On Sunday (14 June), Switzerland is set to decide whether the country should implement the world’s first population cap.
The divisive proposal, which is supported by the right-wing Swiss People’s Party (SVP), has been pitched as a “sustainability initiative” aimed at limiting population growth and stemming immigration.
However, for companies based in the country, the proposed cap at 10 million people could significantly limit access to international talent and damage economic growth in a country that has the fourth-highest GDP per capita in the world.
Switzerland’s democratic system allows citizens to propose changes to the constitution through a popular initiative. If these initiatives receive 100,000 signatures from the Swiss electorate within 18 months, the proposal will be put to a referendum.
While most constitutional changes proposed through this form of direct democracy have been unsuccessful, the referendum on limiting the Swiss population is expected to be close.
Among eligible voters who intended to participate in the referendum, 45% would definitely or probably vote in favor of the initiative, according to polling from Swiss research company gfs.bern, while 52% would definitely or probably vote against. A further 3% remain undecided.
If successful, the government would be required to introduce measures to prevent the Swiss population from exceeding 10 million before 2050—Switzerland currently has a population of 9.1 million. This could include tightening rules on asylum and family reunification, once the number of permanent residents reached 9.5 million, and terminating Switzerland’s agreement with the EU on the free movement of people, if the 10 million threshold is exceeded.
Although Switzerland voted on a similar initiative in 2014, Martina Mousson, senior project manager at gfs.bern, says: “This is the first time a fixed population size is being defined for a country. Until now, the focus has always been on percentages rather than absolute figures.”
The Swiss business federation, economiesuisse—which counts pharmaceutical firm Roche, mining company Glencore, and the Swiss divisions of Google, Amazon Web Services, and Accenture among its members—has also been vocal in its opposition to the proposed population limit.
Economiesuisse chief economist, Rudolf Minsch, says: “Switzerland relies heavily on highly qualified foreign workers. Major restrictions on immigration would weaken innovation, growth, and competitiveness, while making it harder for companies to attract international talent.”
Population cap could put a limit on growth
EU citizens have held the right to reside and work in Switzerland since an agreement on the free movement of people was reached in 2002. Since then, Switzerland’s population has grown by almost two million people, while its GDP has increased from $314bn to more than $1tn, according to the International Monetary Fund.
“This is the first time a fixed population size is being defined for a country. Until now, the focus has always been on percentages rather than absolute figures”
Martina Mousson, senior project manager at gfs.bern
Reto Föllmi, professor of international economics at the University of St. Gallen, says that immigration has been key to the country’s economic growth over this period. “Immigration has allowed many young and well-educated people to come to Switzerland and has allowed the pharmaceutical, chemical, and IT industries to grow and hire specialized talent,” he says.
Roche, which employs 15,500 people in Switzerland and over 100,000 globally, says it is “highly concerned” about the 10-million initiative and claims that the free movement of people is “of central importance” to the pharmaceutical industry.
Jürg Erismann, site manager at Roche Basel, says: “Our industry is particularly research-intensive and has a very high proportion of highly qualified employees, which the small Swiss market cannot cover on its own. Restricting this access would directly impact our ability to innovate.”
In many ways, Föllmi argues, the immigration system has been a “victim of its own success.” The open-border policy has allowed organizations to recruit skilled talent from neighboring European countries, and many sectors now rely on foreign workers. Approximately 30% of the Swiss population was born abroad.
Proponents of the cap claim that population growth is putting too much pressure on the country’s infrastructure, including housing, transport, schools, and hospitals. Those in favor have also argued that the limit would help protect natural resources and living conditions, Mousson adds.
While the Swiss food and drink multinational Nestlé acknowledges that it’s important to take concerns about the societal and infrastructural impacts of migration seriously, it warns that limiting the population risks weakening Switzerland’s status as a business hub. Switzerland has the highest number of Fortune Global 500 companies per capita in the world.
Christoph Meier, its global head of external communications, says: “Nestlé considers the free movement of people to be central to the competitiveness and innovative strength of the Swiss economy. Limiting the population and restricting access to skilled workers would be critical, as this could weaken Switzerland as a business location.”
Switzerland’s demographic challenge
The referendum—which has been likened to the Brexit vote in the U.K.—puts Switzerland at the forefront of the immigration debate that is dominating much of European politics. Political parties including National Rally in France, Alternative for Germany, and Reform in the U.K. have risen in popularity off the back of their anti-immigration policies and promise of stricter border enforcement.
However, like many European nations, Switzerland is also facing the challenge of an aging population. The Alpine nation now has 30.2 old-age dependents per 100 working-age people—the highest ratio since records began. Föllmi says: “We are getting older and this stream of young immigrants and workers has helped to smooth out the demographic challenges we face.”
Swiss employers’ association, Die Arbeitgeber, which represents over 100,000 small, medium-sized and large enterprises that collectively employ around two million people, has also warned that the putting a halt on immigration would “create substantial economic risks and weaken Switzerland’s long-term prosperity.”
If the Swiss electorate does vote in favor of a population cap, Föllmi is eager to stress that no change would happen immediately. However, it would create increased uncertainty and could eventually force Switzerland to abandon many of its economic agreements with the EU, where its most important trading partners are based.
Stefan Heini, head of communications at Die Arbeitgeber, adds: “A rigid ceiling of 10 million residents ignores Switzerland’s demographic realities and would jeopardize key agreements with the EU, which are essential for the country’s economic success.”
The outcome of Sunday’s vote will determine more than the size of Switzerland’s future population. It will also signal how the country intends to balance public concern over immigration with the economic and demographic challenges it faces—a dilemma that many European nations are now grappling with.
