Zug Leads Swiss Cantonal Competitiveness Rankings

In the latest UBS study of Swiss cantonal competitiveness, Zug has emerged as the clear leader, followed by Basel-City and Zurich, maintaining their top positions from the 2023 rankings. The study reveals a significant economic gap between these leading cantons and the rest of Switzerland. The top ten is rounded out by Vaud (78), Aargau (77), Geneva (73), Basel-Country (73), Lucerne (72), Schwyz (71), and Schaffhausen (68), showcasing the concentration of economic strength in central and northern Switzerland.

The Cantonal Competitiveness Indicator (CCI) employs a comprehensive methodology based on 57 distinct parameters, designed to evaluate long-term economic expansion prospects. The scoring system assigns 100 points to the best-performing canton, with others ranked proportionally. This sophisticated approach considers multiple factors including economic structure, labor market conditions, and regional accessibility. The methodology emphasizes that lower CCI values don't necessarily indicate limited absolute potential, but rather reflect below-average opportunities relative to other cantons.

The study highlights significant regional disparities across Switzerland's cantons. At the bottom of the rankings, Graubünden (44), Valais (44), and Jura (33) face considerable challenges. Graubünden's lower ranking is primarily attributed to geographical constraints, affecting accessibility and limiting company catchment areas. Ticino, while improving to 20th place with an ICC of 52, shows mixed performance - scoring well in economic structure (74) but struggling with labor market issues (5). The analysis also reveals intra-cantonal variations, with urban centers typically outperforming rural areas.

The study reveals varying degrees of export dependency among Swiss cantons, with some showing particular vulnerability to international trade dynamics. Notably, Nidwalden and Neuchâtel demonstrate significant exposure to the US market, with 44% and 38% of their exports respectively directed there. In contrast, cantons like Zurich, Vaud, Geneva, Zug, and Basel-City show greater resilience against trade barriers through more diversified export portfolios. This aspect of competitiveness has gained importance amid rising global protectionism and evolving industrial policies.

Looking ahead, several factors will influence cantonal competitiveness. The study projects that over half of the cantons will face stagnating or declining working populations in the next decade, significantly impacting their competitive positions. While the OECD's minimum taxation rules have somewhat reduced inter-cantonal tax competition, cantonal tax rates remain crucial for business location decisions. Additionally, emerging challenges include housing shortages, rising rents, and increasing electricity prices, which are becoming increasingly important factors in overall competitiveness assessments.