Future of Swiss Manufacturing

Going by the current headlines, Europe has become a difficult place for industrial production: Excessive bureaucracy, soaring energy prices and chronic labour shortages make it hard for manufacturers to stay on the path to growth. In Switzerland, an additional challenge for export-oriented manufactures has been the strong Swiss Franc in recent years – it made production in a high-cost location more difficult and demanded increased efficiency and innovation to remain competitive. In addition, resolving any uncertainties around the continuation of the bilateral agreements with the EU, Switzerland’s most important trading partner, remain of top priority for the future of Swiss manufacturing.

That said, Europe’s and Switzerland’s major industrial companies are still global leaders in both technology and quality in many segments that can compete with competitors from Asia and North America, but the risk of losing that position is rising. What will it take to get the European and the Swiss manufacturing sector on a track for growth? Using various analyses and our recent consulting projects, our new whitepaper provides a broad overview of the current situation and offers possible responses for manufacturers in the current economic and political environment.

All for one in Europe’s manufacturing sector

Between now and 2030, European manufacturers will face considerable geopolitical challenges, particularly as tensions between China and the U.S. are shaping global economic dynamics. Many manufacturers are already factoring these tensions into their investment decisions. Adopting a more agile approach and prioritizing both a global reach and a strong local presence will be also vital for Swiss manufacturers in light of new geopolitical dynamics.

Creating customer-centric solutions that win

With the global quality gap closing in industrial goods, many manufacturers see the digital solutions business as a major opportunity to set themselves apart from global rivals. According to the latest Deloitte perspective on B2B commerce, Swiss manufacturers are still slow in embracing the e-commerce trend. With their long history of “Made in Switzerland”, they should consider adding digital solutions with comprehensive service packages to their high-quality products and create long-term partnerships with their customers (“lock-in effect”).

Rethinking collaboration as an engine for the future

Between now and 2030, European manufacturers need to step up their innovation game. Ecosystems and partnerships – even among competitors – could point the way forward here. With a focus on making these relationships less transactional and more strategic, there is huge potential to develop new and improved business models. This will also be key for the highly innovative Swiss manufacturing industry, as the Deloitte study Innovation as a growth driver highlighted.

Making sustainability a clear priority

Sustainability looks set to remain a top issue for European manufacturers through 2030. Even though Europe is recognized as a green pioneer, manufacturing and other high-emission industries are under pressure to change their practices. Swiss manufacturers also need to decide early on which role they want to play in the energy transition. For example, by becoming pioneering eco-warriors set on achieving energy independence or by adding more sustainable product lines and services.

Building resilience – not only in the supply chain

More political tensions, regulatory constraints and cybercrime is expected in the future. Those manufacturers focused exclusively on efficiency and cost optimization should be careful not to neglect issues like supply chain security, improving smart operations (incl. cybersecurity) or agility in production processes. The Deloitte study Resilience of critical resources showed how Swiss manufacturers can crisis-proof their operations with comprehensive resilience measures to retain access to critical components like semiconductors and microchips.

Banking on artificial intelligence

Using artificial intelligence (AI) and data analytics in software and chatbots has enormous potential to make the manufacturing sector more competitive until 2030. AI is already improving production processes, quality control and preventative maintenance, supporting customer interactions and enabling automated software coding. Like their European peers, Swiss manufacturers have a limited amount of time to invest in AI solutions and lay the groundwork for their digital future – otherwise they risk missing the boat completely.

Find innovative ways to recruit and retain talent

The talent shortage in manufacturing in Europe will continue well into 2030, even as candidates are expected to bring more skills to the table. Talent recruitment and retention remains the greatest challenge. At the same time, many manufacturers don’t have the skills they need for Industry 4.0. In Switzerland, the shortage of skilled professionals remains an issue, despite dual vocational education and first-class universities. In addition, the need for continuous training, upskilling and remote work strategies are essential elements in adapting to the ever-changing technology landscape.