Thurgau Switzerland business environment comparative analysis
1. Sponsors
Thurgau Business Development Agency
2.Objective
Thurgau is a canton in north-eastern Switzerland, centrally located in Europe. The aim of the study is to identify Thurgau’s comparative advantages in relation to other European locations which are similar in size and have the same economic development background and sectors. Throughout the analysis, Global Arena has put a focus on comparing Thurgau in relation to its direct competitors in Germany, Austria, Italy and other locations in Switzerland, as well as similar regions in northern and eastern Europe.
3. Scope
Locations:
Aalborg, Aargau, Almere, Augsburg, Bratislava, Bregenz, Chester, Galway, Limburg, Linz, Malmo, Thurgau, Varese, Vercelli, Wroclaw.
Data series:
Economic
- Corporate tax rate
- Labour productivity
- Infrastructure
Talent
- Education
- Labour availability
- Labour market flexibility
Attractiveness
- Consumer market potential
- Socio-political stability
- Cost of living
4. Results
The optimal weight setting attains higher weights to talent criteria and relatively lower weights to attractiveness criteria. The reason for that may be found in the fact that companies that locate in Thurgau tend to provide products and services outside the local area, the relative importance of the market attractiveness factors will be low in comparison with the talent factors.
Thurgau has several competitive advantages in comparison with similar competing regions which makes it a very interesting region as it comes down to attracting foreign direct investment for the following reasons:
- The effective corporate tax rate is second lowest among the locations in scope.
- Switzerland’s labour availability relative to its population is highest among all competing countries. Switzerland shows a very high employment rate.
- Thurgau’s labour market flexibility is second least rigid in comparison with its competing regions: it is least difficult to hire and dismiss employees and the redundancy costs are low.
- Switzerland is highly politically stable and corruption perception is low.
- From an investor’s point of view, Switzerland has the highest FDI inflow per capita. Moreover, Thurgau has a higher than average purchasing power and population size, which makes the region specifically attractive in terms of consumer market potential.
- Thurgau’s ICT infrastructure is highly developed, more advanced than Germany, Austria and Italy, and is far ahead of its competing regions in Eastern Europe.
For many companies, the most compelling factors that impact a headquarter location decision are socio-political stability, the corporate tax rate, labour market flexibility and infrastructure. When these factors are heavily weighted, the top ranking locations are Thurgau, Aargau and Aalborg. In this context, Thurgau becomes one of the most suitabe locations in the Zurich metropolitan region as a headquarter location for dynamic Small and Medium Enterprises (SMEs). When the location factors ICT infrastructure, labour availability, labour flexibility and socio-political stability are assigned a high weight, Thurgau appears in a top position as well. Combing these two findings makes Thurgau the most ideal candidate to attract international innovative high-tech start-ups, set up SME headquarters and is particularly interesting for investors and companies active in the knowledge economy.
5. Appendix