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Inhabited by about 7 million people, Switzerland ranks among the small countries of the world. Small though it is, Switzerland holds an impressing 8th position among the machinery-exporting countries, the position being even more eminent in certain specific sectors, such as textile machinery industry. Thus mechanical and electrical engineering products account for 41% of total Swiss exports (2005), and the engineering industry exports more than two thirds of its total output. In some sectors, such as textile and graphic machinery, up to 95% and more of total production are sold abroad. For example, textile machineries have carved a niche in the Bangladesh market. Exports to Bangladesh are increasing each year (see table). Other major sectors with high export ratios are precision instruments, machine tools, pumps and compressors, oil hydraulics and pneumatics, food processing and packaging machines, power generation and electrical equipment. In 2005, the Swiss engineering industry's exports totaled 49 billion US$, of which 66% went to the European, 15% to Asian and 11% to North American markets.
The success story
The industry's 2,500 companies - featuring small subcontracting firms as well as large multi-national organizations - employ about 53% of all industrial workers in Switzerland, a majority of them in small and medium-sized private enterprises. Certainly, the highly qualified and motivated workforce plays a vital part in the Swiss success story. Also, Switzerland is a politically stable democracy with a good working climate and hardly any strikes. But a key element in explaining the global success of our industry lies in the deep commitment to research & development (R&D) activities, because keeping abreast with state-of-the-art technology is vital. Continuous technological progress and the international competitiveness of industry hinge on training, research and development. Thus the mechanical and electrical engineering industries accounted with US$ 27214) million for 35% of all private-sector expenditure in Switzerland alone on R&D in 2004. R&D outlay in Switzerland and abroad amounted to US$ 77774 million.
Still, a major drawback had to be compensated for: The lack of raw materials and the small home market taught the Swiss the need to survive from the work of their own hands. Mass produced goods, asking for large quantities of imported raw material and a huge number of buyers, could neither be manufactured nor sold in a country with a small population. Moreover, mass production would not compete against the output coming from larger countries. The Swiss therefore adopted another strategy. They specialized in producing high-quality and sophisticated goods which found acceptance and appreciation in the whole world. Doing business abroad, co-operating with foreign governments, companies or even individuals is a long lived tradition in Switzerland. Comparatively new is the tendency to get closer to markets and customers by establishing plants and affiliated companies in various countries.
Contact between customers and suppliers becomes even easier nowadays: The Internet Homepage of Swissmem (an association of machinery industries) contains broad information about the Swiss industry. The site http://www.swissmem.ch offers information about the association as well as links to all the member companies. The service is continuously expanded and enhanced.
The Swiss engineering and capital goods industry will continue to keep up with or even out-perform the global competition due to the significant research and development investments. "On site"-research, keeping well in touch with the production process, together with a well formed and motivated workforce guarantee, that the Swiss Engineering Industry can offer products of high quality in due time.
Strong momentum
forecast to continue
in 2006
The Swiss mechanical and electrical engineering industries can look back on a gratifying 2005. Exports clocked in at over Swiss Franc (CHF) 61 billion, a 3.9% rise on the previous year's figures. Sales (+3.0%) and new orders received (+4.5%) both reported healthy growth rates. The outlook for the Swiss machinery industries in 2006 remains favorable.
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