Locational quality Indicators for enterprises

Companies tend to invest in attractive locations, thereby creating jobs, adding value, and bringing prosperity. According to our recently updated locational quality indicator there is a clear ranking of quantitative criteria that Swiss' cities have to offer.

The canton of Zug has the highest locational quality, followed by Zurich. While the cantons of Central Switzerland tend to stand out because of their low tax rates, the two Basels plus Zurich and Aargau shine in terms of their accessibility indicators. The analysis here focuses on the accessibility of the population, the workforce, and the airports via the transport infrastructure. The rural and mountain cantons, including Jura, Valais, Neuchâtel and Graubünden, come in below the national average. This is largely due to their challenging topography which makes them less accessible.

On the other hand, the central cantons, Vaud and Bern, also have below-average scores. However, a closer look at the individual parts of these cantons shows that the city of Bern and the Nyon region show above-average attractiveness. In recent years Switzerland's cantons have demonstrated high levels of activism in relation to corporate income tax rates. The most notable winners are the cantons of Lucerne and Neuchâtel, which have cut their tax rates sharply.

In contrast, St. Gallen has lost ground in terms of its tax attractiveness, the main reasons here being its deteriorating income situation and the cantonal debt cap. As far as the tax burden is concerned, the French-speaking cantons tend to be less attractive because the calculation of locational quality is based on publicly available tax rates and cannot take account of the discretionary tax agreements that are common in French-speaking Switzerland. However, the international controversy about corporate tax rates and the seemingly inevitable abolition of tax privileges for special companies should bring statutory tax rates back into sharper focus.


Lake Geneva region and German-speaking cities attract highly qualified people

Our analysis shows a town/country divide in the availability of highly qualified staff. This is particularly pronounced in the Lake Geneva region and the major German-speaking cities.

Around 17 percent of all highly qualified individuals resident in Switzerland have moved to the country since 2000, and in both the Lake Geneva region and Zurich the figure is substantially above 20 percent. Knowledge and innovation – the most important factors in the success of the Swiss economy – are therefore dependent to a large extent on the movement of individuals internationally.

Analysis of the traffic infrastructure down to square kilometer level clearly shows that in Switzerland small distances can produce major disparities. Where private motorized transport is concerned, we found that the major highways and their feeder roads have a more generalized effect on accessibility. While people commuting to Lausanne from the west had to put up with delays of 15-20 percent, the equivalent figure for commuters from eastern and northern areas was around half of that. In Zurich, the northern bypass is having a delaying effect on traffic, with commuters from Winterthur and Frauenfeld to central Zurich having to factor in delays of 20-30 percent on journey times. Similar congestion-related delays are also experienced by commuters from the Knonaueramt and Zimmerberg regions.




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Author: Thomas Rühl

Head Swiss Regional Research, Credit Suisse

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