English

Transcription

English - Perspectives Pictet

ISSUE FOURTEEN | WINTER 2013
MADE IN SWITZERLAND
Prof. Klaus Schwab
Insight on Global Competitiveness p5
Confiserie Sprüngli
The Swiss confectioner p9
François-Paul Journe
The watchmaker p17
Mario Testino
A philanthropist p21
Suvretta House
The deluxe hotel p27
Fondation Beyeler
The art museum p34
Quincy Jones
An encounter at the Montreux Jazz festival p39
Victorinox
The Swiss army knife p43
Maxon Motor
The engineering manufacturer p50
Actelion
The biopharmaceutical company p54
Prof. Youssef Cassis
Insight on Swiss banks p58
Foreword
Switzerland is a small land-locked country with around 8 million inhabitants,
four official languages and a history as a federal republic dating back less than
two centuries. Yet when the World Economic Forum published its annual
Global Competitiveness Index earlier this year, Switzerland was in first
place for the fifth successive year. In this issue of Pictet Report, we wanted to
understand what makes Switzerland so special and how the Swiss ‘brand’ has
become synonymous with quality and innovation.
We started by asking Professor Klaus Schwab, founder and executive
chairman of the World Economic Forum, how Switzerland had out-stripped
much larger countries. We then looked at some of the industries behind
Switzerland’s global success, and at the values they embody of excellence,
discretion and first-class service. They included Victorinox, manufacturer of
the famous Swiss Army Knife, Maxon Motor whose precision motors power
the Mars rovers, and Actelion whose biopharmaceutical products treat lifethreatening diseases.
But Switzerland also stands for watches, chocolates and some landmark
hotels. We spoke to François-Paul Journe, who launched his fine watch brand
in 1999. We visited Confiserie Sprüngli which began selling delicacies in the
heart of Zürich in 1836 and Suvretta House near St Moritz which has provided
outstanding service to guests since 1912. And of course there is banking.
We asked a leading financial historian how the Swiss banks had evolved to
become global leaders in wealth management.
We did not neglect the arts. At this year’s Montreux Jazz Festival, we
interviewed Quincy Jones, the legendary African-American musician who has
been involved with the festival for decades. We visited the Fondation Beyeler
in Basel, home to a remarkable collection of modern and contemporary
masterpieces. And in our regular look at philanthropy, we spoke to Mario
Testino, the photographer whose recently created foundation celebrates the
artistic heritage of his native Peru.
Pictet has grown and prospered in Switzerland by embodying the Swiss
values of excellence, discretion, long-term thinking and service. We hope that
you will enjoy learning more about the unique characteristics of this small
but influential country which has been our home throughout our history.
Philippe Bertherat
Partner, Pictet
December 2013
Cover Image–View from St Moritz on the Lake Silvaplana, Grisons, Switzerland
Pictet editorial team–Ninja Struye de Swielande and Olivier Capt
Design & editorial consultancy–Winkreative | Rapporteur–John Willman
Photography–Beat Schweizer, Richie Hopson, Meinrade Schade, Claudio Bader, Elisabeth Real.
Photographs for Mario Testino courtesy of Musuk Nolte and MATE.
Fondation Beyeler: Matthias Willi and Serge Hasenböhler
Fondation Beyeler artworks by Thomas Schütte © 2013, ProLitteris, Zurich Artworks
by Alexander Calder: Collezione Gori, Pistoia; Courtesy Galerie Vedovi, Brussels; Calder Foundation,
New York, © Calder Foundation, New York / 2013, ProLitteris, Zurich.
Winter 2013 ISSN 1664-008X
For subscription information please contact: privatebanking@pictet.com
contents
Educate
Prof. Klaus Schwab
Insight on Global Competitiveness
p5
Prof. Youssef Cassis
Insight on Swiss banks
p58
Suvretta House
The deluxe hotel
p27
Entrepreneurs
The Swiss confectioner
p9
The watchmaker
p17
TO BE REPLACED BY
NEW HIGH RES
Victorinox
The Swiss army knife
p43
Maxon Motor
The engineering manufacturer
p50
Actelion
The biopharmaceutical company
p54
p21
Fondation Beyeler
The art museum
p34
Quincy Jones
An encouter at the Montreux
Jazz Festival
p39
Inspire
Mario Testino
A philanthropist
pictet report | winter 2013
made in switzerland
3
Global Competitiveness
Professor Klaus Schwab
The founder of the World Economic Forum says that
Switzerland has retained its top place in the Global
Competitiveness Index for the fifth year running as a result
of the excellence of its economic and business performance,
its human capital and the strength of its public institutions
Professor Klaus Schwab is Executive Chairman of the World Economic Forum, a Swiss non-profit
foundation based in Geneva which
he founded over 40 years ago. Born
in Germany to parents of Swiss origin, he has two doctoral degrees,
one in Mechanical Engineering and
the other in Economics. He spent a
year at Harvard University in the
US and went on to be the youngest
professor at the University of Geneva where he developed ‘stakeholder theory’. The World Economic Forum began life in 1971, and fulfils
its mission of improving the state
of the world by engaging business,
political, academic and other leaders
of society to shape global, regional and industry agendas. In 1998,
he co-founded with his wife Hilde
the Schwab Foundation for Social
Entrepreneurship, supporting social innovation around the world.
He also established the Forum of
Young Global Leaders in 2004 and
the Forum of Global Shapers in 2011.
made in switzerland
When Professor Klaus Schwab launched his
first competitiveness report in 1979, he was
seeking to find the secret formula that makes
some countries more successful than others.
At the time, he was primarily interested in
how European economies were positioned in
comparison with their main rivals around the
world. But the report has become increasingly
global in its scope, and now covers 148 countries from every region and at all stages of
economic development. And a striking development has been the emergence in the last five
years of tiny, landlocked Switzerland as the
world’s most competitive country.
Switzerland has held on to its top place
again this year because it scores highly
on the main competitiveness indicators across the board, according to Prof
Schwab. Despite the problems afflicting
the neighbouring eurozone in recent
years, the country has recorded impressive growth while maintaining one
of the most stable economic environments in the world. Many qualities drive
Switzerland’s excellent performance,
he adds, with the country’s most notable strengths lying in its strong institutions, human capital, innovation record
and efficient markets, as well as the
sophistication and diversification of its
business sector.
‘The country is famous for its financial institutions, and they contribute
more than 10 per cent of value added to
the economy,’ he says. But Switzerland
is much less dependent on one sector
than many other countries, such as
those in Latin America whose growth is
based on exports of raw materials. The
highly diversified range of products
and services—which extends from financial services and watches to industrial
machines and pharmaceuticals—gives
the economy resilience.
‘Swiss companies offer high-quality products and compete across a very
sophisticated product range. This has
helped alleviate the adverse effects of
a strongly appreciating Swiss franc, so
global competitiveness
5
‘Swiss companies
offer high-quality
products and
compete across a
very sophisticated
product range’
6
that the market share of Swiss goods has
remained largely stable. Productivity
is further enhanced by a highly sophisticated business environment supported
by well-functioning labour and financial markets.
‘Against the current high unemployment in Europe and other parts of the
world, Switzerland compares extremely
well. The country has a labour market
that is both flexible and efficient in
deploying its talent. Employee protection and the interests of employers are
well-aligned, with strong employeremployee relations, and conflict resolution resting on social dialogue rather
than industrial action.’
Then there are Switzerland’s
public institutions, which Prof Schwab
describes as among the most effective and transparent in the world. ‘One
thing that sets the country apart from
any other is its unique governance structure. In addition to its highly decentralised form of federalism, seven members
of the Federal Council act as a collective head of state. The political system
ensures cohesive and inclusive leadership across political boundaries, which
enables the country to implement a
long-term economic agenda.
‘Also important is Switzerland’s strong
collaborative culture among stakeholders. Government, business and civil
society work together in a coherent
way to find solutions for the country.
This effort is facilitated by the strong
involvement of its population, which
votes on major decisions directly.
Governance structures—including an
independent judiciary, strong rule of
law, and a highly accountable public
sector—ensure a level playing-field,
enhancing business confidence and thus
reinforcing competitiveness.
Switzerland is also a global leader
when it comes to innovation, he says—
not just in coming up with products,
but also in doing things differently. The
excellent innovation ecosystem makes
the country an attractive place to work
for highly qualified people. Its scientific research institutions are among
the world’s best, with strong collaboration between the academic and business
sectors. Combined with high corporate
spending on research and development,
much of this research is translated into
marketable products and processes.
‘The education system is outstanding, producing a highly skilled workforce that continues to receive important
on-the job training. Unlike many other
countries, Switzerland’s labour force
is growing, thanks to the migration of
particularly skilled labour, boosted by
the bilateral agreements on free circulation with the European Union that
entered into force in 2002.
‘This investment in human capital
is underpinned by strong intellectual
property protection. The robust innovative capacity leads to a high rate of
patenting per capita, which puts Switzerland in second place on this criterion. Indeed, the combination of highly
innovative companies with a strong
institutional environment is a characteristic of other countries at the top of
the Index, such as Singapore, Finland
and Germany.’
Switzerland’s ascent to the top of
the competitiveness league table has
come at a time when the shift in the
centre of gravity from advanced to
emerging or developing economies has
made in switzerland
Switzerland is
a global leader
when it comes to
innovation
made in switzerland
been accelerated by the global financial and economic crisis. Prof Schwab
expects that broad shift to continue,
with hundreds of millions of people in
China who still aspire to higher living
standards continuing to drive economic
growth through their productive work
and their purchasing power. In the
longer term, however, he expects to see
more balanced but lower growth in the
global economy, as the increasing size
of emerging economies makes it harder
to maintain annual growth rates of 10
per cent.
‘There is also an underlying global
trend of moving away from mass
production in emerging markets,
with repatriation of manufacturing to
advanced economies such as the US,
encouraged by cheaper shale gas and oil
and rising labour costs in China. This
will raise one of the biggest issues facing
the world, which is whether 3-4 per cent
annual growth rates will satisfy people,
even though in the past they would have
been normal. Annual growth of 5 per
cent doubles the economy every 14 years,
while growth of 3 per cent means that it
takes 24 years. And with the growth in
productivity due to technology, the chal-
lenge will be how to create enough jobs
while the world’s population continues
to grow.’
The Global Competitiveness Index
is compiled by looking at the extent to
which countries have developed their
productive potential, measured using
more than 100 variables. The performance of different countries against
similar competitors and over time varies
considerably. South-East Asia performs
much better than South Asia for example: Indonesia is the most improved G20
economy since 2006, while Malaysia
remains the most competitive economy
among the Asian developing nations.
By contrast, India has fallen 15 places
since 2006 to fall behind the Philippines
which was once 40 places below it—while
Pakistan has slumped 28 places, one of
the biggest declines of the past eight
years.
The Index focuses on the medium
to long-term drivers of economic performance. Some changes can have an
impact in the shorter term—regulations
affecting the time required to start a
business can be eliminated at the stroke
of a pen through policy reforms. But
others such as improvements to educa-
7
‘The education
system is
outstanding,
producing a highly
skilled workforce’
tion or building infrastructure take
longer to bear fruit. Switzerland may be
the most competitive nation now, but
barely 150 years ago it was a poor country which had only recently become a
federal republic after centuries of strife.
‘I recently met Madame Park, the
Korean President, and she reminded
me that in the late 1950s, the GDP per
capita in Korea was the same as that of
Kenya. Today, it is around USD23,000,
while Kenya’s is under USD1,000. The
two countries have developed in differ-
8
ent ways, and it needs long and consistent economic and institutional progress
to achieve significant improvements
in competitiveness.’
How long can Switzerland hold its
top place in the Index? Prof Schwab says
that it will be important to resist drifting
into complacency. ‘The banking sector
is under scrutiny and necessarily undergoing great change. Finding ways to
integrate more women into the labour
force will be important for enhancing the country’s talent pool further.
And Switzerland must continue to build
on its competitive strengths and resist
over-regulation and protectionism.
