Decentralized Economic Complexity in Switzerland and Its Contribution to Inclusive and Sustainable Change

Abstract

The UN Sustainable Development Goals (SDGs) aim at harnessing economic complexity for sustainable and inclusive economic growth by calling for a decade of joint action. In this paper, we show how the action-oriented collaborative culture of complex and competitive economic ecosystems in places outside the major population centers may generate significant positive external effects for society and the environment at large. We illustrate this by means of two small case studies in Switzerland, a country with a federal system that enables decentralized economic development. The first case study investigates the economic ecosystem of the small town Monthey to show how productive migrants and embedded multinational companies increase the knowledge and know-how of local small and medium-sized enterprises (SMEs). The successful collaboration of insiders and outsiders accounts for the internal economic complexity that makes the region innovative and competitive. The second case study highlights the importance of the federalist system by showing how the canton of Solothurn succeeded in nurturing globally competitive export-oriented SMEs. We conclude that the success of these inclusive economic ecosystems in unexpected places may only be understood in the specific geographical, historical and political context, as well as the general openness of these regions toward entrepreneurial migrants and global business. The importance of local social capital makes it hard to replicate such success stories. Nevertheless, they indicate that the global knowledge economy may not just pose a threat, but also offer great opportunities for productive regions beyond the major global high-tech clusters of economic complexity.

Do changes in the business environment and sustainable development really matter for enhancing enterprise development?

“…This study extends previous sustainable development research by clarifying the potential causal linkages among sustainable development, external and internal business environments. The research results of this study go beyond corroborating with prior empirical studies that suggest various dimensions of the external and internal business environment evolvement according to the sustainable development goals fulfillment (Aerni, 2021; Camilleri, 2020; Nasiri et al, 2022; Ren & Jackson, 2020). In this study, sustainable development was found to positively cause changes in freedoms of movement for labor, capital, and goods, an absolute absence of coercion or constraint of economic liberty.…”

“…Issues of sustainable, self-sufficient economic agents' development that do not deplete natural resources have gained increasing popularity and taken into account by policymakers worldwide. This implies (Aerni, 2021;Camilleri, 2020;Nasiri et al, 2022;Ren & Jackson, 2020). In this study, sustainable development was found to positively cause changes in freedoms of movement for labor, capital, and goods, an absolute absence of coercion or constraint of economic liberty.…”

Investigating the environmental Kuznets curve in the five most complex countries: Insights from a modified ecological footprint model

“…104 Switzerland's growing ECX can also have a positive impact on its global competitiveness and environmental performance. 105 Thus, ECX can help transform both countries’ economies in an environmentalist direction. Contrary to the findings of Neagu and Teodoru, 21 Neagu, 57 and Rafique et al, 26 our results are in line with those of Dogan et al, 55 who suggest that ECX has a positive effect on the environment in Germany and Switzerland.…”

The Intrinsic Links of Economic Complexity with Sustainability Dimensions: A Systematic Review and Agenda for Future Research

“…According to Aerni [50], the United Nations Sustainable Development Goals (SDGs) can harness economic complexity to explore potential pathways toward sustainable and inclusive economic growth. Furthermore, in accordance with Cakir et al [51], countries that achieve high levels of economic complexity (meaning a high level of diversity in productive capabilities and a low level of ubiquity products that reflect a kind of sophistication) in a holistic manner are well equipped to respond to external shocks through internal processes that can also impact their future export structure and sustainability (in terms of resilience).…”