Published by Accenture at the World Economic Forum's annual meeting in Davos, "From Disruption to Reinvention - The future of supply chain in Europe" examines three possible scenarios for how the war could unfold in the coming year. It models the impact of each scenario on the eurozone in terms of cost and recovery timeframe.

Costly supply chain disruptions

According to the study, supply chain disruptions related to COVID-19 cost the eurozone economies approximately €112.7 billion in lost GDP in 2021. Even before the war, material shortages, logistics disruptions and inflationary pressures undermined economic recovery in Europe, with resurgent demand and precautionary hoarding of products overwhelming supply chains. Russia's invasion of Ukraine has exacerbated the situation, according to the study. For example, semiconductor shortages that were expected to ease in the second half of 2022 are now expected to last into 2023. A protracted war could result in a further loss of up to €318 billion in 2022 and €602 billion in 2023, while inflation could be as high as 7.8 percent in 2022 before declining in 2023. "Although experts agree that Europe will avoid a recession this year, the combination of COVID-19 and the war in Ukraine has the potential to significantly impact the European economy and cause a substantial slowdown in growth," said Jean-Marc Ollagnier, CEO of Accenture in Europe. "While before the war some normalization of supply chains was expected in the second half of 2022, we don't expect it now until 2023, maybe not even until 2024, depending on how the war develops."

Reinventing supply chains in a new economic order

Solving supply chain problems will be crucial for Europe's competitiveness and growth. According to the study, up to 30 percent of total value added in the eurozone depends on functioning cross-border supply chains, either for sourcing materials or as a destination for production.

The study suggests that supply chains need to be reinvented to meet a paradigm shift. Supply chains were designed primarily to optimize costs. However, in today's world, they must also be resilient and flexible to respond to increasing supply uncertainties. At the same time, they are becoming a key competitive advantage to enable future growth. The focus for addressing supply chain disruptions is on three key areas:

• Resilience: Supply chains must be able to absorb, adapt to, and recover from disruptions whenever and wherever they occur. Improved dynamic insights, risk identification, and mitigation solutions enable companies to deal with sudden changes in the supply chain. Scenario planning and risk and opportunity analysis help adapt to evolving supply and demand. Network modeling and simulation, stress testing, strategic buffer sizes, and multi-sourcing options enable companies to manage uncertainty.
• Relevance: Supply chains must be customer-centric and flexible to adapt quickly and cost-effectively to changes in demand. Capturing new data sets, including real-time data, inside and outside the enterprise across the value chain will be critical. Automation and artificial intelligence will enable companies to quickly identify new data patterns to make better decisions. Moving from centralized, linear delivery models to decentralized networks with on-demand production, and in some cases moving production closer to the point of sale, can help companies better meet customer expectations for order fulfillment.
• Sustainability: Modern supply chains must support companies' sustainability goals, if not accelerate their achievement. To gain stakeholder trust, companies need to make their value chains transparent, for example through blockchain or similar technologies. A shift from linear to closed-loop, circular processes that reduce waste will also be essential.

"Transparency in supply networks, including Tier 2 and Tier 3 suppliers, is critical," said Kris Timmermans, head of supply chain & operations at Accenture. "Companies need to move from a just-in-time to a just-in-case approach by diversifying their supply base, planning alternate freight routes, flexing their distribution centers, and building inventory. This comes at a cost, but it is a form of 'insurance' against future shocks. Key to this is investing in new technologies to make better use of data - from digital twins and analytics to supply chain control instances - as well as the cloud continuum, which delivers massive computing power in a cost-effective, flexible and sustainable way."

Energy security and availability of talent as further challenges

The study also highlights two deeper and longer-term challenges arising from the pandemic and the war: first, energy security, as European economies must address their heavy dependence on oil and gas supplies while accelerating their net-zero agenda; and second, the imbalance of available talent resulting from an aging population, changing workforce expectations, and shifting skill requirements.

Michael Brueckner, chief strategy officer at Accenture in Europe, said, "The war in Ukraine will increase the number and duration of disruptions in supply chains. The extent will depend on how the war develops. Nothing short of reinvention is required, as the inflationary environment, increasing regionalization, the energy transition and a tight talent market are already shaping a new economic order. To achieve greater security, it will be critical to improve energy efficiency and accelerate the transition to green energy sources. In addition, the ability to recruit, retain, retrain and upskill employees is emerging as one of the most pressing issues of this decade."