‘But at present it is a magnet for
global talent. Indeed, that is one of the
most important factors which attracted
the World Economic Forum to locate
here: being based in Switzerland reinforces an organisation’s ability to attract
and retain top talent.’
made in switzerland
The Swiss confectioner
An iconic family business in the heart of Zürich, established
in 1836 and now in the sixth generation of its management,
is famous across the world for its delicious Luxemburgerli
truffles, pralines, tarts and pastries
made in switzerland
the swiss confectioner
9
Walk down Bahnhofstrasse, Zürich’s exclusive main street, and
you soon reach Paradeplatz the commercial heart of the city.
And there on the corner of the famous square stands one of Europe’s
most renowned confectioners, selling exquisite delicacies made in its
own workshops from Swiss milk, cream, butter and eggs. Confiserie
Sprüngli is a national institution, which more than 175 year after
its foundation continues to prosper, expanding its product range
and global reach.
10
Sprüngli’s flagship product is the world-famous
Luxemburgerli, a macaroon that melts on the
tongue. The name reflects the origins of the
young pastry chef who more than 50 years ago
introduced the speciality of the Luxembourg
master confectioner he worked for while spending time at Sprüngli. Constantly refined in their
new home, there are now more than 30 different
varieties of Luxemburgerli, with flavours including chocolate, vanilla, champagne, raspberry,
lemon and pistachio. Every month, new tastes
are developed for devotees who are encouraged
to enjoy their fresh ingredients—made without
preservatives or artificial colours—immediately.
‘We make more than 800 kilogrammes a day
on average—around 80,000 Luxemburgerli,’
says Tomas Prenosil, Sprüngli’s chief executive.
‘And we sell them only in Switzerland and only
made in switzerland
through our own retail outlets. They
are not available wholesale or through
other retailers. Everything we produce,
we sell ourselves exclusively.’
That policy, he adds, is central to
the company’s success, because it can
ensure the quality of its products and
keep in close contact with its market.
‘It also means that we determine our
prices and can control our margins,
which is important in the luxury food
sector. Other companies that distribute through third parties get squeezed
by retailers, but our approach helps
us to stay independent and maintain
our luxury niche in Switzerland and
around the world.’
The company was founded in
1836 when David Sprüngli bought
Konditorei Vogel in the marketplace
of Zürich’s Old Town. His son introduced chocolate production in 1845,
and in 1859 the confectionery business
was moved to the newly built Paradeplatz where a modern transport and
business hub was developing. The
construction of Bahnhofstrasse in
1864 created a direct link to the city’s
central railway station, and Confiserie Sprüngli’s key position made it a
popular meeting place. In 1892, Chocolate Sprüngli went its separate way
as an industrial enterprise that later
became Lindt & Sprüngli, leaving the
confectionery business to continue as a
family-owned craft business.
Under Richard Sprüngli, a fifth
generation family member, production was moved out of Paradeplatz
in 1961 because of traffic and space
considerations, to the home it has
today in Dietikon to the west of
the city. And in 1970, a second sales
outlet was opened in a Zürich shopping centre, launching a programme
of expansion into prime retail positions in the city. But with no children
of his own, Richard decided to pass
control of the business in 1994 to two
nephews: Milan and Tomas Prenosil.
They had arrived in Switzerland from
Czechoslovakia after the Soviet crackdown on the Prague Spring of 1968,
making a new start in Zürich where
their aunt had married him.
made in switzerland
‘I love to identify
new trends
and devise new
products,
packaging and
designs’
‘At that moment,’ Tomas says, ‘we
who had been found ourselves at the
centre of Zürich society through our
connection with one of the best-known
companies in Switzerland. We would
spend a lot of time with my uncle
on holidays and at weekends, and
my brother and I grew up with Confiserie Sprüngli. During the summer
holidays we sometimes worked in
the factory and drove trucks to
deliver orders—from our earliest days
we were involved.’
Tomas originally intended to
be a lawyer, and studied law at the
University of Zürich after his national
service. His uncle wanted him to study
economics, but he thought being a
lawyer be more interesting and challenging. However once he had qualified in 1994, his uncle asked him if
he would like to join the company—
giving him one week to answer. When
he agreed, he started work as plant
manager at the Dietikon production
factory. His older brother Milan was
already working in the business in
marketing and sales and is now the
company’s President.
Amazingly, this was not the first
time that the succession had passed
sideways through the family chain
in this way. ‘The fourth generation
Sprüngli also had no children,’ Tomas
says. ‘He adopted his nephew—my
11
‘We are Sprüngli
today because of
our outstanding
quality, because we
are Swiss, because
we are in Zurich and
because we are in
the Paradeplatz’
12
uncle—and put him in charge. So we
have now had two successions that
brought in younger people eager to
prove themselves. The old saying
used to be that a family business lasts
three generations: the first starts it,
the second continues it and the third
runs it down. We are now in the sixth
generation because two of our predecessors were able to choose the next
generation family members with the
right characteristics to succeed.’
Tomas Prenosil says he quickly
realised that he had made the right
decision by joining the business:
he found that he had management
skills, he liked to work with people
and was good at dealing with tactical and emotional issues. One of
his motivations for wanting to be a
lawyer was that he felt it would give
him independence, but being a director of the family business gave him
the independence he desired. He has
no outside shareholders to answer to,
and since the company finances itself
from its own resources, no banks to
worry about. Thus he has the freedom
to be entrepreneurial, constantly innovating in a world where the pace of
change is accelerating.
Tomas describes innovation as his
hobby. ‘I love to identify new trends
and devise new products, packaging
and designs—working with staff, sharing experience, thinking about what
the market wants and finding ways to
meet those needs. We organise innovation through a dozen groups that
bring together financial, procurement,
production, marketing and sales staff
to work on ideas for developing the
business. I always try to encourage
young talent, being flexible when they
come up with new ideas and never telling them that if they don’t like it here,
they can leave.’
One good example of the fruits
of that approach was the introduction of takeaway lunch products in
the company’s shops. ‘People came
to me with little sandwiches and
salads in Tupperware containers and
suggested that we offer takeaways. At
first there was resistance by those who
said we only sell chocolates, but confiseries have always made canapés. So
we started to produce our takeaway
lines and today they are an important
part of the business, attracting regular
customers who often buy chocolates at
the same time.’
The expansion of retail outlets
started by his uncle has also continued. Today there are 21 shops, mostly
in Zürich but with branches in other
Swiss cities. There are also airport
branches in Geneva and Zürich which
have high footfall because their products make good presents for colleagues
and family. Tomas expects to open a
few more stores in Switzerland, but he
is also excited about the growth potential of Sprüngli’s online shop, especially for corporate customers.
‘For corporate clients, we can individualise everything—boxes, packaging and even special Luxemburgerli
flavours for a single event. A lot of
global companies have head offices
in Switzerland and our very strong
logistics division can ship our prod-
made in switzerland
ucts wherever they want them to go.
And companies can even link into our
online shop through their intranets to
make ordering easier.’
As for international expansion,
Tomas Prenosil sees few opportunities in other European countries which
have had their own long-established
chocolatiers. But he sees potential for
the internet business outside Europe,
especially in countries such as Japan
and cities such as New York, Dehli
and Shanghai where Sprüngli Luxemburgerli and luxury chocolates could be
be sold online. A subsidiary in Dubai is
pioneering B2B (business to business)
markets in the Middle East and India,
and also B2F—business to families in
those regions who often stage very large
events such as weddings and the Eid
celebrations. While the cost of flying in
supplies to ensure quality and freshness
is expensive, people from those markets
spend time in Switzerland and know
Sprüngli’s products, he adds.
made in switzerland
With rising turnover of more than
Tomas Prenosil’s tips
CHF120 million a year, Confiserie for family businesses
Sprüngli is not a small business: to
retain its artisanal manufacturing •Stay close to the vision for the
business, so that it survives and
techniques, it employs around 1,000 remains independent
people. But Tomas is keen to point •Define a system of family
out how Sprüngli’s success reflects the governance with rules about
wisdom of the early family members the role of family members in
the business and procedures for
in buying the Paradeplatz shop in resolving issues
1859. ‘It was one of the most impor•The succession process is the
tant decisions in our history, since biggest challenge—it means
it gave us a visible presence in a very finding successors who are
important and exclusive place. Selling willing and able to take over, and
who have the right personality
coffee, croissants and Luxemburgerli to run a family business
could never pay the rent for this loca- •The older generation must
tion today—only fashion, watch and step back when the younger
jewellery shops can afford to be on the generation takes over—and not
hold on to any aspects of the
Bahnhofstrasse now.
business. It can be very difficult
‘We are Sprüngli today of our for entrepreneurs to let go, but it
outstanding quality, because we are is essential if their successors are
to succeed
Swiss, because we are in Zurich and
•Appoint directors who can
because we are in the Paradeplatz. contribute to running the
Without this location, we would be business—avoid giving power
to family members who have
somebody else.’
nothing to contribute
13
14
made in switzerland
Grand Restaurant, Suvretta House, St. Moritz
made in switzerland
15
16
the watchmaker
made in switzerland
The watchmaker
In less than three decades, the Geneva-based Frenchman has
become famous among discerning collectors for timepieces
which combine traditional Swiss quality with revolutionary
innovation and exceptionally beautiful design
When François-Paul Journe created his
first watch 30 years ago, the Swiss watchmaking industry was in crisis. New quartz
products had flooded the market, replacing
traditional mechanical watches and driving many of Switzerland’s world-renowned
manufacturers out of business. Yet today the
industry has been restored to health, with
buoyant demand for Swiss-made timepieces
produced by the country’s best-known watchmakers. Among the most sought-after by
collectors are those of F.P. Journe, the marque
established by François-Paul in 1999.
‘My first watches
in Switzerland
were available on
subscription only
to clients I
personally knew’
made in switzerland
‘I created my first watch during the evenings and weekends
while working as an antique watch restorer with my uncle
in Paris,’ he says. ‘When I had finished it, a watch collector
asked me if he could buy it, and then a second one asked
the same. At that time, watch collectors were very few, but
each year I had new requests for tailor-made watches, which
I continued to make on my own.
‘I thought there were probably only ten collectors in the
world and that I would not have a job in ten years’ time. But
I continued to work on my own, and the orders steadily rose
to 11, 12, 13 and then 100. I had created a need, and today we
make 900 watches a year.’
By 1989, the French watch-making industry was all but
dead, so François-Paul left his country of birth for Switzerland where he could still find all that he needed to make his
watches. He opened his first movement manufacture at Sainte
Croix in the Jura—the original home of the Swiss industry in
the Jura mountains. A year later, he moved to Geneva where
he continued to develop a range of watches which were very
different to those of competitors who often stuck to tried and
tested designs. Ahead of the times, his innovative timepieces
attracted little attention at the Basel Watch Show at first, but
recognition began to grow around 1995.
‘An important factor behind this was the launch of
watch magazines, such as La Revue des Montres in 1991. Even
though watches have been around for more than 200 years,
it is only in the last 20 years that they have become fashionable. When I started making watches, I had no business
plans—I did it because I enjoyed it and hoped that someone would like them. My first watches in Switzerland were
available on subscription only to clients I personally knew,
who paid half the price upfront.’
He finally decided to launch his own brand, and F.P.
Journe made its debut in 1999 under the motto of Invenit
the watchmaker
17
et Fecit—Latin for ‘invented and made’. His very first timepiece had been a pocket watch with a tourbillon mechanism
which had taken him five years to complete. In 1999, he
premiered the first tourbillon wristwatch in his Souveraine
collection, with the remontoir system he had created in
1982. At Basel in 1999, there was now a queue to order them.
He now employs 25 watchmakers in a beautifully
restored 19th century building in Geneva, with in total 65
employees. Another 50 collaborators works in Meyrin close
to the city at the Cadraniers and Boîtiers de Genève that
belongs to F.P.Jorne. With ten F.P.Journe Boutiques worldwide in cities such as Paris, New York and Tokyo, his staff
totals more than 150. And he has continued to innovate and
win prizes in many international forums.
