The rise of disruptive technology in Switzerland

Posting date: 09 July 2019
Technology continues to disrupt industries across the world in numerous ways; for example, the mobile phone changed the way we communicate. Then came cross-platform messaging platforms, such as WhatsApp, which nearly killed SMS. But disruptive technology doesn’t just involve replacing existing technologies; it also creates new marketplaces in itself, like Apple’s App Store and ss technology has continued to disrupt modern society, countries have been racing to keep up.

Switzerland is rated the world’s most innovative country, and is leading the way with blockchain and fintech. But why Switzerland? Heinz Tännler, President of the Swiss Blockchain Federation offers the suggestion that start-ups are attracted to Switzerland due to its legal security, world-class infrastructure and the “Crypto Valley’s” strong ecosystem.

What also makes Switzerland stand out is the government’s willingness to adopt and adapt to these industry-disrupting technologies as they emerge.

It’s important to consider what’s happening in three key industries in Switzerland including fintech, cryptocurrency and blockchain, what led to their rise and the future of these industries within Switzerland.

Fintech

The popularity of fintech in Switzerland is no surprise. The nation is a world leader in financial services, featuring an array of financial institutions and a corresponding rise in innovative banking software. In addition, huge tech corporations such as Google and IBM have set up base in Switzerland.

A lot of the fresh talent can be accounted for by Zurich and Lausanne’s first-class international universities for technology and engineering – a promising factor which may lead to the rise of innovation in the future of technology in Switzerland. This talent surplus is aided by the country’s high quality of life and salaries, attracting international talent and retaining more Swiss grads.

Fintech’s current state in Switzerland sees it act as a home to 10% of all global European fintech enterprises with 46% of those in Zurich and 30% of these offering financial services. This can be explained by the fact that Switzerland supports fintech innovation through its financial market laws and the attractively low tax model for start-ups — leaving innovators feeling supported and encouraged.

So what has the Swiss government been doing to aid the growth on fintech in the country? Thanks to The Federal Council’s sandbox exemption the start-up process is becoming more streamlined in Switzerland compared to other European countries. This means that under the Banking Act, public deposits that equal CHF 1 million or less won’t require a license requirement, and as of April 1st, 2019 this law has been extended for crowdlending business models as part of the Consumer Credits Act. The new fintech licence also became active as of the 1 st of January, 2019 which saw more lenient requirements when compared to fully-fledged banking licences — for instance, no interest needs to be paid on deposits and there are additional safeguards for customers.

Government interest in the continued growth of fintech with these new laws and the rise of new talent, means it’s no surprise that investors are biting — in particular, venture capital giants such as Index Ventures and Google Ventures.

Because of the focus on expanding this sector of finance Investments in Swiss start-ups hit the billion mark in 2018, with fintech accounting for CHF 685 million of this, making it Switzerland’s largest venture capital sector. These investments are only likely to increase, and with it, further advancements in fintech thanks to exaggerated buoyancy of government interests.

Cryptocurrency

Zug, Switzerland’s fastest-growing cryptocurrency hotspot, nicknamed “Crypto valley” has seen billions invested in the sector in just the last few years. Cryptocurrency has revolutionised financial services with its game-changing potential to increase efficiencies and decentralise services.

Zug hosts low tax rates — the entire canton charges 14% corporation tax, making it an ideal spot to build a business. Innovators seem to agree as Zug had over 750 companies with over 3,300 employees registered in it by the end of 2018.

To keep Switzerland at the forefront of finance innovation the government ensures the crypto-movement in Zurich, and other leading cities in Switzerland, thrives doing so with its’ advantageous elements of digital privacy, a stable economy and supportive IT laws, when compared to other European countries. In addition, companies have begun to form clusters to innovate their services to offer unique expertise in cryptographic and security issues.

The Swiss government is clear in its stance to embrace all forms of technical innovations, shown through the way cryptocurrencies are treated as foreign currency, meaning there is no special law based around them. In fact, Zug became the first region in the world to accept bitcoin as a form of payment for a range of governmental services and in politics, and has just successfully completed a trial of blockchain-based voting. Furthermore, it established a digital identity system built on Ethereum as part of the new “e-government” initiative which offered blockchain-based digital IDs for the 30,000 employees working in the Swiss Federal Railway.

Switzerland continues to integrate cryptocurrency into businesses, and even into government, due to its low security risk and high accessibility.

Blockchain

The biggest stakeholder in blockchain development is Switzerland’s affluent financial sector, one of the largest and most diverse in the world. SIX Group, which owns Switzerland’s Stock Exchange, is at present building a trading infrastructure for digital assets using blockchain technology.

