Economic prospects for Switzerland remain uncertain – Swiss managers place emphasis on innovation
 

11 Mayy 2016 | Category: Analytics

Swiss managers remain critical concerning prospects for the economy, as a recent survey* by the Brightcon Group of over 80 senior managers demonstrates. Although cost reduction is still a priority for management, the search for growth opportunities has taken on increasing importance. However, participants are sceptical of the impact of existing innovation strategies, and see a need to adopt a more systematic approach, as an impact on revenue remains elusive.


Dr Andrew Mountfield, survey leader and Chairman of the Brightcon Group, sums up the current economic climate, in the view of participants, as follows: “The devaluation of the Euro against the Swiss Franc continues to be a major concern for management.” The majority of participants believe that 2016 will, at best, be a “moderate” year in business terms, both for the economy as a whole as well as for their own industries. Concerning their own companies, Swiss managers are a little more optimistic: Approximately 40% judge economic prospects for 2016 as “good”. But as Andrew Mountfield notes, the survey demonstrates that these figures are not consistently supported by specific internal growth targets.

Over half of all survey participants confirm that an exchange rate of €1.00 to CHF 1.10 will have a “strategically significant” impact on their organisations. Measures including procurement optimisation and cost reduction in indirect and support functions remain one area of focus. However, increasingly for participants, cost reduction in direct functions, such as production and marketing, have become the priority.  Andrew Mountfield summarises the situation: “It has become clear that more radical measures such as bundling of functions across borders, off-shoring or outsourcing are being examined. There appear to be very few taboos left.”

The survey makes clear that the effects of the CHF exchange rate have not yet been fully absorbed by Swiss companies, and point to a further emerging problem. Participants recognize that cost reduction alone will be insufficient to guarantee future business success, and that new growth opportunities are required.

However, revenue growth forecasts are generally low, according to participants, and half estimate that revenues will either stagnate or fall, contradicting the optimistic assessment of company prospects made in the first half of the survey. Where growth is planned, the focus is on the Swiss market, and based on existing products or line extensions to current ranges. The financial impact of investments in innovation for 2016 remain modest.

Marc Friedrichsen, Partner at Brightcon, and responsible for innovation consulting, comments: “Survey participants consider that their current efforts in innovation need improvement, both in the systematic approach used to identify opportunities, as well as the integration of their own staff into the process. It is worth noting that only around 20% of participants agree that they generate measurable contributions by staff.” In addition, both customers and suppliers are not systematically integrated into the innovation strategy, according to survey data.

Although “Big Data” remains a strategic topic, its use as a driver of innovation within the participants´ companies is judged critically. While two-thirds of survey participant view statistical analysis of internal and external data to drive innovation to be “significant” to their companies´ success, 60% state that success to date has been either “low” or “negligible”.

 

Marc Friedrichsen sees the explanation in the current poor state of the necessary internal IT systems and in the availability of internal, qualified resources. 80% of participants judge their own systems or resources to be “in development”, at best. Significant improvement is required, as participants´ expectations are that Data-Driven Innovation will be focused primarily on market opportunities and become a revenue enhancer. Around 30% believe that innovation will lead to a renewal of existing business models, with fewer than 20% viewing internal processes, such as planning and forecasting, as being the target of innovation. Marc Friedrichsen concludes: “Harnessing the power of data for innovation with require both effort to mobilize external sources, as well as investments in the internal processes, people and systems to generate revenue.”

*For further details, please contact the author of this April 2016 survey, Dr Andrew Mountfield, Chairman of Brightcon Group:

andrew.mountfield@brightcon.com

Tel. +41 79 412 0775

Brightcon AG, Switzerland
Tel: +41(0) 44/400 95 01
info@brightcon.com

Brightcon GmbH, Germany
Tel: +49(0) 7 61/4 29 96 49
info@brightcon.com

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