How Switzerland emerges stronger from the crisis

In the face of the crisis, Switzerland was able to act from a strong position – with a solid state budget, a strong economy, an active civil society and robust infrastructure. But, the crisis has also revealed weaknesses in Switzerland’s success model. Simply “returning to normality” is not the right approach if Switzerland wants to be able to adopt a strong position during the next crisis too. We need to look at the crisis as an opportunity to make the Swiss success model fit for the future. In our publication “Die Krise nutzen und das Erfolgsmodell Schweiz fit für die Zukunft machen” (using the crisis to make Switzerland’s success model fit for the future), we show how our country can build upon its existing strengths against the backdrop of the impacts of the crisis and how it can improve on its weaknesses. It’s aim is to stimulate a nuanced and far-reaching debate on the further development of Switzerland.

New era, new potential

Switzerland’s success model in the face of the COVID-19 crisis

What our seven points have in common is that the current COVID-19 crisis offers unique opportunities to further develop Switzerland as a country, as well as a place to live and an economic region.

Switzerland is in an excellent position to harness these opportunities. It has a solid political system with extensive legal security, proven federalism, a liberal market economy, close diplomatic relations, resounding innovative strength and strong entrepreneurial spirit among the population and economy.

Seven points for Switzerland’s future-oriented success model 

To say that the COVID-19 experience can make Switzerland stronger might also sound paradoxical. But it presents us with a unique opportunity to address the clear weaknesses in Switzerland’s success model, respond even more quickly and energetically to new challenges in the future and further develop Switzerland as a country as well as a place to live and an economic region. We have broken down this scope of action into seven different points, oriented around Switzerland’s proven strengths: 

Strengthening Switzerland’s success model

The intervention programmes and falling tax revenue will have a negative impact on Switzerland’s public finances. A liberal economic system cannot privatise profits in the long term, but it can socialise risks. The Swiss success model – based on federalism, subsidiarity, liberalism, concordance, direct democracy, a military system and strong entrepreneurialism among the population – is an ideal starting position so that Switzerland can respond to challenges concerning the public finances and the forecast recession in a way that is targeted and tailored to requirements. At the same time, the crisis has also revealed that collaboration between all parties can be improved in certain areas and that even a success model can be continually developed, in line with new framework conditions. The strengths as well as the weaknesses all need to be considered.

Harnessing the momentum of the digital transformation

The crisis has highlighted the fact that the public authorities have a lot of catching up to when it comes the digital transformation. But it has also unleashed tremendous forces in politics and administration, which in turn have accelerated this transformation. These political institutions need to harness this momentum and continue driving the digital change. This means that the public authorities will not only be better armed for the next crisis, they will also be more efficient, innovative and needs-oriented overall. Digital success requires an exchange between state levels and with the private economy.

Reinforcing international collaboration

The coronavirus knows no boundaries. And yet, to a certain extent, protectionist and nationalist attitudes have grown stronger during this time of crisis. Switzerland is a country with few natural resources and is a major exporting nation, so it relies on well-functioning foreign trade and international cooperation. Switzerland should make use of its proven diplomatic and international relationships to make international trade and the supply chains more robust, and to put urgent cross-border challenges like sustainability, biodiversity and safety on the agendas of the international community of nations.   

Expanding an innovative lead

Switzerland is an international innovation hub with an excellent dual education system, intensive research and development activities and close collaboration between companies, start-ups and universities. The costly measures to support national trade and production as well as social security will oblige European neighbours to limit their investments in research and development over a long period of time. This is a valuable opportunity for Switzerland to further build on its lead in major areas through targeted funding with existing and new instruments. The education sector needs to play a prominent role in this, and this will require adjustments to content and structures so as to create a leading edge for Switzerland in the long term.

Playing a pioneering role in the area of sustainability Besides the tragic impact, the current pandemic has also had unexpected positive effects on our environment. In the aftermath of the crisis, the climate discussion will make its way back onto the political agenda. But there are fears that the pendulum will swing in the opposite direction in some national economies and that countries will relax their environmental regulations to give their economy a short-term boost. Supported by the accelerated digitalisation and the country’s innovative universities and companies, Switzerland can position itself here as a pioneer in the sustainable transformation of the economy and innovative working models. It can also become even more attractive as a high-quality place to live and work as well as a high-quality economic and tourist location.

Strengthening the resilience of infrastructure and ramping up the digital sovereignty discussion

There have been no major failures in Switzerland’s infrastructure and the measures have proven effective, although cyber criminals have carried out many attacks during the crisis. In particular, the rapid relocation of workstations out of offices, where they are usually protected by central IT departments, into homes has made it easier to access sensitive data. And we do not expect to see a complete reversal of this working arrangement, even after the crisis. This means that the national cyber security efforts need to be strengthened to counteract this threat on a broad front. Equally, there needs to be a discussion among economists, scientists and politicians about a meaningful interpretation of “digital sovereignty” for Switzerland as the crisis has highlighted our reliance – albeit without any difficulties – on providers abroad.

Developing scenarios for future crises

After the crisis is before the crisis. This means that the current plan scenarios need to be relentlessly evolved. They must incorporate all precautions, from crisis management across the three state levels as well as healthcare through to protection and countermeasures. The public authorities need to be able to recognise health and safety trends early on if they are to respond promptly and effectively together with the parties involved. Depending on the field of action, an appropriate level of transparency towards the population and the involvement of the different parties are critical for the success of these plan scenarios, particularly as democratic principles need to be met and trust needs to be strengthened.