Which topics currently preoccupy Swiss SMEs the most? Reto Benz talks about the multifaceted Swiss SME landscape and takes a close look at the concrete pressures small and mid-size businesses are under.
Given that it’s already impacted every part of the Swiss economy, including SMEs, digital transformation is definitely the big one. Digitalization offers huge business opportunities, that much is clear. However, it also forces companies to rethink their business models, poses substantial risks as a result of cybercrime and requires that additional efforts be made in the area of data protection.
The huge regulatory burden represents yet another big hurdle for companies and makes Switzerland, already an extremely costly location, even more expensive. Another topic troubling our clients is legal uncertainty, with one example being the pending corporate tax reform (TRAF). Then there is the ongoing shortage of skilled labor, which poses a further big challenge.
Export-oriented companies are paying special attention to the relationship between Switzerland and the EU, protectionist tendencies in the US and general geopolitical uncertainties. Many of Switzerland’s traditional trading partners have become more unpredictable: Germany was left without a government for an extended period of time, Great Britain is in the middle of the Brexit process and both France and Italy are caught in a reform deadlock.
Switzerland’s SME landscape is just as multifaceted as the country itself. They run the gamut from newly founded start-ups to well-established family-run businesses that have been in operation for generations. The companies’ industry affiliation, regional roots and a basic domestic/export market focus also play a huge role in terms of the specific challenges they face: While start-ups are chiefly concerned about financing and tax-related topics, family-run businesses often grapple with issues related to succession planning. Digitalization in general might affect each and every company, yet the various industries are finding themselves confronted with different aspects of it: Whereas the importance of process automation is rising in the service sector, that development has already been a reality for other sectors, like the manufacturing industry, for some time now. In the border regions along Lake Constance, in Western Switzerland and in Ticino, labor migration and shopping tourism are hot topics. Unlike businesses working on the domestic market, export companies mainly rely on free trade agreements and legal certainty with respect to both market access and copyright-related issues.
We are physically present at eleven locations in Switzerland and Liechtenstein where we offer high-quality audit, tax, legal, accounting, payroll and advisory services. We have strong regional roots and a direct line of communication to all our clients. They benefit from multidisciplinary services from one source as well as our affiliation with KPMG’s international network, which ensures us direct access to specialists and authorities in 160 countries.
What I love best is the diversity I see among our clients, something I already touched on. I also enjoy being in direct contact with companies and having a chance to effect changes that impact both Switzerland as a location and SMEs as the backbone of the Swiss economy. Both I and my colleagues working in this market segment are also motivated by the fact that we’re so extremely successful in what we do, with our activities accounting for around 40 percent of the revenue generated by KPMG Switzerland.
First and foremost, policies should guarantee good framework conditions and legal certainty. Right now, this is only being achieved inadequately in dossiers and tax policy or in the relationship between Switzerland and the EU. Beyond that, politicians should also consider how private and state investments in education and innovation can help ensure Switzerland’s ability to successfully cope with digitalization.
Last but not least: For years, now, local companies have been promised an appreciable decrease in their administrative burden but, in practice, this decrease has not materialized. On the contrary: the regulatory burden is rising. Politicians urgently need to identify unnecessary regulations and eliminate them as needed. That, in itself, would be enormously helpful to Swiss SMEs.
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