EY survey: Swiss companies are global leaders in terms of planned investment in digitization

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Swiss companies aim to invest an average of CHF 47 million in digitization – putting them in pole position internationally / Worldwide, companies see technology as by far the most important driver for changes to their business model, ahead of competition and customers’ behavior / Swiss companies have the most optimistic view of digitization worldwide

ZURICH, 16 March 2015 – As a business location, Switzerland has a sound approach to digitization. Swiss companies (with revenue of EUR 10 million or more) are set to invest an average total of CHF 47 million – or possibly even more – in digitizing their business this year. More than 40% of companies indicate that they would like to invest more, but they are prevented from doing so by a lack of financing, expertise and staff (in that order).These are the results of a recent survey by EY of 1,025 companies in twelve different countries.

Business models under pressure
Both worldwide and in Switzerland, more than half of all companies have had to significantly alter their business model in the last five years. Switzerland faced a particularly challenging situation: in the list of countries that underwent the largest changes, it came in third after Italy and India. The United States, the UK and Germany were further down the list. The need for companies to increasingly reinvent themselves is expected to continue in all countries. Almost two-thirds of respondents worldwide anticipate that their company’s business model will change in the next five years. Here again, Switzerland is high up the list, with 70% sharing this expectation. Only in India was the figure higher (76% expecting change).

New technologies as the main driver for change
According to the respondents worldwide, by far the most important drivers for these future changes are new technologies (39%). New competitors (21%) and a change in consumer behavior (19%) are considered less significant for the next five years. The study showed that rapidly growing companies have a greater tendency to expect to have to adjust their business model than less dynamic companies. It should also be noted that Swiss companies believe new technologies have played a very small role in changing their business models in the past. Only 21% of companies in Switzerland, compared with 29% worldwide, cite new technologies as a driver for changes to their business model in the last five years.

“This assessment of the past by Swiss companies appears to contradict their position as world leaders in readiness to invest in future digitization: it clearly shows that Switzerland has some catching up to do. On a positive note, companies have understood the signs of the times, as evidenced by the high level of agreement with the statement that their company’s business model will change in the coming five years,” says Markus Schweizer, Managing Partner Advisory at EY Germany, Switzerland and Austria.

Digital technologies as an integral part of companies’ business models
Digitization of the economy is not an imminent development – it’s already well under way. At nearly one out of three companies worldwide, digital technologies play a very large role in the business model, and at another 40%, they play a fairly large role. And Switzerland leads the field worldwide in digitization. Of the Swiss companies surveyed, 41% stated that digital technologies already play a very large role for them – ahead of India, China and Germany.

Swiss companies are the most optimistic worldwide regarding digitization
Swiss companies are also out well ahead in terms of optimism about digitization. 79% of those surveyed considered digitization of the economy as an opportunity for their business – only 3% see it primarily as a threat. Swiss companies are thus much more confident than their foreign competitors. Worldwide, only 64% consider digitization as an opportunity and 4% view it as a threat. “The current optimism is essentially a welcome development. Now it’s important to put the hype behind us and turn digitization into a feasible strategy. Many projects are being initiated, but often in an unsystematic, uncoordinated manner. It would be helpful to have guidelines that set out the direction to be taken and the practical steps involved, so that digitization will always be taken into consideration as a key component of future economic growth. Digitization will increasingly be an integral part of corporate strategy,” stresses Schweizer.

About the study
This study, which was carried out for the first time, is based on a survey of 1,025 companies in Switzerland, the US, Germany, the UK, France, Italy, China, Spain, the Netherlands, India, South Korea and Sweden. The sectors surveyed included services, consumer goods, machine/equipment manufacturing, trade, transport and logistics, IT and electronics, banks and insurance, health, telecommunications and media, as well as the automobile industry.
The telephone survey was conducted in December 2014 and January 2015 on behalf of EY by the independent market research institute Valid Research of Bielefeld, Germany.

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EY’s organization is represented in Switzerland by Ernst & Young Ltd, Basel, with ten offices across Switzerland, and in Liechtenstein by Ernst & Young AG, Vaduz. In this publication, «EY» and «we» refer to Ernst & Young Ltd, Basel, a member firm of Ernst & Young Global Limited.