http://www.oecd.org/eco/surveys/economic-survey-switzerland.htm

2017 OECD ECONOMIC

SURVEY OF SWITZERLAND

Boosting productivity and meeting skills needs

Bern, 14 November 2017

@OECD

@OECDeconomy

2

Living standards are high

OECD Better Life Index, 2017

Index scale, 0 (lowest) to 10 (best)

Note: For each dimension indicators are normalised and averaged.

Source: OECD, Better Life Index.

0

2

4

6

8

10Income and wealth

Jobs and earnings

Housing

Work and life balance

Health status

Education and skills

Social connections

Environmental quality

Personal security

Subjective well-being

Switzerland

OECD

3

The economy is growing but only slowly

GDP growth

Source: SECO.

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

-4

-2

0

2

4

6

2006 2008 2010 2012 2014 2016

% y-o-y

4

Employment is high

Source: OECD, Labour Force Statistics database.

Employment-to-population ratio

50

55

60

65

70

75

80

85

2010 2011 2012 2013 2014 2015 2016 2017

Switzerland OECD%

5

Productivity has stalled

Source: OECD, OECD Economic Outlook 102 database, preliminary version.

Trend labour productivity growth

2000 2002 2004 2006 2008 2010 2012 2014 20160.0

0.5

1.0

1.5

2.0

Switzerland OECD

%

-30

-20

-10

0

10

20

30

40

50

GR

C

FIN

SV

K

NLD

LVA

CZ

E

DN

K

HU

N

ITA

ES

T

ES

P

BE

L

DE

U

EU

15

SV

N

IRL

PO

L

PR

T

AU

T

GB

R

FR

A

NO

R

CH

E

SW

E

ISL

LUX

High skill Middle skill Low skill

% pts

6

The demand for skilled workers has been

strong

Contributions to changes in total employment growth over 2000-16

Note: Countries are ordered by the contribution of high-skill employment

Source: Eurostat.

Entrenching the expansion

7

8

Fiscal policy is sound and public debt low

Gross general government debt, % of GDP

Note: The shaded area denotes the 25th to 75th percentile range for OECD countries. OECD is an

unweighted average of data for available countries.

Source: OECD, OECD Economic Outlook 102 database, preliminary version.

0

20

40

60

80

100

120

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Switzerland OECD

9

Unconventional monetary policy has

supported growth

Source: Swiss National Bank; Thomson Reuters Datastream; OECD, OECD Economic Outlook 102 database, preliminary version.

Interest rates SNB’s foreign exchange reserves

0

25

50

75

100

125

150

175

200

225

2006 2008 2010 2012 2014 2016

% of imports

CHF/EURceiling

-2

-1

0

1

2

3

4

2006 2008 2010 2012 2014 2016

SNB target range

3-month, CHF LIBOR

%

10

Low interest rates increase risks

Source: OECD, House Price database.

House prices, 2010 = 100

80

90

100

110

120

130

2006 2008 2010 2012 2014 2016

Ratio to consumer prices

Ratio to average household income

11

Household credit is high

Source: OECD, Vulnerability Indicators database.

Household credit, % of GDP, 2017 Q1

0

20

40

60

80

100

120

140

ME

X

TU

R

HU

N

CZ

E

PO

L

ISR

ITA

CH

L

IRL

AU

T

DE

U

JPN

FR

A

BE

L

LUX

GR

C

ES

P

FIN

PR

T

US

A

SW

E

GB

R

KO

R

NZ

L

CA

N

NO

R

NLD

DN

K

AU

S

CH

E

12

Age-related public spending will become

a fiscal burden

Long-term projections for age-related spending, % of GDP

Source: Federal Department of Finance (2016), Report on the Long-term Sustainability of Public Finances in Switzerland.

9

10

11

12

13

14

15

0

5

10

15

20

25

2013 2030 2045

By type of spending

Long-term care Health care

Pensions (AHV/IV) Education

0

5

10

15

20

25

2013 2030 2045

By level of government

Communes Cantons

Social security Confederation

13

The current account surplus is large

Current account balance in OECD countries with a surplus, 2016

Source: OECD, OECD Economic Outlook 102 database, preliminary version.

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

2

3

4

5

6

7

8

9

10

PR

T

CZ

E

LVA

AU

T

ES

T

ES

P

ITA

IRL

ISR

JPN

SW

E

LUX

NO

R

SV

N

HU

N

KO

R

ISL

DN

K

DE

U

NLD

CH

E

% of GDP

14

High household saving is contributing to

the large current account surplus

Net saving and investment balances in selected countries with a current account surplus

% of GDP

Source: OECD, Annual National Accounts database; Federal Statistical Office; OECD calculations.

