“Education is important – especially in the age of AI”

• Swiss Economy
• News

Before we look at economic developments, let's first take a look at the institute. Last year, the KOF Swiss Economic Institute became the KOF Institute. Why this step?

Jan-Egbert Sturm: We have been working towards this change for a long time. Over the years, many areas have been added to the KOF that do not have much to do with economic research in the strict sense. That is why the name no longer really suited what the KOF does today. In English, we were already the KOF Swiss Economic Institute. And now we are consistently the KOF Institute.

Hans Gersbach: The name change underlines our commitment at the KOF to providing economic analyses of the key challenges facing the Swiss economy and its international interdependencies, thereby offering well-founded insights to decision-makers across all key sectors. And that is precisely the commitment we will continue to uphold in the future.

The KOF Lab has been in existence for a good two years now; it serves as an incubator for new ideas and projects at the institute. How do you think the Lab has developed?

Hans Gersbach: The KOF Lab has developed very well over the years. Numerous projects are now underway in the health sector. In the area of medium-term forecasts, we have developed rapid assessment tools that enable swift assessments in the trade sector. The past year in particular has shown how important such tools are for rapid assessments, for example in relation to customs issues. In addition to nowcasting in the economic sector, we now also have such a tool in the trade sector. This puts us in a much stronger position overall. In this context, we have also developed the Trade Benefit Ratios, a metric that allows a country's geopolitical negotiating position to be derived from its trade relations. In the area of financial and monetary system design, we have published several papers on stablecoins and have also drafted a submission as part of the current consultation process. Things are also going well at the Data Centre. I therefore expect a high level of activity across all areas next year.

Jan-Egbert Sturm: In the area of distribution and public finance, there is also an important project: the Distributional National Accounts. In Switzerland, there is currently no overview of income distribution at the macroeconomic level. We are the first to compile such accounts for Switzerland, thereby providing an overview of income distribution. These Distributional National Accounts already exist in the EU and other countries. This will also make Switzerland comparable with other countries. We should have more on this by 2026.

You have already mentioned the US government's tariff policy. How do you assess the geopolitical developments and the tariff measures taken over the past year?

Jan-Egbert Sturm: No forecaster could have anticipated what we witnessed in economic policy over the past year. Namely, that a new US president could shake up the global economy to such an extent, creating uncertainty and new dynamics in trade relations. This naturally has major internal consequences for us as well. Our economic forecasts stand or fall with the international economy and, consequently, with the US economy. And when this sort of policy change keeps coming, we are constantly on our toes, trying to use both our new models and our Rapid Assessment Tools to better understand the consequences, whilst also incorporating this into our standard economic forecasting operations. But of course, that is no longer really standard practice. However, we must not only talk about tariffs, but also about the appreciation of the Swiss franc against the US dollar. That is also a kind of tariff, because it places an additional burden on Swiss companies.

What are your expectations for 2026? What economic challenges will we face?

Hans Gersbach: The challenges for this year will remain broadly as significant as last year's, or may even become greater. There are essentially three reasons for this. Firstly, it will take some time for the global economy to return to calmer waters following the war against Iran. Secondly, the US and China are seeking to gain greater strategic autonomy within their respective spheres of influence. This trend is likely to continue. This will put other countries under pressure, and the pressure on Switzerland to take a stronger stance could also increase. Thirdly, there is much debate within the EU about how to proceed in future and whether it might be necessary to deviate from the existing framework of WTO rules. Depending on the EU's decision, this could give rise to a significant risk scenario. For instance, if it places greater emphasis on local value-added requirements or pursues different principles than before. For Switzerland, one of the greatest risks is that free trade with major economic blocs and other key trading partners may become less of a given in future. These are key risk factors for Switzerland. And for companies, this means they must factor geopolitical signals even more heavily into their decisions.

Jan-Egbert Sturm: We know in Europe that, in many respects, we are not always the quickest off the mark. That probably applies here too, but nevertheless, the risks are there and the shifts are happening. And they are often not really predictable.

Activity Report 2024

Download All academic publications, projects and further information can be found in the Activity Report 2025 (in German). (PDF, 930 KB)

Let's move on to another major topic: artificial intelligence. How do you assess developments to date? And what do you expect for the future?

Hans Gersbach: Artificial intelligence is the technology that will most profoundly change human behaviour. For the first time, the power of the word, the ability to reason, analyse and persuade, is no longer the exclusive preserve of humans. In my view, AI is the fastest disruptive transformation of the economy and society that we have ever seen. Expectations regarding productivity gains are correspondingly enormous, yet the range of estimates on this is very wide. These effects will have a broad impact if the wider environment also evolves, for instance through further training, institutional adjustments and adapted social security systems. The measurable effects of AI deployment are not yet really visible in productivity figures. This is not surprising, however, as there is currently a great deal of investment taking place and it takes time for these investments to be reflected in productivity figures. Here at the Institute, we have a number of plans in the AI sector and are already working on various topics. In the near future, we will certainly also be getting involved in the development of AI agents.

Jan-Egbert Sturm: The development of AI will have a significant impact on us in the medium and long term. Last year, we published the first study examining the effects of AI on the labour market. The labour market is the first to be affected, partly because different skills are required. However, that does not mean that education and further training are becoming less important. I believe quite the opposite. The most recent studies I have seen in this context all suggest that productivity gains are greatest among people who are well-educated and able to use these new tools. Of course, we are seeing a shift in production processes where these tools are used. With AI, however, it is also important to understand what is possible and where the limits lie. And we must not forget that humans are social beings. AI will not be able to replace that. Social skills are likely to become more important rather than less so. People like to think things through and exchange ideas with others. And of course they are supported in this by AI, but I do not yet see that being fully replaced.

How is AI changing the work of economists, or will they too be replaced one day?

Jan-Egbert Sturm: Well, I honestly don't know how I'd manage to get through my day properly without these toolboxes anymore. I don't blindly trust the tools, but they help me to organise myself and be more efficient. Today, you can do things without having in-depth knowledge. In the past, you would never have dared to do them, or it would have taken a very long time to acquire the knowledge. This helps researchers and staff a great deal in their work.

Hans Gersbach: AI tools can also be used to analyse large volumes of data. This means that some of the work can be taken over by AI. For researchers, this frees up more time for what really matters: economic expertise, critical analysis and well-founded judgements. At the same time, AI opens up the possibility of tackling new research questions that were previously out of reach. In this sense, it can significantly advance our understanding once again. One example is near-real-time web scraping: this allows us to gather data that enables us to answer research questions today that previously could only have been investigated retrospectively.

The interview was held by Dr. Thomas Domjahn and Anne Stücker, KOF Corporate Communications.

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