Big Ideas from Small Economies / Davos 2025

Summary

This panel discussion at the World Economic Forum in Davos focused on how small, advanced economies can have an outsized impact on the global stage. Participants from Switzerland, Bhutan, Singapore, and academia shared insights on how their countries drive innovation and sustainable development.

Key themes emerged around the importance of education, workforce development, and social cohesion in small economies. Switzerland highlighted its bottom-up approach and direct democracy, while Singapore described its more top-down sector transformation strategies. Bhutan emphasized its unique “Gross National Happiness” philosophy guiding development.

Panelists agreed that small economies can be nimble in responding to challenges, with the ability to quickly convene stakeholders when needed. They also noted the importance of openness to global talent and trade. However, small economies face challenges in areas like climate change, where their individual actions have limited global impact.

The discussion touched on how small economies can maintain stability and sovereignty in an uncertain geopolitical landscape. Domestic cohesion was cited as crucial for weathering external pressures. Panelists also debated the merits of smaller versus larger government, with some arguing that efficiency matters more than size.

Overall, the session highlighted how small economies can pioneer innovative approaches to development that may offer lessons for larger nations. Their experiences suggest the importance of investing in human capital, maintaining social cohesion, and staying open to global opportunities while developing distinct national strengths.

Keypoints

Major discussion points:

– The importance of education, upskilling, and integrating learning with work in small advanced economies

– The role of social cohesion, domestic stability, and good governance in economic success

– The benefits of openness to global talent, trade, and investment for small economies

– The need for agility, efficiency, and innovation to stay competitive globally

– Approaches to climate action and sustainability, including Bhutan’s carbon negative status

Overall purpose:

The goal of this discussion was to explore how small advanced economies can have an outsized impact on the global stage through innovation, sustainability, and effective governance strategies. The panelists aimed to share insights from their countries’ experiences that could potentially be applied more broadly.

Tone:

The tone was largely collaborative and positive, with panelists finding common ground despite their different approaches. There was a spirit of mutual respect and interest in learning from each other. The tone became slightly more pointed when discussing definitions of “small” economies, but remained cordial overall. The Prime Minister of Bhutan injected some humor by playfully questioning whether he belonged on a panel of “advanced” economies.

Speakers

– Juliet Mann: Anchor for CGTN Europe

– Ricardo Hausmann: Founder and Director of the Growth Lab at Harvard University

– Tan Chong Meng: Board Director of Temasek

– Helene Budliger Artieda: State Secretary for Economic Affairs, Switzerland

– Tshering Tobgay: Prime Minister of Bhutan

Additional speakers:

– Camilo Sea: Chairman of the board of a large transmission company in Colombia

The World Economic Forum panel in Davos brought together leaders from small, advanced economies to explore how these nations can have an outsized impact on the global stage. Participants from Switzerland, Bhutan, Singapore, and academia shared insights on driving innovation and sustainable development, highlighting diverse approaches to economic growth and governance.

Education and Workforce Development

A key theme that emerged was the critical importance of education, skills development, and workforce training in small economies. Helene Budliger Artieda of Switzerland emphasised their unique educational system with strong research capabilities and a bottom-up approach to innovation. Tan Chong Meng from Singapore stressed the need for constant reinvention and workforce transformation, citing their goal to train 15,000 AI practitioners within five years. Ricardo Hausmann highlighted the importance of openness to global talent. While the speakers agreed on the centrality of human capital development, their specific approaches varied based on national contexts.

Governance and Social Cohesion

The discussion revealed different governance models among small economies. Switzerland’s Budliger Artieda described a bottom-up approach with direct democracy and federalism, emphasizing the lack of top-down sectoral planning. In contrast, Tan Chong Meng outlined Singapore’s more top-down strategic planning with close government-industry collaboration, including the concept of tripartism. Bhutan’s Prime Minister Tshering Tobgay introduced the concept of an “enlightened entrepreneurial bureaucracy,” attributing it to the King of Bhutan, and argued that government efficiency and accountability matter more than size.

All speakers emphasised the importance of social cohesion and domestic stability as crucial assets for small economies. Hausmann particularly stressed that maintaining internal unity is vital for weathering external pressures and uncertainties in the global landscape.

Economic Strategies and Global Integration

The panellists concurred on the benefits of openness to global talent, trade, and investment for small economies. Hausmann noted that small economies particularly benefit from a rules-based world order, as they rely heavily on global integration. Switzerland’s strategy of maintaining a strong industrial base while competing on quality and innovation, rather than cost, was highlighted as a distinctive approach. Budliger Artieda emphasized that Switzerland never de-industrialized and continues to focus on high-quality manufacturing.

The discussion also touched on how small economies can leverage comparative advantages and niche specialisation. Singapore’s proactive approach to emerging technologies and Switzerland’s approach to free trade agreements exemplify how small nations can adapt to global challenges and carve out unique economic roles.

Sustainability and Alternative Development Models

Bhutan’s approach to development provided a thought-provoking counterpoint to traditional economic metrics. Prime Minister Tobgay explained their focus on “Gross National Happiness” over GDP, emphasising the balance between economic growth and social progress. He also highlighted Bhutan’s carbon-negative status and the disproportionate impact of climate change on small nations, particularly the risk to Bhutan’s glaciers and hydropower infrastructure.

The discussion raised questions about how carbon-neutral countries could be better recognised and rewarded for their efforts, with Tobgay proposing initiatives like the GZERO alliance to address this issue.

Government Efficiency and Size

A significant portion of the discussion focused on government size and efficiency. Tobgay and Tan compared their countries’ approaches, with both emphasizing the importance of running government like a business. They discussed tax rates and the balance between government services and economic competitiveness. Switzerland’s direct democracy system was noted as a unique approach to decision-making that impacts government efficiency.