François-Paul Journe designs all his watches, drawing inspiration from many sources. The Grande Sonnerie,
for example, is a very complex timepiece, created in 2000,
which chimes the hours and quarters. Designed to be
used by a child of eight, it took six years to develop, has
ten patents behind the design and is guaranteed to strike
35,040 chimes a year. Many of his watches have windows
18
the watchmaker
‘We are the only
watchmaker to
use 100 per cent
Swiss-made
parts, including
the cases’
made in switzerland
in the faces to reveal the mechanisms beneath,
and where the hours and minutes are shown on
a smaller dial, it is placed to the right-hand side—
easily seen when on the right wrist with a shirt
cuff half covering the case.
There are different business models in Switzerland’s watch industry, he says. Some watchmakers focus on luxury and craftsmanship, while
others with factories in China target the mass
market. F.P. Journe is firmly in the former group,
and is the only watchmaker to produce and use
100 per cent Swiss-made parts, including the cases.
‘Other watchmakers claim to be Swiss-made,
but their parts are only 60–70 per cent Swiss in
origin. I think the government should be much
firmer on this and defend the ‘Swiss-made’ brand
for a certain quality of watch—there is no interest among collectors and discerning buyers in
‘Swiss-made’ watches manufactured in China.
Obviously you cannot produce an entirely Swissmade watch for CHF250–300, but you can for one
that costs CHF250–300,000 or less.
made in switzerland
François-Paul says the challenge of running a
watch-making business is to bring together all
the elements: design, the workshop, the administration—and then to find the right watchmakers. Making just 900 pieces a year means that his
watchmakers spend a lot of time producing each
watch. A new timepiece, for example, requires
900 to 1,000 plans to realise the design. And
around 90 per cent of the movement parts are
made in-house using highly sophisticated equipment capable of cutting metal at molecular level
and measuring as little as two microns.
When it comes to assembling a watch, a single
watchmaker works on one timepiece from start to
finish, which can take as long as three months. His
or her name is engraved beside the serial number
of the watch, and that person is responsible for
all after-sales service during the two-year guarantee period. As for finding the best watchmakers,
he likes to recruit them from other manufacturers, because they will appreciate the advantages
of working for F.P. Journe. But he will never take
the watchmaker
19
François-Paul Journe’s tips
for entrepreneurs
• Do something you enjoy doing,
because you will spend so
0much time on it—you need
passion to succeed in business
• Be organised—it is vital to have a
plan and follow it
• Manage your growth so that you
can avoid incurring too much debt
20
the watchmaker
someone back once they have left:
‘Watchmakers are very fickle, and will
change jobs for a small salary increase.’
He adds that he is not really a businessman by nature. ‘I manage growth
carefully and prudently, and I never
spend more than I have. That way I
never have to raise too much debt. My
only growth plan at the moment is to
launch a women’s collection next year,
and it will have taken me eight years to
do so. If you grow 20 per cent per year
and your spending rises by more than
20 per cent, you have to raise debt. If
you earn 15 per cent after tax, that is
the amount you can invest in machinery, sales outlets and so on. We have
just opened in Los Angeles, and will
open another Boutique in Beirut by
the end of the year.’
Around 70 per cent of his sales
are to established collectors around
the world. Real collectors, says François-Paul, stick to one brand only—
many who now collect F.P. Fourne
timepieces had previously collected
Patek Philippe watches. Some of the
other watches are sold to customers
in emerging markets. Hong Kong and
Taiwan have been good markets for
a long time, and mainland Chinese
are slowly becoming buyers. ‘But this
takes time: they have to buy their first
Rolex, and then develop over time into
real collectors.’
When entering a new market, most
of the watch companies initially work
with distributors and are in competition with each other for the best retail
space. As a result, smaller brands such
as F.P. Fourne start off with smaller
displays which means that it can take
time to achieve the profile necessary to
attract potential customers.
However, F.P. Journe’s carefully
managed growth strategy has other
trump cards, the most important
of which is the enthusiasm of those
who collect its watches. ‘They are
our ambassadors,’ says FrançoisPaul, ‘and therefore they are our most
important customers.’
made in switzerland
A philanthropist
Called back to his Peruvian roots
The renowned Peruvian photographer Mario Testino has created
a cultural institute in Lima to exhibit his work, celebrate the
artistic heritage of his native country and provide a focus for his
philanthropic activities
made in switzerland
a philanthropist
21
Mario Testino is a fashion photographer well-known
for his portraits of models such as Kate Moss and Gisele
Bündchen, celebrities like Madonna and Gwyneth
Paltrow, and members of royal families around the
world. His royal commissions have included Queen
Rania of Jordan, Britain’s Prince of Wales, Prince
William and his wife Catherine Duchess of Cambridge,
Prince Harry and—most famously—Diana Princess of
Wales. Intensely proud of his Peruvian origin, he has
now established a cultural institute in Lima to promote
and celebrate the arts of his home country, and to participate in cultural and social programmes for the benefit of
the poorest in society.
22
a philanthropist
‘It is a way of giving back to my country,’ he says. ‘People always say that you
reach an age in life when your roots
call you back. I left my country in 1976
because of the lack of opportunities in
my chosen field of fashion. Now there
are lots of new opportunities—Peru is
no longer just a small Latin American
country. Today, Peruvian artists are
making an impact on the global scene,
and I want to be part of this movement.’
MATE, Asociación Mario Testino,
is a not-for-profit cultural institute
which opened in July 2012 in Lima’s
historic Barranco district, once the
made in switzerland
home of many of Peru’s leading intellectual figures, writers and artists.
‘I had bought a house in Lima
close to the sea to spend time with my
mother who is now 90. The person
who helped me to buy it said that there
was a wonderful Republican villa just
a block away which nobody wanted to
buy. It is a historical monument, but
people today want modern homes and
aren’t interested in these older properties. They see them as “big elephants”,
with high ceilings and no heating or air
conditioning, and they don’t want to
have to renovate them.
‘So I bought it. The price was low,
but restoration was very expensive. My
intention was to use it to store my work
which up to then had been stored in
London after being exhibited—I wanted
to bring it back to Peru, my home. But
I soon realised that it was pointless to
leave the work in storage in Lima: I felt
that Peruvians should own my work
and so I decided to open it up to them.
I could use the building as a place to
show my own work, as a platform to
promote Peruvian art and as a place to
bring to Lima things that would not
otherwise come to Peru.
‘When people are doing well
in Europe, they give back to their
communities through art or other
activities. But this is not yet happening much in Peru, and while I
am not the only person to do it,
I wanted to be part of this new movement. Peru is going through such a
good moment right now.’
Mario Testino quickly realised
that he had the power to make things
happen in his country. ‘When I call
people, they are likely to take my call—
so I can really put things together. It is
like painting by numbers: as you put
one number after another, it becomes
a picture. I can call the private sector
and the cultural, tourism and government sectors to persuade them to work
together for the same purpose.’
MATE opened in 2012 with a show
of his own work called Todo o Nada (All
or Nothing) which brought together 54
photographs illustrating two contrasting themes of his work: fashion and
made in switzerland
the nude. The intention is to stage two
special exhibitions a year among other
projects. For example, in 2013 it was
Alta Moda (High Fashion)—a series of
striking portraits of Peruvians wearing
traditional and festive attire from the
Andean region of Cusco.
‘Alta Moda has been a sensation.
For many years, Peruvians had looked
abroad for artistic greatness—like all
third world countries, they felt that the
grass was always greener on the other
side. But after years of looking down
on their own people, they have now
become very proud of their heritage. I
try to promote our culture to encourage
this, creating a new nationalist feeling.
‘I have worked abroad for 30 years,
yet when people write about me they
always describe me as “the Peruvian
photographer Mario Testino”. You
don’t hear people talking about “the
German designer Karl Lagerfeld”
or “the British photographer David
Bailey”. They are never associated
‘It is like painting
by numbers: as you
put one number
after another, it
becomes a picture’
a philanthropist
23
with their countries, but this has been
another sign for me that being Peruvian
is a great asset.’
Mario Testino’s next project for
MATE is an exhibition in October 2013
to showcase 30 contemporary artists
worldwide. It will be called Somos Libres
(We Are Free), which has been the first
sentence of Peru’s national anthem since
independence in 1821. It will feature the
work of artists he has already collaborated with, such as Keith Haring,
George Condo, Ugo Rondinone and
Julian Schabel, together with photographs he has taken of them at work.
He expects resistance from those who
do not see many modern works as art
at all. ‘I have been collecting for 25
years and I am not worried about the
perceptions people may have about
this. It is important to show people
that art has to live. I have been working with Neville Wakefield, the curator
of this exhibition, and the whole point
of it is that artists today are fully free to
do what they want in their work. The
works on display are not just paintings
on canvas but various mixed media,
such as pieces using chewing gum
24
a philanthropist
or items of rubbish glued together.
It’s all about freedom.’
For the moment, MATE is focused on
his cultural projects, but Mario Testino is bubbling over with other plans.
He has been asked to help a new engineering university in Peru, which
wants all its students to take an art
course. His original plan was to target
people from the arts scene only, but
with others wanting to learn from him
he has realised that he must cast his
net more widely. He has also decided
that it is time to set up his own charitable projects.
He had already been involved
in the philanthropic activities of
Russian model Natalia Vodianova
whose Naked Heart Foundation
creates parks in her native Russia
where children can find a safe and
inspiring play environment. He has
long supported her work and recently
donated a portrait sitting that was
auctioned off for EUR1 million at her
LOVE Ball. Part of the money raised
will go towards Mario taking this
initiative to Peru and developing play
parks there—with his own twist.
‘Nothing in life is
without a purpose’
made in switzerland
‘In Europe, children are taken very
early to museums and galleries which
open their minds. So I want to create
an entertainment park with swings,
but I also want to have creative exposure for poorer children. When I went
to Europe, I knew nothing about art,
but I went to galleries and taught
myself all about it.’
He had also helped raise
EUR450,000 in 2006 to build play
parks in a hospital in Russia for children with cancer. ‘When I was 18, my
younger brother died of cancer at the
age of 10. When I visited the park at
the hospital in Moscow, it all came
back to me. Nothing in life is without
a purpose—I felt my brother had taken
me there.
‘So in my philanthropy, I try to tie
together all the formative experiences
in my life. I chose children and cancer
because of my brother’s death, and I
chose culture which can help people
out of poverty.’
He admits that he has no overall
vision yet, but says that life throws
up challenges that will help the
cultural institute find its place. ‘The
more ideas I have, the more it costs,’ he
adds, laughing.
One source of income for the
cultural institute is sales of products developed in partnership with
sponsors, using the MATE brand. He
has already designed clothing, bags
and jewellery with a modern take on
Peruvian craft for exclusive sale by
Net-A-Porter, the online luxury fashion retailer. Each sale will produce
a donation for MATE to help fund
its activities.
He is also involved in a partnership with the Peruvian Government
and the World Bank to organise
cultural and educational initiatives
during the lead-up to the World Bank
and International Monetary Fund
2015 annual meetings in Lima.
The three aims of the partnership are
to promote the brand of Peru, to link
the country’s cultural assets to underprivileged communities, and to
create new learning centres for arts
and leadership.
made in switzerland
Other plans include encouraging
foreign tourists, who tend to visit
only the Inca sites at Cusco and Machu
Picchu, to explore Lima and its rich
culture. He is also keen to do more in
the Baranco district where MATE is
based to restore it to its former glory.
And he wants to promote the Peruvian textile industry, perhaps with a
national costume institute. ‘We have
such a rich history in our traditional
costumes,’ he says. ‘For Alta Moda,
I took photographs in only one
region—Cusco—but we have 23.
‘Alta Moda (which moves to New
York in November) was amazing, but
now I want to do something very different. You plant seeds in your garden and
you see which flower the best. My only
clear vision is that I can give my time
and rather than stick to one thing, try to
do the next new thing—as I have always
done as a photographer.’
