Chemical and pharmaceutical industry as a driver of growth
With above-average growth rates and a significant share of overall economic output, the chemical and pharmaceutical industry is one of the strongest performing sectors in Switzerland. In order to maintain this momentum in the long term, government regulations should not prevent the penetration of new fields of knowledge.
The chemical and pharmaceutical industry is experiencing above-average growth rates and accounts for a growing share of industry value added in overall economic output. As a result, the sector is increasingly playing a role as a growth driver for the Swiss economy. Over the past 25 years, real gross value added in the chemical and pharmaceutical industry has increased by an average of 6.4% per year compared to the economy as a whole, which grew by 1.5% per year.
In 1980, the chemical and pharmaceutical industry accounted for 1.2% of national value added, but this share had risen to 8.7% by 2021. This increase in value creation is largely due to structural changes. Over the past 30 years, a specialisation strategy has increasingly emerged, which has ensured our members a global presence and often market leadership with their products.
Employment declines – increased proportion of women
The trend in employment over the past 25 years shows a different picture: between 1985 and 2021, the proportion of persons employed in the chemical and pharmaceutical industry of the total number of persons employed in Switzerland fell from 2.2% to 1.4%. Whereas in 1985 around 89,990 people were employed in the chemical and pharmaceutical industry, today there are only around 77,500.
Recently, the number of employed persons has risen slightly again. The proportion of women has also risen steadily since 2000. It is currently 36% across the industry. Compared to other sectors, Chemistry, Pharma and Life Sciences also have a higher proportion of women in middle and senior management positions. This is partly due to the more international orientation, which often focuses on diversity and inclusion.
Increased production and high innovative strength
The contradictory development of value added and employment in the chemical and pharmaceutical industry was made possible mainly by an increase in productivity and a high level of innovation. This is evidenced by the number of patent applications from Switzerland to the European Patent Office (EPO), which rose again in 2021 by 3.9% to 8,442, a new all-time high. Switzerland continues to be the country with the highest concentration of inventions.
Innovation-friendly framework conditions are essential for innovations and solutions to current and future challenges in the Chemistry Pharma Life Sciences industries. Blockades or even bans on technology are fatal, damage the local research location and would hamper Switzerland in the international competition as a location.
Increasing importance of foreign trade
Foreign trade has gained in importance as a result of the global marketing of specialised products. The Swiss domestic market for chemical and pharmaceutical products is very small: most of the companies' sales are generated abroad, with only around 5% of production being sold domestically. In 2021, around CHF 131 billion was generated through foreign trade, which corresponds to more than 50% of total Swiss export revenue.
This means that the chemical and pharmaceutical industry is currently the most important foreign trade sector in Switzerland. Exports in terms of value have increased by an average of 13% per year over the past 20 years. This corresponds to an increase of almost 265% over the period from 2001 to 2021 and reflects the increasing focus on exports of companies in the chemical and pharmaceutical industry.
High degree of specialisation – successful in niche markets
Thanks to the high degree of specialisation, large multinational companies in the chemical, pharmaceutical and life sciences sectors can successfully sell their products abroad. At the same time, many small and medium-sized enterprises (SMEs) pursue a successful niche strategy that allows them to access the global market.
Looking at export trends in the sub-sectors, the above-average development of pharmaceuticals, vitamins and diagnostics is particularly noticeable. Over the past 20 years, foreign trade in these products has increased by around 400%. The share of total exports of the chemical and pharmaceutical industry increased from 66% in 2001 to 83% in 2021.
In other sectors, such as raw and base materials (+157%), agrochemicals (+24%) and dyes (-41%), exports have shown very different trends over the past 20 years. This shows, among other things, their rapidly growing importance within the chemical and pharmaceutical industry.
During the coronavirus pandemic, the Chemistry Pharma Life Sciences industries have demonstrated their resilience to crises. In many instances, a crisis can only be weathered with innovative processes or products. Global crises increase the pressure for innovation on companies competing on the international stage. Thanks to specialisation and consistently high investments by our members in research and development – more than 40% of private research funds in Switzerland – it is now clear that the Chemistry Pharma Life Sciences industries are well positioned even in difficult times.
> Read the editorial and prelude to the series of articles by our director Stephan Mumenthaler on the anniversary of scienceindustries Chemistry Pharma Life Sciences.