Keeping a digital edge

Written by Catherine Hickley

Ralf Schlaepfer, Vice President of the Swiss-Chinese Chamber of Commerce.
Ralf Schlaepfer, Vice President of the Swiss-Chinese Chamber of Commerce.
Swiss companies have not entered the digital age, according to President Doris Leuthard. In the IMD’s annual global report, Switzerland took second slot behind Hong Kong in general competitiveness. In digital competitiveness, it is only in eighth place.

To rank in the top 10 for digital competitiveness is not bad, says Ralf Schlaepfer, the vice-president of the Swiss-Chinese Chamber of Commerce and a managing partner at Deloitte in Zurich. “But we are just at the beginning,” he says. “Return on investment is no longer the issue. It needs to be replaced with the concept of ‘risk of inaction.’ If you don’t adapt, you will lose.”
The millennial generation already functions effortlessly in a digital world. “Companies should be asking – how can I meet the future expectations of my customers better?” says Schlaepfer. Recent corporate history is littered with stories of companies that failed to adapt to digitalisation and lost their leading edge – among them Kodak, Nokia and Blockbuster. Ninety percent of the Fortune 500 biggest companies in 1955 have now disappeared from the list.
“Everyone has to test things fast and decide quickly whether it works,” Schlaepfer says. “Agility and flexibility have become more important than economies of scale.”
He cites the example of Silicon Valley – which remains unequalled in the world in attracting both talent and funds. That gives its companies both the means and the people to experiment with new products, and the freedom to abandon them if they don’t work. Willingness to fail is one of its strengths, Schlaepfer says. “There have been dozens of attempts to replicate Silicon Valley around the world, but none of them have succeeded,” he says.

Switzerland “More Conservative”
Though companies such as Logitech, ABB and Sonova have profited from digitalisation, “Switzerland’s culture is certainly more conservative,” Schlaepfer says. There is a lack of connection between young, innovative businesses and the big, more firmly established companies, he says. At the ETH in Zurich, young entrepreneurs are producing impressive concepts and prototypes.
“What is missing is someone to help them with the marketing and distribution to go global,” he says. “It would be great if the big companies would invest a few hundred million to do that.”
Schlaepfer is one of the organisers of the First Chinese Market Fair in Zurich, an event that focuses on digitalisation, the Belt and Road project to strengthen connectivity and cooperation between China and Eurasian countries, and practical considerations for doing business in China such as tax and law. China has been Switzerland’s most important Asian trading partner since 2010, and is the third-biggest partner in the world after the European Union and the United States. A bilateral free-trade agreement was signed in July 2013 in Beijing and entered force in 2014.

Learning From China
A number of Chinese industrial and technology parks and free-trade zones will present their offerings at the First Chinese Market Fair, which takes place on 27 October and aims to look at “what we can learn from the Chinese environment and help Swiss companies to get a foothold in China,” Schlaepfer says.
Digital themes under discussion include the digital area, the future of mobility, industry 4.0 and digital product platforms. China benefits from the number of small companies making digital products at low cost and on a small scale, Schlaepfer says. “They have a new flexibility that will prove a challenge for big companies in future. In the digital area we will see new ecosystems evolve that take full advantage of the social shifts with future generations and exponential technologies.”

Publication date: 26 October, 2017