Swiss "renovate" the Internet and have a head start on data ethics
Suzanne Thoma (CEO BKW, Verwaltungsratspräsidentin Sulzer), Marc Schürmann (Executive Vice President Komax Wire Processing), Peter Delfosse (CEO Axon Group) und Eric G. Sarasin (Verwaltungsratspräsident The Singularity Group, Innovationsinvestor) diskutieren die Schweizer Innovationslandschaft im Terrassensaal des KKL Luzern.
Lucerne, June 8, 2022 - Last Tuesday, May 31, 2022, Swiss investment boutique The Singularity Group (TSG) and Lucerne Economic Development invited representatives from industry and business to the presentation of the TSG Global Innovation Study followed by a panel discussion. The event took place in the Terrace Hall of the KKL Luzern. The focus was on the question "How innovative is Switzerland?" As an introduction to the topic, TSG CEO and co-founder Evelyne Pflugi provided insights into the results of the recently published innovation study, in which around 400 managers worldwide participated. Thematic context was provided by comments from the Singularity Think Tank, a global association of experts that advises TSG on identifying applied innovation within value chains.
During the presentation of the study, Evelyne Pflugi showed, among other things, that technologies such as Artificial Intelligence, Internet of Things or Big Data help companies to achieve their sustainability goals. "There is one underestimated area where a quantum leap has taken place: Recycling," Pflugi elaborated. "Only now, thanks to computer vision, is it possible to separate waste in a detailed and meaningful way." This, he said, opens up whole new possibilities for recycling. In the field of sustainable agriculture, technologies such as the Internet of Things or robotics are also responsible for the fact that in just a few years there will be a real alternative to the animal model in the form of cell-based foods. "In 10 years, it is conceivable that meat from bioreactors will enter domestic kitchens and restaurants," Pflugi commented on the insights from the advisory board. On the topic of 'Novel Foods,' TSG is working primarily with entrepreneurial experts from Asia, where food safety is a big issue.
Innovation boost through knowledge transfer
A global comparison shows that European companies will focus 12% more on big data and artificial intelligence in the future than their US counterparts. "The reason for this is simple: a need to catch up," Pflugi stated. When it comes to innovation collaborations, listed companies are more likely to focus on open innovation, while non-listed companies are looking to collaborate with startups, customers or other companies. "What we see is that innovation is most likely to happen when it is integrated into the company and structures," Pflugi said. "Take the example of innovation hubs: these only work if there is a permanent transfer of knowledge and employees consistently carry this from the hub into the company." It is precisely the exchange that spurs innovation, he said. "Now that people can talk to each other live again, there could be a renewed upswing in innovation," Pflugi added.
TSG specializes in identifying applied innovation within publicly traded companies - regardless of industry, sector or country. Unlike typical technology stock indices and funds, only companies that are able to generate cash flow related to applied innovation are selected. The key metric used in compiling the index is the Singularity Score, which represents the percentage of revenue generated by products and services in innovation value chains. For the event, TSG applied and presented its investment methodology to a Switzerland portfolio. "Looking at Switzerland through an innovation lens, a picture emerges that may be surprising: the usual suspects such as Nestlé, Roche and Novartis are missing," Pflugi pointed out. "Instead, stocks such as Straumann and Givaudan are represented, a promising mix of companies with predominantly small or mid-sized market capitalizations that can excellently hold their own against the Swiss index SPI as well as relevant competitors."
Banking industry lags 15 years behind when it comes to data
With this insight, Pflugi led into the high-level panel discussion and posed the opening question: "How does Switzerland compare internationally when it comes to innovation?" Peter Delfosse, CEO of the Axon Group, opened the panel with a look towards Asia. Thanks to more lax regulations, there is much greater availability of data there. The intelligent use of data leads to a head start in many areas, he said. "In Europe, you don't really feel the appetite for data use yet. Banks, for example, use only 30% of the available data - the same as 15 years ago," Delfosse said. "The interconnectedness between the company and the customer has virtually not happened here." Eric G. Sarasin, TSG board chairman agreed that the banking industry in general is lagging behind when it comes to innovation. "However, there are exceptions like SEBA Bank, and with companies like Sygnum, there are also a few 'Teslas' - and in the crypto area." In addition, with leading universities such as ETH, Switzerland receives great recognition abroad and has a solid foundation. "We have created a good microcosm that is very innovative - unfortunately, sooner or later, the best ones migrate to the U.S. for IPOs." Young companies in particular are not supported enough by the government and the public.
"Delivering not only technologies, but also cultural and legal knowledge."
When asked how far Switzerland has come in terms of sustainability, Suzanne Thoma, CEO of BKW and Chairman of the Sulzer Board of Directors, was very optimistic about innovation as a driver: "Technologies such as carbon sequestration at the point of emission are becoming increasingly concrete. In addition, there is progress in recycling: for example, that fibers can be separated and re-bound in packaging." There is also a lot of potential in optimizing building infrastructures and smart energy use, he said. Marc Schürmann, Executive Vice President Komax Wire Processing, added: "Sustainability has definitely arrived at the automotive suppliers and thus in the value chains. Take the example of automation: here, efficiency and 'return on investment' considerations used to be decisive, but sustainability factors are increasingly playing a role in terms of the location of production sites, for example."
Peter Delfosse also sees an important unique selling point of European countries and Switzerland in data ethics: "We not only provide the technologies, but also cultural and legal knowledge about how to handle data. We can help organize data in a way that creates trust - because in Europe, data use is increasingly focused on the individual." As an example, he cited a major project Axon landed with the New York City Transit Authority. "Here, we were able to score points because of our lead in the responsible use of data." This, in turn, would pay off in terms of sustainability - one basis being its measurement. Ultimately, organizing mobility means generating mobility data and using it for optimization. Eric Sarasin also sees the "human factor" as a sustainability driver: "Consumers are demanding this more and more and are becoming increasingly critical - which in turn is pushing the industry to come up with innovative solutions."
Swiss renovate the Internet
The lively discussion also focused on pitfalls and obstacles that can slow down innovations in companies. Suzanne Thoma shared her experiences of working with startups: "Eight years ago, we enthusiastically threw ourselves into collaborations. What we only realized later: Startups want to solve problems, but often we big guys become the problem for startups." Different cultures, goals and expectations would have stood in the way of fruitful collaborations back then. "Today, we approach it differently: With open exchange and transparency." Another important factor is patience, Peter Delfosse knew: "Innovation is not a sprint, but an endurance run. The horizon is ten years plus - you have to hold out that long." Again and again, he said, data is crucial. "What we built 15 years ago with Big Data helps us today with digital transformation. Companies should invest in data sourcing to innovate in a meaningful way." Ultimately, technologies alone have no value in most cases - the value only comes from (the right) data.
Finally, moderator Evelyne Pflugi asked the panelists which technology they would choose if they had to decide on one. Eric Sarasin didn't have to think long: "Blockchain has a huge future." For Marc Schürmann, robotics and the Internet of Things are of great importance, while Suzanne Thoma threw in "low-resource electricity production." Peter Delfosse closed the round with food for thought: "I'm betting on a technology that must be close to all our hearts and that we now take for granted: the Internet." This, he said, is 40 years old and desolate.
"We're lucky every day if it works." Fortunately, however, there are projects that have already begun "renovation," he said. This would be about stability, resilience, data control and lower power consumption. The good news at the end: The technology for this comes from ETH and thus from Switzerland.
The recently published first global TSG innovation study can be found here.