Source: Accenture

At the General Assembly of digitalswitzerland, six new board members were elected: Philomena Colatrella (CEO CSS) Anna Takihara (Google) & Jill Kümin (Google) in job-sharing tandem, Rainer Baumann (COO Migros Genossenschafts Bund), Adrian Müller (Swico) and Sabine Magri (COO UBS Switzerland). With Sascha Zahnd, who was appointed president a year ago, the digitalswitzerland board comprises 23 members. The candidates proposed for election by a six-member nomination committee received a unanimous vote at the AGM. This change is due to the resignation of six board members. "I sincerely thank the retiring members for their great commitment. With the new board members, the transversal knowledge of our board is ideally completed and it is gratifying that we were able to pay attention to diversity in the nomination process," emphasizes Sascha Zahnd, President digitalswitzerland. Sascha Zahnd (President), Yvonne Bettkober, Nicole Burth, Marcel Dobler, Thomas Flatt, Ivo Furrer, Peter Grütter, Catrin Hinkel, René Hüsler, Marco Huwiler, Gabriela Keller, Christian Keller, Cédric Moret, Christophe Nicolas, Marcel Stalder, Marc Walder, Anja Wyden Guelpa were re-elected for another one-year term. Since the founding of the Switzerland-wide, cross-industry initiative in 2015, more than 240 association members and politically neutral foundation partners now support Switzerland on its way to becoming a leading digital innovation location.

The year 2022 marks an important stage of strategy refinement and realignment for digitalswitzerland, according to the statement. The appointment of new Managing Director Stefan Metzger in January 2022 underscores the transition to a stronger impact orientation with six focus activities, the association adds. The further development of the strategy, known as Strategy 2025, defines the key success factors that should distinguish a digital nation. digitalswitzerland's priorities for 2022 focus on the impact areas of education, cybersecurity, e-health, e-sustainability, strengthening regions and SMEs, and finally cloud availability and infrastructure. "Times of change create new opportunities. I look forward to the next 12 months with enthusiasm and optimism. As a team and as a nation, we have overcome many challenges recently. The lingering effects of the Covid 19 pandemic and rapid digitization have created a new normal that is shaping the way we live. Our strategy welcomes ambiguity and turns it to our advantage. It allows flexibility and freedom of design without losing focus on our areas of impact," says Stefan Metzger, Managing Director digitalswitzerland.

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Since 2005, the internationally active Swiss family-owned company simatec has been managed in the second generation by Mischa N. Wyssmann. Since its foundation in 1983, a motivated team has been developing and producing innovative products for the maintenance of rolling bearings under the brand names simatherm, simatool and simalube. To date, the subsidiary simatec inc. in Charlotte USA, simatec gmbh in Pforzheim Germany and simatec ag in China have also successfully commenced operations. In other countries, simatec ag is involved in joint ventures. One of the leading products is the simalube grease and oil dispenser: with this, the company opened up an extremely successful business field and became one of the leading suppliers on the world market. The foundation for this was laid by the development of a special drive: the patented gas evolution cell enables clean, safe and maintenance-free long-term lubrication of bearing points. This novel technology simplifies complex processes and reduces maintenance on thousands of machines and systems.

But simatec does not want to stop there: Despite the current difficult economic conditions, the company is investing in a unique innovation project called "simaX". Why? Because - as the example of simalube already shows - innovation has been the DNA and thus the key to continuous success for years. This innovation project relies on the Design Thinking method, an approach that puts the customer's needs at the center of all considerations. By means of agile and iterative creative processes as well as numerous interviews, the ideas and wishes of future customers are bundled. "We want to tailor new, intelligent solutions and products exactly to the requirements of our customers and thus develop new business areas," says owner Mischa Wyssmann. In practice, this means: Three months of thinking differently and working differently.

Innovate in three office cubes

Two teams of three have the task of finding new fields of application for the technology of the simatec gas evolution cell - the core of the leader product "simalube". The two teams, "Da Vinci" and "Einstein," are conducting research in the fields of MedTech and pest control, plant protection and home automation, respectively, and are working under the guidance of an external moderator. Mischa Wyssmann: "For the interdisciplinary teams, we have completely freed up four employees from day-to-day business and provided them with the optimal infrastructure so that they can work autonomously. In addition, one person each was hired to bring the simatec-external perspective to the teams." The "Da Vinci" and "Einstein" office cubes were equipped with collaboration technology and prototyping material for creative thinking methods. Another factor in the success is the methodological coaching provided by the facilitator and the Innovation Board, who plan and guide the process. The MedTech team is additionally supported by external experts in medically complex topics such as applications, markets, regulatory and compliance.

