A study by McKinsey determined that Switzerland’s attractiveness has diminished. In addition to some of the newer U.S. technology giants choosing to base their European hubs in the Netherlands, Luxembourg, Ireland or the U.K., Switzerland has lured just 5% of China’s top 250 companies. Corporations also began shifting high-value functions away, the report entitled “Switzerland — Wake Up’’ found.
In Geneva, expatriate demand for luxury residences has waned and rents for office space are down, according to Herve Froidevaux, the regional head at consultancy Wuest Partner. That’s partly because more properties have been built and staff housing allowances aren’t quite as generous. While banks and commodity trading houses typically seek top locations, newly arriving companies in the healthcare, big data or crypto sectors want space that’s “cheap and functional but not extravagant,” he said.
Yvan Cardenas, the finance chief of Swissquote Group Holding SA, an online financial services firm, sees parallels with the 1980s, when Switzerland’s watch industry seemed doomed in the face of Japanese competition. Yet Swiss watchmakers are “alive and they’re still growing, but they had to change the business model and they had to reinvent themselves,” he said.
With the World Health Organisation, the Red Cross and the particle physics laboratory CERN in the Geneva canton, science and healthcare may be areas for growth. Western Switzerland is home to more than 1,000 companies in fields like oncology and medical technology. Eye-care manufacturer Alcon Inc., spun off from Novartis this year, chose the city as a base.This week, French energy giant Total SA said it plans to move its natural gas trading operations from London to Geneva and Paris.
Switzerland also remains the world’s no. 1 destination for cross-border wealth, thanks to its high-quality banking service, according to a Deloitte report. Patrick Odier, managing partner at 223-year-old Cie. Lombard Odier SCA, Geneva’s oldest bank, remains optimistic, while conceding the city could bolster its mojo.
“It’s clear that Switzerland is much more resilient and did not depend as much as people said on banking secrecy,” he said. “It’s a city that needs to look to the future with more confidence.”
This article was provided by Bloomberg News.