‘So in my
philanthropy,
I try to tie together
all the formative
experiences
in my life’
a philanthropist
25
The deluxe hotel
Suvretta House
In an era when numbers have come to dominate the hospitality
industry, a family-owned hotel high in the Alps offers
outstanding personal service to guests who return year after
year to enjoy its unique and peaceful location
Switzerland is renowned the world over for
its luxury hotels, many of which are located
in stunning alpine locations offering fabulous skiing in winter and idyllic mountain
walking in summer. One of the grandest
is the stylish Suvretta House, high in the
Upper Engadine valley above St Moritz in
the south-eastern canton of Graubünden.
Opened just over a century ago, it is still
owned by the same family—the reason for its
legendary reputation for service, according to
Helen and Vic Jacob who have managed the
hotel since 1989.
‘There is something special about
Swiss hospitality,’ says Vic. ‘But we
are now one of the few hotels in Switzerland which is still owner-managed
and has been from the beginning. The
long relationship between the founding Candrian-Bon family and the
hotel makes a big difference, and is
very attractive to the many guests who
have come here for many years. They
want to see everything the same—that
nothing has changed in the hotel, the
nature of its clientele or its management. They often come back year after
year, bringing two or three generations
of their entire families, so these values
are very important.’
Suvretta House, built in just 18
months, opened in December 1912—
one of the last grand hotels built in
Switzerland. The founder, Anton Bon,
kept the hotel open when the First
World War broke out, but it was forced
to close during the Second World War.
made in switzerland
When it reopened in 1946, it had no
guests, no money and needed to be
restored. But in the following decades,
it was modernised by the family, who
brought in the first outsiders to run
the hotel in 1968.
Located at 1,850 metres above
sea level on a plateau two kilometres
from the alpine resort of St Moritz,
Suvretta House has uninterrupted
views of mountains and lakes. Even
the journey there can be magical, travelling in panorama cars on the worldfamous Rhaetian railway which winds
through rugged mountainous terrain
and across deep gorges on vertiginous
viaducts. It is not surprising, therefore,
that it has always attracted famous
guests, such as the ballet dancer Nijinsky, Douglas Fairbanks Snr, Emperor
Akihito of Japan, Evita Perón and
Gregory Peck.
The Candrian-Bon family—which
has other interests in the hospitality
industry—remains the hotel’s owner,
and fifth and sixth generation family
members sit on its board. Most of the
investments required over the years
have been funded from cash flow,
although there has been one capital
increase and there are other big shareholders, including Urs Schwarzenbach, the wealthy Swiss investor.
But, says Vic, the family commitment to Suvretta House means that it
still keeps control and is prepared to
invest for the very long term through
constant refurbishment.
‘Clients often come
back year after year,
bringing two or
three generations of
their entire families’
the deluxe hotel
27
Precision, security
and long-term
thinking: values of
Swiss hospitality.
28
the deluxe hotel
Today, it has 181 rooms and suites,
and a wellness and spa area with a
25-metre swimming pool. It owns
three mountain restaurants, as well
as its own Grand Restaurant and the
more rustic Suvretta Stube with a sun
terrace. The Grand and the nearby
Restaurant Chasselas have both been
awarded 15 out of the maximum 20
points by France’s prestigious GaultMillau restaurant guide. With as many
as 45 chefs in high season, the kitchens make everything, including all the
hotel’s bread and the chocolates served
with coffee.
The Jacobs are only the second
outsiders to run Suvretta House,
having arrived with solid experience
from jointly managing two other Swiss
hotels. They are proud that the hotel is
called a house, because it aims to make
guests to feel at home—Helen and Vic
personally greet every arrival and bid
farewell to every departure. Traditions
are carefully preserved: dark suits and
ties are de rigueur for gentlemen guests
at dinner in the Grand Restaurant,
while some choose to wear dinner jackets for big occasions.
With their three children also in
the hotel business, Helen and Vic feel
that the industry is deeply in their
hearts. ‘It is a 24-hour-a-day, seven
days a week job,’ says Vic. ‘You have
to be in good health in this business,
and you have to love the job. And you
must be disciplined and able to decide
what is really important and what can
be calmly neglected. I contrast our
job with that of a conductor, who can
always say “play it again”. We do not
have that option.
‘There are a lot of very good hotels
so there is more competition than
made in switzerland
ever,’ he adds. But while many of them
are very beautiful, they lack soul and
spirit. It was not easy to step into the
footprints of our predecessors, but in
our 24 years here, we have tried to give
Suvretta House soul.’
The hotel’s most important
markets have always been Switzerland, Germany and the UK, along
with other European countries such
as France, Austria, Italy and The Netherlands. Word of mouth is now bringing visitors from further afield—from
countries such as Brazil, Israel and
Australia—and from Eastern European
countries from Estonia to Armenia.
Meanwhile, North American guests
continue to return to Suvretta House
year after year.
‘Two days ago,’ says Vic, ‘an American family came back after a 15-year
gap. They wanted to visit the Kiddy
Club [the in-house kindergarten] and
the Teddy Club children’s restaurant,
to revisit the places of their memories.’
After so long in the business, nothing that guests request surprises Vic any
more. But he admits to being impressed
with the personal contacts and longterm friendships that develop over time.
‘People come with personal stories and
challenges, approaching you as a friend
rather than a hotelier. That is why Switzerland’s tradition of discretion is so
important when dealing with families.’
Helen and Vic stress other traditional values of Swiss hospitality: precision, security and long-term thinking.
But they are also acutely aware that
while staying within their traditions,
they must be open to new ideas and
ways of working as the market changes.
Suvretta House is now on internet hotel
sites such as Booking.com, for example,
because that is where customers expect
them to be.
‘If you don’t do these things,
potential guests see you as not modern
and open for bookings. However our
business model is still firmly focused
on personal service, which has been
lost in a lot of the industry. Nobody
wants to be treated as a number, but
the trend today is to turn customers
into numbers. When our guests call,
made in switzerland
we recognise their voices. And we also
look for long-term relationships in our
suppliers: we still use the builder who
built the hotel.’
Suvretta House opens for two
seasons each year: ten weeks in
summer and a 17-week winter season.
The hotel has its own ski-school, the
first in Switzerland in the 20th century,
with 200 instructors, a ski shop and
storage facilities for regular guests to
leave their equipment from one season
to the next. In summer, it offers windsurfing, sailing, horse-riding, tennis,
golf and other mountain pursuits,
though inevitably revenues fall below
those of the winter season.
‘There are many
beautiful hotels but
Suvretta has a soul’
the deluxe hotel
29
30
the deluxe hotel
made in switzerland
Vic jokes that he does not show the
much weaker summer figures to the
bank: ‘They would just say “Close the
hotel”!’ Winter has more to offer, he
adds, but at least Swiss mountain hotels
have two seasons: ‘Italy and St Tropez
have just one.’ And although Europe’s
financial crisis has had an impact on
business, with the economies of Switzerland’s neighbours suffering, the
hotel is surviving without subventions. ‘Because we are now more global,
we are very well connected to other
markets,’ he points out.
The seasonal nature of the business
presents people management challenges
for the hotel. ‘It is like a cruise boat
which has to hire part of the crew for
one season at a time. All of our important positions are full-time contracts,
but we cannot guarantee that to all of
our employees. For many young people,
however, a season at Suvretta House is
a step in their career—and an important
one. We have to manage that.’
He adds that there is also a challenge in motivating permanent staff.
‘We have people who have been with
us for 10, 20, 30 or even 40 years,
and we do not want them to become
just numbers.’ Long-serving staff
are awarded a star for each decade of
service, which they wear on their jackets. The maître d’hotel, for example,
sports four stars.
Due to retire in 2014, Helen and Vic
Jacob see their role as ensuring that the
next generation of managers have the
same opportunities that they enjoyed.
‘It is like a ship that moves in one
direction, and you hope it continues
in that direction rather than becoming just another hotel. In our 25 years
of managing Suvretta House, we have
seen it as the Patek-Philippe of the
hospitality industry: we never own it,
but hold it for future generations.
‘The challenge has been to decide
which trends to follow, and which are
just fads or fashions. A guest wrote to us
that Suvretta House is a rock in a sea of
short-lived trends. That is what I hope:
what I know is that the mountains
outside will still be there when I have
left, and that is very reassuring.’
made in switzerland
the deluxe hotel
31
32
made in switzerland
Watch movements, F.P. Journe, Geneva
made in switzerland
33
Thomas Schütte, Frauenkopf (2006), Walser’s Wife (2011), and Frauenkopf (2006)
made in switzerland
the art museum
34
The art museum
Fondation Beyeler
A unique collection of modern and contemporary art masterpieces,
assembled over more than 50 years by a husband and wife team, has
welcomed more than five million visitors since 1997
Ernst Beyeler was one of the most successful
art dealers of his time, a friend of artists such
as Picasso and Giacometti and a key player
on the international art scene. Together
with Hildy, his wife and business partner,
he assembled a fine collection of some
250 classic Modernist and contemporary
artworks of the highest quality in their
home town of Basel. Housed in a stunning
museum designed by the eminent architect
Renzo Piano, it has become a magnet for visitors from all over the world.
‘We want to pay
homage to the great
artists of our time’
made in switzerland
The museum, clad with red porphyry from Patagonia, has a
glass roof and glass walls on three sides, providing views over
the gardens and bathing the exhibits in the natural light.
And those exhibits are of exceptional quality: paintings by
Monet, Degas, Cézanne, Van Gogh, Picasso, Klee, Kandinsky,
Mondrian, Miró, Rothko, Warhol, Bacon and many others;
sculptures by Picasso, Miró, Calder, Giacometti and Arp.
When the museum was opened in 1997, Ernst Beyeler
described the couple’s motivation as follows: ‘Firstly, we
have always been deeply moved by great works of art, and
their impact on us is such that we are often loathe to part
with them; and secondly, we have a need to share these
works with others and pass on the profit they bring. Also,
and above all, we want to pay homage to the great artists of
our time, a time which will probably go down as one of the
outstanding periods in the history of art.’
The story behind the creation of the Fondation Beyeler
is a remarkable one. Ernst Beyeler, born in Basel in 1921,
was studying economics and art history at the city’s university in 1940 when he landed a job in an antiquarian book
and print shop run by Oskar Schloss, a Jewish refugee from
Nazi Germany. Ernst later recalled that his education was
completed by the evenings spent discussing literature,
philosophy and art with his employer, and that he also
learnt much about business from him.
When Schloss died unexpectedly in 1945, Ernst took
over the business along with some substantial debts, helped
by a loan from Hildy Kunz whom he later married. Buying
and selling books was not where his heart lay, and he
decided to pursue his love of art instead. In 1947, he staged
his first exhibition to raise money by selling off Japanese
woodblock prints which had come with the shop. Although
it was successful, he felt out of his depth with the Japanese
prints, so he started exhibiting Swiss artists. And in 1951, he
launched his first exhibition of classic Modernist works by
artists such as Bonnard, Renoir, Picasso and Matisse. It was
the art museum
35
the first of more than 300 such exhibitions in what was soon renamed the
Galerie Beyeler.
Success quickly followed, as Ernst
established friendships with many
artists, including Picasso who allowed
him to acquire 26 works from his
own holdings. Hildy Beyeler oversaw
the financial side of the business and
managed the staff, while he travelled
abroad—including to the USA. There
he met G. David Thompson from Pittsburg whose decision to sell him his
legendary collection of modern art—
including 100 works by Klee and 80
by Giacometti—put the Galerie Beyeler
on the map in North America. Another
coup came in 1972 when he was able
to acquire around 100 Kandinsky oil
paintings, water colours and drawings
from the artist’s widow.
Most of the artworks he handled
were sold on to private collectors,
foundations and galleries but Ernst
and Hildy held on to some of their
favourites which they put into a Swiss
foundation in 1982. The collection was
first shown in its entirety in 1989 at
Madrid’s Centro de Arte Reina Sofia,
and when Ernst decided to hang the
pictures himself, he was astounded at
their quality. Having attracted international attention, the collection was
later shown in Berlin and the need
for a permanent home was clear. The
couple decided to build a museum to
make it accessible to the wider world.
