«Together we can achieve more»
The Greater Zurich Area AG (GZA) is the location marketing organization for the Greater Zurich Area. It pools the strengths of nine cantons. Marc Rudolf, director of the GZA, explains in an interview why the numbers of settlements are declining and how the corona pandemic is affecting the GZA.
The Greater Zurich Area (GZA) initially comprised the cantons of Glarus, Graubünden, Schaffhausen, Schwyz, Solothurn and Zug bordering Zurich. Uri and Ticino are new. Why did you decide to take this step?
In the beginning it was Zurich, Schaffhausen and Graubünden, then over the years other cantons were added. Zug joined them in 2007, Uri in 2015. Ticino has been a member of the GZA since 2019. In order to become a member, an application must be submitted, which will be examined by our Board of Trustees. Cooperation should make sense for both sides. With the accession of Ticino, the Board of Trustees wanted to strengthen our technology skills in the Zurich economic area and expand the network. The technologies that are important to us, such as life sciences and mechatronics, are of particular interest. Ticino has a lot to offer here: For example, the Dalle Molle Research Institute, which deals with artificial intelligence.
Is the name Greater Zurich Area still appropriate when it includes so many areas further away from Zurich?
The name has long since become a brand – like «Switzerland» or «Geneva». We invented the name “Greater Zurich Area”, but it is not only used by us for a long time. The Ceneri Base Tunnel has brought Ticino closer to Zurich. Important research projects in Ticino work well beyond the Gotthard. Cantonal borders are completely irrelevant – but a functioning economic area is relevant for companies.
So it is conceivable that other cantons will join the GZA?
It is not planned. But if someone knocked, the same considerations would be made as with Ticino. In Switzerland a lot is voluntary. In other countries it is different: in Finland, for example, there are no regions or cantons, everything is decided in Helsinki. Of course, one can also be happy with a centralized organization. But we are organized on a federal basis, so the cantons can decide for themselves: Do you want to do location marketing in your own region? Or do you want to join forces and work with someone else? Our Chairman of the Board of Directors always emphasizes that our doors are open.
The number of resident companies from abroad in the GZA fell to 103 in 2019. What are the reasons for that?
Seen globally, there are developments that are anything but business-friendly. This includes the trade dispute between China and the USA or Brexit. In the last few years the uncertainty in the global economic area has increased. This worsens the investment environment. In Switzerland, we have been registering declining numbers of settlements since 2016. This development arrived with a slight delay in the Zurich economic area: the number of settlements only declined in 2019. Interestingly, the number of jobs in the GZA has risen anyway: The companies located there generated 40 percent more jobs than in the previous year. Projected over the next five years, a quarter more new jobs are planned than at the companies that settled in 2018. The quality of the projects has increased.
"Switzerland offers stability and reliability."
Then do you expect the numbers to continue to decline?
Definitive. We expect the corona pandemic to further intensify this global downward trend. The Organization for Economic Cooperation and Development (OECD) estimates that the global market will collapse by 30 percent this year. There are certainly industries that are even more successful than in the past. For example, those that specialize in digital tools. For video conferencing tools like Teams or Zoom, the share price has risen tremendously during the pandemic. In general, however, Corona is of course a damper for the global economy.
Why should a company choose its location in the GZA or in Switzerland?
Switzerland is chosen so that European business can be carried out from here. This requires the right specialists. These can be found in Switzerland or can easily be recruited from other European countries via the Free Movement of Persons. We are already very internationally positioned: We are not the center of Europe, but we are very central, especially in Western Europe. Switzerland also has good bilateral agreements with the EU and is innovative. We can also offer stability and reliability. Corporate taxes are cheap in this country. You don't come to Switzerland to pay high wages. You come to Switzerland because there are people here who earn high wages.
Does the GZA approach companies more or vice versa?
We have a double function: We market the economic area, but we are also the point of contact. However, customer inquiries only make up around 11 percent of all settlements in the cantons. We are open and check everything. But of course we invest our time and resources primarily in worthwhile projects. We actively acquire around 60 percent of all settlements and around 15 percent are recommendations from the strategically maintained network, which includes partner organizations, consulting firms and business lawyers.
Foreign companies are important as employers. How many jobs are you currently generating in the GZA?
The pure number of jobs for the settlements from 2019 was 651. These companies will create 1676 new jobs in the next five years. That is then 24 percent more than those of companies that settled in 2018. This is the second time we have commissioned a consulting firm to prepare a comprehensive analysis in this regard: between 2009 and 2018, at least 8,618 jobs were created through location marketing.
What other added value does the GZA create for the cantons it belongs to?
We contribute to the fact that the innovative strength is strengthened and that we remain networked above all with the growing markets in Asia. There are also certain cantonal added value effects within the cantons. Maybe someone works in Zug, but lives in Zurich. The nine cantons come together in the GZA to jointly pursue location marketing. Together you can achieve more. A single Swiss canton is too small to survive in international competition. We bring important interfaces together and see ourselves in the role of mediator.
How has the quality of the GZA location changed specifically in the last five years?
The uncertainties have increased. We see reasons for this in Brexit and the EU crisis, among other things. Italian banks are still a big question mark. The trade dispute between the USA and China and the unresolved relationship between Switzerland and the EU are also causing problems. In an international comparison, however, Switzerland certainly offers very stable conditions. The laws don't change overnight, taxes are neither suddenly increased nor unreasonably decreased. The tax reform is now through, and certain areas of technology have advanced extremely. In terms of robotics and drones, Zurich does not need to shy away from comparison with Silicon Valley at the moment. In Switzerland we score with qualified specialists: We have very good graduates from our universities and at the same time offer an attractive environment for the brightest minds from all over the world.
"The competition has increased."
How does the corona crisis affect the GZA?
It also triggered a surge in digitization in us. We travel less and work more virtually. This is likely to continue, or perhaps even become standard business practice. As before, we conducted webinars, but supplemented them with a question-and-answer session with experts in Korea, for example. This new format has been very well received. In general, we are doing video broadcasts at the moment instead of traveling to another country ourselves.
What consequences do you expect in the long term?
In the near future, more events are likely to be held in hybrid form. A two-day conference is planned in Zurich in September. This will take place virtually on the first day, and you can meet in person on the second day. The organizers don't just want to create something special for this year, they want to create something that gives you flexibility. Especially with regard to future similar scenarios.
What other challenges does the GZA have to contend with?
The competition has increased. When we started a good 20 years ago, there weren't that many efficient location development organizations. Today even the smallest countries and even cities have some. Another challenge: There are many foreign organizations that offer benefits. For example, grants for employment so that the recruiting process is less expensive for the company. Something like that is inconceivable in Switzerland, because tax money would have to be used for it. We also do a lot of persuasion – not everything is more expensive in Switzerland. And if someone earns $ 200,000 in the USA, he also earns it in London, Madrid or Amsterdam. In Zurich you may even have to pay less wages, because taxes here are cheaper for the individual than elsewhere.
How does the GZA counteract the restrictions and probably also the further decline in settlements caused by the corona crisis?
In the future, we will not only use social media channels for communication, but also for acquisition. We try to win new customers using a data-based approach.
The most important markets for GZA are the USA, Germany, China and Italy. Which other countries / cities is the GZA still concentrating on and why?
We have been active in Korea since 2014. In Israel we are just starting. As soon as the crisis is over, we can start with activities – everything is in place. We regularly check where we could still be active. For example, India was a focus market from 2006 to 2008. In the absence of results, however, we gave up on this again. If Russia or Brazil didn't have a recession, these markets would definitely be an option. Within the markets we serve, we select the regions according to the technology hotspots. ■