Challenges and Future Outlook

While celebrating the agility and efficiency of small economies, the panel also acknowledged challenges. These include limited domestic market size, vulnerability to external economic shocks, and the need for constant adaptation to stay relevant globally. The disproportionate impact of climate change on small nations was noted as a particular concern.

Looking forward, the discussion highlighted how small economies can pioneer innovative approaches to development that may offer lessons for larger nations. Their experiences suggest the importance of investing in human capital, maintaining social cohesion, and staying open to global opportunities while developing distinct national strengths.

Conclusion

The panel demonstrated that while small, advanced economies face unique challenges, they also possess distinct advantages in terms of agility, efficiency, and the ability to implement innovative policies. The diversity of approaches – from Switzerland’s direct democracy and strong industrial base to Singapore’s strategic planning and Bhutan’s focus on national happiness and carbon-negative status – illustrates that there is no one-size-fits-all model for success. Instead, these nations offer a range of strategies that could potentially be adapted and scaled to address global challenges in larger economies.

The discussion left open several intriguing questions for further exploration, including how to extend successful strategies from small economies to larger ones, how to better recognise and incentivise carbon-neutral countries, and how principles like Bhutan’s Gross National Happiness index might be integrated into global economic models. These questions point to the ongoing relevance of small, advanced economies in shaping innovative solutions to global challenges.

Juliet Mann: Hello, everybody, and welcome. My name’s Juliet Mann. I’m an anchor for CGTN Europe, and we’re here across the week getting reaction from the world’s most influential people here in Davos. And I’m delighted to be here for this session, which is Big Ideas from Small Economies. We’re going to look at the outsized impact small, advanced economies can have on the global stage. From driving technical innovation to pioneering new ways for sustainable development, these nations are charting the way forward for the global economy. So how do they do it? And how can their strategies extend maybe to bigger economies to meet the challenges of tomorrow? Well, as we’re going to discover, there is no one-size-fits-all, but collaboration and partnerships can go a long way. We’re going to discuss how small, advanced economies can provide the ideas, the innovation, and the confidence to move the global economy forward. We’ve got a brilliant panel here doing something a little bit different in the normal WEF way. Instead of focusing on sectors and regions, we have a very international panel. So you’re in for a treat. Let me introduce them along the line. We have Helen Budliger-Arteaga, who’s the State Secretary for Economic Affairs here in Switzerland. Then we have the Prime Minister of Bhutan, Tshering Tobgay. Ricardo Hausmann is next in line. He’s the Founder and Director of the Growth Lab at Harvard University. And last but not least, from Singapore, we have Tang Chong-Meng, who’s the Board Director of Temasek. So thank you all very much for being here. And then let me start with you, since we are in Switzerland, and talk about the building blocks. Because when we think about Switzerland, it’s banking, it’s insurance, it’s pharma, it’s medical devices, it’s watches. So how important is it to have a sophisticated

Helene Budliger Artieda: financial sector and tax regime to keep all that ticking? Well, the Swiss government is working very hard on framework conditions. Of course, access to finance is one of the building blocks. Having a good infrastructure is equally important. When I speak to companies, taxes of course are important, but what they say, what Switzerland’s advantage is, is the fact that the Swiss government heavily invests into education. And we have a unique educational system. We’re very strong in fundamental research. Our companies invest a lot of their money into research and development, and some of it is very out there. But then we’re very strong in applied science as well. Getting things bigger, not the big leapfrog for humanity, but getting a product better, cheaper, lighter, better quality. Greener. Greener, of course. That’s now extremely important. And we’re lucky, geographically speaking, we’re in the heart of Europe, large markets around us. We’ve always been global. The lack of commodity, I have to say, pushed us to compete on innovation. So in that sense, pretty tough. 120 years ago, we were this poor house of Europe, Alpine country, not much going for us. And that pushed us to be smart. And, you know, it’s not like a cooking recipe, take a spoon of that and a pinch of that. It’s really an ecosystem. And I think we’ve also managed to work in clusters. I find it interesting that people always think of the finance centre. It’s an important thing. Don’t get me wrong. I did mention other sectors. Yes. We have never de-industrialised in Switzerland. Never. It’s equally important to us. Of course,

Juliet Mann: you know, cost of production is high, but that’s why we have to compete on quality, on innovation, on being reliable. But for us, it’s important to be as diverse as possible. Prime Minister, Bhutan’s economy is small, but some really exciting things are happening beyond things like agriculture, in hydropower and in tourism. So what are your big ideas for your small economy?

Tshering Tobgay: I think I’m in the wrong event. There’s supposed to be big ideas from small economies, and you have big economies. Singapore, look at Switzerland. What are you doing here? They invited me. I’m sorry, Prime Minister. Either I’m in the wrong place or you’re in the wrong place, but I actually feel like a misfit. We’ve benefited from some big ideas for our small economy, and we’ve benefited from big ideas because of the leadership of our kings. Just 50 years ago, we were a medieval society still trading with barter. Nobody went to school. Life expectancy was in the 40s. Today, 50 years on, we’re doing fairly well, given that just one generation ago, we were almost like a medieval society, and that’s because of one big idea called gross national happiness. So our king has said that for Bhutan, not necessarily for other parts of the world. For Bhutan, gross national happiness is more important than gross national product, and by gross national happiness, it is an emphasis on the happiness and well-being of our people by balancing economic growth, which is a necessity, with social progress. So education and health care is completely free in Bhutan, and balancing economic growth, which is a necessity with cultural preservation, environmental conservation, and good governance. So we are a unique democracy as in we didn’t fight for it. It was imposed by the monarch. We are a carbon-negative country, the first carbon-negative country, and a heavily carbon deficit. So that’s one big idea that has worked, and we have enjoyed the benefits of it in Bhutan. As a carbon-negative country, we are now working with other carbon-neutral countries. So Panama, Suriname, Madagascar, and Bhutan, during the last COP in Baku, COP29, we launched an alliance of carbon-neutral countries called GZERO. So I think this can qualify for a big idea. The idea is to acknowledge carbon-neutral countries and encourage other countries to make meaningful and quick progress towards net zero. The third big idea that’s coming out, again for Bhutan, not necessarily for the world, is a special administrative region that His Majesty the King is building in the southern part of Bhutan, over 2,500 square kilometers, called the Gelufu Mindfulness City. And we hope that this will be an urban living space based on values of gross national happiness, but also of mindfulness, spirituality, sustainability, where people can live in harmony with each other, but also in harmony with nature. So a much more holistic approach then to economic growth. Really interesting themes that you’re

