Swiss: Change is underway

by Mundi Live

by Elvio Bordignon

& Margherita Chiara Immordino Tedesco

The Italian-Swiss Chamber of Commerce, founded in 1909, has three offices in Zurich (central), Geneva and Lugano and has been ranked first in the last four editions. Fabrizio Macrì has been the Director since 2012, but has worked for the CCIS since 2007. The CCIS is a public-private partnership chamber recognized by the Italian Government with the aim of offering advice and support to Italian exporters and investors in the Swiss market. Fabrizio deals with the development of export and due diligence of SMEs in the internationalization phase and his main skills are in the field of consumer goods and hi-tech in particular in the matching process between innovative start-ups and investors. At present, the federal and cantonal authorities provide special support for projects that generate new jobs and for projects with a low environmental impact. Particularly interesting are the incentives provided by some regions such as St. Gallen, Jura, Bern, Neuchâtel. Despite the limited size of the country, this market absorbs almost the same value of Italian goods as Spain. The key to the importance of the Swiss market for Italy lies in its centrality in the international economy, Switzerland’s ability to be an international platform for processing and services with high added value, which then translate into “re-exports” of Italian products to third markets. In order to further deepen every aspect, the CCIS naturally has a website (www.ccis.ch), and tries to satisfy in a pragmatic way the needs of the companies that turn to it.

The Made in Italy brand speaks to a foreign consumer of quality, excellence and dynamism, but if you analyze the data well you will discover that the share of Italian companies that regularly export does not exceed 30% of the total and a large part of our economy is made up of ‘non-traded’ sectors. A country truly looking to the future cannot continue to live with two opposing systems. What could Italy do to start moving its economy and culture more towards exports?

This theme of “export emergence”, i.e. helping non-exporting companies to do so for the first time, is a very topical one. I think it is useful because it serves to reduce the polarization between winners and losers of globalization by spreading the benefits of export to a wider number of companies. How to do it is much more complex: it is certainly not enough to increase the opportunities for b2b: if you are thrown into a fair full of international buyers and until then you have only sold in your province, they are not doing you a favor: the risk is to expose the company to ridicule instead of helping it. I think there are two keys:

1. Technical training but not only. An aptitude for export and the development of international relations must be developed. This often involves hiring young people who have already gained significant experience of study and work abroad. If you want to sell in the World you must also have a global mentality. You have to breathe in the world, know it, keep up with trends and speak the language before you see it as a simple market. In addition, in Italian SMEs, economic training should be given more value alongside the technical training of employees. In general, alongside highly specialized figures from the technical point of view, there are people without commercial and economic training who, instead, in a competitive and complex global market, would provide them with the methods of analysis necessary to compete and better position themselves.

2. Development of domestic demand. The domestic market is fundamental and allows you to make large numbers coming with the biggest shoulders on the international markets. The best companies I have known are those that have important references in Italy and are used to working with large and medium industrial clients in Italy. For companies that do not have these references on the domestic market, the State could do a lot by directing demand to support Italian suppliers in key areas of globalization. A selective public investment plan aimed at supporting demand in sectors with high added value and in favour of small companies with little experience to qualify them as high-level suppliers of large companies in which the public has a stake, for example, could be a way of equipping many more companies than the current 30% with international markets. For example, the ENI Group has made such experiences in the past decades in the South of Italy, with excellent results.

Switzerland is also experiencing a fairly marked slowdown, but the trend is rewarding small segments of the market for luxury goods and services related to hi-tech and digitisation. How could this be interpreted? Is it a valid signal for everyone and in particular for Italy, or is it only a Swiss phenomenon?