Why was the gas evolution cell the focus of the design thinking method? The gas evolution cell, the size of a hearing aid battery, exploits electrochemical principles to generate hydrogen gas. It is an autonomous energy source that also functions as a motor, clock and clock generator - an absolutely potent, agile miniature power plant whose potential benefits are far from exhausted. And this is precisely where Design Thinking comes in.

Learned Design Thinking method a year ago

So how do you find the ultimate solution and how is progress measured? One thing up front: Innovation is not a matter of chance, but the result of a consistent strategy, the achievement of which is continuously monitored: the teams plan and work in 14-day sprints. They share the results in a review meeting with the innovation board, consisting of members of the executive management and the board of directors. This performance review is the basis for the next sprint. "We place particular emphasis on exchange throughout the company," says Mischa Wyssmann. "The innovation teams regularly share their experiences with work colleagues at an information event - at the Fürobebier. With this innovation project, steered by the Design Thinking method, the focus is not on our business goals, but rather on serving as an innovation engine for motivated and enthusiastic employees."

simatec became familiar with the Design Thinking method as early as fall 2021 during a three-day workshop at the Mobiliar Forum in Thun. Establishing the innovation technique in the company was the right decision and an exemplary model for industrial companies that want to reshape their future in the context of digitalization.

More information: simateg ag

In Switzerland, 80 percent of all cleaners are still currently employed via the black market. For the cleaners, this means a lack of financial security and a lack of legal protection. The consequences are precarious working conditions in the cleaning industry, which have further intensified as a result of the pandemic, as many private households have laid off their cleaning staff at short notice. Before the pandemic, one in seven Swiss households employed a cleaner, according to a 2018 Comparis survey. Batmaid and putzfrau.ch have therefore made it their mission to enable cleaners to leave undeclared work and offer them safe, progressive and fair working conditions through permanent employment in accordance with the legal provisions in Switzerland with the associated protective measures. So far, Batmaid and putzfrau.ch have been able to support more than 8,000 cleaners in exiting the black market.

Together against undeclared work

The success in the fight against undeclared work and the black market is also due to the simple and straightforward booking process when arranging cleaning services through a cleaning company such as Batmaid or putzfrau.ch. "Our focus is on technology and innovation, which is why the desired cleaning service can be booked in just three clicks via our website or app and the upcoming tasks can be changed at any time," explains Andreas Schollin-Borg, CEO and founder of Batmaid.

Anyone who trusts in a professional cleaning company also enjoys many advantages, including no time and cost expenditure for administrative issues or personnel replacement in the event of absence during vacations or illness. In addition, "For private individuals, two important criteria are paramount when hiring cleaners: trust and professionalism. These guarantees are missing when hiring a cleaner through the black market. With Batmaid and putzfrau.ch, only trained, trustworthy and registered persons are placed," explains Adrian Gsell, Managing Director of putzfrau.ch.

No cash payment since January

Trade unions and the Association of Swiss Cleaning Companies are also working to combat the black market. A new collective labor agreement for cleaning work, which has been in force in German-speaking Switzerland since January of this year, means that, among other things, wages may no longer be paid out in cash. Clear rules and control instruments would combat abusive employment relationships and unfair competition. In order to support the new law and to ensure its compliance, the two cleaning companies Batmaid and Putzfrau.ch demand the establishment of a control body and are open to the responsible offices in this respect. Through its international expansion, Batmaid is an attentive observer of European regulations, which could serve as food for thought for the Swiss authorities.

Sources: www.batmaid.ch / www.putzfrau.ch

On May 18, 2022, the Zurich Forum for Sustainable Investment (ZFSI) took place for the second time at the Kongresshaus Zurich. Attentive listeners, lively discussions and speakers who shared their experience and in-depth knowledge made for a successful event, according to the organizers. The speakers and panel participants included Anne Marion-Bouchacourt from Société Générale, Kerstin Torgler from Zurich Insurance Company and Philip Hinsen from FINMA. They provided their views on the future of sustainable investing.

During the event, experts in sustainable finance exchanged views in numerous conferences and workshops on issues and topics related to skepticism about sustainable investments and the integration of ESG criteria. In the eyes of the organizers, the lively participation once again underlined the relevance of these topics for financial professionals as well as their commitment to finding solutions that have a real impact.

Skepticism about sustainable investments inspired participants to search for actionable solutions with impact. The founder of Voxia communication, Laurent Ashenden, commented: "When people doubt a particular solution, it is usually because there is room for optimization. We wanted to explicitly draw attention to this fact with our choice of theme this year, and the feedback we received showed us that this strikes a chord."