Juliet Mann: bringing up there. Tan Tong Meng, let me bring you in next, because there’s been a huge transformation in Singapore over the last 60 years. Your economy is now worth about $550 billion. Now I see what you’re saying about how we quantify what a small economy is. What does Singapore have in place that shouts out, we’re open for business?

Tan Chong Meng: Okay. Well, assuming I’m in the right panel. And maybe just to add to that data point, if you put it on purchasing power parity, the GDP is actually much higher. It’s about the same size as Switzerland. And also another similar point to what the Secretary said is that we started as being the poor house of Southeast Asia 60 years ago. And so this year we will celebrate 60 years of Singapore’s history, 60th birthday. But the current Singapore is not something that happened on the flip of a page. It took quite a long time in the making. So perhaps the big idea is sharing a little bit about how we got here. And I would say maybe the playbook is not unique, but how we did it may be quite interesting. So of course in the 60s, Singapore started with resource-intensive industry. Industrialisation was big, trying to make the most of limited labour and land resource. And suddenly we also do not have commodities. And in the 70s and 80s, then moving up from there to to skill-based, technology-based, and it was during this time, in fact, Singapore was called one of the four Asian tigers, if you remember. So that went on for some time. In fact, that accelerated the GDP growth. But of course, with technology, then 1990s and 2000, it became much more about service-based and knowledge-based. But that doesn’t mean manufacturing took a backseat. It’s just that service became much bigger, and in composition-wise, service started to become the major GDP contributor. Now think about what that means. That means that you have to constantly be rescaling and making sure that you adapt and are capable of delivering what you are expected to do. And I think the playbook for Singapore through this entire period can be covered in three words or three thoughts. One is relevance. The world is changing all the time. It’s true for us, it’s true for all countries. The question is, how do you keep relevant? You’ve got to run hard almost to stay at pace. The second is efficiency, but yet agility. The size of our country is well-known. It’s only 700 square kilometers. We are 50 times smaller than either of Switzerland or Bhutan. And so with those constraints, you really have to make the most of what you have. So the ability to have greater efficiency, productivity, and yet be agile to change when value has shifted is very important. And the third thing is teamwork, yet inclusive growth. Now, teamwork between public and private sector is actually very key, because when you have to remake, if everything is on a clean sheet and you can start a new industrial sector every time and forget the last one, that’s a different thing. But if you have to remake and to transform and to build in situ, that requires people to somewhat agree that this is what we have to bear with while we go on. In order to do this, the key tenets I would say that Singapore believes in are having a stable, open approach to trade, as well as to business investments in Singapore. A stable government is very important in that. And making sure that you constantly upscale the workforce while you’re importing talent all the time, because you’re always inadequate in terms of meeting the next turn of demand. And one final thing I would say is this thing called tripartism, which I think is actually quite unique to Singapore. There’s a very strong compact between the government, employers, and employees, and the understanding that everybody’s interest is important, that every worker matters, and that there should be progressive growth of all parties mean that it’s win-win for all. And of course, then the data points prove that.

Juliet Mann: We’re getting some common themes here already, aren’t we, in terms of education and upskilling. Ricardo, we’ve heard from Singapore, we’ve heard from Bhutan, we’ve heard from Switzerland. Well, what can other small economies do to ensure that they can make themselves heard above all the noise, above the big powerhouses, like the United States, like China, like the European Union?

Ricardo Hausmann: Well, it’s very interesting that Switzerland has this perception of being small, but in general, it is remarkable how small economies tend to outperform bigger economies. And it’s not just in Singapore and Switzerland. Let me say, in my part of the world, Panama and, if you want, the Dominican Republic are the fastest growing countries in our region. Namibia and Sub-Saharan Africa is only 2 million people, but it’s growing very nicely. Albania and even Kosovo are catching up very nicely to the European average. And you ask yourself, well, you know, you think of it, well, they don’t really have a very large internal market, so it’s hard to attract investment if you have a very small internal market. So, by the way, you have relatively few people, so you have a smaller kind of talent pool to pull out the superstars. So, what I guess Singapore, Switzerland, Panama, Dominican Republic, Namibia, realize that they have to tap into world talent. A lot of the storied Swiss companies got started outside of Switzerland. Even, you know, Switzerland became the haven for the Huguenots, and that’s how they got their watch industry. So, it’s this openness to the rest of the world that allows, while maintaining domestic cohesion. Domestic cohesion is a very important asset. You were mentioning, you know, the importance of domestic cohesion. It’s sometimes easier to achieve domestic cohesion in a smaller place than in a bigger place, because there’s bound to be less heterogeneity. But even in Switzerland, there’s a lot of heterogeneity, and you’ve managed it with radical federalism, right? And so, interesting lessons from that. And I think that, for example, I’ve worked on Namibia, I’ve worked on South Africa. You would say, well, South Africa is much more developed than Namibia, but if you ask yourself who’s really moving on the green agenda, Namibia is miles ahead of South Africa. By the way, by attracting South African companies that find the domestic policy framework too inconvenient and too unstable for them to operate, so they’d rather operate in Namibia. So, I think these are some of the assets that small economies bring to the table. So, domestic cohesion, openness. And in both cases, Singapore and Switzerland are examples, not of the fact that they put people through school for a long time, et cetera, but because they have a policy of integrating the learning process to the work process. And everybody’s learning from Switzerland’s ability to have workers learn on the job and to certify their learnings on the job. And that’s a quite unique thing. It got them to where they are technologically, but it’s completely different from what the rest of the world does. Singapore has this very, very high-tech following of the labour market and the needs in the labour market so that they can adapt their lifelong training to the needs of the market. It’s interesting that these things happen

