Business location «Switzerland» under pressure
How is the Swiss medtech sector evolving, and what are the main challenges? Every two years, Swiss Medtech’s Industry Study provides the answers. The latest edition – the 10th, produced in collaboration with the Helbling Group – shows that companies continue to thrive even though the operating climate is deteriorating.
«The question is not if the Swiss medtech sector can continue in the future. We know it has a future. The question is: will that future be located in Switzerland? That is the central political issue highlighted by this study,» says Damian Müller, Council of States Member and President of Swiss Medtech.
Medtech – a central component of the Swiss economy
The Swiss medical technology industry is one of the country’s key industrial sectors. Approximately 1,400 medtech companies employ nearly 72,000 people. With revenue growth of 5.5% over the past two years, the sector has grown at twice the rate of the Swiss economy as a whole, and accounts for approximately 10% of industrial added value. It generates 12 billion Swiss francs in exports and achieves a trade surplus of 5.5 billion Swiss francs – the third largest in Switzerland. Over half of exports and imports are with Europe; with the US and rest of the world accounting for approximately 25% each. Furthermore, the sector invests around 12% of its turnover in R&D, making it one of the most research-intensive industries in the country. The medtech industry also contributes significantly to the provision of healthcare for the Swiss population. It accounts for 7.9% of total expenditure, and the long-term increase of 1.9% is significantly lower than the 3.3% rise in overall medical costs.
«These aren’t just impressive figures created for an industry brochure. This is the successful Swiss economy and innovation in action,» says Damian Müller.
Switzerland is becoming less attractive as a location for medtech companies
Economic indicators show that the sector remains strong. At the same time, there are growing signs that Switzerland is facing pressure as a business location. More than 50% of companies now rate Switzerland’s attractiveness less favourably than five years ago.
The decline in the country's appeal as a business location is particularly pronounced in terms of employment and investment. Companies’ plans for recruitment have been scaled back and job growth has virtually ground to a halt. In net terms, only around 200 new jobs were created in the past two years – significantly fewer than the ten-year average of 1,500.
At the same time, 43% of companies are not planning any new investments – the highest figure since the survey began. There has been a particularly sharp decline in future funding allocated for production and R&D. Reasons for investing within Switzerland have also shifted: the country’s traditionally renowned medtech expertise is losing in significance and, for the first time since 2018, is no longer the top criterion.
Simon Michel, CEO of Ypsomed, expands on the warning signs: «As an entrepreneur, I naturally ask myself: Where should we invest next? Where should we build another plant for insulin pens and auto-injectors? Our analyses clearly show that locations in the EU, as well as in China and the US, have become more attractive than Switzerland.»
Biggest challenge: cost pressures
Swiss medtech companies have demonstrated their high degree of adaptability on numerous occasions in recent years. However, even this has its limits: persistent cost pressures are now the biggest challenge. Tariffs and bureaucratic hurdles are reported as particularly difficult. The sector is therefore calling on policymakers to remove trade barriers through international agreements, and to reduce the administrative requirements at home.
«The Swiss medtech industry is successful on the international stage, but its competitiveness should not be taken for granted. As external pressures mount, the state must not place additional demands on domestic companies. What is needed now is targeted reduction of red tape and concrete assistance – not new hurdles and costs. Reducing red tape is economic policy. Our companies want to continue investing and innovating. To do so, they need a business environment that can keep step,» says Damian Müller.
The greatest opportunity: artificial intelligence and digitalisation
Companies continue to identify artificial intelligence and digitalisation as areas with the greatest potential. The shift from traditional medical devices towards integrated, patient-centred solutions reflects this trend. However, Switzerland offers only limited amounts of the know-how required for this. As a result, companies are increasingly setting up teams with relevant skills abroad.
«Switzerland is ideally placed to play a leading role in the next wave of innovation. We must make more consistent use of this potential. To ensure that value creation remains in Switzerland, we must specifically strengthen digital skills and further improve the framework conditions for innovation,» says Adrian Hunn, Director of Swiss Medtech.
Swiss Medtech represents more than 800 members in its role as industry association for medical technology companies in Switzerland. With approx. 72,000 employees and a contribution of over 10% to the country’s positive trade balance, medical technology constitutes a significant economic sector for Switzerland. Swiss Medtech advocates for conditions that enable the medtech industry to perform at peak capacity and provide first-class medical care.