Pestle analysis of Switzerland. Swiss Confederation or Switzerland is a central southern European country. It comprises 26 states and the federal government administers all the states. The country shares the borders with Liechtenstein, Austria, Germany, France, and Italy. Bern is the capital of Switzerland.
Switzerland gained its independence from the Roman Empire during the middle ages through the Peace of Westphalia in 1684. The country hasn’t participated in any war since 1815 and remained neutral. She became the federal state on September 12, 1848.
The total area of Switzerland consists of 15,940 square miles, and it’s the 132nd largest country in the world in terms of size and area. Roundabout more than 8,570,146 people are living in the country, and it’s the world’s 99th most populated country. However, Basel, Geneva, and Zurich are her largest and most developed cities.
The headquarters of many International Organizations are in Switzerland. Like the Bank for International Settlement, 2nd largest Official building of the UN, and FIFA. The country has International Airports in its major cities like Zurich, Geneva, and Basel.
Today, we’ll discuss the pestle analysis of Switzerland. It would analyze the macro-environmental factors impacting the world’s most developed country. Here’s the pestle analysis of Switzerland.
Political factors impacting Switzerland
Decentralized Government System
Switzerland follows the decentralized federal democratic system of government. The sever members of the country’s federal council elect the head of the government, President, for one year. However, the federal council has the most executive powers, whereas the role of the President is usually symbolic and ceremonial.
The Swiss people directly share their views in the government affair throughout the year. The government applies the simple formula of power-sharing. However, the country has 4 main political parties and they form the government.
Stable Political Environment
Switzerland is the world’s safest and most secure country and has a stable political environment. Some of her neighboring countries have unstable political environments. But she maintains political stability in the home country. The majority of people are loyal to their political parties.
The job market, climate change, social insurance, premium health insurance, political asylum, and migration are some of the main concerns of Swiss people.
Alliances & Membership
Switzerland has complete membership to the UN’s table. The country is also a member of the IMF (International Monetary Fund) and the World Bank. However, she doesn’t have a membership in the European Economic Area and EU.
The country has made Schengen Agreement and European Single Market Agreement. It allows the Swiss people to openly move and live across Europe. It’s because of the country’s worldwide peace-keeping activities and maintaining neutrality in global affairs.
Economical factors affecting Switzerland
According to an estimate, the annual nominal GDP of Switzerland in 2020 was 749 billion US dollars, and it’s 20th world’s highest. Out of which, the per capita income of the country was 86,673 billion dollars, and it’s 2nd world’s highest. The pandemic of covid-19 has slowed down the country’s economic growth rate.
Switzerland has the following traits that are contributing to her economy. Like the stable political environment, advanced infrastructure, strong buying power, lower taxation, and skilled workforce.
However, the Swiss economy comprises a majority of SME’s (Small & Medium Enterprises) and every SME has less than 250 employees. According to an estimate, the country has an unemployment rate of 3.211%. The lower unemployment rate and developed service industry are the prominent features of the Swiss economy.
Switzerland has established a reputation for having the world’s best banking system. That’s why a plethora of international businesses and politician deposit their money into the Swiss Banks.
Imports & Exports
Switzerland’s main industries are tourism, banking, service, manufacturing, and agriculture. Top Swiss exports are jewelry, watches, vaccines, packaging of medical products, and gold. She exports these products to India, France, China, the USA, and Germany. However, Swiss chocolates are also very popular worldwide.
Switzerland’s top imports are medical packaging, cars, jewelry, and gold. She imports these products from France, the USA, Italy, UK, and Germany.
Social factors impacting Switzerland
Approximately more than 8.6 million people are populating Switzerland. She falls under the category of the world’s wealthiest countries. The average life and Swiss men and women are 81 and 85 years old. However, modernism has changed the culture and lifestyle of many people across the country.
Switzerland is also facing some social challenges. For instance, the Swiss social circle doesn’t readily accept outsiders. According to a study conducted by HSBC, it’s very difficult for foreigners to make friends and integrate into Swiss society.
Some of the other main issues are hostile attitude towards immigrants, increasing number of aging people, poverty, and discrimination. The majority of the Swiss workforce comprises immigrants and they’re from countries like China, India, Sri-Lanka, Turkey, Austria, France, Italy, Spain, and Germany.
Technological factors affecting Switzerland
Tech Developed Nation
Switzerland falls under the category of the world’s most technologically developed countries. She is home to the world’s top educational institutes. They play a significant role in the country’s innovation and professional workforce.
According to the ranking of the Global Innovation Index, Switzerland is the most innovative country in the world in 2020. Architecture, biomechanics, robotics, and medical are some of her tech advanced areas. The Swiss scientists are working in those areas to innovate something that would make them easier.
Switzerland has produced the world’s highest number of scientists and Nobel Prize winner. The country has the world’s top research center. However, the government has been increasing the investment in digital health and ICT (information and communication technology).
Some of the prominent social media platforms in the country are Tumblr, Instagram, YouTube, Twitter, Pinterest, and Facebook. Many tech companies choose Switzerland as their hosting location. It’s worth mentioning it here that the country needs a lot of talent in the digital fields.
Legal factors affecting Switzerland
The judicial system of Switzerland is independent of external pressures. It provides free trial and justice to everyone regardless of their background. However, a country’s decentralized system of government provides states the autonomy to decide their local economical and social policies. The federal government deals with economic policies and foreign and international affairs. Swiss Gender Equality Act encourages and promotes equal pay both for men and women.
Environmental factors impacting Switzerland
Switzerland is facing environmental issues like water pollution, scarce natural resources, and air pollution. They could impact the country’s environment.
Switzerland is the world’s most beautiful country in terms of natural and scenic beauty. Some of the country’s beautiful places are Lucerne old Town, World’s Heritage sites of the UN, Mount Rigi, Rhine Falls, National Park, Schweizerischer, Jungfraujoch, pyramid-shaped Matterhorn, villages of Zermatt, Lake Geneva, and Alp mountains. They attract millions of tourists annually and promote her tourism industry.
After a careful study of the pestle analysis of Switzerland, we’ve concluded that Switzerland is indeed the world’s most beautiful and developed country. The increasing aging population, discrimination, racism, and immigration are some of her top challenges. Switzerland should address these issues before they could impact her economy.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.