From Delancey Place, November 15:
Today's selection -- from The Competitive Advantage of Nations by Michael E. Porter.
Over the last century, Switzerland has emerged as one of the world’s wealthiest nations due to its perennial export surplus (though rising energy prices in Europe are now impacting that surplus):
"Switzerland had been a poor nation as late as the nineteenth century. Among its major exports were mercenaries and emigrating citizens. By the early decades of the twentieth century, Switzerland had emerged as an industrial nation of importance far beyond its small size. In the postwar period, Switzerland was one of the richest of nations. By the 1960s, using some measures, Swiss per capita income was the highest in the world."Swiss prosperity is the result of national competitive advantage in a surprisingly wide range of advanced manufacturing and service industries for a small nation. Industrial success has been enough to more than employ all available Swiss citizens at high wages (total Swiss unemployment in many years has been less than 200 people) as well as many guest workers. Swiss companies, among them Nestle, Hoffmann-LaRoche, Sandoz, Ciba-Geigy, Schindler, Landis and Gyr, and Lindt and Sprungli, are among the most global of any nation. The leading Swiss multinationals employ far more people outside of the country than in Switzerland. The Swiss case vividly illustrates how a small nation, without a large home market as in Japan or America, can nevertheless be a successful global competitor in many important industries. Switzerland is also an economy that has continually upgraded itself to support a rising standard of living. …
"In Switzerland, as in virtually all the nations, industries with high export share which signals the presence of competitive advantage account for the major part of export trade. … Twenty-nine of the fifty leaders in terms of [export] value are also among the top fifty in terms of export share, and nearly all the others have world export shares several times the Swiss cutoff. Only one industry that makes the top fifty value list falls below the cutoff in terms of world export share. I will concentrate on the export share data in my discussions of each nation, because it is more representative of the industries where the nation has a competitive advantage and these industries account for a large fraction of both trade and foreign investment. …
"For a nation of only six million people, the range of industries in which Switzerland has a position is extraordinary...."
....MUCH MORE
