"The Swiss software industry is a job engine".
The current Swiss Software Industry Survey (SSIS) conducted by the University of Bern on behalf of ICTswitzerland shows that the Swiss software industry has mixed feelings about the future: The industry expects to create around 20,000 new jobs over 2018/19, although it anticipates rather moderate revenue growth of 5 %.
As part of the CNO Panel 2018, the current Swiss Software Industry Survey (SSIS) was presented on October 30, which was conducted by the University of Bern and sieber&partners on behalf of the umbrella organization ICTswitzerland. The SSIS is the largest study of the Swiss software industry and also provides forward-looking statements on revenue and employee growth. The focus of this year's study was on the role of the Swiss software industry in a globalized economy. For the first time, the internationalization of the entire value chain from service creation to sales was examined.
The main results at a glance
- Declining profitability and slower sales growth: Profitability in the Swiss software industry has fallen further from an already low prior-year level of 9.1 % and now stands at 6.7 %. Revenue expectations have also dimmed: Swiss software companies expect revenue growth of 5 % in 2019, which is 9 percentage points slower than in the previous year's survey.
- Faster employee growth: Despite the gloomy expectations with regard to business development, Swiss software companies are planning to expand their workforce in Switzerland massively and at an increasing pace: in 2018, the workforce is to be expanded by 8.2 %, and in 2019 by as much as 13.6 %. This corresponds to around 20,000 additional jobs in the period 2018 to 2019.
- Increasing export orientation: In 2017, the Swiss software industry generated around 25 % of its sales abroad. This is a significant increase in the export ratio of 10 percentage points compared with the previous year. Around 70 % of these exports go to Switzerland's four major neighboring countries, with Germany remaining by far the most important foreign market with an export share of 35 %. On the international markets, Swiss software companies impress above all with their reliability, innovative strength and precision. In terms of price, marketing and sales, Swiss software companies still need to catch up with international competitors.
- Internationalization of service provision: Swiss software companies are not only increasingly selling software abroad, they are also increasingly producing it there. The companies are planning to expand the workforces of their foreign subsidiaries by 19.3 %. They are also increasingly working with external service providers from abroad; especially in the areas of implementation and testing.
- High-revenue activities: The strongest revenue-generating branch of software companies is custom software development (26.8 %), followed by customization of standard software (Customization 18.3 %) and maintenance and support (12.5 %).
Internationally successful thanks to reliability
ICTswitzerland is particularly pleased that Swiss software companies are increasingly successful in international markets. The export quota, for example, grew by 10 percentage points compared to the previous year. The industry attributes this success to the high reliability, innovativeness and precision of Swiss software companies.
Andreas Kaelin, CEO of ICTswitzerland, concludes: "The Swiss software industry is and remains a job engine for Switzerland. This is remarkable against the backdrop of strong pressure on profit margins and moderate growth prospects".
