Benedikt Zoller-Rydzek

Featured project

ZHAW SML Nearshoring Index

Measuring the attractiveness of European regions for Swiss IT service firms — 115 regions, five weighted pillars, one score from 0 to 100.

The index draws on roughly fifty variables organized in five pillars, primarily from the Eurostat regional database at NUTS 1 and NUTS 2 level, complemented by the specialized sources listed in the references below.

1.Labor Market Factors

Reflects various dimensions of the local labor market — IT labor supply and demand as well as labor cost factors — enabling firms to access a qualified workforce.

  • Employment in the IT sector relative to population in a NUTS 2 region
  • Average hours worked per year and employee in the IT sector in a NUTS 1 region
  • Employment of young workers (25–34 yrs) relative to overall employment in the IT sector at NUTS 1 level
  • Vacancy rate in the IT sector in percent of IT employees in a NUTS 1 region
  • Hourly labor costs (wages and bonus) in EUR in the IT sector in a NUTS 2 region
  • Labor cost growth in % between 2012 and 2016 in the IT sector

2.Social Factors

Incorporates cultural distance metrics, health infrastructure, and quality-of-life measures affecting site attractiveness and workforce integration.

  • Purchasing Power Standard (PPS) adjusted GDP per capita in a NUTS 2 region as a measure of economic wellbeing
  • Number of hotel beds in a NUTS 1 region as a measure of regional attractiveness
  • Number of expats in a country as a measure of openness towards foreigners
  • Life expectancy in years at the NUTS 2 region
  • Number of medical doctors per capita as a measure of health system quality at the NUTS 1 region
  • Number of hospital beds per capita as a measure of health system quality at the NUTS 1 region
  • Language proximity as a measure of cultural closeness and ease of communication at the country level
  • Number of Swiss expats in a country as a measure of cultural closeness and possible contacts
  • Murder rate per 100,000 inhabitants at the country level as a measure of safety
  • Cultural distance index between Switzerland and a NUTS 1 region
  • Power distance index between Switzerland and a NUTS 1 region
  • Uncertainty avoidance distance between Switzerland and a NUTS 1 region
  • Masculinity distance between Switzerland and a NUTS 1 region
  • Individualism distance index between Switzerland and a NUTS 1 region

3.Institutional Factors

Reflects political factors and their direct economic consequences for the offshoring decision, including regional government quality to gauge the ease of conducting business.

  • EU/EEA membership indicator at the country level
  • Schengen indicator at the country level
  • Doing Business indicators at the country level
    • Ease of starting a business score
    • Ease of dealing with construction permits score
    • Ease of getting electricity score
    • Ease of registering property score
    • Strength of minority investor protection score
    • Ease of paying taxes score
    • Ease of trading across borders score
    • Ease of enforcing contracts score
    • Ease of resolving insolvency score
  • Rule of Law index at the country level
  • Quality of government scores at the NUTS 1 region level
    • Overall score
    • Impartiality score — treating individuals and firms equally
    • Corruption score — education, health care, law enforcement, elections, corruption experience
    • Education, health care, and law enforcement quality score
  • Voter turnout in the last general election as a measure of political participation at the NUTS 1 region level

4.General Location Factors

Addresses geographical factors — such as distance from Bern and airport connectivity — that influence site selection, as physical separation creates communication obstacles.

  • Physical distance between Bern and a NUTS 1 region in km
  • Number of airport passengers (in 1,000) at NUTS 1 level as a measure of reachability
  • Motorway km per sq. km as a measure of infrastructure and mobility within the NUTS 1 region
  • Broadband access in % of population within NUTS 1 as a measure of internet infrastructure
  • Common spoken official language in a country and Switzerland, in % of population of the foreign country
  • Percent of population speaking English
  • Office rental costs in EUR for 80% prime office space, based on selected cities within the NUTS 1 region

5.General Economic Factors

Encompasses direct financial considerations — labor taxes, corporate rates — that operate somewhat independently of institutional quality.

  • Non-wage labor costs (taxes, etc.) in percent of IT employees' wages in a NUTS 1 region
  • Corporate income tax in percent at the country level
  • Inflation between 2015 and 2018, taking 2015 as the base year
  • Variation in yearly exchange rates between the foreign currency and CHF, 2008–2018
  • Exchange rate trend between the foreign currency and CHF, 2008–2018 (depreciation is better for Swiss firms)
  • GDP in EUR in the NUTS 2 region
  • GDP per capita in EUR in the NUTS 2 region
  • GDP growth between 2014 and 2018 by NUTS region
  • Ease of getting credit score

References