Juliet Mann: in these smaller economies. And I find that to be important lessons for the bigger ones. Prime Minister, would you agree with that? I mean, we’ve also been hearing a lot here in Davos about the rise of the voice of the global South. And I wonder if that’s maybe helping small economies like yours cut through. It should help, but ultimately, we have to do our own work.

Tshering Tobgay: Especially, well, all economies. Take Singapore, this is a page from Singapore’s book of success. Nobody’s going to give you a free meal at the end of the day. There are vested interests all around. This is a serious competition, growth. And the earlier you understand that nobody’s going to give you a free handout, they are helping hands, yes. People might help you. Like Switzerland has been very helpful to Bhutan over the years. But bottom line is you have to do your own work. You have to want to grow as a society and as an economy. So while the global South as a block is being increasingly heard, it’s going to be very difficult for a small economy, a genuinely small economy to be even heard there. So we’ve got to get our act together, whether it is by organizing ourselves as a society more meaningfully, whether it is by improving the relationship between education and the real world of work, but most importantly, by accepting full responsibility and accountability for the future of our country.

Juliet Mann: Helene, we’ve heard some great stories here, but all of this is taking place against a really uncertain economic backdrop. I wonder how resilient you think small economies can be to the big things that rock the market, from pandemics to slowdowns and to geopolitical turmoil. What challenges has Switzerland had to contend with? How are you coping?

Helene Budliger Artieda: Well, I have to say, Switzerland is a truly bottom-up country. You called it what? Radical… Federalism. Federalism is a new word, but it’s true. So, we’re truly a bottom-up country. We’re a nation of free will. I think it’s really important to understand. I love your GDP of happiness. We don’t have that, but we have direct democracy. In Switzerland, we vote on smaller and bigger issues four times a year. We have a permanent coalition. You know, we don’t have, like, somebody’s in government and opposition and then four or five years later, somebody comes in and says, well, no, what the others did, let’s redo. So, we have stability. In pandemics, it can be sometimes a bit difficult because we have to vote twice on COVID measures. But then afterwards, no demonstrations, everybody respected, majority won. And so, I have to say, in a way, I’m in a very comfortable seat because our companies, they have learned to deal with the issues themselves. I’m just a person of last resort. You know, if for some reason they get discriminated or… But, you know, we’re not giving them advice on how they should structure their supply chains or which markets they should consider. They have learned to do that themselves. My job is to create the best possible framework conditions. So, I’m the person that runs around and tries to conclude free trade agreements, that, you know, attends WTO ministerial conferences, makes sure that the things which are important to us, for example, protection of intellectual property, because we do not have commodities. So, intellectual property is the bread and butter of Switzerland. So, that’s my job. And the one thing that, though, we do well, and I think that has to do with size, we know each other. So, if there’s a real issue, I will have immediately the companies on the phone in my office, I’ll be in their office, and I can, you know, quickly call my colleagues from other ministries. It’s not that we don’t have silos. Even in small administrations, we fight with silos. But if, you know, it’s really important, we can rally together. Switzerland has been the country during COVID. I think our companies, within 10 days, they were able to get a loan from the government because we sat together with the banks, with the associations, with the government, and worked through night and had the scheme going. And as an entrepreneur in Switzerland, 10 days later, you could ask for a loan to keep paying the salaries, to keep your business open. So, I think this is an advantage. And I’ve never visited Singapore yet, but I think it’s the same for you. If needed, we can rally around an issue. We know each other, and that’s a big advantage.

Juliet Mann: So, you can be a lot more nimble. So, maybe you can talk to us a little bit more about that. Because we’re really talking here about how having that right mindset is really key. But big ideas need big investment, don’t they? Singapore’s Prime Minister has said the government’s pro-growth and pro-worker. Are they putting their money where their mouth is? Well, first, a short answer, absolutely.

