Thoughts and facts about the innovation and development potential of Swiss SMEs

Innovation and development potential of Swiss SMEs

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SMEs don’t have to hide, at least in the recent past and the present. With regards to the future, more agility and a braver “gene-pool renewal” would be appropriate. Because: success and development curves naturally fall over time if no one countersteers. The same conclusions also apply largely to the big brother, German SMEs.

In the “Best Countries Ranking 2019” (Source: U.S. News & World Report) Switzerland is ranked in fourth place (ahead of Japan, Germany and the USA) regarding optimal conditions for entrepreneurship and startups.

  • According to KPMG, outbound activities with Swiss involvement in the year 2018 totaled to over 50 Billion US-Dollars (total transactional value of all global fusions and acquisitions of foreign companies).
  • 14% of that consist of invesments with Swiss involvement in the area of “technology, media and telecommunication”; if you break down the numbers to the Swiss SMEs landscape however, outbound investments in that area only account for 9% (Source: number from 2018, KPMG and Deloitte).
  • And what does this tell us? – Overall the Swiss economy is doing well. Certainly yesterday and today. And quite certainly tomorrow as well. But how about the day after tomorrow?
  • Gigantic investments in high tech companies and R&D activities in the USA and Pacific Asia lead to literal technological leaps, that move the needle on the market environment of entire sectors and completely change business models.
  • Accordingly, Swiss companies, in 2018, see technological change as the biggest driver of change according to the FHS St. Gallen.
  • It still is fact though that agility, especially in larger SMEs, is already quite limited because of structural reasons – building internal centers of innovation can take years and could fail for any number of reasons.
  • Even if acquisitions are risky and pose many challenges, Swiss companies will have to think about “gene-pool renewals” in the technology and hightech sectors – as a sensible company you probably should be among the pioneers but to only be reactive in the context of rapidly changing business models can also be too little to late.
  • This is why Switzerland needs an SME landscape that, in addition to the important Swiss quality-first mentality, can move a tick faster by using trial-and-error methods to ensure it will be able to compete in the long run.