The ZFSI is modeled on the Geneva Forum for Sustainable Investment, which will be held for the 13th time this year and is an integral part of the Swiss financial market agenda. The GFSI will take place this year on September 22 at the Fairmont Grand Hotel.

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The BVG, or the second pillar, often takes a back seat in the debate surrounding retirement provision. The fact that billions of Swiss francs from the investment income of active employees are used for current pensions also hardly leads to any resistance. This was shown by a study conducted for the second time on behalf of Vita and Zurich on the topic of "Fair Play in Occupational Pension Plans". The starting point for this study is a key finding from the first Fairplay study in 2021, which showed that 56% of the working population do not count BVG pension capital as part of their own assets. The current study has now investigated the reasons for this lack of awareness and shows that the bond with one's own retirement assets could be strengthened if its visibility were increased and/or if the population were given more say in BVG investments.

LOB savings - importance systematically underestimated

"The population is not aware of the importance of occupational pensions for their income in old age," notes study director Michael Hermann. Today, the second pillar (BVG) contributes a larger share of retirement income for average earners who retire than the first pillar (AHV). Nevertheless, working-age respondents rate the importance of the AHV for their financial security in old age as significantly greater than that of the BVG. They assume a split of 44 percent (AHV), 33 percent (BVG) and 22 percent (voluntary savings). "This distorted perception is matched by the fact that only 18 percent of the working population even know the sum of their own BVG pension capital," says Hermann.

LOB contributions - half perceive it as a fee or tax

Although BVG payroll deductions are paid directly into the personal retirement account, only 47 percent of those in employment perceive them as an investment in their own retirement capital. 28 percent see it as a kind of tax ("contribution to safeguarding pensions in Switzerland") and 21 percent consider the contributions to be a fee that must be paid. The design and naming of BVG contributions as a "payroll deduction" analogous to AHV contributions contribute to the fact that only 43 percent perceive their own retirement capital as part of their assets at all. "If the salary contributions to occupational pension plans have the character of a fee or tax for the insured, this weakens the basic idea of occupational pension plans as savings for one's own old age," Hermann explains.

Second pillar is usually not an issue with employment

Although the design of the pension fund differs significantly from company to company and involves large sums of money, the BVG is usually not an issue when hiring. "The structure of the occupational pension plan played a role in the hiring process for only 22 percent," says Hermann. Only 18 percent brought it up during the application process. Here, too, the BVG is invisible to the vast majority.

According to the study, it is striking that young adults are much less aware of the BVG than older people. Yet it is precisely the younger generation whose wealth accumulation is most affected in the long term due to the use of a large part of their investment income for current pensions. Overall, only one-third of the population is aware that part of the investment income of those in employment is currently used to finance current pensions.

SNB - more visibility and co-determination

What are the solutions to the problems that have been identified? "If awareness of and the importance of the BVG is to be increased among the population, it must become more visible and there needs to be more co-determination," Hermann explains. This is the assessment of the population, he says: 72 percent of the actively insured would welcome the possibility of using an app to obtain an overview of the pension situation at any time and from anywhere. Just as many are in favor of the possibility of choosing the pension fund (72 %) or the investment strategy themselves (71 %). In addition to such measures, a general improvement in investment knowledge in particular would also contribute to a better understanding of the BVG. Those who are familiar with investments usually have a very good understanding of the mechanisms of the BVG.

Redistribution in the SNB is considered unfair

Only one-third of respondents are aware that today around half of the investment income of working people is used to finance current pensions. However, if people of working age who contribute to the BVG are informed about this redistribution of their investment income, 63 percent consider this unfair. Even more, 78 percent of respondents, would find it unfair if part of the earnings from their pillar 3a retirement account were used for current pensions. "This shows that the personal connection to the pension capital is decisive for the fact that the use of earnings for others is perceived as unfair and alien to the system ", Hermann states.

Source: Vita Collective Foundations

On Tuesday, May 10, 2022, the Zurich Logistics Colloquium could be held again in the Lecturers' Foyer of ETH Zurich after a two-year "Covid-19"-related break. Around 70 guests took the opportunity for a lively exchange of ideas in the course of the four presentations. Afterwards, a view of a beautiful sunset over the city of Zurich was not to be missed.

