2007-2008 Global Competitiveness Report

Switzerland remains among the best performers in the GCI, climbing two ranks from 2006 to reach the 2nd position overall.The country is characterized by an excellent capacity for innovation and very sophisticated business culture, ranked 1st overall in the innovation and sophistication factors subindex. Similar to the United States, Switzerland is endowed with top-notch scientific research institutions and high spending on research and development—particularly impressive given the country’s small size. Strong collaboration between the academic and business sectors ensures that much of this basic research is translated into useful products and processes on the market, buttressed by strong intellectual property protection.The innovative activity is reflected in the high rate of patenting in the country, for which Switzerland ranks 6th worldwide on a per capita basis.
Switzerland has also developed an institutional environment that is rated among the most effective and transparent in the world (4th), ensuring a level playing field and enhancing business confidence, including an independent judiciary, a strong rule of law, and an accountable public sector. Competitiveness is also buttressed by excellent infrastructure and labor markets that are among the most flexible in the world, ranked 4th and 3rd overall, respectively. And compared with the United States as well as several other industrialized countries, Switzerland’s macroeconomic environment receives a comparatively high ranking of 22, attributable to a balanced budget, high national savings, and an inflation rate that is among the lowest in the world.
Given the key role of innovation in spurring Switzerland’s productivity enhancements, one area for improvement is the relatively low university enrollment rate of 47 percent, placing the country 37th on this indicator. Educational attainment at the highest level should be reinforced to prepare more home-grown talent for innovative activities.