TL;DR
- Switzerland still tops the tables for institutions and infrastructure. On economic performance it now ranks 37th.
- The country has grown mostly by adding people. Output per person has barely moved, and more than half of all exports now come from chemicals and pharma.
- Our read: not decline, but a comfortable drift. The vote on the EU agreements in 2027 is where it either stops or speeds up.
Switzerland is often called a country club, and it is easy to see why. The grounds are beautiful: green hills, clear lakes, the mountains behind. Everything is clean and in order. The standard of living is high, the politics are neutral, and the place is full of private banks, wealth managers and real golf clubs.
Getting in is expensive, and full membership is slow. More than a quarter of the people who live here hold a foreign passport, and a Swiss one takes at least ten years of residence. In June the country voted on whether to cap its own population at 10 million. The club sits in the middle of Europe without belonging to it. It keeps its own currency, and it trades with the EU through more than a hundred bilateral agreements instead of joining. And it lives very comfortably on the fees of a few rich members.
The vault
It is worth remembering how the club got rich in the first place. For much of the last century, a large part of Swiss wealth came from looking after money that belonged to people elsewhere.
In 1934 Switzerland passed a law that made bank secrecy a criminal matter. A banker who told anyone who their clients were, or where the money came from, could go to prison. So the money came, from all over the world. Because the country stayed neutral, its banks kept working through the Second World War. In 1998 UBS and Credit Suisse paid $1.25 billion to settle claims from survivors and their heirs over accounts left dormant since the war. A commission appointed by the government examined the period and reported in 2002, including on the gold the Swiss National Bank had bought from Germany's central bank during the war.
The secrecy ended in stages. In 2009, under American pressure, UBS handed over the first client names. Since 2018, Swiss banks have sent account details to the tax authorities of around a hundred countries every year. In 2023 Credit Suisse collapsed and was taken over by UBS.
Our club crest carries a motto: consensus, caution, comfort. Those three words built the vault. Governments that never lurch, bankers who never talk, a place where money feels safe. The question now is whether the same three words are holding Switzerland back.
The plaque in the hallway
For most of the last decade, Switzerland has been first in almost every ranking that counts. It has topped WIPO's innovation index every year since 2011, and did so again in September. Last year it was also first in the IMD World Competitiveness Ranking. It is used to winning.
This year it dropped to third, behind Singapore and Hong Kong. Look at why. For government efficiency, Switzerland is still first. For infrastructure, still first. For economic performance, it is 37th.
The rankings are very good at measuring how well a place is kept. They are much worse at measuring whether it is still earning its keep.
Richer country, not richer people
Here is a number that rarely makes the brochures. Output per hour worked in Switzerland grew by about 1% a year between 2000 and 2022. The EU managed 1.1%. So did the OECD average. The United States grew about 0.4 points a year faster than the EU over the same years. The most admired economy in Europe has been getting more productive a little more slowly than Europe, and a good deal more slowly than America.
The economy still grows, because the country keeps adding people. Since free movement with the EU began in 2002, the population has risen by around 1.7 million, to about 9.1 million. More people means more GDP. It does not mean each person earns more. In 2024, real GDP per head was flat, slightly negative. Growth in 2025 was 1.3%, below the ten-year average of 1.8%.
The franc hides this. Measured in dollars, the Swiss look richer every year. Measured in what each of us produces, we are treading water.
Who pays the bills
A country can live very well on a few big earners. Until one of them moves.
Pharmaceuticals alone were 41% of Swiss exports last year. With chemicals, more than half. Watches, the other export everyone pictures, are flat: CHF 12.8 billion in the first half of 2026, with mainland China fallen to sixth place among its markets.
The stock market shows the same dependence. Roche, Novartis and Nestlé make up 47.4% of the Swiss Market Index. When two Novartis drug trials disappointed recently, the share lost more than a tenth of its value and pulled the whole index down with it.
Then there is the bank. On 23 September the Council of States voted for rules that would require UBS to hold around $16 billion of extra capital. By the bank's count, that brings the total added since it took over Credit Suisse to around $33 billion. UBS calls it excessive. Three days before the vote, its chief executive, Sergio Ermotti, had told the Neue Zürcher Zeitung: "We can live with a black eye, but two black eyes and a broken nose is too much." Parliament went ahead anyway.
Two days later, Semafor reported that UBS had revived talks about getting out from under Swiss regulation, possibly through a combination with a foreign bank. Morgan Stanley, Deutsche Bank and Standard Chartered were named. UBS declined to comment. This is not new. Last November its chairman had already discussed with the US Treasury Secretary what a move to America would look like.
After Credit Suisse, Parliament has good reasons to insist. It also means the country's last global bank has shareholders urging it to leave, and is reported to be weighing it. UBS says its goal is to stay.
And last November, keeping the American market open came with a receipt. The US had put a 39% tariff on Swiss goods. It fell to 15% after Swiss companies pledged to invest $200 billion in the United States over five years. That means new factories and new research jobs. Built somewhere else.
Careful has a price
The next Nestlé or Roche has to start somewhere. That is getting harder. Swiss start-ups raised CHF 1.25 billion in the first half of this year, 15.5% less than a year earlier.
There is one bright spot, and it is close to home. Vaud led every canton, on the back of record rounds for hardware companies, much of it out of EPFL. The talent is here. What's thin is the ambition to turn it into the next big local employer rather than a good exit.
Artificial intelligence shows the same thing. Stanford's AI Index for 2026 puts Switzerland first in the world for AI researchers and developers per head. People here also use generative AI more than Americans do: adoption stood at 32% against 28% in the United States. Then look at the money. On private investment in AI since 2013, Switzerland ranks 14th. Last year it counted 34 newly funded AI companies. Israel, a country of about the same size, had 64.
The national instinct doesn't help. When Switzerland voted on a digital ID last year, the yes side won with just 50.39%. The app was then delayed to December 2026, because of worries about how it encrypts data. Careful is a virtue in a bank. In a country competing with the rest of the world, it has a price.
Where this is heading
We don't think Switzerland is in decline. We think it is drifting, comfortably, and from the inside the two look alike for about ten years.
The good news first. Voters keep choosing the open door when it counts. In June, 55% rejected capping the population at 10 million, a cap that could have ended free movement with the EU. That was a vote for the people who do a lot of the work.
The new package of agreements with the EU was signed in March and goes to the people in early 2027. Our read is this. If it passes, Switzerland keeps its access to its biggest market and its seat in European research, and the drift slows. If it fails, the drift turns into a slide, first in the numbers and then in the hallway plaques.
Either way, the rankings will be the last to notice.
Switzerland doesn't need to be rescued. It needs to stop confusing being well kept with being well placed. Consensus, caution and comfort made it the safest vault in the world. They won't make it the place where the next great companies get built. In The Leopard, Giuseppe Tomasi di Lampedusa's novel, the old prince's nephew puts it in one line: "If we want things to stay as they are, things will have to change."