09 Jul Build resilience to succeed in a challenging environment
Andreas Staubli, CEO, PwC Switzerland, advises businesses to focus on the opportunities that will emerge from the current crisis
Economies in Europe are starting to emerge from the COVID-19 health crisis. As we slowly move back to normalcy and exit the sanitary crisis, now has come the time to contemplate the economic consequences of the crisis. How would you evaluate the impact of the crisis on Swiss businesses, manufacturers and the country’s industries and exporters?
Industries have been very differently affected across the world. In Switzerland, our two biggest industries—the life science and the financial services industries—are coping relatively well. Our manufacturing industry, however, has been deeply hurt, essentially because of its high dependency on the automotive industry. Although we did see some capacity reduction, overall industries in Switzerland really tried to retain their workforces and prevent layoffs, which is what Swiss society would expect from the business community.
What is notable is that the government in Switzerland acted very quickly and, through a rigorous approach, came up with strong support measures for the local economy in a very short time, which was quite unique. The COVID-19 credit scheme, offered by the banking system and fully guaranteed by the Swiss government, has been supporting numerous businesses, offering a unique guarantee for them to get funds within one day. In some cases it was even possible to get funds in one hour, which is quite impressive. This obviously helped the business community to maintain liquidity and, therefore, to fulfill its obligations.
How would you evaluate the responsiveness and solutions deployed by Switzerland to cushion the crisis’ socioeconomic costs?
The responsiveness and commitment of Swiss authorities has been really remarkable in general. Measures were applied immediately and extended generously. There was a common understanding both from the business community and from Swiss society that we need to pull through this crisis. The government took additional measures to help small businesses specifically. This help was not a given from the start, but knowing how vital this is for the recovery of the overall Swiss economy, it was a critical success factor. Currently, the focus is on ensuring that the right economic and regulatory framework is provided to the business community to succeed after the crisis.
It is said that, with every crisis comes opportunities. Do you think this will be the case with coronavirus?
Many companies are still struggling with the challenges associated with this crisis, however at the same time they are trying to identify where the opportunities could lie. Many are trying to focus on their core capabilities and seeking to take the opportunities that the market offers for consolidation. They are also looking at new working models. For example, everybody had to digitalize much faster than ever before: work has become more virtual and this offers new opportunities. Businesses are changing the way they render their services and operate and, more importantly, they are changing the way they interact with their customers. Insurance companies, for instance, are looking at the best ways to interact with their customer base. They want to ensure that their clients still get the right service virtually and that interactions are run properly. There really is room for companies to succeed over their competition if they innovate now.
How has the crisis disrupted traditional models, accelerated transformation and digitalization and revolutionized work organization? Which trends will shape and consolidate permanently and how can PwC help businesses through this transition?
Many companies will continue to invest in collaboration and communication platforms in order to support interaction with their customers. There are emerging opportunities in business models and brand new ways of rendering services. Also, from the value chain perspective, it will be interesting to see if the value chain will continue to be as global as it has been in the past, to see if it is resilient enough to this kind of crisis. This kind of question provides opportunities for our clients and, obviously, we at PwC see an area here where we can add value. We can provide ideas and insights on what others are doing, on what works best to cope with new situations and business challenges. We can add a lot of value by providing tailor-made solutions for businesses.
As a firm well positioned to feel the pulse of the economy, what would PwC’s recommendations be for propelling faster economic recovery for Switzerland post COVID?
What is important for Swiss businesses is to focus on becoming more resilient. Companies need to be agile enough, flexible enough and lean enough to cope with challenging situations. This is critical for businesses today, during this COVID-19 crisis, and will be also tomorrow for future crises—because there will be other crises linked to climate change or biodiversity in the future. That is why building a higher resilience is key.
Further more, the focus on the customer must remain a priority for the Swiss business community, as well as the focus on innovation. That’s a key strength of Swiss society and the Swiss business environment. Our culture of innovation needs to be nurtured even more than before. Governments should play a key role to further support that and should continue to invest, not only in hard infrastructure but rather in soft infrastructure—meaning investment into universities and into research and development. Switzerland has been successful in this area and if the government provides the right environment, businesses will be even more successful.
Last but not least, we need to ensure that international business is further supported, with a liberal framework allowing for global trade and free movement, to avoid custom duties and ensure a liberal trade environment.
One of the other fields where the Swiss are taking the lead is sustainability. What place will sustainable development have in the post-pandemic world?
Before COVID-19, sustainability was a hot topic that was very much on the agenda of the Swiss Government and society. Now the focus has shifted to surviving and getting out of this crisis, and how to position businesses to pull through in the best possible shape. I am convinced, however, that the whole topic of sustainability—or environmental, social and governance (ESG) issues—will gain importance again very quickly. I think it will be a key differentiator for businesses. From a financial services perspective, from an investment perspective, it will be crucial to provide direction and guidance for sustainable investment.
Switzerland can and should play a leading role with regard to sustainability, because it has a strong financing sector and is becoming a growing sustainable finance hub. We need to put in place a sustainable system to channel investments in the right direction. For that, we need to look at companies from a new sustainability angle and assess how sustainable they really are. We should aim to come up with new ESG metrics and reporting systems to measure the success and quality of a business based on these new parameters.
Leaning on its capacities, infrastructure and innovation power, Switzerland can, should and must play an important role in coming up with new products, new ways of building new technologies and manufacturing new products that are more sustainable. It should come up with new business concepts that lead the way on a sustainability basis, on a business basis and on a global basis. The Swiss government needs to provide the rules and regulations for this, it needs to set the right incentives and provide the right support for universities and research sites to come up with these products and technologies.
Considering all its advantages—its neutral status, central location, multi-lateral approach and integration—do you think Switzerland is doing enough in terms of pushing global cooperation?
I think Switzerland will play a relevant role and will continue to contribute more and more. The country is well placed to act globally because it is neutral and also because it hosts many supranational organizations. Together with others, Switzerland can provide a lot of help and support, and can steer discussion in new directions.
Do you have a final message for our readers?
A key lesson to take away from the COVID-19 crisis is that, together, people can be very powerful. We can all act in a positive way, focus on the opportunities and realize those opportunities together. That’s what I saw happen at PwC and what I wish for in the future.