"No mechanical engineering without logistics

Frank Brinken, Chairman and Founder of BB Intec AG in Rotkreuz and holder of various supervisory and administrative board mandates, postulated "No mechanical engineering without logistics". He impressively illustrated that machine tools are the mother of all machines. Without machine tools, there would be no industrial products. Europe has the largest world market share (35%) in the production of machine tools with a turnover of around 28 billion. Euro (2019). Brinken makes it clear that for such machines with up to 12,000 individual parts, not only good and long-term supplier relationships are needed, but also a large pre-financing requirement must be ensured. The variety demanded by customers results from the combination of basic machines with various components and specific assemblies. In product development; e.g. also through "design-to-shipment", transport costs and time can be saved. For quality components, there are only three global clusters worldwide: Europe with Italy, southern Germany, the Czech Republic and Switzerland, Taiwan and Japan. To date, the mechanical engineering sector has been largely spared the current crises. But those who are already tackling the three biggest challenges in Europe today, such as the dilemma of small batch sizes, sourcing and transport costs, are well equipped for the future, Brinken sums up.

How to reduce the inventory value

Dr. Gesine Moritz, Division Manager Supply Chain Management and Member of the Executive Board of Woodpecker AG Frauenfeld, followed with her insight on "Change in Retail". She pictorially showed the way of Woodpecker AG from distributed local dealers to a future-oriented and successful process-oriented sales organization. In the process, logistics was the decisive success factor. Service levels were developed and implemented. For example, new customer orders received by 5:00 p.m. are guaranteed to be delivered the following day. Inventory value has been reduced by over 20% in three years and inventory turnover has increased from 2.5 to 4.5. The biggest stumbling blocks in this transformation were also the biggest success factors: WE the people. Regular communication with employees, involvement from the outset according to the motto "turn those affected into participants," trust and empowerment, and letting brakemen off the hook proved particularly effective.

Digitalization meets automation

The future is digital! This was impressively demonstrated by Daniel Gilgen, Deputy CEO and Business Unit Manager Systems at Gilgen Logistics AG Oberwangen, on the topic of "Digitalization meets automation". Gilgen gave an in-depth insight into the implementation of seamless data continuity throughout the entire life cycle of logistics systems. The innovative solution approach of Gilgen Logistics AG links state-of-the-art technologies such as augmented reality, digital twin, cloud server and GS1 Digital Link with customer and manufacturer systems and brings them together with intralogistics. The data can be accessed at any time from anywhere in real time via the cloud. This means that all relevant information is accessible to those involved in the right form. The use of augmented reality in the sales process enables potential customers, for example, to take a virtual tour of the developed plant concept with the option of checking it directly in the virtual world. The first individual digital system went into operation in the fall of 2021 at Denner's distribution center in Lyss. After only a short period of time, increased productivity was already evident for the end customer and suppliers.

Joint research project

This year's Zurich Logistics Colloquium was concluded by Werner Züllig, Head of Technology at Geberit Produktions AG Jona and Prof. Dr. Andreas Kunz, Head of the Innovation Center Virtual Reality at ETH Zurich. They provided insight into exciting results from a joint research project on the topic of "Virtual Reality in Workplace Design". Stable standardized processes are to be used with the Geberit Production System to ensure that manual workplaces can also be improved while avoiding waste of resources. In the joint research project, workplaces were evaluated entirely in the virtual world using the MTM method and potential improvements were identified. The benefits are sustained high cash generation, even for small quantities, as well as operating margins that are significantly above the industry average. Geberit is consciously driving forward this strategic initiative of digitalization and sees it as a major opportunity for genuine value creation at the Swiss site.

Source and further information

Marketing and communication are subject to a rapid pace and the social upheavals of our time, in which rules change quickly and the established must give way to the new. Lifelong learning and the repeated acquisition of new skills are essential in the marketing industry. In such a time, orientation is of great importance in order not to miss any changes of direction and trends. The free sessions in live streaming format offered in cooperation with HWZ, Swiss Marketing Forum and AZ Konzept present applied science with strong practical relevance in short brush-ups. In this sense, the Brown Bag Series 2022 point new ways through the marketing jungle, according to the statement. The compact series is designed to help executives gain competent professional orientation and in-depth knowledge.

"The last few years have shown that there is a need for well-founded and equally short formats for knowledge transfer and exchange. The Brown Bag Series responds to this need," says Prof. Dr. Michael Grund, Head of Department for Marketing & Business Communications at the HWZ Hochschule für Wirtschaft Zürich. Marcel Weibel, OC member of Swiss Marketing Forum, adds: "With this partnership and the online format, we have optimal conditions, in addition to the Marketing Day, to offer all managers concrete practical knowledge with direct implementation."

