Broken lines refer to the Riksbank’s forecasts. 10  07  08  09  10  11  12  Sources: Statistics Sweden and the Riksbank  BIS Review 111/2009  7.High unemployment throughout the forecast period Unemployment, per cent of labour force, seasonally-adjusted data 14  14  12  12  10  10  8  8  6  6 Unemployment 16-64 years Unemployment 15-74 years September July  4 2  4 2 0  0 80  85  90  95  00  Note. Broken lines represent the Riksbank’s forecast, 15-74 age group. 05  10  Sources: Statistics Sweden and the Riksbank  8. CPI and CPIF Annual percentage change 5  5 CPI  4  4  CPIF  3  3  2  2  1  1  0  0  -1  -1 -2  -2 00  01  02  03  04  05  06  Note. Broken lines represent the Riksbank’s forecast. BIS Review 111/2009  07  08  09  10  11  12  Sources: Statistics Sweden and the Riksbank  11
The pharmaceutical industry has gained in importance, whereas the share of exports of machinery has declined. In passing, let me just mention that the popular cliché which associates Switzerland with watches is actually true. Their share in total goods exports is sizeable (11%). Note, however, that this has nothing to do with cuckoo clocks, which were invented and are produced in Germany. A closer look at the development across industries reveals that this compositional shift is important in understanding Swiss performance during the crisis. In fact, individual export categories were affected very differently by the great international trade collapse in 2009. While shipments of machinery and metals suffered severely, dropping by roughly 30%, exports of chemicals and pharmaceuticals barely declined at all. As this sector accounted for more than one-third of total exports in 2008, it strongly dampened the negative impact of other sectors. Exports of watches also provided important support. The second structural change has occurred within industries. For instance, the machine industry today is not the machine industry of the 1990s. There has been a constant effort to innovate both products and production processes. Swiss businesses have specialised in high-value-added products. Switzerland has among the highest densities of high-tech industry in the world. The volume of research and development spending is driven by large multinational firms in globally integrated economic sectors, such as pharmaceuticals and chemicals. But small and medium-sized manufacturing firms in a broad range of market segments also play a key role in Swiss exports, and are typically also strong innovators.