Offers of generous support for
building and running the museum
were received from several countries,
but Hildy and Ernst wanted to keep
the collection in their home town. So
with the backing of the canton of Basel
City, they decided on the grounds of
the Villa Berower in the suburb of
Riehen on the northern outskirts. The
plan was endorsed in a local referendum by more than 60 per cent of the
voters, and the site was provided free
of charge by the Riehen authorities.
A priority for
the Foundation is to
fulfil the Beyelers’
desire to share their
love of art
Alexander Calder, The Hairpins (1939), The Tree (1960), Untitled (ca. 1958), Sumac II (1952), The Tree (maquette) (ca. 1958) and Small City (1964)
36
the art museum
made in switzerland
To design the museum, the Beyelers
turned to the Italian architect Renzo
Piano, whose work included the
Centre Pompidou in Paris. The aim
was to create a ‘total work of art that
paid homage to the artists,’ as Ernst
put it—to be guided by the artworks it
would exhibit rather than operating
independently of them. The challenge
for the architect was to understand the
spirit of the Fondation Beyeler, and
the design required repeated revisions
before Ernst and Hildy were satisfied.
After the museum was opened, Ernst
said: ‘The exchange was so intense that
we both emerged in the end with a
feeling that each of us could now enter
the other’s profession: Renzo could
become a collector and I could build
the next museum!’
Hildy Beyeler died in 2008,
followed in 2010 by Ernst at the age of
88, but the Fondation Beyeler continues to develop and grow in ways that
reflect their desires. While providing
a permanent home for the collection,
the museum mounts three large exhibitions each year: one features a classic Modernist artist in the collection;
another an established contemporary artist such as Jeff Koons, Thomas
Schütte or Jean-Michel Basquiat; and
the third is thematic, often focusing
on an art capital such as Vienna 1900
or an art movement like Surrealism in
Paris. And there are smaller exhibitions of contemporary artists such as
Philippe Parreno, Maurizio Cattelan
and Louise Bourgeois.
‘We also work together with
other museums,’ says James Koch, the
Fondation Beyeler’s deputy director.
‘The collection is of such high quality
that our artworks are in demand from
other galleries such as the Guggenheim or the Tate. This lending power
is very helpful in securing loans for us,
which is always one of the main challenges for a museum. Our Degas exhibition in 2012, for example, had around
James Koch, Deputy Director, in front of Thomas Schütte’s Fratelli (2012) at the Fondation Beyeler, Riehen/Basel, 2013
made in switzerland
the art museum
37
Die Fremden (1992) at the Fondation Beyeler, Riehen/Basel, 2013
150 loans from 101 lenders all over the world, in
addition to our own works.’
The Fondation Beyeler continues to acquire
works by artists such as Félix González-Torres
and Louise Bourgeois, who became the first
female artist in the collection. ‘Before their deaths,
Hildy and Ernst Beyeler collected as private individuals,’ says James Koch. ‘But now our Director,
Sam Keller, is in charge of acquisitions. We have
a collection policy to shape the decisions, which
continue Ernst Beyeler’s tradition of collecting
contemporary but established art rather than
buying young and unknown artists. The process is
guided by an Art Advisory Board whose membership includes the directors of the Guggenheim
Foundation, Berlin’s Neue Nationalgalerie, the
Centre Georges Pompidou in Paris and London’s
Tate Gallery.’
Funding acquisitions is a big challenge, he
adds. ‘The market goes up and up, but we have a
generous budget for acquisitions which includes
part of the proceeds from the sale of the Galerie
Beyeler in central Basel after the deaths of Hildy
and Ernst. We also raise private money to buy
particular artworks and are offered donations of
artworks by their artists and by collectors.’
Another priority for the Fondation Beyeler
is to fulfil the Beyelers’ desire to share their love
of art, especially with the next generation. Four
family days each year provide workshops for children to experience the techniques used by the
artists on display. There are also 1,800 guided
tours a year in total, including children’s tours.
Also dear to Ernst Beyeler’s heart was public art,
and when the museum was opened in 1997, the
38
the art museum
artist Christo was invited to wrap the trees in
the park. Two sculpture exhibitions were held
in the park during Ernst’s lifetime, and projects
since his death have included light projections by
Jenny Holzer in Basel and other Swiss cities and
a national tour for the giant Maman spider by
Louise Bourgeois and the ‘Vier Grosse Geister’ by
Thomas Schütte.
Such projects are often attractive to the Fondation Beyeler’s corporate sponsors, which include
many of Switzerland’s best-known companies.
The running costs of the museum are CHF2025 million a year, which is partly covered by the
Fondation Beyeler, CHF2 million in a grant from
Basel City, CHF1 million from the Riehen community and a CHF1.5 million annual gift from the
Foundation of Hansjörg Wyss who is President
of the Fondation Beyeler. The remaining sum of
around CHF15-20 million is raised from sales of
tickets, books and food in the restaurant, corporate sponsorship and individual donations.
Open 365 days a year, the museum attracts
around 1,000 visitors a day or 350,000 a year,
welcoming its five millionth visitor in 2013.
‘Because of its location on the border, few of our
visitors arrive here by accident,’ says James Koch.
‘It is a destination with a beautiful park, landscape and architecture in symbiosis with the
art collection. Although the collection is relatively small if compared to those of other equivalent museums, it holds only masterworks.
It is a unique collection that more than
fulfils the desire of Hildy and Ernst Beyeler
to share their love of the artworks they collected
over their lives.’
made in switzerland
An encounter at the Montreux Jazz Festival
Interview with Quincy Jones
On a visit to Switzerland in the summer of 2013, the legendary
African-American impresario talks about his approach to the music
industry, his social activism and his continuing involvement in what
he describes as the ‘Rolls-Royce of festivals’
made in switzerland
an encounter at the montreux jazz festival
39
Quincy Jones is a record producer,
conductor, arranger, composer, film
producer and trumpeter. As a master
inventor of musical hybrids, he has
shuffled pop, soul, hip-hop, jazz,
classical, African and Brazilian music into many dazzling fusions, traversing virtually every medium, including records, live performance,
film and television. In a career spanning six decades, he studied with
the legendary Paris tutor Nadia
Boulanger who had worked with
Leonard Bernstein, toured Europe
with his own jazz orchestra, worked
with Frank Sinatra and produced
Michael Jackson’s Thriller album.
He wrote scores for films such as In
Cold Blood and In the Heat of the Night,
and co-produced with Steven Spielberg The Color Purple. He continues to
support new initiatives in the industry, with his latest protégés including the youthful Global Gumbo AllStars band.
40
You have achieved so much, as a conductor,
director, producer, musician. How important
is the business side to you?
I have always followed my heart. I do
what I want to do because it’s something I want to hear, and it gives me
goose-bumps. I didn’t do Thriller for
business—if you do something because
it’s what someone else wants you to do,
God walks out of the room. There’s a
lot of divinity in making music: twelve
notes—that’s all there are. You can’t be
thinking about making money when
you’re doing music. We came from the
Be Bop era, when nobody gave a damn
about money. Do what you love, and if
it happens, it happens.
I had to learn about the business
side, of course. I toured in Europe in
1959 and got stranded here aged 26 for
seven months with 33 people. They
say you learn by making mistakes, and
Steve Ross [former chief executive of
Time Warner] taught me the business.
So I know more about business now.
You need to, so you don’t get killed—it
took me seven years to pay for getting
stranded in Europe. But I always go with
my heart—and the goose-bumps—first.
You produced the We Are the World
recording in 1985 which became the fastestselling American pop single in history, eventually selling more than 20 million copies.
Sales raised more than USD10 million for
Africa, with donations and merchandise
sales bringing the total to more than USD60
million. How did it come about?
It started with LiveAid in England,
and Harry Belafonte said we had to
do something similar in America.
I was called in because I had done
an album with Donna Summer just
before Thriller, with a song called State
of Independence. For that, I had put
together what I called the best choir
in the world, including Michael Jackson, Lionel Ritchie, Stevie Wonder and
made in switzerland
‘I have always
followed my heart.
I do what I want
to do because it’s
something I want to
hear, and it gives me
goose-bumps’
Diana Ross. They called me because
they said I was the only one crazy
enough to deal with all those superstars—and we got it done. We had it
very well-planned, and we calculated
that you have to do the backgrounds
first because if you do the solos first,
the superstars leave. So we did the
backgrounds first and planned where
everybody stood—you can’t let that
many superstars make the decisions.
Do you feel that We Are the World changed
the way that the music business does social
responsibility?
When everyone came in that room, we
all became one. We didn’t need a sign
saying ‘Check your egos in’, because
they had come to do something good
for people. I always respect them for
that, but it was hard. After we had
recorded the background, I had to tell
44 people that only 21 of them could
made in switzerland
sing solos. That was not easy and some
were not happy. But the language then
changed in the business, from ‘me’ and
‘I’ to ‘we’ and ‘us’—which was important, because we had to stop thinking
about ourselves and think of others.
When people walked into that room,
they left behind their egos, because
there were so many people there. It
was a good song, but you never know
whether it’s going to work. And the
second one was terrible, because there
were a lot of people interfering. That’s
why I don’t like to do the same thing
over again.
So we did something different in
Rome in 2004, with 800,000 people
in the Circus Maximus to raise the
money for eight centres to educate
children in the worst cities on the
planet like Kigali, Nablus and Kabul.
We had technology from Microsoft,
Oracle and Cisco. Recently we’ve taken
41
this forward with a big conference in
Boston with the Massachusetts Institute of Technology and Google which
is setting up funding and education
for African-American and Latin American kids – it’s going to be great. There’s
some smart kids out there and they
just need a chance.
else’s music, and that’s not a good habit
as far as I’m concerned. They should
write some of their own music. All the
musical geniuses have a common trait:
they have their own identity—they
know who they are. That’s why they
have their own sounds, from Bob Dylan
to Ray Charles.
How long will it take to make an impact?
I don’t know—just do it! We can give
them a place to study and acquire
information, and there’s no better
place than MIT. I’ve been on its board
for years with people like Marvin
Minsky, Ray Kurzweil and Dean
Kamen—they’re so smart. We are at
a place in computer technology now
where there’s going to be a jump in
ten years from silicon microchips to
carbon and hydrogen nanotechnology which will be a billion times faster.
You’ll be able to buy a nanotechnology computer for USD1,000 capable of
1 trillion transactions a second—it takes
a million people to think like that. It’s
going to turn the world upside down.
You are here for the Montreux Jazz Festival.
What attracts you to Switzerland?
I worked very closely with Claude
Nobs [the Festival’s founder, who died
in January 2013]. We met in New York
and were friends for life. In 1991, he
had me come over here to produce
with him for nine years, the first
including Miles Davis’s last concert.
Montreux is the best festival in the
world—the Rolls-Royce of festivals.
I want to see Claude’s legacy kept alive.
He was unconventional and mixed all
the music up.
I’m the same way: after I
co-produced a television show for Duke
Ellington, he said that I could be the
one to decategorise American music.
What matters is that it is good music,
and if you don’t work hard and study, it
won’t be good—it’ll be accidental.
You faced difficulties when your career took
off in the 1960s, but now there is all this technology. Is the world a better place now?
It’s better and worse, because there’s
always yin and yang. Twenty-one
countries could not have done the Arab
Spring without technology, but in the
wrong hands it can be used for bad
things. That’s the chance you have to
take, like in medicine: you can’t stop
progressing because someone is going
to mishandle it. You just have to pray
for the best.
‘All the musical
geniuses have a
common trait: they
have their own
identity—they know
who they are. ’
What advice would you give to a young
musician—a 20-year-old Quincy Jones?
