Zurich SMEs focus on digitalization and AI

The annual "KMU ZH Monitor" study, conducted by the Zurich University of Applied Sciences (ZHAW) on behalf of Zürcher Kantonalbank, sheds light on the current situation of small and medium-sized enterprises (SMEs) in the canton of Zurich. In 2025, 1195 SMEs took part in the survey, which represents a record. Despite an overall solid assessment of the economic situation, SMEs expect a slight improvement, although the mood is noticeably more pessimistic compared to previous years. Particularly against the backdrop of geopolitical uncertainties such as the US trade tariffs, the economic future is being viewed with increasing caution.

The biggest challenge for companies remains the shortage of skilled workers, although this is declining compared to the previous year. The construction/architecture and catering/hospitality sectors are particularly affected. The topics of digitalization and artificial intelligence are also becoming increasingly important, with larger companies tending to be more affected. Cybersecurity and cybercrime have also become more relevant, as many SMEs have fallen victim to cyberattacks in recent years.

The liquidity situation of SMEs shows a wide spread: while almost 30 % of companies have reserves of more than three months, some companies even have enough funds to cover their expenses for several months. This contributes to the resilience of SMEs, which have been confronted with crises such as the coronavirus pandemic and the shortage of skilled workers in recent years.

Another key issue is company succession. Around 50 % of SMEs will have to find a succession solution in the next ten years, as many entrepreneurs from the baby boomer generation are retiring. This represents an enormous challenge, as it is becoming increasingly difficult to find suitable successors. Experts recommend early planning in order to ensure a smooth succession and avoid future problems.

Source: ZKB

Impact of US tariffs for the canton of Zurich

Assessment by Kevin Gismondi, Economist Switzerland, Zürcher Kantonalbank

The impact of the US tariffs on the cantons varies greatly. Many cantons export around 15 to 25 percent of their goods to the USA, which is close to the Swiss average of 17 percent. The canton of Zurich, on the other hand, is affected below average with a share of 11%.

However, it is also crucial how the US export values compare to the cantonal economic output. In most cantons, around five percent of gross domestic product (GDP) is affected. In the canton of Zurich, the figure is significantly lower at just two percent. Over the last four years, Zurich companies have exported goods worth an average of almost CHF 30 billion worldwide. The proportion of products affected by US tariffs is around CHF 2 billion. About this 
primarily include products from the watchmaking, precision instrument, metal and machine industries.

At 87%, the service sector in the canton of Zurich accounts for a significantly higher share of GDP than in Switzerland as a whole. Value creation there is predominantly local and is not affected by the tariffs. Overall, the canton of Zurich is therefore less affected by the trade conflict than other cantons or Switzerland as a whole due to its economic structure and lower dependence on the USA. The canton of Zurich would also be less exposed to any tariffs on pharmaceutical products than Switzerland as a whole. Nevertheless, Zurich's export companies and some internationally oriented service providers will also feel the direct and indirect effects of weaker demand, which will dampen growth prospects.

The tariffs threaten the existence of individual small export companies. The longer the tariffs are in force, the more visible the effects will be in the cyclical and price-sensitive industrial sector. SMEs that produce domestically and export a lot to the USA are more exposed than large companies. They often have no location abroad and rapid relocation of production is often not possible.