Viewpoint: Marco Huwiler, Country Managing Director, Accenture Switzerland
When the world economy catches a cold, Switzerland sneezes. Following weak global growth, Switzerland is feeling the sniffles, with stagnant GDP and a collapse in profitability in recent years. But there is wisdom in the old saying “starve a fever, feed a cold”. Companies with the courage to invest in innovation can reap enriched competitiveness, differentiation and growth.
With a small domestic market, Swiss companies – large and small – typically play on the global stage. That brings opportunities, but also the challenges of a vast competitive landscape and powerful disruptive forces. For firms ill-equipped to handle these challenges, the impact can be devastating. Those firms already experiencing weak growth face the greatest threat from disruption, and this is the challenge ahead for Switzerland. Due to weaker recent performance, 64% of the Swiss economy is experiencing higher disruption than global industry competitors, according to Accenture’s recent global Disruptability Index.
How do firms fight back?
Firms must fight fire with fire and transform macro threats into catalysts for positive change. Faced with new business landscapes, technological change and disruptive competition, companies must innovate, embrace technology and disrupt their own business models to create unforeseen opportunities. Those firms which harness innovation to drive entirely new value propositions, are those which outpace their competitors. Tinkering with innovation is not enough. In 2018, our research showed technological laggards worldwide missed out on 15% of potential turnover. By 2023, that is expected to grow to 46% – a handicap few firms can afford.
Hesitation is fatal
Weak growth diminishes investment appetite, but hesitation is fatal. Successful companies hold their nerve in challenging times and invest now in opportunities that will carry their company into the future. If we look at the Top 500 Swiss companies, the trend is clear. Switzerland’s Growth Champions, which have enjoyed 6% annual revenue growth in the past five years, have an investment rate 1.4 times higher than other Swiss firms.
Closing the innovation gap
It is not only a question of having capital and courage to invest. Many fully digital companies struggle to reap the full potential of their technology investments. How can companies close the innovation gap and turn potential gains into reality?
Technology pioneers succeed because they invest strategically in changes that deliver holistic business impact, and facilitate man and machine working together with regular skills development. They recognize that data is only powerful if it is usable. By de-coupling their data from legacy infrastructure, firms make data more easily available, and use AI to ensure the quality, security and efficient analysis of their data. Cloud computing makes AI and data analytics possible.
The journey towards digital transformation is well underway, but never ending. In times where digital is normal, the difference between pioneers and laggards is large. It depends on a firm’s ability to invest strategically in driving new business models at scale, with a rigorous focus on creating incremental business value – instead of only experimenting with digital technologies.