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Tapping Industry 4.0 for SMEs' business growth
AS a centre of excellence for internationalisation, Switzerland Global Enterprise (S-GE) works all over the world to support entrepreneurs and promote Switzerland as an industrial location. It has been commissioned by the federal government to promote export, import and investment and help clients to tap into new potential for their international business and to strengthen Switzerland as an industrial location. With its global network of experienced consultants and experts, S-GE is a trusted and strong partner to clients, cantons and the Swiss government.
S-GE, with the mandate to enable new business, says that the business environment in Switzerland is tailor-made for small and medium-sized enterprise (SMEs) to export after the fourth industrial revolution. Under the future scenario of Industry 4.0, today's value chains are turning into value-creation networks.
The basis for this is the exchange of data and the automation of production processes. As a result, companies can innovate and produce mutually, largely without inefficiencies between the organisations. A specialist is responsible for each process, irrespective of industrial sector, size or distance from the other members of the value-creation network.
These interconnections have been revealed by a new study commissioned by S-GE , which was presented recently at the Forum for Swiss Foreign Trade.
"The flexibility and niche expertise of Swiss SMEs predestine them for the world of the fourth industrial revolution. Never before have there been so many opportunities to do business internationally," says Daniel Kueng, CEO of S-GE. "New creative business models make it possible to generate greater revenues while at the same time increasing efficiency in international business."
Swiss SMEs are in a good position to gradually adapt their business model and international network, according to S-GE. Today, the difficult currency situation has already led to a high degree of agility and efficiency on the part of Swiss SMEs. Their innovative capabilities, their high amount of industrial value creation, and the broad deployment of technology also put them in a good position for the fourth industrial revolution. Use has to be made of this potential in order to realise opportunities arising from the future scenario.
"Whoever doesn't get on board with the fourth industrial revolution will be left behind. This not just applies to suppliers from MEM (mechanical, electrical and metal engineering industries) and ICT (IT and communications), but also for all industrial sectors," explains Mr Kueng.
The Swiss MEM industry is the largest industrial employer in Switzerland with more than 330,000 employees. The success of the industry lies in its great innovative ability: continuous investments in research and development help Swiss companies to succeed in continuously improving their products, technologies, and processes, as well as obtaining its leading international position.
The "Swiss Made" label stands for excellent quality, reliability, and security, which the Swiss precision technology has been able to achieve worldwide thanks, primarily, to its first-class reputation.
"However, SMEs can proceed gradually. A CEO can schedule training for qualified employees for the very next day and designate an individual responsible for pushing ahead with digitisation in the company. A second step is to use existing tools in order to digitise international business, such as through the Export Digital platform launched by S-GE and Google," added Mr Kueng.
In the long term, the aim is to get to know customers better, both domestically and abroad, come up with new technologies and business models that go beyond industry boundaries, and venture the one or other experiment.
SMEs ultimately also have to reconsider the relationships with their international business partners and competitors in order to create the foundation for the greater exchange of data and expertise.
In addition, the more an organisation digitises, the more urgent the issues of security - keyword cyber security - and intellectual property become.
S-GE says that new concrete sales opportunities through investments in export markets are emerging. Already today, the fourth industrial revolution is advancing quickly in many of Switzerland's important export markets. Regardless of product or service, industrial sector and target market, B2B or B2C, this is resulting in new business opportunities for Swiss SMEs that adapt their business model and products in a timely manner.
In particular, technology companies in the MEM and ICT sectors will have concrete opportunities to benefit from Industry 4.0 in the coming years. According to a study by PwC, 40 billion euros (S$60.1 billion) will be invested in Industry 4.0 applications in Germany, a traditional core market, in the coming years.
The technological trailblazing US and the high-tech-oriented markets of Japan, South Korea and Singapore are likewise banking on the digitisation of their industries. With their reputation for high quality, precise niche solutions, Swiss SMEs can find success here.
S-GE has launched a new "export digital" platform in association with Google Switzerland. With the help of the platform, exporting Swiss SMEs can facilitate their market research, realise online sales potential and access new export opportunities.
Digitalisation is a key aspect of Industry 4.0. The platform digitalises market research, sales opportunities, and export prospects through a simple-to-use channel, allowing Swiss SMEs to access knowledge at their fingertips.
A feature of the platform is the "Market finder" tool to evaluate the product-specific online export potential of countries around the world.
Then there is a comprehensive e-learning platform featuring digital know-how: 100 videos from S-GE, Google and further partners covering all questions from market entry and cultural knowledge to financing, customs duty management and digital marketing.
In the role of Switzerland within the fourth industrial revolution, exporting SMEs have the potential to benefit from Industry 4.0 and strengthen the economy, says S-GE. The success of exporting Swiss companies is based on innovation, productivity and high value-added offerings. This becomes even more important with Industry 4.0 and is based on:
- Switzerland's high level of education and stable political system.
- High standards and requirements on data protection.
- Good balance between big, global industrial players and a strong SME segment.
- The high Swiss franc drives the development of new capabilities and digital business models.
- The Swiss government is heavily investing and supporting the innovation location of Switzerland.
S-GE says that Industry 4.0 will be a huge boon for companies which fully understand what it means for how they do business. Industry 4.0 often requires a company-wide transformation. The organisation has to be willing to experiment with new technologies and learn new ways of operating. It suggests that companies take the time to consider what they could gain by collaborating with customers, suppliers, technology partners and even competitors, without limiting their vision based on current constraints.
As a case study, S-GE cites Swiss company ABB's process automation of digital asset management using collaborative data analytics for process automation. A leading global technology company in power and automation, ABB had revenue of US$35.5 billion last year. It employs 135,000 people and is present in 100 countries globally.
The challenge was how to manage large amounts of customised industrial data to improve performance of customers while lowering environmental impact; flexible productions in larger consolidated plants; more insights into plant performance; and reliable and secure data analytics with high capacity.
As Industry 4.0 is about building a culture for the digital enterprise, Swiss SMEs need to focus on people and culture to drive the transformation process, adds S-GE. For this they will need to work on how to balance the development of existing internal talents with the need to recruit external talents to install a digital culture.
At the same time, they would need to build a differentiated positioning and a digital brand image to attract the youngest and tech-savvy generations. Another step would be how to acquire companies to integrate quickly their technologies and key digital skills.
Next would be to try to collaborate with institutions like Innovation Switzerland, to get a kick-start and get quick wins from outside-in experience.