-202468

10121416

Net

sav

ing

Net

inve

stm

ent

Net

sav

ing

Net

inve

stm

ent

Net

sav

ing

Net

inve

stm

ent

Net

sav

ing

Net

inve

stm

ent

Net

sav

ing

Net

inve

stm

ent

DNK DEU NLD SWE CHE

Households General government Corporations

To support growth: Avoid persistent budget underspending through better

co-ordinating procedures at federal and sub-national levels.

Reduce agricultural subsidies and pursue efficiency gains in public spending to free up funds for measures that enhance growth and inclusiveness.

To reduce risks: Eliminate remaining explicit cantonal government

guarantees to their public banks.

Establish a formal framework for setting mortgage lending limits that takes affordability into account and is enforced on a comply-or-explain basis.

15

Key fiscal and financial recommendations

To address ageing-related challenges: Fix the retirement age at 65 for both sexes, and

thereafter link it to life expectancy.

Increase financial incentives to work longer before retirement.

Promote programmes to lengthen healthy working lives, including preventative health programmes.

Promote lifelong training, career planning and tailored job-search assistance to enhance workers’ resilience to change.

16

Key fiscal and financial recommendations

(cont.)

Boosting productivity for long-term growth

17

3

4

5

6

7

8

9

10

11

12

13

14

15

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

GR

CIT

ALU

XF

INA

UT

CH

EM

EX

DE

UG

BR

JPN

BE

LN

LDN

ZL

DN

KF

RA

ES

PC

AN

ISR

PR

TIS

LN

OR

SW

EH

UN

AU

SU

SA

SV

NC

ZE

ES

TIR

LK

OR

SV

KT

UR

PO

LC

HL

%

18

Productivity is high, but sluggish

Average annual rate of trend labour productivity growth over 2006-16

Source: OECD, OECD Economic Outlook 102 database, preliminary version.

19

Switzerland is a leader in R&D and

innovation

Innovation performance indicator

EU average level in 2010 = 100

Source: European Commission (2017), European Innovation Scoreboard 2017.

0

20

40

60

80

100

120

140

160

180

PO

L

LVA

TU

R

HU

N

GR

C

SV

K

ITA

ES

P

ES

T

PR

T

CZ

E

SV

N

EU

28

FR

A

ISR

IRL

NO

R

BE

L

LUX

AU

T

ISL

DE

U

GB

R

NLD FIN

DN

K

SW

E

CH

E

Moderate innovators Strong innovators Innovation leaders

20

The productivity of frontier firms has

diverged from the rest

Labour productivity, 2002 = 100

Note: Markers denote survey years. Labour productivity is calculated as value added per employee.

Source: OECD calculations based on KOF, Swiss Innovation Survey.

0

50

100

150

200

250

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Most productive 1% of firms Other firms

21

The administrative burden is heavy

Share of firms that discontinued their business citing bureaucracy as the

main cause, %

Source: Global Entrepreneurship Monitor 2015/2016, Report on Switzerland.

0

10

20

30

40

50

60

KOR NLD AUS NOR DEU PRT ESP GBR ISR BEL FIN USA CAN SWE ITA CHE

22

Regulatory barriers to competition are

high

Product market regulation indicator

Res

tric

tive

nes

s

1. ”Least restrictive countries” is the average of the three countries with the lowest score in each sector. Scores range from 0

to 6 and increase with restrictiveness.

2. Network sectors overall is the unweighted average of transport, communication and energy.

Source: OECD, Product Market Regulation database.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Professionalservices

Retaildistribution

Transport Network sectorsoverall²

Communication Energy

Least restrictive countries¹ Euro area Switzerland

23

Barriers to trade inhibit competition and

productivity

Services Trade Restrictiveness Index, for sectors with largest gaps

Res

tric

tive

nes

s

Source: OECD, Services Trade Restrictiveness Index database.

0.00

0.10

0.20

0.30

0.40

0.50

Logi

stic

s st

orag

e an

dw

areh

ouse

Sou

nd r

ecor

ding

Logi

stic

s fr

eigh

tfo

rwar

ding

Eng

inee

ring

Mot

ion

pict

ures

Com

mer

cial

ban

king

Con

stru

ctio

n

Com

pute

r

Bro

adca

stin

g

Cou

rier

Switzerland OECD

24

Most women work part-time

Part-time employment as a share of total

Source: OECD, Labour Force Statistics database.

0

10

20

30

40

50

60

70

80

HU

NS

VK

CZ

EP

OL

LVA

GR

CP

RT

SV

NE

ST

TU

RF

INE

SP

US

AC

AN

CH

LF

RA

SW

EIS

RIT

AM

EX

ISL

NZ

LIR

LLU

XD

NK

JPN

NO

RB

EL

GB

RA

US

DE

UA

UT

CH

EN

LD

Men Women

%

To improve framework conditions: Increase private ownership and remove barriers to

entry in energy, telecommunications and transport.

Remove representatives of economic associations from the competition authority’s board.

Lower restrictions on trade in both goods and services, notably in agricultural products.

Complete the negotiations for free-trade agreements that are underway.

