Digitization is increasingly affecting Swiss SMEs in international trade. In this respect the strategic partners, S-GE – Credit Suisse, AXA Winterthur, PwC Switzerland and Amber Road are in agreement. For many SMEs it is not clear what impact the new technologies will have on their industrial sector. At the CEO roundtable in mid-January 2016, with guest speaker Daniel Küng, CEO of Switzerland Global Enterprise (S-GE), it was clear that whether an insurance provider, bank or service provider, the radical changes will affect everyone.
It is not only industry that is affected
Industry 4.0 calls many things into question, from business strategy through to leadership models. André Helfenstein, Head of Corporate & Institutional Clients at Credit Suisse says, "the combination of processes, products and customers is revolutionary. In the past individual parts of the supply chain have been automated, but only rarely has a connection been made." The changes are far-reaching, already affecting not only large corporations and the manufacturing industry, but also service providers. The banking sector in particular is experiencing new competition from FinTech, for example in retail, where transactions using bitcoins could work independently of the services of a bank in future.
"Industry 4.0 provides opportunities for market players who previously had nothing to do with industry. So to me this is not an industrial revolution, but one which affects the whole economy," says Dieter Gosteli, Head of Corporates at AXA Winterthur. Julie Fitzgerald, Growth & Markets Leader and Member of Executive Management at PwC Switzerland, sees the corporate strategic orientation towards Industry 4.0 as a huge challenge for Swiss SMEs: "The willingness is there, however adapting to new technologies is expensive and can quickly become a hindrance, particularly for SMEs." Thomas Kofler, Sales Director at Amber road also chips in on this subject, "Swiss companies must become more cost-efficient out of necessity, in purchasing and sales, in production, in customs clearance and in ensuring compliance. They can only do this with the aid of innovative IT solutions."
New business models, new collaborations
New added value networks are emerging, and business partners and customers or new business and collaboration models are being integrated across national and continental borders. This is where Switzerland Global Enterprise (S-GE) comes in. CEO Daniel Küng believes Swiss SMEs are well prepared. "Swiss companies work at a high level in terms of technology. We will not lose touch."
Because the speed with which the fourth industrial revolution is happening is both a factor for success and at the same time insecurity. "The radical changes are challenging for companies," says André Helfenstein of Credit Suisse. "New business models and a modified approach to innovation risks are required." These risks are present during disruptive developments in which existing technologies, products and services are displaced by innovations. "Even though Swiss companies are more risk-averse compared to the USA, there is a growing appetite to be more daring," Julie Fitzgerald of PwC Switzerland explains. Thomas Kofler of Amber Road considers the cooperation of individual stakeholders to be particularly important. "The increasing volatility of the underlying political and economic circumstances necessitates closer networking with suppliers and buyers."
Customer behavior is changing
The strategic partners of S-GE complement the services offered by S-GE with their own services, and support exporting SMEs in facing the challenges of Industry 4.0. They too are repositioning themselves through technology-based services. "Customer behavior is changing as a result of digitization," emphasizes Dieter Gosteli of AXA Winterthur. "Customers want certain things to be digital and other things to be analog. The integration of the two is the driving force behind the way we will deliver our services in future."
Digitalization in exports "Our task is to help SMEs to tackle new markets as rapidly as possible using digital methods. Around 60 percent of SMEs tell us that their strategy is increasingly reliant on diversification in order to counteract the strong Swiss franc," says Daniel Küng.
Industry 4.0: Jobs at risk?
Company representatives view the consequences of Industry 4.0 for the workplace quite differently. Jobs will be shifted rather than cut. "Some sectors are declining, but new ones are also emerging," says Helfenstein. Willingness to take risks will pay off. Switzerland’s dual education system proves successful – once again. "Ultimately, there needs to be a product. And that requires practitioners who also have the theoretical background to develop processes further. We have not yet produced anything from the skills of a data-analyst alone."
And this is exactly where host Daniel Küng sees the USP of Switzerland: "We are the most industrialized country in the world and have the capacity to turn digital information into products. "Swiss SMEs are showing willingness to go along with the digital transformation. Due to the strong Swiss franc, they already know that it is sometimes necessary to reinvent yourself. And they are already in change mode. This means they are sure to tackle the challenges associated with digital transformation successfully."
2016 Foreign Trade Forum on the topic of Industry 4.0
At our Foreign Trade Forum on April 21 in Zurich, you will have the opportunity to discuss Industry 4.0 and its impact on SMEs in detail with our partners. Register now!
More information about the topic in our dossier: Industry 4.0
You can find video statements of Credit Suisse, Axa Winterthur and PwC here.