Entrepreneurs in Switzerland: Courage to leave the comfort zone

The new, nationwide Entrepreneurs' Day puts the spotlight on the movers and shakers behind Swiss companies. Andreas Gerber, Head of SME Business at Credit Suisse, sees the initiative primarily as a way to honor entrepreneurs for their wide-ranging contribution to the country's prosperity.

The headlines in the business press may be dominated by the big corporate names, but it is actually Switzerland's small and medium-sized enterprises that keep the country's economic engine running. Entrepreneurs' Day reflects that fact, and seeks to remind the wider population of the importance of SMEs.

The objectives are clear: "We offer entrepreneurs a platform where they can share ideas and network; in addition, it's simply a way to thank them for everything they've achieved," says Andreas Gerber, Head of SME Business at Credit Suisse, which launched the initiative. Starting this year, the plan is to celebrate Entrepreneurs' Day on a nationwide basis every February 20. Switzerland ultimately owes a large chunk of its prosperity and welfare to SMEs. "What's more," adds Gerber, "we can't stress it often enough. Hence the need to build bridges between entrepreneurs and the wider population."

Small country, big punch

February 20 isn't a random choice. It was on that date exactly 200 years ago that Johann Heinrich Alfred Escher (1819–1882) was born in Zurich's Hirschengraben. Escher's role in shaping Switzerland's political and economic development in the 19th century is unparalleled. Firms such as the Gotthardbahn-Gesellschaft (now Swiss Federal Railways, SBB), Schweizerische Lebensversicherungs- und Rentenanstalt (now Swiss Life), and Schweizerische Kreditanstalt (now Credit Suisse) owe their existence to Escher and his creativity. Educational institutions such as the Eidgenössische Technische Hochschule Zürich (Swiss Federal Institute of Technology Zurich, ETH) were likewise established thanks to Escher's initiative. For Gerber, his achievements cannot be praised highly enough. "Before the Escher era, Switzerland was as a typical emigration country; our neighbors thought of us as nation of farmers and peasants. It was Escher who turned our country into the epitome of industry, education, and prosperity."

The entrepreneur and his projects also paved the way for today's many small and medium-sized enterprises. Now, more than 140 years after Escher’s death, the figures of the Swiss SME market are extremely impressive. There are no fewer than 99 small and medium-sized enterprises that have 250 or more employees, or as a group, 1,000 or more employees. In a recent survey, Credit Suisse economists put the total number of SMEs in Switzerland, ranging from carpentry firms, through accountancy firms, to high-tech start-ups, at nearly 600,000. A majority of them are still family or owner run. "We may be a small country," notes Gerber, "but we punch above our weight when it comes to quality, service, innovation, and competitiveness."

Increasing constraints on business

Andreas Gerber has observed, supported, and advised SMEs for over 30 years. Whether as Head of SME Business at Credit Suisse, or in his role as President of the Swiss Venture Club (SVC), the 50-year-old knows exactly where the industry's problems lie. And he doesn’t mince his words when giving his assessment of the situation in which many small and medium-sized companies find themselves today. "As far as competitiveness is concerned, we are managing to place increasing constraints on businesses' freedom to maneuver – in a country that once had an extremely pro-business climate. It's a catastrophe."

Gerber is alluding to the amount of red tape that in some cases makes it virtually impossible for family-owned or traditional firms to withstand competition at home or abroad. "Through laws and regulations, a one-size-fits-all approach is often applied – irrespective of whether it's an internationally active asset manager or a locally based master carpenter." He says he has no objection to clear regulations on compliance or tax matters. "But because Switzerland is an expensive country, it's vital for us to have a basic framework that permits flexibility, guarantees certainty, and enables predictability and simplicity." He adds that many small entrepreneurs feel increasingly overwhelmed by the ever-growing number of legal requirements. "They feel politicians and authorities don’t take them seriously," says Gerber, shaking his head. He gives the following example: "You can't ask firms to expand their production capacity in Switzerland, and then weigh them down with lengthy, complicated building permit procedures. It just doesn't work."

Preparing for the future

Entrepreneurs' Day is also designed to spur reflection on competitiveness. The challenges associated with dense regulations, but also internal succession arrangements, are key issues.  Networking and exchanging views are also vitally important. "We seek to promote dialog – and to do so in a positive, solution-driven way," explains Gerber, who says he is extremely impressed by the variety of successful SMEs throughout the country. "We still have huge opportunities in Switzerland, as evidenced by all the innovative companies not just from the start-up scene but also from the more traditional areas." Looking ahead, digitalization and demographics are key themes.

For the banker, the events of recent years have brought this home. In specific terms, the euro crisis showed that Swiss SMEs are agile, resilient, and ultimately able to respond to a new situation in a fast, sustainable way. "Family or owner-managed companies often have structures that allow them to react efficiently and effectively to developments in Switzerland and abroad. That is certainly one of the major advantages of SMEs."

Looking ahead to Switzerland's future as an economic center, Gerber nevertheless warns of complacency. The fact that we've had 150 years without too many major crises has in some cases cemented the notion that everything will be just fine. People who think along those lines are living with a false sense of security, because the world around us is moving at a pace faster than many people in our country realize. "We can't afford to rest on our laurels," Gerber warns. If you want to remain innovative and be successful, you need to get out of your comfort zone – preferably sooner rather than later. Having the courage to do so, as any entrepreneur would tell you, is what it's all about!

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Content created by NZZ Content Solutions in cooperation with Credit Suisse (Switzerland) Ltd.