The topics offered are dedicated to central challenges of marketing:

• Branding: Brand Leadership, 6/21/2022
• Marketing Strategy: Inbound vs. Outbound Marketing, 8/23-22
• Customer Behavior: Neuromarketing, 9/20-22
• Content Marketing: Storytelling, 10/18-22
• Strategic Media Planning: Online vs. Offline, 11/15/22
• Marketing Automation: Trends, Skills and Tools, 12/13/22

For more information on the entire Brown Bag Series 2022, click here: https://fh-hwz.ch/brown-bag-series-2022/

Switzerland's education system is considered exemplary internationally, but needs explanation because of the many options. In addition, many people interested in further education often do not know in which direction they should develop. In the case of short continuing education courses that deepen one's knowledge in specific areas, the decision is usually not very difficult, but it is in the case of longer continuing education courses. Longer training courses deepen existing skills and teach new topics. They usually last several months or years and cost significantly more than shorter formats.

The right continuing education: short or long?

When choosing the right continuing education, one can distinguish the following continuing education formats:

• Short continuing education:
  • A short training of a few hours to a few days is often used to acquire selectively missing knowledge or skills
  • Formats: Traditional classroom course, seminar, workshop, coaching, online course, short webinar series.
  • Examples: Acquiring new skills in a software update, learning the basics of a new topic, selectively deepening existing skills, etc.
• Longer training courses
  • Longer training lasts several months or years
  • Formats: Instructional course, online course based on webinars and videoconferencing, study.
  • Examples: A course lasting several months that provides a basic knowledge (e.g. online marketing), a course lasting 1-2 years with a nationally recognized qualification (e.g. sales manager with a federal diploma), a continuing education course at a university or a professional reorientation

The short training courses are often decided spontaneously or ordered by companies and financed accordingly due to the significantly lower time and financial expenditure.

Evaluation process for the choice of longer training courses

For the longer continuing education courses, the following process has proven effective in finding the right continuing education course:

Courses with national recognition in Switzerland:

• Federal certificate (professional examination)
• Federal diploma (higher technical examination)
• Federal diploma (higher technical colleges)

Continuing education courses offered by universities in Switzerland with international comparability and recognition via the ECTS points system:

• CAS: Certificate of Advanced Studies (duration approx. 6 months)
• DAS: Diploma of Advanced Studies (duration approx. 1 year)
• MAS: Master of Advanced Studies (duration approx. 1.5 years)
• MBA: Master of Business Administration (duration approx. 1.5 years)
• EMBA: Executive Master of Business Administration (duration approx. 2 years)

Conclusion: The decision-making process is much shorter for very short educational formats, such as for selective deepening of specialist knowledge, than for longer educational offerings. For longer training courses, it is worthwhile to use the process shown in the diagram above.

More information:

• Education-Training.ch
• Career.ch

Around 150 participants from the fiduciary sector gathered on Tuesday, May 17, 2022 in the Kursaal Bern for the annual fiduciary conference of Expertsuisse. This professional association has represented and provided impetus to the auditing and business consulting industry since 1925 and supports the profession with a wide range of services (standards, competence transfer, quality assurance).

Regulation - intelligent, rather than a lot

The fiduciary industry stands for services in the areas of auditing, taxes, accounting and business consulting. In the area of auditing, there has been a strong market consolidation as a result of regulation and supervision - from around 3,000 to 2,000 licensed auditing firms since 2016 alone. However, there are interesting growth areas, particularly in the field of SME consulting on financial and business management issues. These are also rooted in the trends of digitalization and sustainability, which can make financial processes more efficient and - by enriching them with non-financial information - also more effective. What is desirable is not a lot or little regulation, but the right regulation: "Smart regulation" also has a positive effect on developments in digitization and sustainability. Self-regulation also has an important role to play, as Daniel Gentsch, Tax Division President of Expertsuisse, mentions: "The Tax Code of Conduct supported by Expertsuisse regulates the interaction between taxpayers, tax advisors and tax authorities. Their trusting and effective cooperation is an important locational advantage of Switzerland." Of course, the implementation of the new company law is also an important topic for the fiduciary profession and its clients.