Work hard and study your craft, so
that you know what you’re doing. The
rappers are very talented, a lot like jazz
musicians. I’ve worked with all of them,
and my son produced a lot of them—
Tupac, Ice Cube and all those guys. But
they sample other people’s tracks, and
don’t write any music. So I say to them:
‘What are you guys going to play in 20
years? You won’t have any music!’ Their
background music samples everybody
42
made in switzerland
The Swiss Army Knife
Victorinox
The family company which started making knives for the Swiss
army more than a century ago is now run by the great-grandson
of the founder—having diversified from knives and cutlery into
timepieces, travel gear, fashion and fragrances
made in switzerland
the swiss army knife
43
When Karl Elsener founded a cutlery workshop in 1884
in the village of Ibach in the Canton of Schwyz, his aim
was to provide employment for local people who were
forced to emigrate in order to find work. The Original
Swiss Army Knife which he developed is still issued to
every soldier in Switzerland, but is also widely used
around the world because of its quality, functionality
and design. Today, Victorinox under the leadership of the
fourth generation of the founder’s family is diversifying
into other products while never forgetting the values
that have sustained it for more than a century.
Most cutlers and knife manufacturers have long ago moved
production to low wage countries, but Victorinox continues to employ 900 people in Ibach, the biggest employer
in Schwyz. They make around 60,000 pocket knives a day,
almost half of them the traditional Swiss Army Knife, as
well as some household knives. The factory makes 15 million
parts each month—stamping them from sheet metal, polishing them and heat-treating those that need to be hardened,
before assembling the knives and quality checking them. Up
to 80 per cent of the knives are sold through retail outlets,
and the rest to the corporate market. And 90 per cent are
exported, with half the remainder bought by tourists visiting Switzerland who take them home.
With its roots in the heart of Switzerland, Victorinox
celebrates its commitment to the Swiss quality which is
embedded in its products and admired around the world.
And in the spirit of its 125-year history, the company
constantly innovates—there are now 360 models of the little
red Swiss Army Knife offering up to 80 functions. The topof-the-range Swiss Champ, for example, has 33 functions,
the SwissFlash® is a USB pocket knife with up to 32GB of
digital storage capacity, and the Victorinox Rescue Tool has
found life-saving uses for rescue and security services.
Victorinox now has 1,800 employees worldwide, but it
retains the culture of a family firm, not having dismissed
anyone for economic reasons for more than 80 years. Eight
of the eleven children of Carl Elsener Senior, the grandson of the founder who died in June 2013, work for the
‘Victorinox was
our playground,
and we earned our
first pocket money
in the factory’
44
made in switzerland
company—including Carl Elsener
Junior, who succeeded his father in
2007 having shared an office with
him for more than 30 years. One of his
brothers—the family geek—heads the IT
department, while another who liked
working with his hands is in charge
of quality management and customer
service for the Swiss Army Knife.
‘We are a very big family, and
family values are important to us,’ says
Carl Jnr. ‘The Victorinox company has
been part of our lives since we were
children—I was born across the street
from the factory, and below us was
the office, the warehouse and other
departments. Victorinox was our playground, and we earned our first pocket
money in the factory on Wednesday
and Saturday afternoons by packaging
knives in busy periods.
‘It was very important for my
father to give us the feeling of the
company, and he always introduced
us to customers visiting the company
from the USA, Germany or Italy. We
had to sit quietly and listen, and
while we did not always understand
the conversation, we understood that
these people were very important for
our company. My father always said
that at the centre of his thinking he
put our people, our products and our
customers—and that a business which
concentrates on those cannot do much
wrong in the long-term. He gave every
new employee a booklet setting out
the company’s history, values and
philosophy. In that, he wrote that
owner-families should not look at the
reserves that the company has built
over the years, the machines, the land
and the buildings as their property,
but as something that is entrusted to
them to manage and lead responsibly.’
In line with this philosophy, the
family established a Victorinox Foundation in 2000 which now owns 90
per cent of the share capital and reinvests its share of the profits in the business. This will preserve the company’s
assets intact through the generations,
so that it can continue to develop and
remain financially independent. Even
before the creation of the foundation,
made in switzerland
the family had never drawn a dividend
from the company, earning only salaries which are no more than five times
the average wage of employees.
The remaining 10 per cent of the
shares are in a charitable foundation
established in memory of Carl Snr’s
mother and father, which uses it to
support charitable projects in Switzerland and worldwide—for example, to build hospitals and schools
and dig wells in Africa. These ownership arrangements reflect the Christian values that have inspired all four
generations of Elseners, of ‘gratitude
towards employees, customers and
our Creator’, as Carl Jnr put it at his
father’s funeral.
Victorinox is an iconic company
today, but the early days of Karl
Elsener’s business were difficult. At
first he founded an association of 25
Swiss craftsmen cutlers to cooperate
on producing within Switzerland the
knives used by the soldiers of the Swiss
army. The first delivery was made in
1891, but the venture almost collapsed
because a German firm could mass
produce the knives more cheaply. Karl
Elsener persevered but lost all his
money and survived only because of
the support of relatives and creditors
until his products became successful
and he voluntarily repaid all the creditors with interest.
‘The Victorinox
company has
been part of our
lives since we
were children’
45
‘After 9/11 sales fell
more than 30 per
cent overnight.’
46
After the death of his mother in 1909,
Karl Elsener branded his knives with
her name of Victoria and in the same
year registered the distinctive trademark of the cross and shield which is
now protected in more than 120 countries. The invention of stainless steel
revolutionised the cutlery industry, and
in 1921 the company became known
as Victorinox, combining his mother’s
name with ‘inox’, derived from the
French word for stainless. But it was the
Second World War that led to a surge of
exports of the Swiss Army Knife which
was sold in the PX stores of the US
Army, Marines and Air Force.
One of the biggest challenges the
company has faced in recent years
followed the 9/11 terrorist attacks on
the USA in 2001. New airline safety
regulations which forbade passengers from carrying blades on board
hit Victorinox hard, since so many of
its knives were sold to travellers using
airports or given as corporate souvenirs that were no longer useful to travelling executives. ‘After 9/11 sales fell
more than 30 per cent overnight’, but
the company strained every sinew to
maintain its record of not dismissing
employees for economic reasons.
‘We only managed to do this
because of the reserves we had
always built up in good times, which
allowed us to go on investing in new
markets’ says Carl Elsener Jr. ‘We
stopped hiring, cancelled overtime
and retrained some staff assembling
the Swiss Army Knives so they could
make the household and professional
knives. We also moved others to our
timepieces division and we even lent
around 60 people to companies in
the neighbourhood with big orders
to fulfil. Before 9/11, we had seen high
sales and had asked our people to
work overtime to restock the warehouses—so after 9/11 we asked them to
consume their outstanding holidays
and overtime. With all these measures, we managed to keep on all of
our people who appreciated that the
family was prepared do everything
possible to protect their jobs.’
made in switzerland
By the time of 9/11, Victorinox had
already been diversifying its products—a responsibility that Carl Snr had
delegated to Carl Jnr to allow him to
focus on the core knife products and
avoid the international travel which
he did not enjoy. This suited Carl Jnr,
who had spent six months in the US
working with the public company
which imported Victorinox products,
and who enjoyed working abroad
and learning about new cultures. The
diversification was initially prompted
by concerns in the 1980s over counterfeiting, as cheap imitations of the
pocket knives flooded.
‘My father and I discussed how we
could keep production of the Swiss
Army Knife in Switzerland and be
competitive. Our conclusion was that
we should invest in our brand and
make it more visible, because people are
prepared to pay a little more for a brand
and for customer service. Despite all the
functions of the Swiss Army Knife, it
has one disadvantage—it is carried in the
pocket where it cannot be seen. People
who buy a brand like to show it off,
whether it is a Mercedes car or a Nike
shirt, so we needed to make our brand
more visible.’
His first project was the launch
of the Swiss Army Watch in 1989, like
the knives made in Switzerland at
the company’s own assembly facilities in the Jura watch-making region.
Today the high performance timepieces account for one in five of the
Swiss watches sold in the US. In
1999, Victorinox partnered with a US
company to enter the international
travel gear market, followed by the
launch of a fashion line in the US in
2001 and fragrances in 2007. His wife
Veronika leads the brand team which
ensures that all the Victorinox products
support the values of Swiss quality and
reliability behind the little red knives.
The company also opened its first
Victorinox store in New York’s trendy
SoHo district in 2001, and its first
European flagship store in London’s
fashionable New Bond Street in 2008.
There are now 12 stores in the US, one
in Geneva and two in Germany where
made in switzerland
the Swiss Army Knife has always been
Carl Elsener Jnr’s tips
popular. Victorinox products are sold in for entrepreneurs
more than 130 countries today, and the
company is focusing its growth efforts • The advice given to me by my
father remains true today: focus
on Latin America and Asia where the your energy and your passion on
prospects are best and people are less your people, on your products
likely to assume that knives and cutlery and on your customers
• If you want to lead or manage
are its only products.
people, you must be yourself—
The company is also promoting be authentic and able to live the
activities that will encourage the use of values of your private life in your
a pocket knife by children—something business. If you have to adopt
different values in business, it
that it believes many parents want to will be challenging to work with
see in today’s world. ‘We are working passion and commitment
with an outdoor specialist who has • Lead your people by example:
written a book about whittling and has do not ask them to do something
that you would not do yourself
started to give courses about how to do
it. The feedback from schools has been • Go for organic, long-term,
sustainable growth—don’t borrow
incredible, because parents have had too much
enough of computer games and would • Stay grounded
like their children to play in the woods
and work with their hands to make
things. And although children today
have smart phones and tablets, when a
boy is given his first Swiss Army Knife,
his eyes still light up.’
47
48
made in switzerland
Maxon Motor, Sachseln, Switzerland
made in switzerland
49
50
the engineering manufacturer
made in switzerland
The engineering manufacturer
Maxon Motor
Deep in the heart of alpine Switzerland, a family-owned
engineering company makes small electric motors which are
renowned all over the world for their technological innovation,
quality and durability in even the most extreme conditions
Despite being a small country, Switzerland has long been
noted for the excellence of its engineering manufacturers,
which include global powerhouses such as ABB, Schindler
and Georg Fischer. Less well-known outside their industries are a host of small and medium-sized Swiss companies, many of which are world-leaders in their sectors.
Typical of these smaller engineering businesses is Maxon
Motor, whose high precision drive systems power appliances such as medical prostheses, robot vacuum cleaners
and NASA’s rovers exploring the surface of Mars.
The company was created in 1961 by Braun, the
German consumer electrical company, to produce
the shaving foils for its famous electric razors. Soon
after, a separate development department was set
up to make niche electromechanical devices which
became its main focus after the sale of Braun to
Gillette of the US in 1967. It launched a series of
innovative products, including much more efficient motors, smaller motors for pocket calculators,
video and cassette devices, and miniature devices—
including the smallest and strongest positioning
motor in the world with a diameter of just 4mm.
Since its foundation, Maxon Motor has been
headquartered in Sachseln, a village of around
5,000 inhabitants in the picturesque canton of
Obwalden—one of the forest cantons behind the
founding of the Swiss Confederation in 1291.
Today it employs more than 2,000 people, half in
Sachseln and the remainder at German, Hungarian and Korean plants. Its revenue in 2012 was
CHF360 million and it invests around 10 per cent
of its total revenue in research and development.
It exports 80 per cent of its products, with sales in
every relevant market in the world.
The company is 100 per cent owned by the
family of Dr Karl-Walter Braun, grandson of Max
made in switzerland
Braun, who founded Braun in 1921. Karl-Walter
represents the family on the Maxon Motor board,
whose membership also includes Dr Bianca
Braun, Karl-Walter’s daughter and Max Braun’s
great granddaughter. Currently Maxon’s Head of
Internal Audit (and nine months pregnant), she
wrote her doctoral thesis on what makes leading
family businesses more successful than companies
listed on stock exchanges. Understandably, therefore, she attributes her own company’s success to
its family ownership.
‘We are prudent and long-term in our
approach, and we do not spend more than
we have—our growth is completely financed
in-house. Since my father and I come from the
commercial side of the business, we employ nonfamily members in management and engineering roles, with long-term profit-sharing schemes.
And although we have a long-term strategy, we
can take decisions very quickly, sometimes in our
headquarters but also on occasions, over a good
dinner or a weekend.’
