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UBS Outlook Switzerland: Companies face challenges due to digitization

Zurich Media Switzerland

Around 41% of Swiss companies are seriously affected by digitization and will have to significantly adjust their business models. This is the conclusion of a survey of around 2,500 companies. In combination with demographic trends, digitization could lead to some dramatic employment shifts among sectors in Switzerland.

Zurich, 16 November 2017 – A great deal is being written about the consequences of increasing integration and automation on companies and their employees. At the level of the overall economy, however, hardly any significant effects have been noticed yet. This could well change in the next few years. Along with digitization, the aging of the population will lead to major structural changes in the years to come. The combination of digitization and aging could lead to a major employment shift among sectors. And this process is already underway.

Many companies expect major changes in business activity

In a survey conducted for the second time, UBS economists questioned 2,500 entrepreneurs or persons in senior company roles about the effects of digitization on their businesses. About 41% of those surveyed replied that it is having a big or a very big influence, forcing them to markedly adjust their business models. For that reason investment in digitization is seen as a strategic decision by most companies, and 44% of them said they will be increasing their investment in digitization projects in the next five years.

"So it is no longer a question of whether we are affected by digitization. The question is: How well can we prepare for the changes and how quickly can we adapt?" said Martin Blessing, president of UBS Switzerland, at a media event in Zurich. The survey results show that 87% of the companies are financing their investment in digitization exclusively with their own funds. Only 2% stated that they were making such investments solely with borrowed capital. The fear that companies would have more trouble securing loans for digitization projects than for conventional investments was not confirmed by the survey.

Swiss economy may grow by 1.8% next year

Swiss economic growth in the first half of this year was disappointing. But thanks to the weaker franc and the robust global economy, UBS economists expect considerable acceleration in the next several quarters, with the unemployment rate possibly falling below 3%. UBS anticipates real economic growth reaching 0.8% this year and 1.8% next year. A recovery in oil prices and the weaker Swiss franc will cause inflation to rise as well, with UBS economists estimating a 0.5% climb in consumer prices for 2017 and 0.6% for 2018.

The expectation that the European Central Bank (ECB) will end its bond-buying program next year has considerably strengthened the euro against the Swiss franc. Yet there is no sign that Swiss National Bank monetary policy will change in the short term. Only when the weaker Swiss franc proves it's here to stay and the economy has finally recovered from the franc shock might an initial interest rate move become possible. The economists at UBS foresee such a move at the end of next year.

Limited devaluation potential for the CHF

The closer the end of the ECB's bond-buying program comes, the weaker the Swiss franc could get. So Daniel Kalt, UBS's chief economist in Switzerland, sees a little more scope for the Swiss franc to depreciate over the next 12 months. Even so, the potential is limited because the franc currently trades at much closer to its fair value against the euro than at the start of the year. A gradual normalization of international monetary policy in the coming quarters could lead to a slight rise in long-term interest rates – including in Switzerland.


UBS Outlook Switzerland:
UBS publications and forecasts for Switzerland:

UBS Switzerland AG

Media contact

Daniel Kalt, Regional CIO Switzerland
Phone +41 44 234 25 60,

Sibille Duss, UBS Chief Investment Office WM
Phone +41-44 235 69 54,

Alessandro Bee, UBS Chief Investment Office WM
Phone +41 44 234 88 71,


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