Agency scrambles to bolster small exporters

Daniel Küng said the extra SFr10 million given to his organisation could make a difference in the short term Keystone

An extra SFr10 million ($8.8 million) will be spent on helping smaller Swiss exporters survive the recession, a government agency has announced.

This content was published on April 3, 2009 minutes

Additional funds will focus on neighbouring markets and niche areas such as renewable energy. Exports, which make up 40 per cent of Swiss gross domestic product, are set to shrink some eight per cent this year.

Business Network Switzerland (Osec), a federal agency that supports Swiss exporters, has set up a new range of measures designed to further boost small and medium-sized enterprises (SMEs). The programme was unveiled in Zurich on Thursday.

These measures include a promotion campaign for companies that specialise in the fields of renewable energies, healthcare and supplying the car industry. Osec specialists will also road test products for export worthiness and identify appropriate markets for innovative firms.

The extra cash, that comes on top of Osec's annual SFr35.4 million budget, was doled out from two government economic stimulus packages - worth a combined total of SFr1.7 billion - and will be spent over the next two years.

Short-term effect

Osec chief executive Daniel Küng said the extra SFr10 million given to his organisation could help to make a difference – but only in the short term.

"It's much more difficult than it looks because it is not just about spending SFr10 million, it is about spending it wisely. One challenge is to find new ideas and concepts. That takes a lot of time to do well, and we don't really have time," he told swissinfo.

"It's enough [money] for the next two years if you only want to reduce the pain. But if you want to position our economy well in the mid- to long-term, after the crisis, then it is not enough."

Osec has also reversed its policy of concentrating on distant countries, such as China, to be able to provide more support in the short-term to Switzerland's most important European markets and to countries that have signed or intend to sign free trade agreements with Switzerland.

Some 61 per cent of all Swiss exports go to European Union countries, with Germany alone receiving a fifth of all goods and services sold abroad.

One of the biggest threats to Swiss exporters could come from other countries setting up trade barriers to protect their own markets as the recession takes its toll of companies and jobs, according to Küng.

Plans by President Barack Obama to bail out the United States car making industry have been criticised in many quarters as favouring homegrown firms over foreign competitors.

SMEs still confident

"These trends are unfortunately likely to happen and it would be a major drawback. What the world has achieved from the Doha round [of international trade talks that started in 2001] was quite something and it would be a pity to fall back into mercantilist behaviour," Küng said.

"I hope there will be a strong signal from the G20 summit that this should not be happening these days."

But it is not all bad news for Swiss exporters, according to Küng. Osec expects the export market in other countries to shrink much further than in Switzerland – some 14 per cent in Japan and South Korea, for example.

And an Osec survey shows that SMEs still appear confident despite the deepening recession. The study showed that 35 per cent of such firms plan to increase their export activities this year, compared with just 14 per cent that will cut back.

swissinfo, Matthew Allen in Zurich

Swiss exports

The export industry makes up around 40% of total Swiss gross domestic product (GDP). However, the sector is expected to shrink by as much as 8% this year.

Exports totalled SFr207 billion in 2008 (up 4.6% from 2007) with goods and services to the value of SFr187 million coming the other way – a trade surplus of SFr20 billion.

The volume of exports has risen dramatically from 1990 when they were worth some SFr90 billion and Switzerland had a trade deficit of SFr9 billion.

The chemicals industry makes up for most Swiss exports (SFr72 billion), followed by machinery and electrical goods (SFr44 billion) and precision instruments (SFr38 billion).

Around two thirds of all Swiss exports go to European Union countries, with Germany receiving around a fifth of goods and services sold abroad.

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