Maxon’s capabilities were amply demonstrated in 1997, when NASA sent the Pathfinder
probe to Mars. It carried the Sojourner robotic
vehicle to explore the surface—driven by eleven
of the company’s motors. Two further rovers
landed on the red planet in 2004, each with 39
Maxon drives powering the robot arms, control
mechanism, camera, stone-borer and wheels. The
devices had to cope with temperatures that fluctuated from –120oC to +25oC, as well as tremors
and the unique atmosphere.
Today, motors for medical technology appliances account for half the business, with the
other half in industrial automation, consumer
applications and—increasingly—aerospace. The
51
company’s medical division was
launched in 2007, and produces highprecision drives for appliances such as
insulin pumps, prosthetic limbs and
surgical robots. Its motors power a
hospital bed transfer device that helps
even the smallest nurse to move a
heavy patient from one bed to another,
as well as respiration therapy equipment for patients with sleep disorders.
The industrial automation and
robotics division powers underwater
robots and robotic rescue equipment
which operates in disasters that are too
dangerous for humans. Products for
consumer appliances include model
airplanes and trains, motorised golf
caddies and electronic power shifts
for sports bicycles. And in aerospace,
the company supplies the new Boeing
Dreamliner with equipment powering everything from the air-conditioning and toilet flushes to new seats in
First and Business classes which tailor
themselves to the passengers’ shape.
‘We produce about 5 million
motors a year in 14,000 different
models,’ says Bianca Braun. ‘Many
of our competitors mass-produce
millions of motors a day for a couple
52
of cents each. But we are really in the
high quality business, producing
tailor-made motors for applications
that can be up to six years in development—particularly in aerospace.
The clients often require very small
batches, so we need to be adaptable
and flexible to supply them.
‘Our motors are used in all sorts of
fancy products, many with a science
fiction feel: humanoid robots, where we
have 80 per cent of the market; Formula
1 racing cars; rotary tattoo machines;
and devices digging on the seabed.
New requests come in all the time and
we produce new models almost every
week. When NASA selected us, we didn’t
know where the request had come
from—we were just intrigued by the
specifications which were very specific
and looked interesting!’
Bianca Braun’s decision to join the
company seemed the natural thing to
do, she says—her father had always told
her interesting stories about it. During
her studies at the prestigious University of St Gallen, she had done lots of
internships at Maxon, including at
many of its sister companies in the
US. And now she works closely with
her father who travels a lot, spending
more than half the year abroad meeting clients, and visiting the company’s
production sites and trade fairs.
She describes Maxon is a ‘true
Swiss company’, which benefits from
the country’s reservoir of skilled engineers. The Swiss Federal Institute of
Technology (ETH) in Zürich and the
École Polytechnique Fédérale de Lausanne are in the premier league of the
world’s universities for engineering
and technology, but there are many
other contenders behind them. Switzerland’s dual education system also
turns out skilled workers as well as
graduates. But the company’s growth
has been such it could not recruit
enough—despite being number six in
the top 100 Swiss engineering companies in 2012.
‘We have 200 engineers in Sachseln
where the beautiful mountains and
lakes and the high quality of life give
us a distinct advantage. But it is not to
made in switzerland
everyone’s taste: many people prefer to
live in a city, and our plants in countries such as Hungary and Korea can
recruit the staff we need to fill the gap.
And that creates internal competition
between our plants, which is positive
for performance.’
Producing abroad also helps in
coping with the high exchange rate
of the Swiss franc, an issue for many
of the country’s manufacturers. ‘Our
main competitor from Germany has
the advantage of the euro, and is
much less expensive for similar quality products. But our production sites
in Germany, Hungary and Korea have
helped reduce costs, and although
further afield, we can reach them easily
and manage them much better than if
we moved production to China.’
There are, of course, many challenges, including the increasingly
complex nature of the sector, shorter
technology cycles and the decreasing
visibility of future orders as companies give shorter notice than before.
Raw materials such as the rare earths
needed for the company’s magnets
have risen sharply in price in recent
made in switzerland
Maxon is a ‘true
Swiss company’,
which benefits
from the country’s
reservoir of skilled
engineers
years. Regulation is also an issue in
sectors such as medical technology
where there are more and more fences
to jump in order to demonstrate that
the company is compliant with the
latest standards—some projects may
never take off if approval is denied.
And like many companies, Maxon
Motor was hit by the 2009 global recession following the financial crisis.
However the fall in revenue at 16 per
cent was less than feared because of
the company’s diversification and
the importance of the projects it was
supplying. And while sales in Europe
continue to stagnate outside Germany
where half the company’s sales go,
Asian markets such as Korea and Japan
have been growing again.
‘When the recession hit, we helped
ourselves with shorter working times,’
says Bianca Braun. ‘Now I am glad
to say that we have a full pipeline of
orders. And it is great to see how our
people can always use their expertise
to launch new products and processes
at any time. It’s almost like building a
new company within the company—we
are always reinventing ourselves.’
53
54
the biopharmaceutical company
made in switzerland
The biopharmaceutical company
Actelion
The co-founder and Chief Executive of Europe’s largest biotech
company, which has pioneered a series of innovative drugs, says
that Switzerland is to pharmaceuticals what Paris and Milan are
to the fashion industry
When Roche, the Swiss pharmaceutical giant, decided in
the mid-1990s not to proceed with a new compound discovered by its cardiovascular researchers, four of them made
a momentous decision. They left the company to set up
Switzerland’s first biotech company so they could develop
bosentan, thought to be of use to just 5,000 people suffering from a rare and life-threatening heart and lung disorder. Today, the compound, marketed as Tracleer, treats
almost 50,000 patients around the world, including
some with a different disease. And with a string of other
treatments on sale or in the pipeline, Actelion is now a
company with a market value of more than CHF7 billion.
According to Dr Jean-Paul Clozel, the French
cardiologist and researcher who is now the Chief
Executive of Actelion, the move was about more
than just the new compound: it was to create
another way of doing research, and it would focus
on specialised or rare diseases that were not of
interest to the large pharmaceutical companies.
In addition, the four co-founders had a total of 47
years of working for Roche between them, giving
them the experience of bringing scientific discoveries to market through the regulatory process
which is often lacking in biotech start-ups.
‘Roche didn’t have the same view as us, and
was shifting its focus from cardiovascular research
to concentrate on oncology,’ says Jean-Paul. ‘But
they licensed bosentan to us, which we initially
paid for with our own money. Indeed we founded
the company in late 1997 from our own resources—
a frightening moment using a lot of money.
We had given up well-paid jobs at Roche,
spent our personal savings and we were still
without investors.’
made in switzerland
The company started on a lean basis, renting a
room in a former hospital building which had
become an enterprise centre at Allschwil, just
outside the Basel city boundary on the French
border. ‘It wasn’t quite starting in a garage,’ JeanPaul says, ‘but we brought old furniture from
our homes and used crates as desks and tables.
We chose Allschwil because one of our co-founders lived here and there was a lot of empty space
where land was cheap in comparison with the
centre of Basel.’
The funding break-through came with the
addition of a fifth co-founder: André Mueller, who as Chief Financial Officer of a biotech
company had been through an IPO and had also
been a founding partner of the first Swiss venture
capital firm. He became CFO and raised CHF18
million of venture capital—though not before
being turned down for a bridging loan by a large
bank. He recalls that at first the company lacked
the funds to buy laboratory equipment.
Altogether venture capital of CHF60 million
was raised from French, Swiss, Dutch and US
firms. Then in March 2000, less than two and a
half years after its foundation, Actelion raised
net proceeds of CHF249 million through a placement of its shares on the Swiss New Market Stock
Exchange (SIX). The majority of shares were
bought by American funds, which—unlike European investors—were familiar with the biotech
industry in the US. Today Actelion has grown to
be Europe’s largest biotech company, with 100 per
cent of its shares listed.
Entrepreneurs are often reluctant to lose
control of their companies, but Jean-Paul says
there was a very simple choice: ‘Either we stayed
55
small and retained control; or we
ceded control and grew rapidly. We
chose the second option very quickly,
because our aim was to find as many
good drugs as possible and bring them
to the market as quickly as possible.’
Switzerland is a natural home for
pharmaceutical businesses, according to Jean-Paul. ‘It has the highest
concentration of researchers in the
world, with two world-class institutions in Zurich and Lausanne producing excellent research and human
capital. And it is home to innovative
pharma companies such as Novartis
and Roche. Switzerland is to pharma
what Paris and Milan are to fashion.’
Jean-Paul says that he would
not have contemplated making the
leap into the unknown without the
support of all four of his co-founders,
whose roles were complementary. In
addition to André Mueller, there was
Walter Fischli, a Swiss biochemist
who built up the biology department,
and Thomas Widmann, a German
cardiologist who was Actelion’s first
Chief Executive. The fifth member of
the team was Martine Clozel, JeanPaul’s wife who had been behind
the discovery of bosentan at Roche.
She created Actelion’s pharmacology department, and in 2009 was
given the additional role of Chief
Scientific Officer.
Some of the co-founders have
retired or stepped back from executive roles, but all are still involved in
the company. The five never had issues
between them, says Jean-Paul, and are
all still very good friends. ‘And I am
still married to Martine,’ he adds with
a smile.
The company which was founded
with just four employees now employs
2,350 staff worldwide, with around
1,000 in Switzerland. It has moved
into elegant purpose-built facilities
next door to where it all started, creating a working environment reminiscent of leading higher education
institutions, with plenty of spaces
where staff can interact with each
other. The surrounding area, meanwhile, has grown into a substantial
56
‘If you know exactly
what the market
is, that is not
innovation.’
business park, which has attracted
other large pharma companies.
Unlike many of its competitors,
Actelion spans the full pharma value
chain, from research and development
on which it spends 21 per cent of net
sales, through production via partnerships and licensing, to marketing
and distribution. It has established
30 wholly-owned marketing affiliates worldwide and has a distribution
network which extends its reach to 70
territories worldwide.
‘Investors did not at first understand our model,’ Jean-Paul says. ‘But
innovation is more than discovering new compounds. As Tracleer has
shown, our breakthroughs can reach
a much greater number of patients
if they are explained to the medical
profession so that they can be exploited
fully. That is why our focus on rare and
orphan drugs produces results: if you
know exactly what the market is, that
is not innovation.’
Tracleer is still Actelion’s blockbuster drug, with sales of CHF1.5
billion a year. It was the first oral treatment approved for pulmonary arterial
hypertension, a serious disease that
made in switzerland
restricts the flow of blood through
the arteries connecting the lungs to
the heart. However, the company has
several other drugs on the market,
including the first oral medication for
treatment of two rare genetic conditions, and a treatment for a type of
skin cancer.
‘We are constantly looking to
develop new products,’ says Jean-Paul.
‘In pharma, we have 10-15 years protection for new drugs before they face
cheaper generic products. Tracleer, for
example, was approved first in 2001
and will soon face generic competition, but we now have a new treatment
which offers even better results and has
recently been approved for use in the
US. We will market it as Opsumit.
‘The two drugs are based on 25
years of research by my wife, which
shows how long it takes to create
new products. Although there are
limited numbers of patients with
some of the conditions our drugs treat,
people are prepared to pay the high
prices required to recoup costs—especially when there is currently no
other treatment.’
made in switzerland
There are challenges in operating a
global company from Switzerland, he
says—especially the high exchange rate
of the Swiss franc which reduces the
value of foreign sales revenues. It must
also operate under Swiss company law
which does not offer the protection
against hostile take-overs enjoyed by
competitors in the US and elsewhere.
And despite the availability of qualified
researchers, there is intense competition for the best.
But the solution for these challenges is to continue to innovate and
be successful, Jean-Paul adds. ‘Nobody
wants the second-best staff, and it
is success that attracts the very best
people. Our independence has been
central to our success—helping us to
develop a culture that takes risks,
works differently from other companies and produces drugs of great benefit to patients. But we cannot become
complacent: only by consistently
delivering those results can we justify
our independence.’
