No. 137, February

The business situation of Swiss companies improved slightly in January. At the moment it is much less challenging than it was in January of last year. Following a very weak first half of 2019, the situation has been stable since the autumn. The Swiss economy has been able to pull out of its downward spiral.

There are frequent reports in the news suggesting that information and communication technologies lead to higher productivity especially for highly educated workers. However, most of the studies consider only the complementary effect of new technologies and tertiary educated workers. A new study investigates the effect these technologies have on workers with different levels of education.

Companies investing in product and production process innovations can achieve a significant increase in productivity, as shown by a study jointly conducted by KOF researchers and the German ZEW Institute. The correlation is particularly strong for companies that are subject to very high levels of international competition. Thus these investments evidently play an important role in securing competitive advantages.

Since 2015 the Swiss National Bank’s base rate has been in negative territory. Do the benefits of negative interest rates outweigh the drawbacks, or vice versa? How is the base rate expected to change over the next few years? And how are the current policies of the SNB, the ECB and the Fed to be assessed? A survey of Swiss economists carried out in December 2019 attempted to cast light on these issues.

Five years after the suspension of the minimum exchange rate of the Swiss franc, the manufacturing industry is still complaining about lower competitiveness on the eurozone markets and the excessive strength of the Swiss franc compared to the euro. For the majority of companies, the advantages and disadvantages of the negative interest rate policy balance each other out. However, as a special KOF survey shows, financial institutions have a very different view on the matter.