Question

Explain why Switzerland is an innovative economy and how it is doing compared to the US.

Answer 1

Switzerland is one of the world's most advanced free-market economies. The service sector has come to play a significant economic role, particularly the Swiss banking industry and tourism. The economy of Switzerland ranks first in the world in the 2015 Global Innovation Index and the 2017 Global Competitiveness Report.

In the early recession in 2000, being so closely linked to the economies of Western Europe and the US, Switzerland could not escape the slowdown in these countries. After the worldwide stock market crashes in the wake of the 9/11 terrorist attacks, there were more announcements of false enterprise statistics. The rate of GDP growth dropped and had a noticeable impact on the labor market.

On 10 November 2002 the economics magazine Cash suggested five measures for political and economic institutions to implement to revive the Swiss economy:

1. Private consumption should be promoted with decent wage increases. In addition to that, families with children should get discounts on their health insurance.

2. Switzerland's national bank should revive investments by lowering interest rates. Besides that, monetary institutions should increasingly credit consumer and offer cheaper land to be built on.

3. Switzerland's national bank was asked to devalue the Swiss Franc, especially compared to the Euro.

4. The government should implement the anti-cyclical measure of increasing budget deficits. Government spending should increase in the infrastructure and education sectors. Lowering taxes would make sense in order to promote private household consumption.

5. Flexible work schedules should be instituted, thus avoiding low demand dismissals.

These measures were applied with successful results while the government strove for the Magical Hexagon of full employment, social equality, economic growth, environmental quality, and positive trade balance and price stability. It acquires its position back by 2010.

Switzerland is very much proactive towards its industrial, service, and agricultural sector. If any of these sectors have any problem it has been taken care of with delicacy.

The Swiss economy is characterized by a skilled and generally 'peaceful' workforce. One-quarter of the country's full-time workers are unionized. Labor and management relations are amicable, characterized by a willingness to settle disputes instead of resorting to labor action. It is a highly supportive and effective force.

If we compare Switzerland and the US, the US is 238 times of Switzerland. Switzerland and the US are not exactly comparable in terms of the economy. The per capita of Switzerland is $6,301.73 rank 1st and in US $3,258.85 12th in rank

Economy GDP wise Switzerland is $632.19 billion 21 in rank US $15.68 trillion. GDP percapita$79,052.34 and rank 3rd in the world whereas the US $49,965.27 ranked 10th. GNI is$277.00 billion for Switzerland and $9.78 trillion in the US ranked 1st in that. There are so many other factors are there which have an impact on their economic and non-economic sectors. With some similarities and differences, Switzerland and the US is the best performer in the world economy.