The Swiss mechanical and electrical engineering industries (MEM industries) are a major pillar of the Swiss economy, generating over 9% of Swiss GDP, accounting for 35% of the country’s goods exports and employing more than 330,000 people in Switzerland.
Almost 80% of the MEM industries’ output is exported. 60% of these exports go to the eurozone. Most indicators show that growth in the MEM industries’ main market of Europe is likely to remain weak over the next few years. The only countries reporting substantial growth are Brazil, Russia, India, China and South Africa (the BRICS economies) and some other emerging economies. In the past decade, the MEM industries’ exports to these countries have skyrocketed. The increases are 75% for Brazil, 88% for South Africa, 141% for India, 172% for Russia and no less than 284% for China. The BRICS economies’ share of the MEM industries’ total exports has thus risen from 4.5% to 11.5% within a decade.
However, these figures do not present the full picture. In particular, the larger companies in the Swiss MEM industries have long stopped restricting themselves to exporting and now employ almost 500,000 people abroad – significantly more than in Switzerland. Far from resulting in redundancies in Switzerland though, this expansion has primarily strengthened the international presence and competitiveness of the companies in question.
In the view of Swissmem President Hans Hess, it is vital for the MEM industries to establish a stronger presence in the new markets. «The SMEs are still focusing very heavily on Switzerland, and I think they’re going to have to internationalize in the next few years. We’re talking about issues such as international procurement, international employee exchanges and investments abroad.» Hans Hess feels that the opportunities significantly outweigh the risks, although he makes no secret of the fact that the risks of such a step are «not inconsiderable», especially for SMEs.
Federal Councillor Didier Burkhalter emphasized the special role played by Switzerland. The Swiss government’s foreign policy aims to promote the country’s interests and defend its values. Responsibility and solidarity are central to this policy. The Head of the Federal Department of Foreign Affairs demonstrated this using the opening up of Myanmar as an example. As a result of this development, new opportunities are emerging for Switzerland and Swiss companies. However, this also entails responsibility, in other words nurturing values such as human rights and democracy.
Representing a BRICS economy government, South African Trade and Industry Minister Dr Rob Davies pointed out the growth opportunities available in Africa. Six of the ten fastest growing states in the world are in Africa, he said. This was primarily due to the high demand for raw materials and to growing consumption. Other speakers were Kurt Haerri, President of the Swiss-Chinese Chamber of Commerce; Ambassador Stefan Flückiger, Switzerland’s Permanent Representative to the OECD in Paris; Alexander Hagemann, CEO of the Schaffner Group; and Francesco Gherzi, Chairman of the Swiss-Indian Chamber of Commerce. Their contributions made it clear that establishing a foothold in a BRICS economy is not a stroll in the park, and the path to success is often considerably more challenging, time-consuming and expensive than companies think.
The discussions at the Swissmem Industry Day demonstrated that Switzerland’s MEM companies see very good opportunities in these growth markets. However, they need to be followed up intelligently and with the necessary respect. Furthermore, it became clear that global competition is set to intensify further. Only healthy, competitive companies will survive. To help them do so, industry needs the support of its social partners and the government. If the Swiss MEM industries are to remain internationally competitive and continue to generate value and create jobs in Switzerland, it is essential that new regulations and cost burdens do not bring about a further deterioration in the existing setting.
For further information, please contact:
Ivo Zimmermann, Head of Communications, Swissmem
Tel.: +41 (0)44 384 48 50 / mobile: +41 (0)79 580 04 84