Tan Chong Meng: But I first want to invite the Secretary to Singapore. By the way, we are connected by direct flight. I know, I know. It’s a pandemic that I never went. Is there a direct flight to Bhutan? No, but Swiss people love to visit Bhutan. I’m sure we are a certain percentage of tourism in your country. And tourism’s a growing sector. Yes. So, coming back to the question about what the government does to promote and spur economic growth, I would say perhaps it’s important to deal with what Ricardo put up just now. Another important factor is social cohesion. So, I think the government works as hard on social cohesion, if not harder, than the economic side. Of course, we are conscious of the economic side because as investors, when you get into the country, what do you want to see? But don’t underestimate that factor which Ricardo highlighted, which I will not talk too much about. But coming back to the economic side, I would say that the way the government puts itself forward is to be at every table of discussion that is necessary, either as an enabler, a promoter, a sponsor, or sometimes both. And focusing on, let’s say, three levels, and very constructive and as well very clear and deliberate. The first level is sector transformation. So, the entire economic base of Singapore is divided into 23 sectors and clustered into seven clusters, and examples of clusters are like advanced manufacturing and trade, connectivity, so land, sea, air, human health, urban systems, including built environment, real estate, resource, environmental sustainability, modern services, including AI, stuff like that, and lifestyle, which I think we all know what that is. Now, these sectors and these clusters are then tasked to consider the future, take the externalities, and see how that sector will need to be transformed. The government’s role is to listen to those inputs and come up with a joint, what we call an industry transformation map. So, you can actually search for that and find that there are industry transformation maps across these sectors, and money is put to work in that, so about $4.5 billion across these sectors over the next few years. At the enterprise level, we all know how important it is to make sure that our enterprises, no different from others, we have Queen Bees, we have foreign big investors, and we also have quite a number of SMEs who all have to be uplifted and be able to be at the level of the game that is called for on a transformative basis. So, the agencies in government, again, have lots of dialogue and take feedback, and just to give an example, we all know the Economic Development Board, so their role would be to consider where are the gaps in terms of enablers that will ensure that enterprises are able to perform and thrive, including things like intellectual property management, research innovation, and so on and so forth. So, research and innovation is also a huge enabler that is pursuant to the ITM, so at the sector level and enterprise level, there is convergence and there’s, I would say, mutual reinforcement. Finally, last but not least, then, the workforce transformation, and here, scaling is very important. Let me just give an example. The Singapore government tries to listen and be ahead of the time, hopefully, sometimes, but you can say in AI we are all followers, but then we set a goal to have 15,000 AI practitioners to be trained within the next five years, and then there’s another scheme to ensure that these are available to enterprises, and then there’s another theme to make sure that the broader set of workers and general public are not left behind. So, all of these are important factors, and I think the government is on top of these aspects, with a lot of inputs and participation from the private sector, and that’s just an example of how things work.

Helene Budliger Artieda: Can I just say we have a completely different approach? No strategy on innovation, top-down, no sectorial growth plan. We leave it up to the companies, and yet I think both of us are successful, and I think that’s really important because not one size fits all societies, and we have a different history than you do. We have different political systems, but everything can work.

Juliet Mann: In which case, Riccardo, how do small economies then cherry-pick the best bits when they’re looking to grow their economies?

Ricardo Hausmann: Well, small economies benefit from a rules-based world because they rely on integrating themselves to the world. There are companies realized from the beginning that they have to look at the world for growth opportunities, and so they benefit from a certain world order. We are reminded that suddenly President Trump has somewhat of an obsession with Panama, now with Greenland, so it’s important that there’s a security envelope in which countries operate, and that a rules-based order means It’s not that a more powerful country dictates, but that every country’s sovereignty is respected. So that’s one element in the background. But I think that many countries, much of the discussion here, are struggling with what to do with internal divisions. It’s very interesting that that was the obsession of the founding father of Singapore, where you had a community that had 75% Chinese, and Malay, and Indian. And actually, their separation from the Malayan federation was on ethnic grounds. So for them, it was very important. What was the slogan? One country, one nation, one Singapore, right? Yes, quite right. So achieving domestic cohesion was a very important element. To have the internal strength to face a potentially adverse world, because there was this fear that you were going to face a relatively hostile environment. And Switzerland survived two world wars unscathed, because it was sufficient internal cohesion that generated a deterrent effect for no one to want to mess with Switzerland. So I think cohesion is important for many things, like solving economic problems. But also, it’s important for stability in a world where it’s not always rules-based.

Juliet Mann: Prime Minister, how well-placed are small advanced economies like yours to tackle challenges like climate change, the fast pace of technological innovation and food security?

Tshering Tobgay: We are small. We are not advanced. Yet. Yet. So you keep talking about small advanced nations. Again, I want to remind you that Switzerland and Singapore are hardly small. They are leading nations. But if we do a definition in terms of what a small economy is, it’s the population, isn’t it? Weighed up against GDP per capita. And that’s why Bhutan is very excited. Their GDP per capita is the highest in the world. Let’s agree on small population. Small population. Small population. Nominators. Maybe, maybe small. We are happy to have you here, and we want to hear more. Thank you. Thank you. Our population is very small. The territory is probably bigger than ours. So I don’t think it’s not even territory. We are the same. We’re the same. Yeah, we are the same. You’re much smaller. OK, let’s agree on small population. Small population. Ours is tiny because ours is only 700,000 people. Yes. But when it comes to issues of climate action, it gets very difficult for us. Because as a small economy, there’s very little we can do. There’s very little in terms of reducing emissions. We don’t emit anywhere near the amount that larger economies do. So as it is, we don’t emit as much, and there’s very little we can reduce. Our sequestration track record is really big. So we sequester almost three times more carbon equivalent than we emit in terms of greenhouse gases. Therefore, we are a carbon negative country. But our entire glacial system is at risk. Our glaciers are melting really quickly. And below the glaciers, we have glacial lakes. And as the levels of the glacial lakes increase, they risk what we call glacial lake outburst floods, which destroy infrastructure, lives, livelihoods downstream. And a lot of the livelihood, our livelihood, our national livelihood comes from hydropower. Now, on the one hand, hydropower is green, it’s renewable, and we have a huge potential, much of which can be used to developing our country, growing our country, particularly in the area of technology. But with global warming, but with climate change, and with the risk of glacial lake outbursts, our hydropower projects and investments in that sector may not be as secure as it should be because of climate change, which we have very little to do with. Now, our voice in this matter is also, I mean, it’s not in our nature to lecture to the world that we are carbon negative, and therefore we should be rewarded. No, it’s just common sense. We should take care of our country. We should take care of our environment. We should take care of our planet. We should take care of our future. But that said, there’s very little recognition. And therefore, the alliance I mentioned earlier, GZERO, the Alliance of Carbon Neutral Countries, to come together and to develop our own platform to talk about the urgencies of net zero. Let’s agree that there is an urgent need to achieve net zero, and then also to recognize those who are net zero. All discussions, the pledges that all governments and even corporations make during discussions is, we will become net zero, we will, at a future date. But those who are already net zero are not recognized. So this is an attempt, GZERO is an attempt to allow for countries to achieve net zero ahead of their promised schedule, and to be, if not rewarded, at least recognized for it.

