7 Reasons Why Switzerland Is The Best-Run Country In The World

12 Dec 2012

Switzerland is a remarkably stable and economically strong country. It was recently named the world's most competitive country by the World Economic Forum, and it's avoided the debt and unemployment that have plagued the whole world, and its neighbors in particular.

That's not the only way it beats other nations. From a Credit Suisse bulletin examining the country's success:

"The verdict is in, and it is unequivocal. Whether we are comparing global business locations and the civil liberties they enjoy, considering the number of Nobel Laureates or the quality of academics, entrepreneurs, artists and authors, Switzerland has long occupied the topmost echelons."

German economist Gerd Habermann came up with seven reasons which, while partially specific to governments and countries, can easily be applied to business.

Small is good

Each level of government (or management) gets more expensive and more unwieldy as it gets larger. The highest level is often the most expensive. Because Switzerland is a small country, every level is small and agile. Additionally, the size of government doesn't scale up massively as you reach the federal level.

There are few middlemen and everyone is accountable

Switzerland doesn't have the massive bureaucratic class that many European neighbors and other governments, and the voter has more power than almost anywhere else. That includes the ability to vote on public spending, and elect judges. The government is accountable at all levels.

Everything is decentralized

The federal government in Switzerland has power over only a small portion of tax dollars. Cantons (equivalent in many ways to states) and municipalities have powers of taxation. Every part of the country competes to be as attractive to businesses and people as it can. 

Most decisions are made at the local level

Because the country is so decentralized, decisions tend to be practical and informed by the needs of a small area, so there's less lost in translation to higher authorities. Also, the impact of bad decisions is limited, and everything's faster because people don't have to keep appealing to higher ups.

There are no career politicians

Switzerland doesn't have career politicians. Citizens serve for a time but also work independently. That avoids the pet projects, the influence peddling, and conflicts of interest that can result when you have a separate, professional long serving political class.

The business lesson here is that management can easily become stagnant, and centralized, long lasting authority can be problematic.

The country is a safe haven for money and brain power

Staying neutral and avoiding political and other sorts of prejudice have seen Switzerland accumulate a huge amount of financial and intellectual capital. Countries and businesses can lose when they put personal ideology ahead of practicality.

There's a core middle class attitude

Switzerland's culture isn't defined by a particular ethnicity, language, or religion, but an attitude, and one that businesses would do well to emulate. It's defined by "moderation, mainstream thinking and deliberation, for business sense, a no-nonsense attitude and realism," Habermann writes.

Source: http://www.businessinsider.com/swiss-managemenet-lessons-2012-12