Finalise the virtual one-stop shop for administrative matters.

Establish cantonal physical contact points to improve delivery of advisory services and public financing programmes.

25

Key recommendations to boost

productivity

To better use skills of women and immigrants:

Increase childcare affordability.

Shift income taxation to individual rather than household incomes, or implement equivalent measures.

Facilitate high-skilled immigration from non-EU countries to meet labour market needs.

26

Key recommendations to boost

productivity (cont.)

Ensuring a dynamic skills training and life-long

learning system

27

28

The education and training system is

successful

Youth not in employment, education or training

% of 18-24 year-olds

Source: OECD (2017), Education at a Glance 2017.

0

5

10

15

20

25

30

35

ISL

NLD

DN

KLU

XC

HE

NO

RD

EU

SW

ES

VN

AU

SE

ST

AU

TLT

UB

EL

NZ

LC

AN

GB

RU

SA

SV

KO

EC

DH

UN

LVA

FIN

ISR

PO

LP

RT

IRL

FR

AC

HL

ME

XE

SP

GR

CIT

AT

UR

29

Immigration has helped to meet the rising

demand for skilled workers

Contribution to working-age population growth by education and nationality, % points

Source: Federal Statistical Office.

-4

-2

0

2

4

6

8

10

12

Lowersecondary

Uppersecondary

Tertiary Lowersecondary

Uppersecondary

Tertiary

1997-2007 2007-2017

Swiss citizens Other nationalities

30

High-skill vacancy rates are rising

Sectors with above-average vacancy rates, %

1. IT and Other Information Services is a subsector of IT and Communications.

Source: Federal Statistical Office.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Tot

al e

cono

my

Acc

omm

odat

ion

& fo

odse

rvic

es

Man

ufac

ture

of m

etal

prod

ucts

Tra

de a

nd r

epai

r of

mot

or v

ehic

les

Rea

l est

ate

& s

cien

tific

serv

ices

Man

ufac

turin

g of

com

pute

rs &

wat

ches

Man

ufac

ture

of o

ther

spec

ialis

ed m

achi

nery

Fin

ance

& in

sura

nce

IT &

com

mun

icat

ions

IT &

oth

er in

form

atio

nse

rvic

es¹

Average since 2009 Year to 2017Q2

31

Tertiary education should further expand

Entry rates for bachelor’s degree or equivalent¹

1. First-time entry rates, excluding international students. First-time entry rates indicate the share of young adults

expected to enter that type of tertiary education programme during their lifetime.

Source: OECD (2017), Education at a Glance 2017.

0

10

20

30

40

50

60

70

80

LUX

HU

N

AU

T

ME

X

ITA

SW

E

PR

T

ES

P

DE

U

ISR

FIN

SV

K

CZ

E

GB

R

TU

R

CH

E

NLD

NZ

L

ES

T

CH

L

ISL

NO

R

BE

L

DN

K

SV

N

IRL

AU

S

%

32

Participation in life-long learning is high

25-64 year-olds participating in education and training in the preceding four weeks, 2016

Source: Eurostat, Labour Force Survey 2016.

0

5

10

15

20

25

30

35

SV

K

PO

L

GR

C

TU

R

HU

N

IRL

LVA

BE

L

ITA

DE

U

CZ

E

ES

P

PR

T

EU

28 EA

SV

N

GB

R

ES

T

AU

T

LUX

NLD

FR

A

NO

R

ISL

FIN

DN

K

SW

E

CH

E

%

33

Participation in life-long learning is not

broad-based

Difference in participation rates of those with high and low levels of education, 20161

1. 25-64 year-olds participating in education and training in the preceding four weeks. Difference in

participation rate of those with tertiary education and less than upper secondary school.

Source: Eurostat, Labour Force Survey 2016.

0

5

10

15

20

25

30

35

GR

C

IRL

PO

L

BE

L

HU

N

LVA

DE

U

TU

R

NO

R

ES

P

CZ

E

EU

28

GB

R

EA

DN

K

PR

T

ITA

NLD

ES

T

LUX

SV

N

ISL

SW

E

FIN

AU

T

FR

A

CH

E

% pts

Collect more detailed data on skills to facilitate adjustments to education in response to changing labour market needs.

Enhance the effectiveness of pathways between vocational and general streams by increasing the academic component of the vocational curriculum and vice-versa.

Encourage small firms to participate more in apprenticeships by promoting sharing of apprenticeship places between firms and training centres that undertake part of the training.

Strengthen linkages between the vocational education and training system and employer associations in school-based vocational training.

Use subsidies to encourage participation in continuing education and training for groups with low participation rates.

34

Key recommendations for a dynamic skills

training and life-long learning system

For more information

Disclaimers:

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of

the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries

and to the name of any territory, city or area.

35

http://www.oecd.org/eco/surveys/economic-survey-switzerland.htm

@OECDeconomy

@OECD