The U.S. has become a new source of hope for small and medium-sized enterprises, or SMEs, including Swiss ones. While growth in China is weakening and other emerging markets are revealing their dark sides, the U.S. is appearing in a more positive light. The much-discussed reindustrialization of the U.S. may be a somewhat optimistic scenario, since production in the East Asia is considerably cheaper. Despite this, the shale gas revolution, unique IT know-how and entrepreneurial spirit have put the country – battered since the financial crisis – into better shape. Swiss SMEs have spotted the opportunities resulting from this. They are increasingly wanting to participate in this recovery, whether by exporting or by founding or taking over companies there.
Nevertheless, expanding into the U.S. harbors many risks. The Fed is experimenting with an extremely expansive monetary policy. This may be responsible for a certain part of the recovery, but the side effects – such as higher inflation – are unavoidable. The U.S. tax regime is also not particularly attractive for businesses. The rates are so high that firms are using all their creativity to evade them. In this light, an export strategy would be preferable to relocation for a Swiss company. There is also the notorious American product liability. The millions of dollars in fines that this entails scares off even large firms. Tobacco firms, for example, long ago separated their U.S activities from international business so the American judiciary does not have any access to their profits.
Despite consumer confidence and the positive manufacturing situation, there are no free gifts for Swiss SMEs in the U.S. Every business must carefully weight the opportunities and risks that wait on the other side of the Atlantic. The current political developments in Russia and Hong Kong especially remind us of the value of a stable business environment. This is a given in the U.S, in sharp contrast to other countries. Even if Asia and emerging markets offer attractive prospects for growth, Swiss firms should not lose sight of America.