Switzerland’s next act: from business hub to world’s digital labor hub

in Advisory, 24.02.2017

Digital labor is one of the key disrupters impacting global business today. The race is on to find the best location for using digital technology to augment and/or automate the tasks of highly-skilled workers. Already attractive for doing business, Switzerland’s got more than just a head’s start.

Shaping Switzerland’s digital future

In the not too distant future, much of our daily work will be done by computers. The technologies that automated millions of transaction and production jobs are now rapidly encroaching on high-skill professions. Cognitive systems, artificial intelligence and robotic process automation are transforming knowledge and expertise-intense professions. By 2025, one out of every three jobs will be converted to software, robots and smart machines[1],.

Low-cost countries will no longer be the first choice for outsourcing labor.  Requiring more specialized and agile skills, the new digital labor force will improve quality and speed while reducing cost to a third of that of outsourcing labor to low-cost countries. The subsequent shift away from low-cost countries means that many companies are already looking for an ideal location to run their cognitive systems.

Although Switzerland is currently not seen as a preferred outsourcing destination due to the high cost of labor, this may change with the onset of the digital workforce. In 2013, more than 68% of companies admitted that they had limited capabilities in data analytics techniques, and the demand for talent is steadily increasing[2],. The alpine country is well-positioned to respond to the global demand for a pool of specialized, highly-skilled digital talent.

Three reasons why Switzerland is ready to become the world’s digital labor hub

  • Firstly, Switzerland has a very stable political and economic environment and is globally recognized for being an attractive business hub. Political stability, direct democracy, competitive taxation and effective data protection laws – are huge assets. As are it’s universities and business schools – among the best in the world – they bring a steady flow of highly educated, academic talent and knowledge transfer to the private sector each year.
  • Secondly, Switzerland has a global reputation for innovation. As a top location for R&D and multinationals, it’s recognized as one of the world’s top innovators. The country already ranks high as a research hub for AI, computer science, biotechnology and pharmaceuticals. Disney, Google and IBM all have invested in research centers here while Novartis, Hoffmann La Roche and Biogen have invested in large labs in Switzerland.
  • And thirdly, Switzerland offers a high quality of life. Perceived as a top destination among expats and with more holidays and longer vacations, its location usually isn’t a deal breaker when persuading tech-savvy and highly skilled people to relocate.

Early movers are already using Switzerland as a digital labor hub

Looking for a pool of specialized talent in AI, Google recently set up its first artificial intelligence research lab outside of the US to be near Switzerland’s Max Planck ETH Center for Learning Systems. Another early mover, IBM set up in Switzerland to cultivate close relationships with academic and industrial partners over 50 years ago. IBM’s Research Lab in Zurich is now home to two Nobel prizes and is one of the premier places to work for world-class researchers – helping to drive Europe’s innovation agenda.

What’s stopping Switzerland?

Clearly, Switzerland already has what it takes to offer an environment that nurtures some of the most innovative and creative thinkers in the world. But it’s not all smooth sailing.

One of the country’s main roadblocks is its own attitude of risk aversion and hesitance towards “thinking big”. It has also got work to do in making sure it maintains access to top talent from all over the world. And finally, Switzerland needs to be better prepared for major cyber-attacks on critical infrastructure.

The way forward

Find out what additional opportunities Switzerland’s digital future has to offer by reading KPMG’s recent white paper, “Shaping Switzerland’s digital future – 7 visionary business opportunities”.

 

[1] Gartner

[2] Source

 

Further information:

 


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