The post-pandemic recovery is underway and the Swiss export economy as a whole is once again on course for growth. Yet the experts assembled from AXA, Credit Suisse, Swiss Post, SERV Swiss Export Risk Insurance, and Switzerland Global Enterprise were unanimous in their exchange of experiences: The framework conditions for local SMEs wishing to operate abroad remain challenging.
What’s needed now are practicable solutions so that Swiss SMEs are able to recognize the opportunities of the new normal early on and purposefully utilize them as business opportunities.
Simple solutions make SMEs more risk-tolerant
One of the biggest challenges for SMEs is that international business has become much more complex across the board. There are various reasons for this, one being the increase in regulatory conditions. “One example is the value added tax regulation for e-commerce in the EU,” says Sabrina Borrelli, Head of Sales at Swiss Post. “Here, SMEs need solutions so that they can export to the EU in compliance with the law without excessive effort. This is one area in which we provide direct support to SMES.” Digitization, too, presents new challenges due to issues such as data protection and cyber security. What role do the experts have to play in this increasingly complex business world? “We provide support to companies to ensure that they can continue to operate successfully in complex environments,” says Simone Wyss Fedele. AXA pursues a similar approach: “Customers need solutions that they understand and that are as simple as possible. When we reduce complexity for our customers, they become more risk tolerant,” says Dieter Gosteli, Head of Corporates. SERV, too, has found that customers expect simple solutions. “Complexity poses huge challenges for SMEs and prevents them from making use of opportunities,” says Peter Gisler, CEO of SERV. One solid tip came from Andreas Gerber, Head of SME Business at Credit Suisse: “When it comes to complexity, it’s important to show entrepreneurial pragmatism. Startups in particular often take the direct route and don’t bother with laborious analyses. This pragmatic approach also fosters innovation.”
New normal brings new challenges
During the Covid-19 crisis, according to Andreas Gerber, the high level of internationality among Swiss companies proved to be an important factor for success. This, he claims, was how industrial businesses, for example, were able to enjoy consistently high demand and weather the crisis well. On the whole, CS, AXA, and SERV believe that not much has changed, but say working from home and travel restrictions have meant collaboration has become more efficient. They maintain that the basic need for physical exchange has remained and personal contacts are valued highly. “But what has changed is the speed; customers want things more quickly than before,” says Peter Gisler. Delivery bottlenecks are still an issue. “We have seen that long-term, established partnerships are a crucial success factor for the smooth operation of supply chains,” says Sabrina Borrelli. She explained that this level of security is a major benefit that a partnership with Swiss Post can provide to customers. From her perspective, it is also important that companies understand their customers’ value chains, so that they can provide appropriate support and solutions.
E-commerce and local presence as factors for success
One area that has boomed during the pandemic is e-commerce – a theme that is highly topical for many SMEs. “These days, you need to operate across all channels, so e-commerce has changed many companies’ market strategies,” says Simone Wyss Fedele. It is also extremely important for companies to be present locally to work the market. These days, S-GE is seeing that startups in particular go global from the off, with e-commerce playing an important role here. Five years ago that wasn’t the case.
Digitization as an opportunity for international business
The Covid-19 pandemic has helped accelerate the digital transformation, which represents an opportunity for companies to boost their competitiveness. “In customs clearance, among other things, digitization brings better quality data, smoother procedures, and thus speeds up the processes for customers,” says Sabrina Borrelli. “Digitization enables you to get to know customers better and to design processes more efficiently,” believes Andreas Gerber. He maintains that the difficulty for companies is to not get bogged down and to make use of digitization in the right way. “Digitization means speed and location-independence,” says Dieter Gosteli. The challenge lies in coordinating this with the slower-moving physical world – for example with deliveries.
Cyber crime is also a major risk for businesses. Since the outbreak of the Covid-19 pandemic, virtual attacks and threats have increased dramatically. SERV is likewise convinced by the increase in efficiency brought by digitization. However: “You cannot digitize everything – you still need people.” Simone Wyss Fedele believes it is important to use digitization intelligently: “Digitization makes a lot of things easier, but it does require you to make investments first.”
Sustainability: another hurdle or an opportunity?
Sustainability is more than just hype. SMEs cannot avoid addressing the issue and taking a stance on it. “Many businesses are innovative and contribute to sustainability, but they need to communicate that outwardly, too,” says Peter Gisler. “SMEs have a long-term perspective and are therefore inherently sustainable in many ways,” explains Andreas Gerber. Dieter Gosteli agrees: “Owner-managed SMEs are the most sustainable business model – the long-term mindset also takes into account responsibility for social and environmental issues.” Sustainability is not just about carbon emissions, however, it also encompasses things like diversity. An aspect that can be used to find qualified staff, according to Sabrina Borrelli. “The important thing is that innovative companies look closely at where there is a demand and also use these opportunities to create new markets,” says Simone Wyss Fedele.
Competitive in the EU market
Market access to the EU is currently uncertain following the failed negotiations on the framework agreement. “But SMEs can assess alternative markets and diversify,” says Peter Gisler. Businesses need to be ready to grasp new opportunities and to take chances. For AXA, too, it is important that SMEs do not allow themselves to be hemmed in by existing uncertainties. Simone Wyss Fedele adds: “New technologies bring distant markets closer. SMEs need to ask themselves how they want to diversify and which other markets they find attractive.” “SMEs will adapt if they can,” she adds, “and this is precisely why it is important to make use of the right support.”
Eyes on the prize
Our experts reveal which key factors are central to successful international business for SMEs:
- Dieter Gosteli, Head of Corporates at AXA: “SMEs have a lot in their toolkit: They are innovative and flexible. By helping them to reduce complexity and hedge risks, we are supporting them in boosting risk tolerance within their core business.”
- Andreas Gerber, Head of SME Business at Credit Suisse: “Openness, agility, innovativeness, and customer focus – that’s what SMEs need. After all, the environment is getting tougher, including in Switzerland.”
- Sabrina Borrelli, Head of Sales at Swiss Post: “SMEs should invest in building sustainable, long-term partnerships in logistics.”
- Peter Gisler, CEO of SERV: “SMEs have to be open and innovative, to see opportunities and dare to enter new markets, because the industrial policy of global competitors is increasing.”
- Simone Wyss Fedele, CEO of Switzerland Global Enterprise: “SMEs must be innovative and adaptable and should use new technologies intelligently in their value chains. This way, they remain competitive internationally.”
