Switzerland Drops to Third in Global Competitiveness Ranking

Switzerland has fallen from first to third in the latest global competitiveness ranking published by the International Institute for Management Development (IMD) in Lausanne. The annual report, which measures how attractive a country is for investment, business, and employment, shows that Switzerland has lost ground while Singapore and Hong Kong have surged ahead. Other European nations, including Germany, have also declined in the rankings, while the United States broke into the top 10.

According to the IMD, the main reason for Switzerland's decline is its slower pace of adaptation to global challenges such as wars, trade tariffs, and geopolitical tensions. While strong economies like Singapore and Hong Kong react quickly to shifting conditions, Switzerland takes longer to adjust. High living costs, wages, office rents, and energy prices in Switzerland also make it less appealing for international firms.

IMD study director and economist Arturo Bris warned that Switzerland risks further erosion of its competitive edge. For a long time, the country benefited from a position "half in Europe, half outside." Bris noted that this unique positioning no longer works as effectively, adding that "Switzerland practically no longer plays a role in the international technological race." He highlighted that the race for artificial intelligence is now dominated almost exclusively by the United States and China, leaving Europe behind.

Switzerland continues to excel in areas such as legal certainty, stable public finances, relatively low taxes, reliable infrastructure, and an excellent education system—including vocational training. These strengths make the country attractive for long-term business location decisions. Moreover, the current IMD ranking does not yet reflect the impact of the Iran war, as data was collected before the conflict. Since Switzerland is less affected by rising oil and gas prices due to the war, this could improve its position in the next ranking.