The Border Triangle of Switzerland, Germany and France - A true sleeping giant?

Since most of my businesses are located in Germany, Switzerland and Liechtenstein, I got to see a lot of the Three Country Region located in between Basel (CH), Loerrach/Freiburg/Karlsruhe (GER) and Strasbourg (FRA). What I figured out while studying and doing business in all three countries is that there is so much unused potential and room for cross-border cooperation that should be incentivized far more by the local authorities.

The Three Country Region of the French Alsace, Southern Germany, and Northern Switzerland is an area that has been overlooked as a business region. The only region that fully exploits its know-how and location is northwestern Switzerland, with the pharmaceutical epicenter of Basel. Novartis, Roche and numerous other relevant players cavort there like in almost no other place.

Despite its strategic location at the heart of Europe, and the connection to the rhine and central highways, the region has not been able to attract the level of attention it deserves from investors and businesses. Apart from that, the European Parliament in Strasbourg is perhaps the most central European political institution directly in the border triangle. This would provide ideal conditions for targeted economic-political exchange, lobbying and networking.

In this article, we will explore the reasons behind the underappreciation of the Three Country Region and why it has the potential to be a thriving, international business hub.

One of the main reasons for the underappreciation of the Three Country Region is its location and infrastructure. While its located ideally for cross border cooperation between Northwestern Switzerland, Southwestern Germany and (North-) Eastern France, it is cut off from direct sea access. Due to this fact, even though the region is in the heart of Europe, it is not easily accessible due to the lack of proper transportation infrastructure. This has made it difficult for businesses to establish themselves in the area and expand their operations.

From my own experience of my private equity group, I can further add that the regular low water levels of the Rhine in the hot summer months pose a huge problem for year-round shipments via waterway. This applies to transports in all directions.

What is very interesting is the fact, that the freedom of navigation on the Rhine, which is navigable from Rheinfelden to Rotterdam, is guaranteed to Switzerland by the Mannheim Act of October 17, 1868. This means that Switzerland has access to the sea that is guaranteed under international law, and since 1992 it has also been able to reach Hungary and southern Europe via the Main-Danube Canal.

However, these problems are to be solved, as the governments of France, Germany and Switzerland are investing in improving the transportation infrastructure in the region. The construction of the Rhine-Rhone high-speed train line and the expansion of the EuroAirport Basel-Mulhouse-Freiburg are just two examples of the infrastructure improvements being made in the region.

Education and Talent

The Three Country Region is home to some of the best universities and research institutions in Europe. Among them the University of Basel (CH), the Univeristy of Freiburg (GER), the Karlsruhe Institute of Technology (GER) and the University of Strasbourg (FRA). However, despite the presence of these institutions, especially France and Germany have not been able to retain the talents, as many graduates leave the area in search of better job opportunities elsewhere, often in Northwestern Switzerland.

To address this issue, the region's governments are working to establish more business incubators and start-up accelerators to encourage entrepreneurship and innovation in the region. By providing support to young businesses, the region might be able to attract talents and create a vibrant business ecosystem. Therefore employers must provide competetive salaries and/or excellent overall packages to compete with Switzerland.

Cultural and Linguistic Barriers

The Three Country Region is a unique area where multiple languages and cultures converge. While this diversity is a strength, it can also be a challenge for businesses looking to establish themselves in the region. The linguistic and cultural barriers can make it difficult to communicate and establish business relationships with local partners. However, it is an advantage that schools throughout the region predominantly offer French and German already at primary school age, so that communication is made much easier.

By fostering diversity and channeling the strenghts of all three countries and cultures the region can leverage its unique cultural heritage and use it as a competitive advantage.

My view on the situation

The Three Country Region of the French Alsace, Southern Germany, and Northern Switzerland is a region with immense potential as a business hub. While it has been underappreciated in the past, the region is taking great steps to address its challenges and improve its infrastructure, retain its talent, and become a globally competitive business ecosystem. With its strategic location, world-class universities, the global pharmaceutical epicenter of Basel, strong small and medium sized enterprises and unique cultural heritage, the Three Country Region certainly can become a thriving business hub in the heart of Europe.

I would certainly love to see this happen.

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