Challenges and solutions for Switzerland’s manufacturing industry
Over the past few years, the pressure on the Swiss manufacturing industry to innovate has intensified markedly and, with it, pressure on Switzerland and its industrial sector as flagships for innovation. Companies perceive challenges from three main trends:
- More rapid innovation processes among competitors, who are overtaking Swiss companies and forcing them to be reactive rather than proactive.
- Greater internationalisation of research and development (R&D), triggered in some cases by relocating production abroad.
- A changed perception of innovation as more than just traditional product innovation.
How can Swiss industrial companies respond to these challenges? Our analysis points to three key findings:
- The pace of innovation is accelerating all the time, and not all companies can sustain that pace; many global competitors are now bringing their innovations to market more rapidly than Swiss industrial companies. If Swiss businesses are to remain competitive, they need a different approach to managing innovation. It is important that pressure to innovate originates with company leadership, that the innovation process is clearly organised, that market and commercial experience is tapped, and that companies have the courage to take risks and see through innovation.
- The internationalisation of R&D is an established phenomenon and has gathered pace as production is increasingly relocated and new growth markets are tapped. The greatest challenge is to manage global R&D teams efficiently. Regular exchange and sharing between R&D teams is the key to successfully internationalising R&D, while building trust between individual teams is essential for world-class performance.
- Swiss industrial companies are well placed to make incremental changes centred on creating added value for their customers. Since the quality of existing products cannot, in many cases, be further improved, the focus here is on the functionality of new products. Yet Swiss companies are not doing all they can to drive forward innovation beyond traditional product innovation, including innovative solutions in the maintenance and service sector, greater customer involvement, process innovation, and development cooperation, including ‘open innovation’.