Juliet Mann: That’s a big idea. A big idea, it certainly is. But now he’s brought up something else that you have in common, shrinking glaciers. I was thinking, I see now more things, the shrinking glacier. I think they’re not wanting to teach lessons.

Helene Budliger Artieda: Actually, really, when we speak, I think that’s all of us, because we’re small, we’re not in the business of bullying anyone. We wanna talk to partners at eye level. Of course, we’re also hoping that we’re being talked to at eye level. That’s not always happening. In the case of Switzerland, I don’t know if you’re doing better than we do. But I think that there’s a lot of things that actually, when none of us, mountain people, landlocked, a lot of challenges that we actually face together.

Juliet Mann: So there is some similarity. But let me pick up then on something you just said about inclusivity and how important it is for Switzerland and small economies to have that inclusive growth. That’s important when it comes

Helene Budliger Artieda: to attracting financial direct investment, when it comes to attracting the right talent, isn’t it? Absolutely. Switzerland, we’re multicultural and we’re multilingual. I think that’s another thing that we share. And I speak Swiss German, that’s my mother language, and we’re nine million people and 60, 70% speak Swiss German. It’s not even a discussion. I had to learn French so I can communicate within my country. I cannot participate at WEF in Davos if I don’t speak English. And I happen to be married to a Peruvian so I speak Spanish. And as I said, wherever I go in the world, I meet Swiss companies that have operated in faraway continents, in faraway countries for over 100 years. So Swiss companies understand Africa, they understand Latin America, and they understand China, Asia, Southeast Asia. I was blessed today, EFTA signed a free trade agreement with Thailand, very important for us because we wanna understand Southeast Asia better. So we go where there is growth and we have something to offer. You know, it’s a struggle to negotiate free trade agreement when you’re nine million. It’s an interesting market because we have a high GDP per capita, but it’s nine million. And I had the distinct honor to negotiate and finish a free trade agreement with India. And then you sit in front of someone that offers you a market of 1.4 billion. And so what’s in it for India? But I think all of us have one thing. Well, I’m not sure, but the two of us have one thing in common. We need, we’re net FDI exporters. I don’t have enough land, I don’t have enough people in Switzerland. So I’m the most relaxed person if some of our companies and you know, it’s the large companies, household names, everybody knows them, but often more important, these hidden gem, SMEs, 300, 400 people, maybe in Switzerland, but they’re manufacturing around the globe. and they’re niche leaders in what they do. And that’s fine with me because I cannot offer them, as I said, workforce, and I cannot offer them land. So, and I think that’s what we offer. And it’s interesting FDI. So when you go and see a Swiss company somewhere, you will see it’s run by local people. It’s not run by Swiss people. The Swiss people, they’d rather stay back home. I need them here. We, you mentioned our educational system. So our companies bring the apprenticeship system to wherever they go, because that’s in their DNA. We pay high wages because usually we compete on quality and so on. So this is smart FDI, and it’s the most natural thing. No policy, no government that says you need to do it. It’s important for Switzerland. We’ve done it for over a hundred years. So there are lessons to be learned there. I want to take the last few moments of the session

Juliet Mann: to see if there are some questions from the audience. I thought we’d have a few there. If you can just wait, sir, they’re going to bring a microphone to you. Please say who you are and go ahead.

Audience: Yeah, my name is Camilo Sea. I come from Colombia. I’m the chairman of the board of a large transmission company here. Big governments are associated with big countries normally. And there’s this current discussion, the Miley phenomenon, which is precisely seeking a smaller government. Tax rates in my country are above 35% corporate tax rates, and that’s probably because our government has become larger. The government sizes, or the tax rates, of your three countries, I just looked it up in GPT, are 20 to 30% lower than my country. Don’t you agree on the fact, and I don’t know if Ricardo can say something about it, don’t you agree that these small successful economies are probably more successful because they have smaller governments?

Juliet Mann: What’s the question to Ricardo?

Ricardo Hausmann: I mean, to me it’s really interesting the fact that Switzerland can provide all the services it provides to its citizens at the tax rates that they do. So I wanted to ask that question. And the same thing for Singapore. I mean, the Singapore government, for several reasons, developed these state-owned enterprises that our friend here manages, and these are extremely valuable publicly listed companies that are not part of the government. Maybe it’s through their profits that the government is able to fund itself. But it is very interesting, a point you make, that these two are countries that are always at the top in terms of social achievements, educational quality, and so on, and are able, free healthcare, and are able to provide that at extremely low tax rates.

Helene Budliger Artieda: Can I say the State Secretary for Economic Affairs, we’re 850 people. We cover economic policy. The chief economist of Switzerland is in my office. We do global trade. We’re quite successful with free trade agreements. We do economic development. Colombia, un país de concentración de Suiza. We do, I’m the Labour Minister of Switzerland. I do tourism. I’m sure I’m forgetting some things. So I go to certain countries and I have to go and see nine ministries, something like that. That’s one thing. And then, of course, the radical federalism. We have highly decentralised. We have a free tier tax system. So you pay taxes at your community, you vote. If the community wants to do something crazy that costs millions, voters go to the urn and say, no, we don’t wanna spend money on that. You have not explained yourself. We collect taxes at provincial level. We have tax competition. We’ve tried to explain to OECD and the likes. We’re not in the business of having low taxes just per se, but we have tax competitions among communities, among provinces, not at national level, but that’s actually the smallest tax we pay. I’m a good taxpayer. So I will look, the community I move, the canton I move, is that an efficient administration? And I have a mean to hold them accountable when I go four times a year to the urn. Now, I’m not saying Colombia should copy paste that system because it works for 9 million and a relatively small territory, but still, this is choices that as taxpayers we take. We recently voted on a massive extension of highways. Swiss people said, no, too expensive.

