Strong currency concerns Swiss SMEs

Written by Marianne Burkhardt

Hans-Ulrich Bigler, director of the Swiss SME Association, SGV.
Hans-Ulrich Bigler, director of the Swiss SME Association, SGV.
Economic forecasts by the Swiss government’s expert group are positive, but Switzerland’s strong currency relative to the euro and costly regulations remain major concerns for small and medium-sized enterprises (SMEs).

The outlook for Swiss exports seems “relatively favourable,” according to forecasts published in September 2016 by the State Secretariat for Economic Affairs (SECO). That’s if Brexit doesn’t impact the global economy and the Swiss franc remains stable.
For Hans-Ulrich Bigler, director of the Swiss SME Association (SGV), the strong franc and costly regulations are the biggest problems for SMEs, which represent 99.8% of Swiss businesses.

A pat on the back for SMEs
Despite the panic generated by the Swiss National Bank’s sudden removal of its cap of CHF 1.20 against the euro, Bigler observes that SMEs have coped well.
“I’m really impressed,” he says. “The figures from SECO show there has been growth in the economy and unemployment is low.”
GDP growth increased from 0.3% in the first quarter to 0.6% in the second quarter of 2016.
According to Bigler, exports represent more than 50% of the turnover of one-third of Swiss SMEs and between 10% and 50% for another third. The remaining companies are domestically focused. In 2015, Swiss exports to the EU, Switzerland’s biggest trading partner, accounted for 53.71% of the total.
Bigler believes Swiss entrepreneurs generally find solutions, even in challenging economic environments. “They are well prepared and able to go into their niches, see where the opportunities are and develop strategies,” he says, adding that high-risk strategies are rare.

The cost of red tape
In 2009, the SGV-mandated KPMG Germany to measure costs incurred to Swiss SMEs by regulations. The study revealed that administrative and compliance costs totalled more than 50 billion francs, approximately 10% of GDP.
The SGV has called on parliament to measure the financial impact of the regulation costs of any new political projects on SMEs. It is also calling for the rapid implementation of cost-reducing measures already defined by the government. In addition, a Liberal party motion proposes that any regulation that would incur costs for SMEs above a certain amount or affect more than 10,000 companies should be subject to a vote in parliament and require an absolute majority.
Reducing costs would contribute to growth, create jobs and help SMEs remain competitive internationally, Bigler says.

Publication date: 03 November, 2016