The 'made in Basel' growth engine

The October 2013 study of the pharmaceutical industry’s economic importance contains a wealth of fascinating information on this key sector of the Swiss economy.

The pharmaceutical industry is the true growth engine of the Swiss economy.It has set new records for exports, research spending, per capita value added, and productivity.

According to the study The Importance of the Pharmaceutical Industry for Switzerland, published in October 2013, exports have risen from 8 billion Swiss francs in 1990 to some 64 billion in 2012. Twenty years ago, pharmaceuticals accounted for only about 13 percent of Swiss exports, but its share has risen to 32 percent since then. Exports now total more than 190 billion francs. With an export value of almost 14 billion francs, Roche accounts for about eight percent of Switzerland’s entire export volume.

While the pharmaceutical sector’s 39,500 employees make up “only” about 0.8 percent of the total Swiss workforce, their contribution to gross value added—put simply, the total of salaries paid plus profits generated—amounts to no less than 3.3 percent (19.3 billion francs). The discrepancy in these percentages is attributable to the large difference in productivity between the pharmaceutical sector and the rest of the economy. In the pharmaceutical sector, workplace productivity (value creation per employee) is almost 490,000 francs per year—while the figure for the economy as a whole is only a quarter of that, at just 124,000 francs.

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Basel: the hub of the Swiss pharmaceutical world

A separate study by BAK Basel Economics of the importance of the pharmaceutical industry in the three regions of Basel, Lake Geneva and Zurich/Zug documented Basel’s outstanding role in this field yet again. Two thirds of the Swiss pharma­ceutical industry’s gross value added is created in the Basel region. The sector contributes 23 percent of the region’s gross value added and accounts for over seven percent of its workforce (0.8 percent of the national workforce). In terms of research and development spending, the Basel region is the global leader: Ten percent of the Swiss gross domestic product (GDP) is spent in the region on R&D. With a worldwide research spend of almost ten billion francs, Roche is the R&D leader in the pharmaceutical sector, and ranks third among all companies worldwide, regardless of sector. The pharmaceutical industry employs 27,600 people in the Basel catchment area, or 7.8 percent of the region’s workforce. This is unique in terms of employment density in the pharmaceutical sector. The figures for New Jersey, the number two region, are roughly two percent of the overall workforce (equivalent to 79,000 jobs); for San Francisco and Boston, the numbers are 1.4 percent (30,000 jobs), and 0.8 percent (23,400 jobs), respectively.

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