The government is also updating financial and corporate regulations to support blockchain advancements. Oliver Bussmann, president of the Crypto Valley Association has said that Switzerland is “a global leading ecosystem for blockchain technology. To establish that, you have to work on all dimensions: start-ups, investors, governments, corporations, R&D etc. You have to bring them together.”

These factors are exactly what Switzerland’s government has considered and incorporated with the introduction of ICOs, which allow start-ups to sell digital crypto tokens to investors globally online and have accounted for over $9 billion in assets last year.

Financial security is of utmost importance in fintech, and blockchain technology provides this along with five other sources of value. These include:

1. Simplification of internal operating procedures 
2. Time-saving financial transactions
3. Optimised use of a company’s liquid assets
4. Reduced risk of fraud and efficient regulator
5. Supervised financial firm interactions 

Blockchain technology is still being developed and refined every day. It has countless possibilities for growth within the fintech industry and Switzerland’s governing parties are keen to play a leading role in cultivating innovation within its businesses.

Disruptive industries still require established recruitment

Swisslinx are market leaders in recruiting for the technology sector and financial services. We have been an established part of the recruitment landscape since 1999 and have successfully placed thousands of candidates in technology and finance roles, winning countless awards while doing so.

We also have offices internationally and a home office in the heart of innovation capital, Zurich. Our expert consultants on hand are equipped to hire the best financial services and technology candidates for your company while being trained and steered by industry-leading experts so you can recruit reliably with Swisslinx.

If you’re interested in working in these booming industries, we have exciting roles available in key tech hotspots in Switzerland, Germany and Dubai. Apply for a role with us today.

How has Covid-19 impacted Dubai?

Around the world, countries have been impacted by and responded to Covid-19 in different ways. While Switzerland chose to rely heavily on testing and offered support to businesses, the United Arab Emirates implemented a travel ban, cut interest rates and rolled out a stimulus package. As a travel hub with many expat and temporary workers, Dubai has been presented with unique challenges during the pandemic. Now as individuals and businesses start to recover and now look to the future, what can we expect for the city, and how might the economy recover? Travel plans have changed Dubai came to a standstill in April as the UAE government imposed some of the strictest lockdown measures in the world. Now, the emirate is opening the economy back up, and a significant part of this is travel. As one of the world’s most significant travel hubs, Dubai was heavily impacted by lockdown measures. It's a city reliant on tourism, hospitality and aviation, so the grounding of planes and imposition of strict travel restrictions have had a major effect on the economy. March’s complete halt of passenger flights has contributed to passenger travel through Dubai dropping by a fifth in the first quarter of 2020, though special repatriation flights still operated to ensure travellers and contract workers could return home. The transport and storage sector, which includes aviation, land, air and water transport, made up 18.5% of Dubai’s GDP in 2017 and was its most active economic driver in the first half of 2019, so such a significant halt could be detrimental to the wider economy. However, there is now good news for the aviation and hospitality sectors with the resumption of travel from to and from Dubai by July 7. Airports and national carriers are resuming large-scale operations whilst maintaining strict health and safety measures, which may help to accelerate the predicted economic recovery. We can therefore expect to see more opportunity for investment in the travel and tourism sector over the coming months. Staff consider their options While the UAE did roll out a stimulus package to help its economy in the midst of the pandemic, Dubai hasn’t seen the same level of support that other parts of the world has when it’s come to securing businesses. With no furlough scheme, some employers have been forced to reduce headcount and salaries to ensure survival during and after Covid-19. As the nation is made up largely of expats, many residents are making the decision to return home, and Oxford Economics estimates that the UAE could see 10% of residents leave its shores. However, with job losses and tanking economies an issue worldwide, those in stable industries may choose to stay on in Dubai rather than facing an uncertain future back home. Some nations in the GCC are actively looking to reduce expatriate worker numbers, with Kuwait and Oman looking to fill a higher percentage of key positions with national candidates. As international flights resume and restrictions ease, we anticipate there will be more employment opportunities within the UAE, particularly within the healthcare, distribution and logistics and technology industries. E-commerce is thriving throughout the pandemic, so specialist skillsets in this area will be highly sought after.  Oil and gas take a hit We know that the commodities market has taken a considerable hit in 2020, not just with Covid-19 but with the oil price wars as well. Supply has outweighed demand and we saw storage facilities reach maximum capacity, resulting in a record low oil price that created significant disruption throughout the global industry. However, the past two months have seen the market recover somewhat, and there are predictions that the second half of the year will see oil prices rise back to $50. As lockdowns continue to be lifted around the world and the mobilisation of people and supplies resumes, we hope this sector continues to strengthen and more job opportunities will emerge. Investment shows confidence There are clear signs of opportunity and optimism in the UAE already. One such sign of confidence is the Abu Dhabi National Oil Company announcing a $20.7 billion energy infrastructure deal with global investors, operators and sovereign wealth and investment funds. It’s one of the largest global energy infrastructure transactions and is positive news for the UAE’s gas market – and indeed, clients and jobseekers. Emiratis are optimistic about an economic recovery, according to Mckinsey, and the relaxation of lockdown rules should speed this up. Dubai has maintained its position as among the top three destinations globally for greenfield foreign direct investment, thanks to its ease of doing business, location and security. This should help the city to recover economically, perhaps more quickly than other areas. Flexibility into the future Through this crisis we’ve seen many clients in Dubai and UAE implement remote working, reducing business travel as much as possible and placing projects on hold. We can expect to see some of this continue long into the future, particularly regarding employer flexibility, potentially creating more opportunities for workers who may not otherwise have been able to work full time in an office location. As 22% of UAE employers say working from home has increased their business’ productivity, many organisations may introduce new remote and flexible working policies to allow employees to work from home on a permanent or part time basis. Unnecessary business travel will likely be reduced or eliminated entirely, with a focus on working – and hiring – locally. That’s not to say there won’t be opportunities for global workers to take up lucrative contracts in the UAE, however. For the right candidate, opportunities will remain. Established in 2007, Swisslinx’s Dubai office is focused on banking and finance, oil and gas, and technology. We have a multilingual team of sector experts who are committed to matching the right candidates with the right roles, providing ongoing support before, during and after the recruitment process. View our latest UAE jobs or contact us to talk about how we can help you.

