European business is unique due to the advanced stage of European regional economic integration. At the same time the European region continues to experience frequent and rapid change as a result of its geographic position and role in the global economy. Understanding these dynamics is essential for Switzerland and Swiss businesses.
Switzerland has a unique relationship with the EU, as it is the only member of the European Free Trade Area (EFTA) that has not also joined the European Economic Area (EEA). Instead, Switzerland uses bilateral agreements to remain highly integrated with the European Union (EU) internal market and its member countries. This relationship also reflects the complex and dynamic nature of the European region. Developments like BREXIT show that the perception of Europe as a stable and predictable regional economy is not entirely correct.
Swiss business and Europe in transition
Dr. Johan Lindeque of the FHNW School of Business argues that the broader European business environment is best referred to as ‘EUrope’. This term signifies the very real importance of non-EU countries, while at the same time recognising the significant influence exerted by the uniquely deep integration of the EU’s Single Market. He further argues that the EUropean region is best viewed as a business location in a multifaceted process of transition. This transition includes the Europeanisation of EU and non-EU countries as well as processes such as the EUropean sustainability transition. These multiple ongoing transitions contribute to common and evolving opportunities and challenges for EUropean countries and businesses that need to be understood. This post focuses only on a few selected examples and illustrates the broad implications for Swiss business.
Deepening integration: single market
The ongoing deepening of EUropean market integration is in many ways at the heart of the EU project. One example of this is the implementation and ongoing development of the Single Euro Payment Area (SEPA), which allows consumers and businesses to make international transfers and payments between member countries, including Switzerland, as efficiently as domestic payments. SEPA holds the opportunity for Swiss business to ease cross border transactions. At the same time, it also enables greater competition in Switzerland, to the benefit of consumers. This later point is especially critical for the Swiss banking, the burgeoning Swiss Fintech sector and broader consumer goods and services sectors.
Broadening integration: accession in the Balkans
Admitting new member countries is another defining feature of the EU, even if increasingly controversial. However, recent efforts for a wave of accession in the Western Balkans has been received positively. For Swiss and other EUropean businesses, accession would add approximately 18 million people to the single market, ease and enable further growth in a total trading relationship of over 49.5 bn EUR between the EU and Western Balkans and open the possibility of EUropean and Swiss businesses being able to take advantage of a complex and attractive labour market.
Responding to shared challenges: climate and energy policies
Responding to climate change is a signature EU international policy leadership issue, but while change across EUrope is significant at the EU level, it varies significantly between EUropean regions and member countries. The resulting sustainable energy transition at regional and national levels has significant consequences for Swiss energy businesses and consumers in general, as cross border electric flows, from which Switzerland has benefitted greatly in the past, increasingly are expected to become more intermittent. Switzerland is however well placed to meet the opportunities and challenges associated with this truly EUropean phenomenon and response to climate change, with large-scale investment in Swiss energy research and development across almost all higher education institutions in collaboration with industry to enable the transition to smart grids, storage and renewable energy technologies. The FHNW Strategic Initiative Energy Chance (SIEC) and ongoing energy research collaborations continue to make valuable contributions to this societal challenge. Switzerland has arguably taken a lead in enabling this transition to a more sustainable supply and consumption of energy in EUrope.
EUrope: complex and attractive
Switzerland and the broader EUropean region are inextricably tied by geography, politics and culture. It is essential that Swiss business understand EUropean challenges and opportunities in the world’s largest integrated and harmonised regional market, even as they look to business opportunities in emerging markets such as China and India. Suder et al. (2018) and Suder and Lindeque (2018) provide rich resources for researchers at all stages of their careers and for students in undergraduate and graduate courses to better understand the complex and attractive regional single market at Switzerland’s doorstep.
- Gabriele Suder, Monica Riviere and Johan Lindeque (eds.) (2018) The Routledge Companion to European Business. Abingdon, UK: Routledge.
- Gabriele Suder and Johan Lindeque (2018) Doing Business in Europe. 3rd ed. London, UK: SAGE.