The Geopolitical Situation in 2025

“Switzerland’s security policy situation has deteriorated,” says Markus Mäder, State Secretary for Security Policy. The conflicts between the major powers have intensified and the threats have become more complex, e.g. in the form of disinformation, espionage and cyber attacks. These uncertainties have an impact on the Swiss economy. “Politics and economics cannot be separated, they are interdependent,” explains Prof. Manfred Elsig, Deputy Managing Director at the WTI. In the golden age of globalization, as we experienced from 1990 to 2010, many companies outsourced and optimized with the support of politicians. This development is currently being slowed down. “Globalization is stagnating and protectionism is on the rise,” says Prof. Dr. Rudolf Minsch, Chief Economist at economiesuisse. Swiss companies can expect the following developments:

Trade war and supply chains

“The biggest challenge for the Swiss economy is the trade war,” says Minsch. If the US and China start to impose tariffs and blockades on each other, this will have a direct impact on the supply chains of Swiss companies, especially as the EU will also come under pressure sooner or later and also take protectionist measures. “Supply chains and access to raw materials will become instruments of power politics,” says Mäder. In addition, the bureaucratic burden in international trade will increase due to sustainability regulations. The EU supply chain guidelines of the “Green Deal”, with which the EU Commission wants to make Europe the first climate-neutral continent by 2050, are a highly complex set of rules that will present companies with administrative challenges.

Weak Europe, weak euro

“Europe is and remains Switzerland’s most important trading partner,” says Minsch. Around half of exports go to Europe. Stable relations with its neighbors are essential for Switzerland. However, the EU is weakening: the German car industry is in the doldrums, France is in debt and Italy is unstable. For SMEs, this means a weak euro and weak demand – an unfavorable combination. However, the fact that the euro is low against the Swiss franc has already been the case in recent years, and many companies have learned to deal with this. “The exchange rate with the dollar is almost more unpredictable. There can be greater fluctuations here,” explains Elsig.

New technologies

“The key to power and influence lies in economic strength and the development of high technology,” says Mäder. The new information technologies are an important geopolitical factor. “The EU is lagging behind in this respect. Almost all the big players in the new technologies are in the USA or China,” says Elsig. However, Swiss companies can also benefit from the new technologies. “It is essential that companies use the technologies specifically to increase their productivity,” says Minsch.

Options for action by SMEs

“SMEs should be prepared for turbulent markets in 2025,” emphasizes Minsch. According to Mäder, it is therefore advisable to diversify supply chains, especially for critical goods and services. What’s more: New technologies will continue to develop. For SMEs, this offers opportunities for new business areas and higher productivity. At the same time, new technologies require additional measures in the areas of cyber security and data protection. Last but not least, it is essential to focus on uniqueness, especially in the small Swiss market: “Promote your unique selling proposition. Be it through innovation or particularly good services. This will prevent you from being replaced by a cheaper product from abroad,” Minsch is convinced.

How continuing education helps

“There are no simple solutions,” says Elsig. The new challenges require managers to acquire new skills in order to successfully lead companies into the future. Further training courses, such as those offered by Rochester-Bern Executive Programs, support management in acquiring these skills.

Due to the uncertainties and fast pace of life, openness and a willingness to change are particularly important. “In today’s world, openness is required because it moves fast. You may not learn this openness on a course, but it is the prerequisite for continuing your education and engaging with new topics,” says Minsch.

Specific management tools, such as those taught at business schools, are also becoming increasingly important in order to better assess complex situations. These include, for example, risk analysis, scenario thinking and rolling planning. At the same time, soft skills are more important than ever, especially because it has become more difficult to lead employees through uncertain times with many changes. Communication skills, transparency, a good error culture and a skillful approach to diversity and variety are required here.

In order for companies to get the best out of the new technologies, it is also worthwhile providing further training that shows managers the potential, but also the risks, of digitalization. Continuing education on the topic of digital transformation can help here.

“Despite all the challenges, optimism is required,” says Elsig. 2025 is unlikely to be an easy year for SMEs. This makes it all the more important that managers also see the opportunities: SMEs can benefit from being more agile due to their size, bringing innovations to market faster and being subject to fewer regulations. Further training and the associated network help them to see and exploit these opportunities.

This article was published in a shortened German version in the Handelszeitung.