Johannes Milde looks back on his years as president of the Zug Chamber of Commerce

Johannes Milde has been president of the Zug Chamber of Commerce (ZWK) since 2010. From 2007 until his retirement in 2014, he was the CEO of Siemens Building Technologies in Zug. Prior to handing over to his successor at the ZKW, the 63-year-old Hünenberg resident gave an interview with a journalist of the Neue Zuger Zeitung.
When he was asked to summarise his time as president of the ZWK, he said it had been an extremely exciting and interesting time. “I have come into contact with many people and been able to see things from a different perspective. Might I say that the ZWK is not involved with just local matters, but national ones, too. Of course, as the CEO of Siemens Building Technologies, I was extremely globally focussed, but the cooperation I enjoyed with the various other representatives of industry here, and with the local authorities, was very fruitful.”
As to one particularly challenging time, he mentioned the Minder Initiative, whereby the Swiss population was asked to vote on whether the maximum a company executive should earn was the equivalent to twelve times the salary of an average employee. Had this been accepted, Milde said this would have had a huge negative effect on the economy here in Zug. He also mentioned the economic crisis and the decision of the Swiss National Bank in January 2015 to discontinue the minimum exchange rate with the euro at CHF 1.20 as trying times.
When asked how he managed to cope with being CEO of Siemens Building Technologies as well as the president of the ZWK, he said that his involvement with the latter was his only additional job, so to speak. “I have been living in Zug since 1990 and have since become a Swiss national. Zug has always been very important to me and, in order to support and promote the location, I felt it necessary to become engaged in local matters, hence my decision to become actively involved with the ZWK.”
As to what the purpose of the ZWK was, an organisation which counts some 380 members, who, in all, employ as many as 16,000, Milde said that it was there to support a successful economy in the canton, while at the same time being conscious of its responsibilities and formulating its interests in a proactive way, for example in ensuring there was a good infrastructure, excellent educational facilities at all levels, a flexible labour market and a functioning tax competition. “Hence I also feel it really is an obligation on the part of economic leaders here to get involved in local matters. It is not enough just to present companies’ figures every few months. The local people need to be able to know who the economic leaders are and be able to identify themselves with them. In former times there always used to be more entrepreneurs who became involved with politics. It is a shame there are so few today.”
When asked what a regional organisation like the ZWK could do to ensure there were the right framework conditions to foster good business in the canton, Milde replied that many such conditions could only be influenced on a national front. “However, thanks to our direct democracy, locals can have a say in what happens here. In my view, such a direct democracy can only function if people in the area take the trouble to inform themselves about what is going on or is proposed. Hence we at the ZWK consider it one of our main responsibilities to explain what the various proposals or amendments to laws might have, and not just on the local economy, but on local society, too. After all, if we did not do so, who would?”
When asked about the decision of the Swiss people in a referendum to reduce the levels of immigration to the country, Milde said he was disappointed the country voted in this way, but added that, in Zug, as many as 49% of the local population was against it. “This showed that a lot of people here recognised that our economy in Zug is dependent on foreign employees. Nevertheless, the majority of Swiss people spoke, and we must accept this fact. Now we just have to work out what is to be the precise upper level of immigration permitted, without putting at risk the bilateral agreements we have with the EU. Otherwise Swiss industry would be hampered with increasing bureaucracy again. Furthermore, as a location where much research is carried out, we could be left isolated and this would be catastrophic.”
While on immigration, Milde said how important it was for the country and that a certain level of flexibility was necessary in this regard, and not just in relation to the EU but with other states, too. “Looking at Siemens BT, 60% of our developments take place in Zug, with the rest in the USA and China. We could not continue to work successfully in Zug without staff exchanges with these two countries. In recent years it has not been so easy to get the appropriate working permits required. And look at the latest example, with Google saying it could not expand in Switzerland without being able to secure foreign specialists to work for the company here.”
