Expertise

No recovery without foreign trade

With a 40 percent share of GDP, foreign trade is important for Switzerland. A good position after COVID-19 is therefore essential and offers new opportunities.

Simone Wyss Fedele

Some people believe that restricting the globalized economy is the solution to global crises such as the COVID-19 pandemic. On the contrary: For small economies like Switzerland, it is vital that our companies and our location can hold their own in global competition: If we succeed in attracting leading companies with key technologies to Switzerland, and if many of our SMEs conquer the global markets with highly specialized niche strategies, this will strengthen Switzerland as a business location and secure jobs and prosperity. To support this within the framework of promoting Swiss exports and Switzerland as a location, together with its partners, is the mission of Switzerland Global Enterprise (S-GE). But what does it take these days to stay ahead in global competition?

The cards are being reshuffled

The coronavirus pandemic has severely curbed international trade and consumption. Internationally active Swiss SMEs are significantly affected by this slump. In view of their importance for the Swiss economy, one thing is clear: without a recovery in foreign trade, Switzerland will not recover. And to achieve this, a rapid resumption of international business is essential. Following a phase marked by crisis management, Swiss SMEs must now return to their target markets faster and with a better strategy than their competitors.

The travel restrictions and closed borders that still exist in some cases remain a political challenge. Important progress has been made in the meantime. However, our surveys show: Internationally active companies need more planning reliability in the form of a transparently communicated staged plan that is coordinated with foreign countries, which also highlights the steps for opening up with countries outside of Europe. At the same time, companies are already evaluating their value chains. For Switzerland in particular, which is positioning itself as a stable and leading technology hub in Europe, this provides an opportunity for attracting jobs that provide high added value. However, access to key markets such as the EU, to talent and future technologies, as well as to a business-friendly environment, is and will remain crucial. With the COVID-19 liquidity loans, Swiss politicians have shown that they can quickly and purposefully secure the necessary framework conditions.

For international companies, a reshuffled deck mean that markets, customer requirements, partner networks and value chains are undergoing fundamental changes. To stay ahead of the game, S-GE and its partners provide support to Swiss SMEs in 27 markets: SMEs need to be better informed about the current situation and opportunities in the target markets, they need to have an optimum strategy for (re-)entering the market after the crisis, and they should strengthen the relevant partner and customer networks on site in a targeted manner. We can also help them to effectively and quickly adapt their own global value chains in line with the new circumstances and get them back in the market more quickly thanks to our local teams and virtual formats. Our discussions have shown: If Swiss SMEs are given the required room to maneuver, they will be able to master this crisis with the necessary willpower and innovative strength.

This article was first published in “Die Volkswirtschaft” on June 19, 2020 (focus “Global Competition”)

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