Digitization: SMEs suffer from lack of capital for investments
Recent surveys by Swissmechanic/FHS St.Gallen and Ernst & Young confirm a lack of capital as the biggest obstacle to SME digitalization. Commitment and willingness to implement digitalization have reached their limit, 17% can no longer invest. Simply because there is no more money.
Surveys by Swissmechanic/FHS St.Gallen and Ernst & Young confirm the lack of capital as the biggest hurdle to SME digitization. Nevertheless, Swiss SMEs show above-average commitment and willingness to implement when it comes to digitization and Industry 4.0, according to a recently published statement. More than 70 % of Swiss industrial companies have already implemented process optimization and automation, and more than 63 % are pushing further innovations, the survey says. The motivation for many SMEs is the sheer will to survive and the fight for margins in a very well positioned environment "Extra Helvetia": The euro is becoming increasingly favorable due to an expansive monetary policy, neighboring countries are actively promoting their own industry, where exports, sales and - in the wake of the profits generated - reinvestments are rising. The international market power structure is shifting to the disadvantage of the Swiss electrical, metal and watch industries as well as Swiss mechanical engineering. "Here, on the international battlefield of digitalization, the Swiss SME is fighting with a pocket knife, so to speak, against a well-armed superior force," writes Swissmechanic.
Limited investment opportunities due to lack of capital
The current survey results of Swissmechanic/FHS St.Gallen and those of Ernst &Young all show the same situation of industrial SMEs in Switzerland: The entrepreneurs are in themselves willing and technically able to implement digitized processes. However, their investment options are so limited that they are still pessimistic about their digitization potential. After two weak years for exports and earnings due to the strong franc, reserves have been depleted and budgets for new investments have been exhausted. In the survey, which Swissmechanic conducted together with the FHS St.Gallen and in which 200 Swissmechanic member companies participated, 51 % describe their earnings situation as "not satisfactory". 40 % have difficulties with new business models and strategies, another 42 % with digitalization and automation of production. It is precisely here, in the core elements of digitization, that SMEs face the greatest obstacles. This is because further optimization is very cost-intensive here, or the manufacturing sector has intrinsically high investment costs in the digitization and automation of production.
This finding finds support in the Ernst & Young Company Barometer 2017. When asked whether industrial companies would like to invest more, 31 % answered in the affirmative. Furthermore, 17 % of all industrial companies - SMEs and large companies alike - stated that they were unable to invest (more) in digitization due to a lack of capital.
Digitization brought to the ground
Thus, for many SMEs, further tackling digitization fails due to the availability of investment capital. The expensive purchase of new machinery and the upgrading of existing machinery and equipment are long overdue. Robust measures are needed for this, otherwise the opportunity of digitization for Swiss SMEs will be missed.
Swissmechanic is therefore holding the Business Day at the Lucerne Exhibition Center on 14.09.2017. Well-known representatives from politics, business, finance, fintech and Industry 4.0 will be there to discuss the topic of "Bringing digitalization to the ground". The focus will be on innovation, financing and the concrete implementation of digitalization for SMEs. Speakers and debaters on the panel will discuss the approaches to solutions: Gerhard Pfister (President CVP Switzerland), Ruedi Noser (Council of States FDP), Prof. Dr. Peter Jaeschke (FHS St.Gallen), Otto Hofstetter (Hofstetter AG), Dr. Niklas Kramer (Sandvick AG) and Roland Goethe (Goethe AG, President Swissmechanic Switzerland), Patrick Berhalter (Berhalter AG), Prof. Dr. Christian Thiel (FHS St.Gallen), Christian Frei (InspiredView Ltd), Andreas Rauch (GF), Alwin Meyer (Swisspeers) and many more.
More information about the Business Day: www.swissmechanic-businessday.ch.
