Competition in Switzerland works

Although there are only a few providers in many Swiss industries, competitive pressure is high. A study by DIW Econ on behalf of the State Secretariat for Economic Affairs (SECO) shows that market concentration in Switzerland is in line with the European average, with Swiss companies achieving significantly lower mark-ups. A key driver of this is the strong focus on foreign trade: even in sectors where there are only a few domestic players, international competition creates price pressure and incentives for innovation.

Although there are only a few providers in many Swiss industries, competitive pressure is high. A study by DIW Econ on behalf of the State Secretariat for Economic Affairs (SECO) shows that market concentration in Switzerland is in line with the European average, with Swiss companies achieving significantly lower mark-ups. A key driver of this is the strong focus on foreign trade: even in sectors where there are only a few domestic players, international competition creates price pressure and incentives for innovation.

The article also illustrates areas where competition is less intense, such as former state monopolies like telecommunications and postal services. It also explains why export-oriented industries find it difficult to impose excessive mark-ups in the global price environment despite having concentrated domestic suppliers.

The full article and the focus section ‘Competition is annoying. And good for you’ are available on the ‘Die Volkswirtschaft‘ website.