Business Location Rankings: Many Podium Finishes for Switzerland – Except in Artificial Intelligence

Switzerland faces numerous challenges as a business location: International trade conflicts, a deeply divided country on the EU issue, an acute shortage of skilled workers. Warnings about a deterioration in framework conditions aren’t new – Avenir Suisse has also occasionally voiced concerns. But how does Switzerland actually perform in terms of business environment and competitiveness?

International country rankings provide a useful benchmark. These assessments consolidate a large number of indicators, which are weighted and combined into an overall index. A year ago, we examined 22 of the best-known and most-discussed rankings on competitiveness and location quality covering everything from innovative strength and corruption to the general feeling of happiness.

The result? Switzerland excels in many areas and there was no evidence of a broad downward trend. However, our analysis also revealed the limitations of such rankings: unreliable data sources and frequent methodology changes, making long-term comparisons difficult. This was particularly evident with the World Bank’s “Doing Business” report, which was discontinued in 2021 following allegations of manipulation.

Despite these shortcomings, rankings should not be dismissed outright. They reduce complexity, enable international comparisons and can – at their best – drive policy reforms. So it’s time for an updated look at Switzerland’s standing.

 No front runner in AI

Rankings rarely change from year to year, and 2024 is no exception. Nevertheless, Switzerland has managed to strengthen its already strong position in some areas. It remains the undisputed leader in innovation and talent attractiveness and also ranks amongst the top in terms of general competitiveness.

However, the picture is far less postive in the area of artificial intelligence (AI), where Switzerland continues to slip down the rankings. This is surprising for two reasons: first because the country is a global leader in terms of innovation and skilled workers, and second because Zurich in particular has emerged as a thriving AI hub in recent years.

Several major tech companies such as Google – with its most important research location outside the USA – IBM, Microsoft, Meta, Apple and chip manufacturer Nvidia operate research facilities in Zurich. OpenAI and Anthropic, the developers of thelanguage models ChatGPT and Claude.ai, recently opened offices in the city.

This dynamic is also reflected in the AI rankings: Switzerland performs strongly in categories such as talent availability and research and development – especially when adjusted for its population and economy size. However, various weaknesses remain. For example, public trust in AI and AI-driven companies remains relatively low. In addition, due to its size, the country cannot keep up in absolute terms – especially in comparison to AI powerhouses like the USA and China – for example in terms of investment and company density.

But by far the biggest issue identified in the two AI rankings is Switzerlands lack of national AI strategy. The country has no state-coordinated programs to promote the development and application of AI in business, science and administration through targeted investment, regulation and support measures.

Does Switzerland need a national AI-Strategy?

The question is whether the lack of a national strategy is really a disadvantage. Switzerland ahs traditionally relied on decentralization and individual responsibility. Instead of imposing top-down master plans, it trusts that companies, educational and research institutions themselves know best how to develop and use AI. While other countries invest billions in large-scale government strategies, Switzerland has (so far) remained true to its tried-and-tested approach: innovation emerges from the bottom up – not through centrally controlled programs.

So far, this approach has been a recipe for success. It minimises excessive bureaucratization and leaves room for flexible, practical solutions. At the same time, it would be inaccurate to claim that Switzerland has no AI strategy at all. At the end of 2024, the Federal Council adopted the “Digital Switzerland 2025 Strategy,” in which it identified AI as a focus topic.

There is also the “Swiss Digital Administration Strategy 2024-2027” and the “Digital Federal Administration Strategy,” which address the topic of AI to some extend. However, the titles of these strategies hint at a broader issue: Switzerland’s digital administration remains sluggish. A well-developed digital infrastructure and available data are crucial for AI use. Whether the recent digital initiatives will positively impact Switzerland remains to be seen.

Strategy papers alone do not guarantee success. This shows yet again why individual indicators and the resulting rankings should be interpreted with caution. Nonetheless, properly contextualized, they offer valuable insights into both progress and setbacks helping to keep policy makers accountable.

Switzerland remains an extremely attractive business location – a welcome but risky position. Success and prosperity are never guaranteed, complacency is a real danger. Good rankings can create a false sense of security, causing policy makers to underestimate challenges and delay necessary reforms. In international competition standing still means falling behind.