Digitalization in the fiduciary industry: keeping the customer in focus

Digitization brings with it changes at various levels. For the fiduciary industry, integration, automation, and even disruptive business processes and models are of particular importance. There is great potential in the integration of interfaces between service providers and customers. Even though many number-driven processes have a high potential for automation, auditing and consulting will not be able to do without the human factor in the future. According to Luzia Hafen, member of the executive board of Expertsuisse, it is important to be able to provide new or additional services through targeted interaction with clients, which clients may not yet have recognized as a need, but which promote their successful business development. The job descriptions and the training and further training will have to adapt to the new trends and requirements. Marius Klauser, Director of Expertsuisse, mentions an example: "Expertsuisse's auditing training will take a completely new form from 2023: More digital skills will be taught and this in a more digital way - flexible, effective and forward-looking.

Sustainability - new reporting requirements

The fiduciary industry is a driver in sustainability developments, as sustainability - as a trilogy of economic, social and environmental aspects - is transforming reporting and corporate governance. Among investors, non-financial environmental, social and governance (ESG) factors play a central role in investment decisions. Likewise, expectations are increasing in many quarters to consider sustainability criteria in management activities - from corporate strategy to reporting. At the same time, significant progress has been made in setting explicit standards and criteria for climate and broader sustainability reporting. The next few years are likely to bring about the most significant innovations in corporate accounting and reporting in decades. It is not necessary to wait for regulation, but companies can already be advised and supported in these important developments - sustainable corporate governance is only possible on the basis of financial AND non-financial information, Expertsuisse director Klauser points out. This was also confirmed by multiple board member Michèle Etienne, who in her remarks at the Expertsuisse Fiduciary Conference positioned diversity as a strategic success factor for companies - also with a view to the fiduciary industry: "Sustainably successful fiduciary companies are changing their management and career models."

Source and further information: www.expertsuisse.ch

To effectively develop an urbanized workforce, a country must develop its internal resources and realize its long-term potential. This requires investment in manufacturing capacity to move the workforce away from its agrarian roots and toward a developed, salaried existence. Urbanization is driving consumption as local economies grow and consumers look to increase spending on real estate and durable goods such as cars and appliances. China is one of the most striking examples of this: The country's manufacturing capacity has grown exponentially over the past 25 years, creating enough jobs to move 750 million people out of poverty and into cities. Over the same period, its share of global production has risen from four percent in 2000 to an extraordinary 24 percent today (source: World Bank and United Nations statistics).

China passes the baton

China's economic success has meant that labor prices have risen significantly over time, and the country is no longer the cheapest manufacturing location on a global scale. Meanwhile, the imposition of trade tariffs has hurt China's competitiveness, and the pandemic has highlighted the problems that arise when supply chains are too concentrated in one location. As a result, the world is now beginning to move away from its dependence on China and establish new factories in other emerging markets. Many companies are looking for new economic areas where they can expand production centers for the next two decades. The countries most likely to benefit from this diversification are the next generation emerging markets, also known as frontier markets.

Frontier markets as new investment targets

These countries, which boast a favorable political environment, attractive demographics and good infrastructure, are considered attractive investment destinations. As a result, frontier markets in Southeast Asia have become popular alternatives for investments in the manufacturing sector, as have countries in Eastern Europe and North Africa - such as Romania and Morocco.

Importantly, it is not only Western companies that are following this trend. Investors in these new production sites are often Chinese companies, as they seek to remain cost competitive on the international stage and move up the economic value chain. For example, Chinese investment in Vietnam has increased significantly in recent years, and China is also one of the largest investors in Bangladesh's textile industry.

Follow the familiar path

Vietnam is an excellent example of an economy that is currently following the familiar path of manufacturing growth. Thanks to tax incentives, a cheap and young workforce, and an effective strategy to combat the pandemic, the country has attracted significant investment in labor-intensive manufacturing industries. Over the past decade, for example, electronics giant Samsung has shifted much of its manufacturing from South Korea and China to Vietnam. The company has invested nearly $20 billion in Vietnam and currently operates six factories and a research and development center there. Today, Vietnam accounts for nearly half of Samsung's global cell phone production, and Samsung in turn accounts for nearly one-fifth of Vietnam's total exports (source: Samsung Company Reports, Redwheel; as of: 03/31/2022).

Vietnam should have the potential to follow a similar path and repeat the success we saw in China 20 years ago. Participation in this long-term trend can be achieved through direct investment in infrastructure and manufacturing companies, for example, or indirectly through companies that benefit from rising consumption, financial inclusion and real estate development. Hoa Phat Group, for example, is the largest steel producer in Vietnam with a market share of 30 percent. The company has seen robust sales growth since it ramped up its Dung Quat expansion plant. This is now translating into increasing cash flow for the company. The company can be seen as a major beneficiary of continued foreign investment in production infrastructure (source: Hoa Phat Group Company Reports and Bloomberg; as of: 03/31/2022).

