Success Factors for Swiss SMEs 2016: Digitization – an Opportunity for SMEs
Despite the positive overall assessment of Switzerland as a business location by SMEs, there are challenges as Switzerland has been increasingly at issue as an industrial and business location since the abolition of the EUR/CHF minimum exchange rate on January 15, 2015. Of the five measures surveyed for countering locational disadvantages, the SMEs describe the introduction of new technologies as the most important one. These are the findings of the survey conducted by Credit Suisse Economic Research.
In 2016 we questioned Swiss SMEs on the success factors of the Swiss location for the fifth time. Two thousand Swiss SMEs took part in this jubilee survey. Altogether they believe that the Swiss location has a beneficial effect on their success, as reflected by our locational indicator. The SMEs also only attribute a negative effect on their business success to two out of nine factors defined by us – the economic environment and foreign ties. This pessimistic assessment of the two factors will largely be due to the strong Swiss franc as the appreciation of the franc in 2015 caused many SMEs to sustain further losses in terms of price competitiveness both in Switzerland and abroad. This also curbed the growth of the Swiss domestic economy, thereby exerting a negative impact on strongly domestically oriented companies.
A decisive factor for the positive overall assessment of the Swiss location in 2016, despite this challenge, is the assessment of the most important success factor for the SMEs surveyed: employees and qualifications. Companies attribute by far the most positive influence on their success to this factor. An important reason for this is likely to be the Swiss education system which is recognized globally as a model of success.
In future, the research environment will gain most in importance for the success of SMEs. Furthermore, according to the survey it is set to exert an even more positive impact on corporate success than has been the case so far. The further development of Switzerland as a location for research and innovation will therefore play a leading role for SMEs. However, companies are viewing the future of the Swiss location somewhat more skeptically compared with the current situation. The influence of the underlying regulatory conditions on the future success of SMEs is therefore set to deteriorate significantly. This comes as little surprise in view of the increase in red tape in recent years. Furthermore, SMEs expect the economic environment to have an even greater negative impact on their business success in the future.
Despite the positive overall assessment of Switzerland as a business location by SMEs, there are challenges as Switzerland has been increasingly at issue as an industrial and business location since the abolition of the EUR/CHF minimum exchange rate on January 15, 2015. It is for this reason that we also questioned the survey participants on the locational disadvantages of Switzerland compared with abroad and on possible solutions.
Asked about the extent of the disadvantages of the Swiss location versus abroad in the three areas of production costs, availability of skilled labor, and the strictness and complexity of statutory regulations, the answer of the SMEs is clear-cut: Switzerland above all lies behind in terms of production costs. Of the five measures surveyed for countering locational disadvantages, the SMEs describe the introduction of new technologies as the most important one, followed by the development of new products and services, investments in employees, increased importing of intermediate inputs and finally outsourcing abroad.
Regarding the most important measure that the survey names to combat Switzerland's locational disadvantages, namely the introduction of new technologies, digitalization in particular is set to play an important role. The majority of SMEs questioned are of the opinion that Swiss companies can significantly enhance their global competitiveness by making very strong use of the latest digital technologies.