Before that time, the city-cantons of Zürich, Geneva, and Basel in particular began to develop economically based on industry and trade, while the rural regions of Switzerland remained poor and underdeveloped.

But in Switzerland, hydraulic power was often used instead of steam engines because of the country's mountainous topography and lack of significant deposits of coal.

While Switzerland was primarily rural, the cities experienced an industrial revolution in the late 19th century, focused especially on textiles.

[32] In the 1940s, particularly during World War II, the economy profited from the increased export and delivery of weapons to Germany, France, the United Kingdom, and other European countries.

In 1970 industry still employed about 46% of the labor force, but during the economic recession of the 1970s the services sector grew to dominate the national economy.

By 1970 17.2% of the population and about one quarter of the work force were foreign nationals, though job losses during the economic recession decreased this number.

In 2008, Switzerland was in second place among European countries with populations above one million in terms of nominal and purchasing power parity GDP per capita, behind Norway (see list).

[36] In the early 2000s recession, being so closely linked to the economies of Western Europe and the United States, Switzerland could not escape the slowdown in these countries.

After the worldwide stock market crashes in the wake of the 9/11 terrorist attacks, there were more announcements of false enterprise statistics[clarification needed] and exaggerated managers' wages.

These measures were applied with successful results while the government strove for the Magical Hexagon of full employment, social equality, economic growth, environmental quality, positive trade balance and price stability.

[47][dead link‍] While most of the Swiss economic practices have been brought largely into conformity with the European Union's policies, some trade protectionism remains, particularly for the small agricultural sector.

Swiss companies produce most of the world's high-end watches: in 2011 exports reached nearly 19.3 billion CHF, up 19.2% over the previous year.

Most noticeably, food processing like Nestlé, machines and robot manufacturers such as ABB, Bobst SA and Stadler Rail, chemicals for industrial and construction use like Sika AG, or military equipment such as Ruag.

Before farmers can apply for subsidies, they must obtain certificates of environmental management systems (EMS) proving that they: "make a balanced use of fertilizers; use at least 7% of their farmland as ecological compensation areas; regularly rotate crops; adopt appropriate measures to protect animals and soil; make limited and targeted use of pesticides.

[57] As a developed country with a skilled labor force, the majority of Swiss exports are precision or 'high tech' finished products.

Switzerland's largest specific SITC categories of exports include medicaments (13%), heterocyclic compounds (2.2%), watches (6.4%), orthopaedic appliances (2.1%), and precious jewellery (2.5%).

While watches and jewellery remained an important part of the economy, in 2017 about 24% of Swiss exports were gold bullion or coins.

Agricultural products that Switzerland is famous for such as cheese (0.23%), wine (0.028%), and chocolate (0.35%) all make up only a small portion of Swiss exports.

Switzerland has highly developed tourism infrastructure, especially in the mountainous regions and cities, making it a good market for tourism-related equipment and services.

56.4% of lodging nights were by visitors from abroad (broken down by nationality: 16.5% Germany, 6.3% UK, 4.8% USA, 3.6% France, 3.0% Italy) [61] The total financial volume associated with tourism, including transportation, is estimated to CHF 35.5 billion (as of 2010) although some of this comes from fuel tax and sales of motorway vignettes.

Zürich specialises in banking (UBS, Credit Suisse, Julius Baer) as well as insurance (Swiss Re, Zurich Insurance), whilst Geneva specialises in wealth management (Pictet Group, Lombard Odier, Union Bancaire Privée), and commodity trading, trade finance, and shipping (Cargill, Mediterranean Shipping Company, Louis Dreyfus Company, Mercuria Energy Group, Trafigura, Banque de Commerce et de Placements).

[73][74][75] Swiss banks have served as safe havens for the wealth of dictators, despots, mobsters, arms dealers, corrupt officials, and tax cheats of all kinds.

[83][79] Corporate loans and revolving credit facilities granted to the five main Swiss energy trading houses (Glencore, Mercuria, Gunvor, Vitol and Trafigura) between 2013 and 2019 exceeded $360 billion.

[83][87][88][89] This situation has enabled some types of organization in commodities trading to be involved in corruption and exploitation and operate with little or no transparency or oversight.

Massive layoffs and dismissals by enterprises resulting from the global economic slowdown, major management scandals and different foreign investment attitudes have strained the traditional Swiss labour peace.

[104] The Statistical Office defines the majority of the population as “neither rich nor poor and the average Swiss earns just enough to afford the high cost of living in Switzerland”.

[108] Through the United States-Swiss Joint Economic Commission (JEC), Switzerland has passed strict legislation covering anti-terrorism financing and the prevention of terrorist acts, marked by the implementation of several anti-money laundering procedures and the seizure of al-Qaeda accounts.

Four years of negotiations culminated in Bilaterals, a cross-platform agreement covering seven sectors: research, public procurement, technical barriers to trade, agriculture, civil aviation, land transport, and the free movement of persons.

[110][111] Switzerland has since brought most of their practices into conformity with European Union policies and norms in order to maximise the country's international competitiveness.

While most of the EU policies are not contentious, police and judicial cooperation to international law enforcement and the taxation of savings are controversial, mainly because of possible side effects on bank secrecy.