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1 March, 2012 Press release

UBS launches the Cantonal Competitiveness Indicator

Swiss cantons differ in their economic competitiveness. Zurich, Basel-Stadt and Zug occupy the podium places in 2012, according to the latest analysis from UBS Wealth Management Research.

Zürich/Basel, 1 March, 2012 – UBS Wealth Management Research now publishes the annual Cantonal Competitiveness Indicator (Kantonaler Wettbewerbsindikator or KWI). The indicator uses a multidimensional analysis to show the cantons' potential to sustainably raise their economic performance.

Against the backdrop of increasing international competition, regional economic conditions are gaining in significance. In particular, questions concerning the economic competitiveness of individual regions over the longer term are being asked over and over again. The KWI provides answers to these questions relating to the cantons of Switzerland. The cantons' profiles of strengths and weaknesses, on which the KWI is based, can also be used as basic tools for reaching regional strategic decisions.

The KWI is based on a comparative analysis of five dimensions relating to competitiveness: economic structure, companies, location, population and government. Each of the dimensions in turn consists of two competitiveness pillars. The KWI values for each of the cantons are determined based on these 10 pillars. The higher a canton’s KWI value, the more competitive it is relative to others.

The cantons of Zurich, Basel-Stadt and Zug have the highest relative competitiveness according to the latest KWI. The cantons of Aargau, Basel-Landschaft, Lucerne and Nidwalden also show clearly above- average competitiveness. They are followed by a broad midfield with solid competitiveness, consisting of the cantons of Geneva, Vaud, Schwyz, Bern, St. Gallen, Fribourg, Schaffhausen, Thurgau, Solothurn, Appenzell Ausserrhoden and Obwalden. Neuchâtel, Glarus, Ticino and Appenzell Innerrhoden are those cantons with moderate competitiveness, while Graubünden, Valais, Jura and Uri fall in the group of cantons with low relative competitiveness.

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2012 Cantonal Competitiveness Indicator (KWI)

0 50 60 75 90 100 ZH 100.0 Methodology and interpretation BS 98.0 TopTop ZG 95.3 The Cantonal Competitiveness Indicator AG 82.4 (KWI) is based on the comparative BL 82.3 analysis of ten pillars of growth drivers. HighHoch Each canton is given a score between 0 LU 79.4 and 100 per pillar. The KWI for each NW 77.0 canton is calculated from the average GE 74.7 of the scores for the ten pillars and VD 71.8 scaled so that the average achieved by SZ 71.4 the best-performing canton equals 100. Cantonal competitiveness is divided BE 70.6 into five classes: SG 69.3 FR 69.2 Solid • Top: 100 ≥ KWI value ≥ 90 SH 69.1 • High: 90 > KWI value ≥ 75 TG 67.6 • Solid: 75 > KWI value ≥ 60 • SO 66.9 Moderate: 60 > KWI value ≥ 50 • Low: 50 > KWI value AR 66.0 OW 64.1 When interpreting the KWI, the NE 56.3 cantons’ individual circumstances must GL 54.7 also be taken into account. Because of ModeratModerate TI 53.9 specific conditions, some cantons have a varying ability to achieve high AI 51.5 competitiveness and a high KWI score. GR 48.0 VS 45.3 GeringLow JU 41.3 UR 40.2

Source: UBS WMR

The 10-pillar KWI approach

The KWI is based on the comparative analysis of the following five competitiveness dimensions (see chart on next page): economic structure, companies, location, population and government. Each of these competitiveness dimensions is made up of two pillars. More than 50 variables, so-called growth drivers, figure in the evaluation of the 10 pillars.

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COMPETITIVENESS

Economic structure Companies Location Population Government

Cost Diversi- Inno- Access- Catch- Human Labor Financial Financial Dynamic environ- fication vation ibility ment capital market efficiency leeway ment

Source: UBS WMR

Competitiveness profile of Canton Zurich

On the basis of these 10 pillars, UBS Wealth Management Research has created a profile of strengths and weaknesses for each canton. By way of example, the profile of the canton with the highest competitiveness is explained in brief below:

Dynamic Competitiveness profile of Canton Financial 100 Zurich efficiency Diversification 75 The canton with the highest relative competitiveness has an evenly balanced

50 profile. Although it gains most points in Financial the catchment area, it is ahead in just leeway Inno- about every competitiveness pillar. 25 vation Exceptions are the relatively expensive cost environment for firms and the 0 government’s financial leeway. But even where it shows relative weakness, Zurich Labor Cost still occupies the midfield among the market cantons. environ- ment

Human Accessibility capital

Catchment

Source: UBS WMR

The profiles of all cantons can be viewed in the Cantonal Competitiveness Indicator report at the following link (only available in German and French): www.ubs.com/kantonalerwettbewerbsindikator-de and www.ubs.com/kantonalerwettbewerbsindikator-fr.

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UBS AG

Contact

Claudio Saputelli Head WM Real Estate & Swiss Regional Research Tel. +41 44 234 39 08 / +41 79 513 50 45

Elias Hafner Economist WM Real Estate & Swiss Regional Research Tel. +41 44 234 48 03

Dr. Matthias Holzhey Economist WM Real Estate & Swiss Regional Research Tel. +41 44 234 71 25

The Cantonal Competitive Indicator report can be viewed online at the following link (only available in German and French): www.ubs.com/kantonalerwettbewerbsindikator-de and www.ubs.com/kantonalerwettbewerbsindikator-fr.

www.ubs.com

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