Moving on to matters in the Zug region, Milde said how the sudden rise in the value of the Swiss franc had led to great challenges for the local economy, not least because it had led to increasing costs for companies involved in manufacturing but also the difficulties faced by companies relying on exports. “Not that the financial sector is immune, either. As interest margins shrink, fees go up. I must say, though, that the Swiss economy has taken it all in its stride better than I thought. Nevertheless, we must not forget that it is on account of the strong Swiss franc that already 10,000 jobs in manufacturing have been lost and the same number could be lost over the course of 2016, too. Then there is the uncertainty over the planned national amendments to corporation tax this summer,” he said.
Looking at the future of the manufacturing industry in Switzerland as a whole, Milde said that, at 22%, the country had the second highest level of manufacturing in Europe just behind Germany with 26%. This is in stark contrasts to the levels in France and the United Kingdom, where they are below 15%. “In other words, we here in Switzerland are in a strong position in this regard. Whilst it is true to say levels of employment in this sector have fallen, the fraction of its value in terms of gross national product has practically not changed at all. In other words, the value per workplace has risen. Of course, some industries such as those connected with timber or paper have suffered massively. However, this has been compensated for by the pharmaceutical and electronics industries. Indeed, there has been a great increase in the number of jobs in the pharmaceutical industry in Zug, which is why I am not particularly concerned with regard to Switzerland as a business location, though I am in regard to the metal and synthetics processing industries. In addition to the tourist industry, it is in these areas that the strong franc is having its most deleterious effect.”
And how will this development affect Zug?
“Industry will have to adapt itself yet again and the economy will have to become more diversified. When I came to Zug in 1990 the area was very much dependent on Landis & Gyr with a workforce of over five thousand, 3,500 of whom worked in production. These days, Siemens BT employs around 1,800 in the city of Zug, with just 350 in production. However, there are more than double this number involved in research and product management. Of course, the number of employees at Roche Diagnostics, at almost 3,000, exceeds both those at Landis & Gyr and Siemens BT. Then there are over 60 pharmaceutical and biotech companies in Zug, not to mention numerous IT companies. The economy is more diverse and healthier than it was in 1990 and this development will continue with IT and the service sector gaining in significance, too. Through digitisation, simple activities in administration will disappear or jobs in this area transferred abroad. Yet new jobs will be in demand, especially in highly specialist areas.”
While the journalist recognised that the ZWK could not affect the value of the Swiss franc, he asked Milde what could be done to ensure the region has a prosperous future.
“We can make sure that the local population remains aware of where our prosperity comes from. It is the levels of innovation, industriousness, quality, flexibility and responsibility which make us stand out. Then we must ensure there is as little bureaucracy as possible. To this end, we need the bilateral agreements with the EU and a flexible labour market and social partnership.”
As to what the ZWK did in concrete terms, Milde explained that it strove to improve the qualifications of the workforce, hence it was already involved with those schools which did their best to enthuse pupils embarking on careers in technology. A second area lay in the aspect of internationality. Bearing in mind Zug competes with places like Singapore and Hong Kong, it was essential to support Zug in being a cosmopolitan and tolerant society. “Furthermore, we must do our best to ensure Zug remains attractive with regard to tax competition. We do not have to be the place with the lowest level of corporation tax, but we do have to be among the most attractive in the world.”
As the Swiss people consider how to vote shortly on a second tunnel through the Gotthard, on speculation with regard to foodstuffs and the SVP party’s call to expel foreign criminals, where does the ZWK stand?
“We say “yes” to the second tunnel through the Gotthard because of the safety aspects and because it will enhance the economic significance of the north-south connection with the Ticino and Italy.
We say “no” to the initiative against speculation with regard to foodstuffs. This trade is not the main reason for price fluctuation with regard to foodstuffs. What is true to say is that the commodity trade in Switzerland is more important than the financial sector and we should not weaken it any further.
We are against the SVP’s initiative with regard to the expulsion of criminal foreigners as this is covered in existing legislation. Furthermore, it unnecessarily hampers our negotiations with the EU.”