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The Swiss tech paradox
A book says that the Swiss are frenetic buyers of IT, but when it comes to productivity gains they are almost always at the bottom of the ranks.
by Bruno Giussani
7 March 2005
I have just finished reading a new book by Xavier Comtesse, the director of the Geneva office of the think-tank Avenir Suisse. For those interested in technology and innovation in Switzerland, it is a disturbing book. Because its basic premise is that this country spends way too much on information and communication technologies (ICTs) and extracts way too little from them.
The title of the book is a misfortune (it sounds as if it was passed through one of those infamous automatic translation systems available on the Internet, but I know that Comtesse is not responsible for choosing it). So don't pay too much attention to it: "Dartfish, Logitech, Swissquote und Co: IT-Transformer, die neuen Akteure der Veränderung" (Orell Füssli Verlag). You have certainly recognized the three companies, all of which are Swiss: Dartfish develops software to analyze sports video and better prepare athletes. Logitech is the world leader in computer peripherals. Swissquote is an online bank. All three, according to Comtesse, are positive examples of smart usage of technology.
Comtesse writes from a technocultural standpoint: he believes that technology is a necessary and inescapable element (but not the only one) of social and economic development. So Comtesse looked at technology, gathered an array of statistics, and opens the book with an astonishing observation.
Compared with other countries, he says, Switzerland systematically ranks among the biggest spenders on and users of ICTs. "The Swiss are frenetic buyers", he states. The amounts of money are staggering, the rates of adoption faster than in most other countries. But when he then studies the way Swiss individuals and businesses use technologies and what productivity gains they extract from them, Switzerland "is almost always to be found towards the bottom of the list".
The author calls it "the Swiss paradox", and it worries him. While other countries have done leaps and bounds in productivity, Switzerland has been stagnating for twenty years. At a very high level of revenue, but stagnating nonetheless.
How can this paradox be explained? Partially, by culture: Swiss are fascinated by technology (aren't we all, deep down, engineers?) and affluence lets them afford the latest novelties. But we seem to have lost the capacity to put them to use efficiently and powerfully. We are prisoners, Comtesse suggests, "of a slow-motion perfectionism and of a focus on technology development rather than on usage and market advantage". The other day in his office in Geneva, Comtesse shared with me a telling anecdote he learned when the book was already in print: a bank in Geneva had invested a significant amount in new computers. State-of-the-art PCs, flat screens. The machines arrived. But they remained in their sealed boxes for almost one year before the bank started installing them…
Switzerland, writes Comtesse, faces "a major challenge": learning how to transform its big investments in ITCs into productivity gains and economic growth.
A few weeks ago, Monika Henzinger, a Swiss who leads the research department at Google and teaches at the ETH Lausanne, explained in a speech in Bern how the Google server farm (100'000 computers) doesn't include costly Unix servers and other expensive technology. Google (a truly innovative and highly competitive company) saves millions of dollars by buying cheap components and building its servers itself. When one breaks, it can be discarded and replaced without thinking twice.
Basically, Google has understood that smart use of low-price technology can give better results than ordinary use of expensive technology. Comtesse would certainly agree that that's an example many Swiss companies ought to start paying attention to.
(copyright 2005 Bruno Giussani)
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