Exclusive Interview Switzerland: “In difficult times, one must invest"

In this exclusiv interview with SMM, Swiss President Johann Schneider-Ammann talks openly about the current economic situation of Switzerland as an industrial base.

Mr. President, what is the significance of the industry for the Swiss economy as a whole?

From my point of view, it is crucial. Industry and real economy are the pillars of the Swiss economy and ultimately a lot of businesses in the tertiary sector benefit from the industry as well.

How do you assess the current situation of the Swiss machine industry?

In recent years, the Swiss MEM [mechanical and electrical engineering] industry has employed between 300,000 and 330,000 people. From many talks with entrepreneurs and trade association representatives, I know that the MEM industry currently faces its toughest test yet. I think it is very important that the industry adapts to the next industrial revolution, known as industry 4.0. Our clear focus must be on how to best handle digital processes. That will be the next big challenge.

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Talking about industry 4.0, do you think that education and training models in the industry are up to date for the coming digitalisation?

Education is a very important aspect of this issue. Today, many still do not know exactly what relevance industry 4.0 will have, but - and this is key here - they know that is both a challenge and an opportunity for them. The talks I had in the last couple of months with business owners have confirmed that our MEM industry is on the right path for the digital age.

Swiss industrial companies particularly feel the effects of the strong franc. Margins and revenues are declining and order intake numbers in 2015 were almost as critically low as in the crisis years of 2003 and 2009.

In difficult times, it is a key responsibility for business owners to invest. We must look ahead. The first quarter of 2016 saw a consolidation of the previous quarter’s sales trend, meaning that the downward spiral is stopped and the bottom should have been reached. However, I must agree with you: The industry is under pressure. Margins are sacrificed and the ability to invest has suffered. All the more reason for businesses to do everything they can to remain competitive. And policy must offer them the best possible framework conditions.

Declining margins can also compromise the capacity for innovation, though?

Yes, lower margins reduce the capacity for innovation. We are aware of that risk. Still, there will not be any interventionist innovation policy from the government, which in the long term has no effect, or even a negative one. We are only responsible for the framework conditions. Businesses alone must decide in which areas they want to innovate, because they know best in which direction they need to drive their innovations.

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