Innovation is alive and well in both Switzerland and India, but entrepreneurs in both countries do not always have an easy ride, a conference has heard.
India’s rapidly opening markets have recently provided an abundance of new business opportunities, but Switzerland’s more efficient administrative system has given it top marks for global innovation.
The 40th St Gallen Symposium heard tales of success and failure this week as it tackled the issue of Entrepreneurs – Agents of Change. The title was chosen to reflect the desire of students to see tomorrow’s new breed of entrepreneurs lead the world out of today’s recession.
Indian businessman Suhas Gopinath could provide a template for this ambition having created an IT company – Globals Inc – in a cyber café at the tender age of 14. Gopinath now runs an expanding multinational business, but, despite India’s recent economic success, he faced a formidable array of challenges before his dream came true.
India’s economy may be developing at a tremendous rate, but Gopinath explained that bureaucracy and many ingrained social customs lag behind. Gopinath faced an uphill battle to be taken seriously at first and even had to conceal his business venture from his own family until it was well established.
“Most companies in India are family owned so first-generational start-ups are looked upon with some suspicion,” he told swissinfo.ch.
“Outside of the IT sector, there is very little start-up activity and it is hard to get access to bank credit until a company is four or five years old.”
“Indians are amazing when it comes to innovation, but this is rarely recognised by bureaucrats. Lots of Indian entrepreneurs simply move to America to get started because they know it will be a lot easier.”
Gopinath started off in business as a square peg trying to fit into a non-existent round hole. Things are improving slowly, he said – most notably with the creation of university “incubators” to help start-ups – but there is an urgent need for one-stop offices to give budding entrepreneurs advice under one roof on the wide range of issues that confront them.
The Swiss economy is highly developed by contrast, and its highly efficient bureaucracy is one reason that Switzerland is adjudged the most innovative country in Europe by the European Union and the world’s most competitive nation by the World Economic Forum.
Recent studies have also smashed the myth that ideas do not translate into money by showing that Swiss companies make more hard cash from innovation than those of any other European country.
However, such an advanced and successful economy has resulted in many of the new wave of entrepreneurs resting on their laurels, according to Urs Fueglistaller, a St Gallen University professor and director of the Institute of Small and Medium-Sized Enterprises (SMEs).
A 2008 survey conducted by the Institute showed that Switzerland lagged in the middle ground of entrepreneurial activity of students around the world.
“There is some spirit and passion missing and that sometimes translates into inertia,” Fueglistaller told swissinfo.ch. “There are so many established firms covering such a wide variety of sectors that it is easy to think that everything has already been done and that there are few opportunities to create new markets.”
“Big firms are also poised to use their money to buy good ideas and innovations so they are taken out of the hands of the entrepreneur early on.”
But Fueglistaller has also detected a change in attitude since the advent of the financial crisis two years ago. Gone are the days when lucrative posts with multinational corporate giants could be virtually guaranteed. New job entrants are discovering that their ideas and voices can be better realised working for close-knit SMEs.
In addition, entrepreneurs could take advantage of the growing problem of ownership succession of family-run firms that comprise 88 per cent of all Swiss companies. Fueglistaller himself recently led a takeover of a family-run bathroom products and plumbing business, Sanitar Gemperle.
“Such companies that need new management are perfect for new entrepreneurs,” he told swissinfo.ch “They come complete with infrastructure and machinery in place, well trained staff and an established customer base.”
The 40th student-run St Gallen Symposium was staged on May 6-7.
Matthew Allen in St Gallen, swissinfo.ch
St Gallen Symposium
The idea for the symposium was generated by five students at the University of St Gallen in 1969. They wanted a neutral platform to bridge the troublesome generation divide and to engage constructively with big business and politics at a time of great student unrest in Europe.
The five set up the International Students’ Committee that spawned the first International Management Symposium held in St Gallen in May, 1970.
Around 100 representatives from the world of business and politics attended the symposium along with the same number of students. The success of the meeting led to the resolution to make it an annual event.
The meeting is run by students at the University of St Gallen. In 1974, the St Gallen Foundation for International Studies was formed to oversee the organisation of the event together with a Circle of Benefactors to create permanent links with the business world.
Each year a team of around 25 students are picked to comprise the International Students’ Committee. The team takes a year’s break from their studies to dedicate their time to arranging the symposium meeting.
The 40th symposium, entitled: Entrepreneurs - Agents of Change, is took place on May 6-7, 2010. Speakers include: Josef Ackermann, chairman of Deutsche Bank, Paul Bulcke, CEO of Nestlé and Harvard University professor Niall Ferguson.
Discussions centre on the role of innovation and entrepreneurs in dragging the world economy out of recession.