Trade barriers are increasing
Globalization has been steadily intensifying over the past decades. Yet now the opposite trend is emerging. All over the world, in industrialized as well as emerging countries, protectionist tendencies and measures are on the rise. Credit Suisse is also experiencing this trend, as Andreas Gerber, Head of Corporate Business Credit Suisse (Schweiz) AG, tells us: “It regularly happens that our customers are struggling with difficult delivery conditions or are not invited or not admitted to tenders.” He says that this is a well-known phenomenon used by states to try to protect their regional markets; economic self-determination now almost always means the introduction of trade barriers – one downside of globalization.
Profits of globalization unevenly distributed
Globalization has created great wealth, made many people more well-off and made the poor less poor. However, according to Gerber, the rich have become considerably wealthier and the fruits of globalization have been distributed unequally. This is leading to a decreasing acceptance of free trade. In 2009, more than 1000 protectionist measures were introduced worldwide, as The Global Trade Alert from University of St. Gallen economist Simon Evenett shows.
However, protectionist tendencies in other countries can also have an advantageous effect on Switzerland as an investment location and workplace. International pharmaceutical companies are bringing their headquarters back to Switzerland, for example from Italy or England, and creating jobs here. Disadvantages such as spatial distance and different cultures also contribute to these decisions, as Gerber points out.
There is no country better suited to global operation than Switzerland.
Globalization is progressing – Swiss characteristics will continue to be relevant in the future
“The Swiss are genetically too conscientious,” says Gerber, and calls for more self-confidence in international business. In other cultures, many things are announced in the course of daily business operations, but not everything is implemented. Instead of joining in, Swiss companies, on the other hand, would rather wait and see that they can influence the rules. “There is no country better suited to global operation than Switzerland,” stresses Gerber. He says the characteristics that could be said to make up Swissness are unique selling points: Germanic and Latin cultures in the same country, adaptability, punctuality, precision. In addition to the EFTA Convention and the Free Trade Agreement with the EU, Switzerland has 28 further free trade agreements with a total of 38 partner countries. The positive effects of these agreements are indisputable: they accelerate export growth and, as the survey “SME Export Perspectives 3rd Quarter 2017” by S-GE shows, average exports increase after an FTA comes into force.
Head of SME Business Switzerland at Credit Suisse (Schweiz) AG Andreas Gerber discusses the advantages and disadvantages of protectionist measures in a video interview (in Swiss German), and states why Swiss entrepreneurs should have more self-confidence.
Driven by new technologies, the globalization of the economy is advancing, while digitization and the fourth industrial revolution are simplifying the transport of data and goods across borders. Protectionist tendencies make international business more complex for SMEs. But Andreas Gerber has an optimistic take on the future: “If SMEs invest more in innovation, new technologies and research and development, as well as focusing on countries or regions when exporting, they will continue to be successful in the future.”
Andreas Gerber (born 1968) joined Credit Suisse in 1989 and has headed the SME Business Switzerland since April 2015. His professional career took him from supporting listed major clients to managing the Corporate Banking Business in the Bern market area and becoming head of SMEs Midland Region in 2006. In September 2010, he moved to Zurich, where he led the corporate customer business of the Zurich & Schaffhausen region for 4 years. He is a graduate in business economics and completed the Executive Program at the Swiss Finance Institute in Zurich and at the Tuck School of Business at Dartmouth in Hanover (USA). In 2009, he was promoted to Managing Director.
Credit Suisse (Schweiz) AG
Credit Suisse (Schweiz) AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 46 840 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York.
More articles on free trade and protectionism from the CEO Breakfast at S-GE
Peter Gisler, Director of SERV: “We’re experiencing protectionist measures in major infrastructure projects abroad”
Dieter Gosteli, Head of Corporates Axa Winterthur: “Protectionism harms competitiveness”
Dave Gleixner, Member of the Executive Committee of Data Quest: “Globalization gives us completely new opportunities”