Capturing the Sectoral Performance in Swiss Economy: An Input-Output Structural Decomposition Analysis (SDA)

In the recent decades the technical innovation and productivity has gained a lot of attention. Many economies are going through structural transformation by changing the traditional to technical advancement sector in form of resource allocation. Current study has examined the structural change phenomenon in Swiss economy by capturing the economy wide changes as a total and at sectoral level. Using the Swiss input-output two latest I-O tables as 2014 and 2017 for SDA analysis we find a change in technical and final demand coefficients. This justifies the significant effect of innovation on both structural change at sector level and economy wide. Moreover, aggregately there is 16% seen to be attributed as technological change and 84% from changes in final demand. This mean that there is huge impact of changes coming from final demand compositions as; household consumption, exports and government spending. This suggests that Switzerland has shown considerable resilience on using human capital, research and development for sustainable economic and social growth. The future study can examine the relevant components of final demand such as household consumption, exports and government spending. At the same time, can trace the various aspects of technology changes such as changes in the production recipes and relative price change.