Switzerland enjoys a strong national economy and has avoided many of the problems – transportation, access to services and ageing populations - common to most OECD countries. Despite these pluses, OECD’s Territorial Review of Switzerland 2011 suggests that some regions of the country are lagging behind, affecting overall growth.

The report notes that though Swiss companies are world leaders in pharmaceuticals and high-tech goods such as bio and medical technology and machinery, research and development and innovation are stagnating. The report recommends tapping into the potential of rural regions and small firms – expanding innovative activities, increasing inter-cantonal collaboration, and encouraging knowledge and technology sharing.

To improve regional economic performance, Switzerland introduced the New Regional Policy (NRP) in 2008. This reflects a clear shift away from financial assistance and toward supporting regions’ own competitive edge and value added.

The NRP applies only to rural and mountainous regions while the agglomeration policy applies to urban areas. Expanding the reach of the New Regional Policy to all parts of the country, the report recommends, would strengthen the beneficial links between urban and rural areas. It would also prevent competition between urban and rural areas’ priorities and duplication of sectoral projects such as those related to agriculture, innovation and technology.

Co-operation between cantons is essential to tackle regional growth challenges and the New Regional Policy could play a stronger role by co-ordinating and funding inter-cantonal projects related to cross-border transportation, business and education.

Monitoring and evaluation by the federal government is critical to the success of territorial development. The report says that a more transparent system, with a clear set of indicators and responsibilities, would encourage cantons to divulge information.