COVID-19 pandemic: How the economy and exporters are preparing for the future

The world is becoming more volatile. SMEs need to diversify.

The COVID-19 pandemic is dragging down the Swiss economy. Especially hard hit are SMEs that depend on exports. Simone Wyss Fedele, CEO of Switzerland Global Enterprise (S-GE), talks about the present challenges facing companies and the world after COVID-19 in this interview.

You took over the reins of S-GE in October and immediately underwent a trial by fire with the COVID-19 pandemic. Were you prepared?

Simone Wyss Fedele: Of course, it was a challenge having to address a once-in-a-century crisis after only three months on the job. My experience from my time at Novartis, where I was assigned the handling of the euro crisis, plus the experience of my management team, enabled us to make the right decisions as an organization, however. S-GE has been able to use this crisis as an opportunity to get even closer to its clients, work even more tightly with our partners, and overcome the crisis together as a team. It is nice to see that we, together with our partners, can offer our clients added value in these challenging times.

How has the work of S-GE changed since this all began?

In essence, our work has not changed. We still assist Swiss SMEs with their international business and provide support to highly innovative foreign companies setting up shop in Switzerland. We also continue to focus all our activities on consistently meeting client needs. Yet, our clients' needs are what have changed significantly as a result of the crisis. That is why we have shifted our services to digital and virtual channels where possible since the crisis broke out.

What client needs have you been, and currently remain, focused on?

When the outbreak began, we concentrated on acute crisis management. We had to ensure liquidity and stabilization of value chains. In the meantime, many companies have been able to transition to a recovery phase in which they reinvent themselves by asking, "What will the world look like after COVID-19? How can we generate growth again and optimize our value chain?" Accordingly, our current focus is on helping SMEs during this recovery phase as effectively as possible together with our partners.

You said that, at the beginning of the crisis, liquidity was crucial. How important was the partnership between S-GE and Credit Suisse in that area?

Our partnership was and is extremely valuable. Credit Suisse was involved in developing the COVID-19 bridging credit facilities, an incredibly innovative and effective solution that was also extremely important, especially to foreign trade. In view of the numerous queries we were receiving about the issue of liquidity, it was ideal for us at S-GE to be able to refer our clients to a competent partner. That also applies to the area of hedging instruments – against currency risks, for example – which will become increasingly important as a result of the crisis.

When it comes to doing business, the world after COVID-19 will be completely different to the one we knew before the pandemic. 

Simone Wyss Fedele, CEO of S-GE 

Are value chains undergoing changes on account of the COVID-19 pandemic?

In order for Swiss companies to remain competitive, the individual steps in the value chain need to take place where they can be performed most effectively. For that reason, value chains will remain global. One lesson from the COVID-19 pandemic must be, however, that value chains need to be more diversified. Businesses need alternatives. Bigger companies have had them for a long time. For SMEs, the subject of diversification can be challenging, however. That is why we assist our clients closely with our external network in 31 targets as they evaluate business locations.

What do you think the world will look like after COVID-19?

We will not enter a normal phase of growth again until 2021 at the earliest because completely uninhibited travel will not be possible until a vaccine is introduced. When it comes to doing business, the world after COVID-19 will be completely different to the one we knew before the pandemic. Value chains, partner structures, and client needs will change fundamentally. Many corporate clients and their competitors will also no longer be in the market. Companies should start preparing for this new world as early as possible. They need to consider which markets they want to do business in, which partners they want to work with, which competitors they might have, and how they can adapt their own business models to the new client needs. E-commerce, as well as digital and virtual services and formats, will certainly play an even bigger role in the future.

 

What impact will the COVID-19 pandemic have on globalization? Will the world come closer together or move further apart?

In the near term, I expect that the trend toward greater protectionism, in particular, will grow stronger. It will mainly come in the form of non-tariff trade barriers, such as export subsidies, making market access more difficult. Companies need to learn to deal with that, and S-GE can help. In the medium term, a push in the direction of a tighter economic network would be highly welcome in Switzerland, which benefits greatly from global trade. The future remains unclear, however.

How well have Swiss companies responded to the crisis?

We won't be able to answer that question for another year. That is because it typically takes time for bankruptcies to emerge. However, there are some things the past reveals: Swiss companies can deal with crises well and are highly agile. Most internationally successful SMEs are highly specialized in a particular niche and have a unique selling proposition that is discernible. A USP like that is even more important in times increasingly characterized by protectionism. Thanks to its research facilities and companies, Switzerland is the most innovative nation in the world, as seen by our top spot on the Global Innovation Index for years now. That makes me feel confident.

The world is becoming increasingly uncertain and more volatile. That's why SMEs need to diversify to benefit from the different growth trends. 

Simone Wyss Fedele, CEO of S-GE 

Coronavirus pandemic, euro crisis, financial crisis – we are living in troubled times. What does that mean for SMEs?

It's perfectly normal for crises to occur in cycles from time to time. However, for several years, we have been repeatedly experiencing minor crises in addition to the major ones. In other words, the world is becoming increasingly uncertain and more volatile. That deprives companies of a reliable basis for planning. That's why SMEs need to think in terms of scenarios in order to gain the agility needed to be successful in a variety of worlds. What's more, they need to diversify – that is, be active in multiple markets so they can profit from different growth trends and the influence of different currencies. While the major companies usually have departments that concern themselves with future scenarios and the issue of diversification, SMEs often lack the time and resources. That is precisely the reason for the existence of partners such as S-GE, who help SMEs do business successfully on an international scale in a volatile world.

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