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How have startups pivoted to respond to Covid-19?

The Covid-19 outbreak has led to a raft of changes across industries, from home working and virtual business meetings through to social distancing and reorganisation. Beyond the day-to-day of how we’re working, we’ve also seen dramatic changes within some industries as to what we’re working on. One of the most interesting impacts of Covid-19 has been the response of businesses who are trying to not only survive, but also help in the face of a massive global pandemic. Restaurants have moved to online delivery models, fashion labels are manufacturing face masks and life science organisations worldwide are devoting their efforts entirely to finding a vaccine. This is easier for some than others – changing business models and production plans suit organisations that are agile and free from the restrictions that many established large-scale businesses have in place. With that in mind, we’re taking a look at how startups have pivoted in response to Covid-19. What does ‘pivot’ mean? Anyone who’s worked in technology – and particularly the startup world – will be familiar with the pivot. It’s the term given to a change in approach to test a new business model or product, usually after receiving feedback that the original approach is not effective. It’s common in the startup community where entrepreneurs typically follow a lean methodology where everything is questioned – even the purpose of the organisation. Famous organisations that have pivoted include Nintendo, whose previous products have included instant rice and vacuum cleaners, and Twitter, which was once a service called Odeo that allowed people to find and listen to podcasts. Which startups have pivoted as a response to Covid-19? The 2010s saw a huge amount of hype generated over 3D printing, yet the technology has so far seemed somewhat underutilised. Now, however, Covid-19 is presenting new demand for additive manufacturing, thanks largely to the stranglehold China has had on manufacturing personal protective equipment and other products that have been in short supply during the pandemic. When Chinese manufacturing came to a halt during lockdown, startups and other businesses stepped up to use 3D printing to fill the gap, with designs for face shields and medical equipment shared on open source platforms to allow anyone to create these much-needed products. The Middle East and North African market have seen 3D printing startups such as Eon Dental pivot to contribute to the Covid-19 battle, reconfiguring machines and temporarily changing their entire business models. Meanwhile, UAE commodities startup Immensa produces 10,000-12,000 face shields a day to export to Europe, the US and Middle East. Closer to home, Swiss-based fertility tracking organisation Ava Women is researching whether its fertility tracking device can be used to detect early signs of Covid-19. Another life sciences startup, Warsaw Genomics, has moved away from its genetic testing to now offer Covid-19 tests for distribution within Poland’s hospitals, while delivery network Gophr is now delivering pharma, bio-sample and test kids for health services companies. The fintech market is not exempt from virus-driven pivots. Examples include US neobank Moven selling its direct consumer offering to focus entirely on developing financial technology for other banks, and British credit rating startup Credit Kudos launching a tool that allows freelancers to verify their earnings to benefit from the British government’s financial support.  What does this mean for me? These pivots demonstrated the rapidly changing business landscape we are finding ourselves in, and the need for businesses and workers alike to take a flexible, agile approach to the marketplace. While experience in healthcare and life sciences is naturally in demand in the current climate, so too are digital and technology skills to help startups and other businesses pivot and digitalise their offering. If you’re in the market for a new role, we’d love to help. We have deep experience in our specialist markets and are paying close attention to the current market conditions. Contact us to start a conversation about your next steps.

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