Jean-Paul Clozel’s tips for
entrepreneurs
•Work for the long term—don’t
expect to make money in the
short term
•Formulate a vision related to
the nature of the business.
Making money should not be
part of it
•Employ the best people, and
look for people who are better
than you
•Work on developing the right
culture—it is your most valuable
business asset
•Invest in infrastructure such as
buildings and distribution as
the business grows. Without it,
a company becomes like a body
without a skeleton, and cannot
grow sustainably
57
Insight on Swiss banks
Interview with Prof. Youssef Cassis
A leading financial historian discusses the origins of
banking in Switzerland, its evolution through the years
and how it has adapted to the internationalisation and
then globalisation of financial markets
When did banking first come to Switzerland?
Like most European countries, Switzerland has a banking tradition going back
to the Middle Ages, though perhaps not
as far back as Italy where the Medici
Bank was founded in Florence in 1397.
Banking appeared in Geneva in the
15th century, when commercial fairs
held four times a year attracted Italian merchants selling their goods.
The Medici Bank opened a Geneva
branch in 1425 and most of the Italian
banks had a presence—the business was
connected mainly with trade, which
was financed by bills of exchange. But
after 1464, Geneva’s fairs declined as
most of the business moved to Lyon in
France, 150 kilometres away.
What was the next stimulus for banking
in Switzerland?
It was in Geneva again, which became
part of the ‘Huguenot International’
when French Protestants first began
to emigrate from around 1540, until
1598 when the edict of Nantes gave
them protection in France. Geneva,
the centre of Calvinism, was an attractive place for the Huguenots, as were
cities such as Amsterdam, London
and Hamburg in more tolerant countries. After the Revocation of the Edict
of Nantes in 1685, there was a second
exodus which included many bankers
who nonetheless retained close links
with France. They played a significant
role in financing the wars of Louis XIV
and after, through to the French Revolution. Basle was another important
Swiss banking centre at this time.
made in switzerland
Where did this leave the Swiss cities in the
European banking league table?
They were significant centres in traditional banking and finance, but not
on a par with top-tier cities such as
Venice in the early days, then Bruges,
Antwerp, Amsterdam, Paris and of
course London. Geneva—still a small
city—was an important centre for
foreign loans through its relationships with other European centres.
However, there was a set-back in the
French Revolution when lots of its
bankers were ruined as a result of
unbridled speculation on the tontines.
After many of the Jewish and Protestant bankers returned to France
following the end of the Terror, Paris
emerged a second centre to London,
leaving Geneva, like provincial French
cities, weakened. Many of the private
banks such as Pictet that had emerged
to do commercial banking and financing trade gradually switched to the
more profitable business of advising
wealthy merchants and families on
how to manage their assets.
Youssef Cassis is Professor of Economic History at the European University Institute in Florence, in both
the Robert Schuman Centre for Advanced Studies and the Department
of History and Civilisation. Previously, he was Professor of Economic and Social History at the University of Geneva between 2004 and 2011,
and has also held professorial chairs
in Grenoble, London and St Gallen.
Pictet celebrated its 200th anniversary in 2005 by commissioning Professor Cassis to write Capitals of Capital,
the first history of international financial centres and of their major
role in the modern global economy.
Published in 2006, it was updated in
a revised second edition published
in 2010 following the financial crisis
and translated into six languages,
including Chinese. His latest book,
Crises and Opportunities: The Shaping
of Modern Finance, was published by
Oxford University Press in 2011.
When did today’s big banks emerge?
Between 1830 and 1860, the cantonal
banks were set up, effectively ‘state
banks’ handling the public finances of
the cantons. They remained the largest banking sector well into the 20th
century, providing mortgage finance
and supporting local industries at
times of crisis. But by the middle
of the 19th century, big commercial
banks began to appear, starting with
Credit Suisse in 1856. It was followed
insight on swiss banks
59
‘The quality of
service offered by
the country’s banks,
is so much smarter
and welcoming than
in other countries’
How did this changed environment impact
on Switzerland as a financial centre?
Even before the war, France and Germany
had had strong financial interests in
Switzerland. Big German engineering concerns would use Swiss finance
companies to finance the construction
of power plants, for example. Investors in Germany and France, wary about
investing in such ventures, were happy to
invest through Swiss companies backed
by the banks. It was also neutral territory
between France and Germany, helped by
How did Swiss banking evolve in the
the ‘Swiss branding’. This management
20th century?
of money from other countries to finance
The First World War proved to be a foreign investment developed further
turning point, when neutral Switzer- after the war.
land came increasingly to be seen as a
safe haven for foreign capital. Despite When did banking secrecy become
its neutrality, Belgium was weakened enshrined in law?
financially and industrially by occupa- There was a tradition of secrecy about
tion, as were some other centres. Swit- people’s finances in the 19th century,
zerland’s neutrality was respected, and some cantons had already given
and it benefited enormously from this: this a legal basis in civil law. From the
before the war, the Latin Monetary start of the First World War, foreign
Union had fixed the exchange rates of deposits had begun moving to Switzerthe Belgian, French and Swiss francs land from France and Germany, though
at 25 to the British pound. By the time not in large amounts. But the inflow
the gold standard was re-established increased after the war, attracted by the
in the 1920s, there were 125 French stability of the currency at a time when
francs to the pound, 175 Belgian francs other European currencies were deprebut the value of the Swiss franc was ciating, particularly Germany’s during
still 25 to the pound. Maintaining the hyperinflation. And the threat of
the stability of the franc had been an exchange controls in periods of politiexplicit objective of the Swiss authori- cal instability was another motive.
ties, as it still is today.
However, secrecy was enshrined in the
criminal law only in 1934 when Switzerland adopted its first banking legislation, which established a supervisory
framework for the industry. Article 47
made bank employees, managers, directors, auditors and supervisors liable to
fines or up to six months in prison if
they divulged business information—in
particular, the names of a bank’s clients.
by Union Bank of Switzerland in 1862,
Swiss Bank Corporation in 1872, and
many others. They were not particularly big by European standards—of
the top 25 European banks in 1913,
none was Swiss. They were sound businesses in a prosperous country exporting capital, but centres in other small
countries such as Belgium were more
important. Brussels at the time came
closer to London, Paris and Berlin
than either Zurich or Geneva.
What was the justification for secrecy?
There are several explanations for this
move. The Swiss banks were for the
first time required to give confidential
information to the supervisory authorities, and wanted assurances on confidentiality. The authorities, for their
part, wanted to protect their bank
branches in countries such as France,
60
made in switzerland
where police raids were attempting to
uncover tax evasion. There were also
fears that Swiss bank employees in
Nazi Germany were under pressure to
disclose the names of Jewish clients.
Whatever the motivation, the new
legislation undoubtedly preserved the
banks’ reputations for confidentiality.
How were the Swiss banks affected
by the Second World War?
Although Switzerland was surrounded
by Axis powers, it retained its independence and neutrality. Belgium and The
Netherlands, two serious pre-war rivals,
were occupied. Amsterdam, in particular, never regained the role in handling
financial operations for Germany that it
had enjoyed before the war. Switzerland,
in contrast, emerged from the war with
the only convertible currency apart from
the US dollar. The Swiss franc was seen
as a strong currency which provided
protection for foreign capital. Throughout the 1950s and 1960s, Switzerland
played an important role in attracting
capital and investing it abroad when
lenders were in short supply, floating
foreign issues in Swiss francs. While
New York was far ahead as an international financial centre, Switzerland was
the third most important after London
by the end of the 1960s—quite a development for such a small country.
had fallen from seven in 1945 to three
in the 1990s, and then to two with the
merger of Swiss Bank Corporation and
UBS in 1998. They built up investment
banking arms in London and New York
by acquiring British and US businesses,
but after burning their fingers during
the financial crisis, there has been a
partial retreat from this sector.
What has happened since the 1970s?
In the post-Bretton Woods 1970s when
exchange controls were lifted and
deregulation began, Switzerland did
not have the scale to be a centre of the
emerging Euromarkets. However, the
Swiss banks were active in syndicates
for Eurobond issues which could be
placed with customers who were happy
to invest in bearer bonds that were
exempt from withholding tax. And
they increasingly specialised in niches
such as asset and wealth management
where they had competitive advantage,
with some ancillary services such as
investment in precious metals. Geneva,
the ‘capital of private banking’, also
proved an attractive location for the
asset management activities of foreign
banks. The big Swiss banks, meanwhile,
How would you characterise Swiss
banking today?
The Swiss banking industry has at
times aspired to turning the country into a fully fledged international
financial centre, but found it could
not achieve the necessary scale. As a
result, Switzerland’s banks have instead
tended to choose various niches, particularly wealth management. And in
doing so, the industry has benefited
from its reputation for safety and confidentiality, both of which are important
for wealthy people. Furthermore, its
home base in a small country that has
always had to look beyond its borders
gives its bankers an international
perspective when it comes to investment that other countries often lack.
And there is of course a tradition of
made in switzerland
personal service in Switzerland—not
just in banking. The quality of service
offered by the country’s banks, even for
someone like me who is not a wealthy
person, is just so much smarter and
more welcoming than that of banks
in other countries. As a bank customer
who has lived in different countries,
I still much prefer to deal with a Swiss
bank—as so many others do.
61
afterword
As this issue of Pictet Report has shown, there are factors that
have contributed to the success of Switzerland. They include
its stable economic, political and legal environment, its
outstanding education system and its collaborative culture.
Equally important have been the entrepreneurs who have
created world-class businesses renowned for the excellence
of their products and the quality of their service. The control
and independence over such businesses maintained by
the founders and their descendents encourages long-term
strategic thinking and stimulates restless innovation.
We should like to thank Professor Klaus Schwab for
analysing these characteristics of Swiss competitiveness for
us, and Professor Youssef Cassis for his account of the history
of Swiss banking. We are also grateful to the entrepreneurs
who provided us with insights into their companies: Carl
Elsener Jnr of Victorinox, watchmaker François-Paul Journe,
Actelion’s Dr Jean-Paul Clozel, Dr Bianca Braun of Maxon
Motor and Confiserie Sprüngli’s Tomas Prenosil. Helen
and Vic Jacob described the attention to detail involved in
running a luxury Swiss hotel, while James Koch outlined the
events behind the creation of the Fondation Beyeler with its
remarkable art collection. Finally, we would like to thank
the remarkable Quincy Jones for taking time out for us at the
Montreux Jazz Festival, and the famous photographer Mario
Testino for telling us about his new foundation and the role
he envisages for it in his native Peru.
62
afterword
made in switzerland
Pictet report
Pictet
Pictet Report is published by Pictet on
a periodical basis. Its contents are based
on a series of specially commissioned
interviews and discussions on particular
investment and business themes of topical interest.
Founded in 1805 in Geneva, Pictet is
today one of Switzerland’s largest private
banks, and the leading independent
asset management specialist in Europe,
with CHF 392 billion (EUR 320 billion) in
assets under management and custody at
September 2013.
The Bank is organised as a limited
partnership and owned and managed
by eight Partners. The Partners thus
act as managers, shareholders and the
Board of Directors.
Pictet, based in Geneva, employs
more than 3,300 staff. The group has offices in the following financial centres:
Amsterdam, Barcelona, Basel, Brussels, Dubai, Florence, Frankfurt, Hong
Kong, Lausanne, London, Luxembourg,
Madrid, Milan, Montreal, Nassau, Osaka, Paris, Rome, Singapore, Taipei, Tokyo, Turin and Zurich.
Disclaimer
This document is not aimed at or intended for distribution to or use by any person who is a citizen or resident of,
or domiciled in, or an entity that is registered in, a country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The information and material contained herein
are provided for information purposes only and are not
to be used or considered as an offer or solicitation to subscribe to any securities or other financial instruments.
This document and the contents therein may be cited if
the source is indicated, but the reproduction or distribution of this publication, in part or in whole, is prohibited.
For subscription information please contact: privatebanking@pictet.com
All rights reserved. Copyright © 2013 Pictet
www.pictet.com
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