Geneva. Its banks, trading companies and international organizations are world-renowned. Not your factories.
And still. An untold number of perfumes come from two Geneva companies that supply the ingredients or manufacture them for the world’s biggest brands. Thousands of luxury watches are made in Carouge or Plan-les-Ouates. In just a few years, Spineart’s high-tech prostheses have conquered more than 50 markets.
Geneva’s industry, largely made up of SMEs and a few locomotives, may have migrated over the decades from the city center to the periphery of the canton city, but it remains a determining factor in its prosperity.
As Giovanni Ferro Luzzi, professor of economics at the University of Geneva and Haute Ecole de Gestion, explains: “Industry has always played the role of substrate on which the service economy could develop and grow. Today, it continues to be an important sector for job creation and added value, but above all for channeling major technological innovations.”
As we will see in this Exploration, the face of Geneva has been shaped by its industrial past. And, as we’ll also discover, a big part of their future lies in how their industries innovate and transform to take advantage of the opportunities of a rapidly changing world.
If we look at it through the prism of numbers, Geneva is, above all, much more industrial than we think. First idea received to sweep, despite the headlines about the de-industrialization of the canton, industrial employment resists better in Geneva than in the rest of Switzerland.
Nationwide, the total number of full-time equivalents (FTEs) in manufacturing industries dropped from 614,689 jobs in 2016 to 584,799 in 2020, according to the Federal Statistical Office (FSO), a 5% drop. At the same time, in Geneva, the number of FTEs in industry (in the strict sense, ie excluding construction) fell from 23,696 to 23,064 (just 1%). The number of industrial enterprises is also stable. It went from 1695 in 2016 to 1666 in 2020.
According to data from the Federal Customs, exports of manufactured goods from the canton of Geneva (25 billion francs in 2021, 19.6 billion without precious metals and stones) are roughly equivalent to those of a canton still considered the industrial champion of French-speaking Switzerland: Neuchâtel (with 22.4 billion in exports of manufactured goods in 2021).
More unexpectedly, exports of manufactured goods from canton Geneva are higher than those from canton Vaud (15 billion in 2021) or Valais (4.4 billion). Indeed, in terms of industrial exports, Geneva holds the bronze medal of the Swiss cantons, behind Basel and Neuchâtel, but ahead of Bern, Aargau and even Zurich.
Seriously? Yes, indeed, this third place is obtained without taking into account precious metals, which in 2020 still represented 43% of the total value of exports from the canton. Behind watchmaking, jewelery and chemical products have respective shares of 28%, 15% and 6%. That’s lucky, because in 2021 Geneva’s precious metals exports were divided by four (down to 3 billion francs) from the previous year. It may be just a breath of fresh air, but it reminds us that a heavily importing canton like Geneva needs a strong industry to balance its trade balance.
From this point of view, the constant progression of exports of high added value products shows the path to follow. Exports of electronics, optics and IT products, i.e. watches mostly, increased from 8.2 billion in 2016 to 11.4 billion in 2021. At the same time, pharmaceuticals increased from 160 million to 238 million and chemical products from 1.9 billion to 2.1 billion.
Despite this, in Geneva most of the job growth is in the tertiary sector. Employed 254,362 FTE in 2011 and 283,899 in 2020. Always more bankers and lawyers? Not exactly. In insurance and finance, the number of jobs fell from 28,599 FTE in 2011 to 26,741 in 2020. In the same period, the number of jobs fell from 11,199 to 13,544 in public administration, from 16,509 to 18,859 in 30,969 to 51,534 in health and social work.
Everyone will have their opinion on these numbers – which reflect a significant increase in the number of civil servants – but one thing is certain: if finance does not create more jobs, who will? Since agriculture was marginal in a small canton, this role necessarily fell to industry. Because it is she who compensates for imports. And it can also generate high value-added jobs that a diversified economy needs for its financial balance. In Geneva, industry (excluding construction) accounts for just 8% of jobs but weighs 11% of GDP (with an aggregate value of CHF 6.3 billion in 2021).
The attractiveness of industrial jobs is therefore decisive. But as finance, like other industries, becomes increasingly tech-savvy, the industry struggles to attract talent trained in its techniques. Certainly, as we see in the first episode of our Exploration, a quarter of young Genevans choose technical courses and 10% engineering studies. Industry also accounts for 14% of apprenticeships in the canton. But the needs are huge: around 10,000 jobs to be filled in Geneva’s industry by 2025.
However, according to the OFS, if the average gross salary is 6,859 francs per month in the manufacturing industries of the Lake Geneva region (7,291 in Geneva), it is 4,000 francs higher in financial services (11,280 francs). And increases in finance are also more generous: more than 1,000 francs on average since 2010, while in industry they are around 200 francs.
Faced with this competition, however, Geneva’s industry has more and more advantages. Not only is it heir to a history, but geographically it is located at the center of an industrial basin: microtechnology and biotechnologies on the side of its French-speaking neighbors, mechanics and plastics in neighboring France. Although the pandemic has alerted manufacturers to the weaknesses created by relocations with the breakdown of supply chains, Geneva can serve as an interface between these sectors where innovation reigns.
This does not necessarily involve building new factories, but R&D centers and accelerating the transfer of innovations born in the laboratories of schools and universities and even at CERN. An emerging field where there is still much to be done as we will see in one of the next episodes. In Geneva, startups are still much more focused on services than industry. With the exception of biotechnologies, there is no industrial incubator…
However, as Giovanni Ferro Luzzi points out, Geneva’s industrial future is taking shape in innovation. It’s not just for start-ups. Yesterday, chemically oriented, the perfume and aroma giants from Geneva placed biotechnologies at the top of their priorities. This we will also study in detail. In the transport, mechatronics or machinery industries, it is the energy transition that opens up new perspectives, as we will see. Efficiency and the need for shorter circuits, including in industry, are creating an experimental terrain of “urban mining” that will surprise you.
This laboratory, testing ground idea is fitting for a Genevan industry whose costs are often higher than elsewhere, but which has also become accustomed to adapting due, among other things, to the strong franc. We will thus see how the concepts of industry 4.0, additive manufacturing such as 3D printing or rapid prototyping become an opportunity for industrialists in Geneva, whether to customize prostheses or to reinvent themselves in watchmaking subcontracting.
As part of this Exploration supported by the Office for the Promotion of Industries and Technologies (OPI), we invite you to follow the often invisible but crucial transformations of industry for Geneva’s economic future.