Before playing host to world-beating firms, Switzerland was perhaps best known for inventing yodelling. We explain what’s behind the country’s business success
Save time by listening to our audio articles as you multitaskSomething remarkable must be going on in the nation of mountains and valleys that before playing host to world-beating firms counted the invention of yodelling among its achievements. Relative to itsSwitzerland has the highest density of Fortune 500 companies in the world . Multinationals contribute around one-third of Switzerland’s economic output, a much higher share than in other countries of comparable size.
There are several explanations for Switzerland’s corporate one-upmanship. One is that the country’s defining characteristic is “common sense”, says Paul Bulcke, chairman of Nestlé. This manifests itself in a unique political model that mixes federalism and direct democracy, a weak central government, light regulation, top-notch research universities, and rivalry in education and taxation between the cantons that make up the Swiss confederation.
This endeavour was assisted by Switzerland’s “eternal neutrality”, granted at the Congress of Vienna in 1815. It was spared two world wars that devastated the rest of Europe in the last century. At the same time it benefited from an influx of skilled folk fleeing strife elsewhere on the continent and from the cash they deposited in Swiss bank accounts.
Switzerland’s welcoming of outsiders stands in stark contrast to relations within. The Swiss have no particular affinity for their compatriots in other cantons. The country’s city-states would doubtless have preferred to remain independent, only becoming a bigger unified entity to defend themselves against rapacious neighbours. But they joined together in such a way as to foster self-reliance and responsibility.
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