Juliet Mann: You should invest into trains, highways. No, we don’t want that. And that’s how you are effective. I know you want to chip in just very quickly because it’d be great to get one more question in after that.

Tan Chong Meng: Sure, I just wanted to say that perhaps, I mean, I have no light for light comparison, but perhaps it is that the Singapore government really runs the government with the idea of running a business. So if you look at the number of cabinet ministers and the way in which things are executed and a sense of accountability, that’s one. The other one is if you look at the main expenditure areas, whether it’s education, housing, healthcare, or infrastructure, roads and all that, you find that the government tries to share ownership. There’s a certain concept of co-payment so that that accountability is shared with people who are using the services. Not a magic formula, it’s negotiated or it’s evolved over time, but I think that allows everybody to keep a tight rein

Juliet Mann: of what is this type of expenditure. In Bhutan, do you run the country like a business? I’m sure you haven’t got 850 people in your trade department. That’s the ideal.

Tshering Tobgay: In the last National Day, this was barely two months ago, His Majesty the King announced to the nation that our bureaucracy, our government, we must transform ourselves to become an enlightened entrepreneurial bureaucracy. So the idea is to run like a business. And the question I don’t think is whether the government should be big or small, which is better, whether the size really doesn’t matter. How efficient it is. And this is what Singapore has been obsessing about for decades, meritocracy. So really, even if the government is big, as long as it is efficient, as long as it is based on the principles of meritocracy, you will get the work done. In our case, I think our government perhaps is slightly more towards the bloated side. And one reason is that we are not entrepreneurial. So we can do with a lot of people like you, where we are a lot more efficient in our public service delivery.

Helene Budliger Artieda: Well, I’m delighted then that I’ve been able to facilitate this introduction. Because, you know, maybe- I’m looking for job opportunities in the King of Bhutan, why not?

Juliet Mann: I think this has been a really eye-opening and thought-provoking session. We are all small economies here, and there are lots of big ideas, lots of them focusing on the talent, on the people. But I have to say, not that I should have favorites, but my favorite part is your happiness index. And I think that weaving that into the way that everybody does business, if we could all do that, maybe big economies and the global economy could take a few lessons from that. I think this has been a great session. We’re coming to the last few minutes. So I’m sure everyone’s going to be hanging around a little bit afterwards. If you want to grab someone for a quick comment, but otherwise a big round of applause for our fabulous panel. Thank you. Thank you. Thank you. Thank you. Thank you.

Agreement Points

Importance of education and skills development

speakers

– Helene Budliger Artieda
– Tan Chong Meng
– Ricardo Hausmann

arguments

Education and skills development are crucial

Need for constant reinvention to stay relevant

Openness to global talent and trade is key

summary

The speakers agree on the critical role of education, skills development, and continuous learning in maintaining economic competitiveness and adapting to global changes.

Openness to global talent and trade

speakers

– Ricardo Hausmann
– Tan Chong Meng
– Helene Budliger Artieda

arguments

Openness to global talent and trade is key

Openness to global talent and trade is key

Education and skills development are crucial

summary

The speakers emphasize the importance of being open to global talent and trade as a key factor for small economies’ success and growth.

Importance of social cohesion and stability

speakers

– Ricardo Hausmann
– Tan Chong Meng
– Helene Budliger Artieda

arguments

Social cohesion and domestic stability are important assets

Top-down strategic planning with government-industry collaboration

Bottom-up approach with direct democracy and federalism

summary

The speakers agree on the importance of social cohesion and stability, although they present different approaches to achieving it.

Similar Viewpoints

Both speakers emphasize the importance of government-industry collaboration and citizen participation, although they present different approaches (bottom-up vs. top-down) based on their countries’ unique contexts.

speakers

– Helene Budliger Artieda
– Tan Chong Meng

arguments

Bottom-up approach with direct democracy and federalism

Top-down strategic planning with government-industry collaboration

Both speakers highlight the importance of small economies finding unique approaches or niches to differentiate themselves and achieve success.

speakers

– Ricardo Hausmann
– Tshering Tobgay

arguments

Leveraging comparative advantages and niche specialization

Focus on gross national happiness over GDP

Unexpected Consensus

Importance of efficiency over government size

speakers

– Tshering Tobgay
– Helene Budliger Artieda

arguments

Government efficiency and accountability matter more than size

Bottom-up approach with direct democracy and federalism

explanation

Despite representing countries with vastly different levels of economic development, both speakers agree that government efficiency and accountability are more important than the size of the government.

Overall Assessment

Summary

The main areas of agreement include the importance of education and skills development, openness to global talent and trade, and the need for social cohesion and stability. There is also consensus on the importance of government efficiency and accountability, regardless of the size or approach of the government.

Consensus level

The level of consensus among the speakers is moderate to high. While they represent countries with different levels of economic development and governance approaches, they share similar views on key factors for small economies’ success. This consensus suggests that there are common principles that can be applied to small economies, regardless of their specific contexts, to promote economic growth and development. However, the speakers also emphasize the importance of tailoring these principles to each country’s unique situation, indicating that there is no one-size-fits-all approach to economic development for small economies.

Different Viewpoints

Approach to economic development

speakers

– Helene Budliger Artieda
– Tan Chong Meng

arguments

Bottom-up approach with direct democracy and federalism

Top-down strategic planning with government-industry collaboration

summary

Switzerland follows a bottom-up approach with direct democracy and federalism, while Singapore employs top-down strategic planning with close government-industry collaboration.