Another example of the ongoing shift of manufacturing to next-generation emerging economies can be found in automotive production: Romania, the Czech Republic and Morocco now produce more passenger cars than developed economies such as Italy. Companies such as Peugeot, Renault and Jaguar Land Rover have moved production to lower cost locations and we expect this trend to continue.

Chain reaction

Strong foreign investment in manufacturing has clear immediate benefits. They can set in motion a virtuous circle by improving the balance of trade and government finances, which in turn can stimulate further foreign investment and employment.

As workers receive higher wages and businesses increase profits, domestic consumption will increase, leading to greater use of financial products. These are very strong indirect benefits that multiply the economic value of each dollar from foreign investment.

This multiplier effect leads to broader investment opportunities within these economies. Vincom Retail, for example, is the largest developer of shopping centers in Vietnam and we believe the company is exceptionally well positioned to further benefit from rising incomes and exponential growth in consumer market penetration in the country.

Back to the future

The Asian "tiger economies" of Hong Kong, Singapore, South Korea and Thailand experienced rapid growth in the 1980s and 1990s as they developed outsourced manufacturing and increased employment. China then took the helm as the world's low-cost producer and underwent a similar industrial transformation, expanding its manufacturing capacity exponentially since the early 2000s.

For this reason, we call the development of a manufacturing economy and an urbanized workforce a well-trodden, familiar path. We have seen this before and we will see it again. As the world looks to diversify its supply chains not only in search of lower-cost manufacturing but also to reduce its dependence on China, frontier markets are in a good position to benefit.

Vietnam is at the forefront of this, but other Asian economies such as Bangladesh, Indonesia and the Philippines are also likely to be well positioned to continue attracting inward investment as they create a strong manufacturing base and further jobs. Countries such as Morocco, Kenya, Peru, Colombia, Romania and Hungary are similarly well positioned. The fact that many of these economies are little studied, often misunderstood, and ignored by many investors makes them even more attractive to us as long-term investors.

Author:
James Johnstone is portfolio manager Redwheel Next Generation Emerging Markets Equity fund. Redwheel is a specialized independent investment manager. The company was founded in 2000 with the aim of creating an environment in which fund managers can operate with a high degree of investment autonomy and maximize the benefits of their skills over the long term. 

On April 26, 2021, the Conference and Event Center (TEC) in the Haus der Wirtschaft (HDW) in Pratteln officially opened its doors. Around twelve months later, the operators draw a positive conclusion despite the Covid restrictions still in place during the start-up phase: "We recorded good demand right from the start, even though we had not conducted any pre-sales activities or published any opening discounts due to Corona. The successful start in this challenging period clearly shows that there is a need for our event offering and that the TEC fills a gap in the region," says TEC director Anja Ullmann.

According to the TEC, rooms for plenary events have been in particularly high demand so far, above all the 430 m2 auditorium, which is equipped with an 11 x 3.5 m LED wall. With space for up to 300 people, it was often booked in combination with the smaller group rooms. As individual as the rooms in the TEC are, as varied were the events. These ranged from smaller meetings and workshops to large conferences and corporate events that took up all the rooms.

Technology and consulting at the highest level

Technically, the TEC is state-of-the-art. Although the facilities are also equipped for hybrid meetings, meeting guests directed their focus to face-to-face events while complying with Corona's protective measures. "In the events business, face-to-face contact and networking continue to be among the most important attributes. Hybrid events are indeed also a topic - both for smaller and larger events - and are mainly used to involve additional employee or customer groups in the event," says Anja Ullmann.

However, conference guests sought personal contact not only at the event itself, but already during the booking process. "Particularly when it comes to technical equipment, catering or the combination of several rooms, customers expect personal support and professional advice. Expectations from the customer side are very high, and we are happy to meet them," says the TEC manager.

New coworking space at TEC

The TEC has continued to develop in its first year and new offerings have been added to the portfolio. From summer 2022, a new coworking space will be located under the HDW roof. Startups and individual companies in particular, but also mobile field staff and project-based employees will find ideal working conditions at the flexible workplaces. The HDW has also upgraded in the technical area and since this year has a fully equipped multimedia studio, which can be used for recording video statements and advertising films or even for panel discussions. Another innovation are the installed meeting boxes of the company Mute, which allow confidential discussions in the Open Space of the TEC.

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