunnel opened in Switzerland. The world’s longest tunnel became operational after 17 years of construction on time and on budget as predicted and planned. Punctuality, precision and reliability are key facts of life in Switzerland. That’s probably what has made us such good watchmakers, too.