Government size and efficiency

speakers

– Helene Budliger Artieda
– Tshering Tobgay

arguments

Bottom-up approach with direct democracy and federalism

Government efficiency and accountability matter more than size

summary

Switzerland emphasizes a decentralized, bottom-up approach, while Bhutan focuses on government efficiency and accountability regardless of size.

Unexpected Differences

Approach to climate change and sustainability

speakers

– Tshering Tobgay
– Helene Budliger Artieda

arguments

Disproportionate impact of climate change

Education and skills development are crucial

explanation

While both countries are small economies, Bhutan emphasizes its vulnerability to climate change and its efforts in sustainable development, whereas Switzerland focuses more on education and economic competitiveness without explicitly mentioning climate initiatives.

Overall Assessment

summary

The main areas of disagreement revolve around approaches to economic development, government structure and efficiency, and prioritization of issues such as climate change.

difference_level

The level of disagreement is moderate. While there are clear differences in approaches, particularly between Switzerland and Singapore, there is also a shared understanding of the challenges faced by small economies. These differences highlight the diverse strategies small economies can employ to succeed in the global arena, suggesting that there is no one-size-fits-all approach to economic development and governance for small nations.

Partial Agreements

All speakers agree on the importance of education and skills development, but they differ in their approaches. Switzerland focuses on a unique educational system with strong research, Singapore emphasizes constant reinvention and workforce transformation, while Ricardo Hausmann highlights the importance of openness to global talent.

speakers

– Helene Budliger Artieda
– Tan Chong Meng
– Ricardo Hausmann

arguments

Education and skills development are crucial

Need for constant reinvention to stay relevant

Openness to global talent and trade is key

Similar Viewpoints

Both speakers emphasize the importance of government-industry collaboration and citizen participation, although they present different approaches (bottom-up vs. top-down) based on their countries’ unique contexts.

speakers

– Helene Budliger Artieda
– Tan Chong Meng

arguments

Bottom-up approach with direct democracy and federalism

Top-down strategic planning with government-industry collaboration

Both speakers highlight the importance of small economies finding unique approaches or niches to differentiate themselves and achieve success.

speakers

– Ricardo Hausmann
– Tshering Tobgay

arguments

Leveraging comparative advantages and niche specialization

Focus on gross national happiness over GDP

Key Takeaways

Resolutions and Action Items

Unresolved Issues

Suggested Compromises

For Bhutan, gross national happiness is more important than gross national product, and by gross national happiness, it is an emphasis on the happiness and well-being of our people by balancing economic growth, which is a necessity, with social progress.

speaker

Tshering Tobgay

reason

This introduces a unique perspective on measuring national success beyond just economic metrics, emphasizing holistic well-being.

impact

It shifted the discussion to consider alternative models of development and sparked interest from other panelists in Bhutan’s approach.

Switzerland has never de-industrialised… Of course, cost of production is high, but that’s why we have to compete on quality, on innovation, on being reliable.

speaker

Helene Budliger Artieda

reason

This highlights a distinctive economic strategy that goes against common trends of de-industrialization in developed economies.

impact

It prompted further discussion on how small economies can maintain competitiveness through specialization and innovation rather than cost-cutting.

It’s very interesting that Switzerland can provide all the services it provides to its citizens at the tax rates that they do.

speaker

Ricardo Hausmann

reason

This observation challenges assumptions about the relationship between tax rates and public services in developed economies.

impact

It led to a deeper exploration of how small economies like Switzerland and Singapore manage to provide high-quality public services efficiently.

The Singapore government tries to listen and be ahead of the time… we set a goal to have 15,000 AI practitioners to be trained within the next five years

speaker

Tan Chong Meng

reason

This illustrates a proactive approach to workforce development in emerging technologies.

impact

It sparked discussion on how small economies can prepare for future economic challenges and opportunities through strategic planning and investment in human capital.

Small economies benefit from a rules-based world because they rely on integrating themselves to the world.

speaker

Ricardo Hausmann

reason

This insight highlights the importance of international cooperation and stable global systems for small economies.

impact

It broadened the conversation to include geopolitical considerations and the role of international institutions in supporting small economies.

Overall Assessment

These key comments shaped the discussion by highlighting diverse strategies small economies use to succeed, from alternative development models to efficient governance, proactive planning, and international integration. They challenged conventional wisdom about economic development and sparked a nuanced exploration of how small nations can leverage their unique attributes to thrive in the global economy.

How can the strategies of small, advanced economies be extended to bigger economies to meet global challenges?

speaker

Juliet Mann

explanation

This question sets up the main theme of the discussion and is important for understanding how successful strategies from small economies might be applied more broadly.

How can carbon-neutral countries be better recognized and rewarded for their efforts?

speaker

Tshering Tobgay

explanation

This relates to the GZERO alliance and highlights the need for more recognition of countries already achieving carbon neutrality, which could incentivize global climate action.

How do Switzerland and Singapore provide high-quality social services and achievements at such low tax rates?

speaker

Ricardo Hausmann

explanation

This question emerged from the discussion on government size and efficiency, and is important for understanding how to balance public services with tax burden.

How can the concept of running a government like a business be applied effectively in different contexts?

speaker

Tshering Tobgay

explanation

This follows from the discussion of Singapore’s approach and Bhutan’s goal of an ‘enlightened entrepreneurial bureaucracy’, and is relevant for improving government efficiency globally.

How can the principles of Bhutan’s Gross National Happiness index be integrated into business and economic models globally?

speaker

Juliet Mann

explanation

This was highlighted as a key takeaway from the discussion and represents a potential area for further research in redefining economic success metrics.