I think they’re two different phenomena. Switzerland’s propensity to buy niche and luxury goods at a high end of the market depends on the high average purchasing power of the population and on the quality research that characterises the average Swiss consumer. The phenomenon of digitization and the increase in the technological intensity of processes is certainly a global phenomenon that Italy must take note of and try to adapt in order to make a profit without experiencing it as a threat. The difference between Italy and Switzerland lies in the fact that, while Switzerland is economically (not culturally) a homogeneous country with a clear country strategy oriented towards innovation and competitiveness, in Italy there is more discussion. It is not necessarily a negative phenomenon: Italy is a culturally rich country that has its roots in a glorious and ancient history where Italian schools and universities form men with opinions and critical spirit, not only tools of work. Italian education is rich and full of humanistic and not only technical meanings and the fact that our young people, when they go abroad, often reach important positions in society, is a confirmation of the goodness of our educational system. I believe it is a beautiful and exciting challenge to attract some of our talents abroad to build together with them a coherent strategy to allow our country to survive in globalization and to profit not only from the opening of markets but also from the possibilities of investment in technology and education of the population to its intelligent use. Switzerland is a small, concrete country that accepts phenomena as they arise and tries to take advantage of them. In many ways, it is an example to imitate and an invitation to simplicity.

Switzerland is mainly seen as a ‘treasure chest of the world’ thanks to its banks that have abandoned for some time the classic approach and/or model and the latest news say that the strategies will go more and more towards four factors: robotics, safety, digital health, real estate. These important changes will mark the step. How will they affect Italian companies? Will they have to change as a consequence and if so how?

I believe that Italy, at a macro level, must continue along the road of tax exemption for investments in technology in order to immediately mobilize private investments in sectors that are driving the global economy. A great country like ours must have the ambition to be a leader not only in traditional sectors where we suffer from competition from countries with low labour costs but also in high-tech sectors. For me, a priority would also be a radical simplification and tax exemption for our companies, perhaps giving priority to those that are more dynamic and exposed to international competition or to those engaged in strategic sectors, so as to create a virtuous circle in terms of specialisation in sectors with high added value and free up other private resources to hire from the large pool of skilled labour that Italian universities produce. Moreover, at a micro level, even companies need to make a cultural leap: to stay on the markets today you can not only think of the product as a good craftsman, but also take care of the processes of incoming logistics, internal quality and outgoing logistics and then after sales, in which for example on the Swiss market the Germans outperform us. Basically, if the market disappears, you have a good production. Switzerland, which is specialising in high-tech sectors, represents a close challenge that we must take up: we are not lacking in anything to do so, on the contrary.

I have observed that in recent years Switzerland has invested heavily in its new image, so much so that it has become again and perhaps more attractive (despite the recent physiological halt) for its progress on sustainability and transparency. In the recent elections, the Greens, women and young people took a very strong step forward. Were Italian companies asked to make a change in this direction? If so, which one or more?

Switzerland is very receptive to technological innovations that allow lower emissions, energy saving and environmental/urban recovery.

Very often, for example, the technologies that Switzerland buys on the waste cycle front are Italian. In some cases, cutting-edge Italian technology makes the cleanest incineration plants in the world work, which are found right in Switzerland and in other European countries. Italian companies don’t need to understand much: they are careful and often arrive first in the most advanced sectors. Their problem is that they are small, poorly structured, without financial resources: they need strategic and financial support that allows them to have critical mass and deal with the biggest German or French competitors. A public leverage of domestic demand used in a strategic way towards sectors with high added value could be a way to change step. After all, you don’t just live off exports. The domestic market is fundamental: important references on the domestic market are in fact and without a doubt the best passport to present oneself with greater success on difficult and competitive foreign markets such as Switzerland.

I’m always sure there’s an empty space everywhere to fill with an idea. Given your experience, could you suggest to Italian companies some ideas that could surprise the Swiss or some niche sector that could be occupied with a change of strategy?

I don’t know. The market is unpredictable and constantly evolving and I have often witnessed companies in Switzerland that have had great success with products to which I would not have attributed great possibilities. What I can say is that in recent years I have learnt to recognize in Swiss consumers and trading partners a great deal of concreteness. When dealing with this market, one must be humble and bear in mind that the other party must perceive an immediate advantage in establishing a relationship with us. The Swiss want to understand where their advantage lies in working with an Italian company rather than with that of another country. Let’s put ourselves in the shoes of our interlocutors: let’s help to resell the product, let’s give them concrete arguments to help them do so. We develop long-term, wide-ranging partnerships with the Swiss rather than simple customer-supplier relationships.

 

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