Rich-poor gap grows in canton Vaud, says study

The canton of Vaud has developed into a dynamic region in recent years, thanks to above-average population and employment growth, according to a study by one of Switzerland’s top two banks, Credit Suisse.

The report talks up Vaud’s "global reach" thanks to the presence of a number of international companies, such as Cisco, Philip Morris and Nissan.

Vaud is one of Switzerland’s lifestyle leaders and proximity to the Geneva financial centre and airport is also a plus point.

But a growing rift is emerging between the prosperous lakeside areas of the canton and the "hinterland" stretching north into the Jura mountains, or towards Valais, away from the areas close to Geneva and those directly on the lake.

"These divergent trends have accentuated existing regional disparities – whether in income levels, in the structure of industry, or in economic added value," said the report.

Switzerland is on the whole welcoming towards foreign migrants. The national population rose 1.1 percent in 2008 – more than 80,000 new inhabitants.

Immigration in Vaud has soared during the past decade. While 1,400 new residents moved to the canton in the year 2000, the number of immigrants rose to 15,000 in 2008.

The trend is being driven by foreigners, rather than Swiss moving between cantons. Most newcomers are from within the EU, notably from France. The flow of residents between cantons runs away from Vaud into other regions.

"The hinterland is getting worse," said Credit Suisse senior economist, Merja Hoppe. "I don’t think that it will be a big social problem, but a political problem may arise," she told Swisster.

Wealth disparity within cantons is a problem elsewhere in Switzerland. In canton Schwyz "you have a similar situation . . . some of the peripheral regions don’t prosper," said Hoppe.

In general, the cantonal economy is driven by the service sector, which accounts for a little under three quarters of the workforce. Some parts of the canton also have strong industry, including the watch making region of Vallée de Joux.

The expansion of existing companies and a large number of new start-ups has driven economic development – Nyon is the focal point for newly-registered businesses.

Another regional draw is provided by the federal institute of technology in Lausanne (EPFL).

With growing pressure to live and work in lakeside areas – and near Geneva – "there is a natural phenomenon for property prices to rise," said Hoppe.

People may be forced to live further out in the back country, where housing is cheaper. Increased prices "will not stop this process [of immigration] but could somehow decline it," said the report’s author.

Foreigners are attracted by lifestyle opportunities as well as financial incentives.

"The extraordinary natural setting – Lake Geneva, views of the Alps, and the terraced vineyards of Lavaux – enhances the quality of life," explained the report.

But the economic crisis has highlighted a disadvantage in Vaud, which is susceptible to employment fluctuations.

Vaud has exceeded national growth in employment between 1995 and 2008, in particular in Nyon, Morges, Rolle and Vallée de Joux. But the recession hit these areas heavily, with unemployment exceeding the national average during the downturn, wiping out positions in finance and watch making.

The negative effects of the economic crisis neutralised much of the positive growth generated by the canton’s rising dynamism, according to the report.

However, the recent temporary decline in the canton's economic activity could now be reversed more sharply than for Switzerland overall, said Credit Suisse analysts.

The study’s ranking of 'added value per employee' finds Vaud in eighth place amongst fellow cantons.

Vaud ranks below the national average on tax burden and public transport and in these categories the canton takes second place behind neighbouring Geneva.