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How is innovation organized at Swisscom?

There is no such thing as THE innovation department here. For me, there are two levels of innovation: Firstly, innovations should make a company more compet­itive. For example, developing efficient processes makes the business as stream­lined as possible. At Swisscom, we work on this in everyday operations. The second level is innovation in the company itself. Which means developing new customer services that meet a need and that customers are happy to pay for. These are innovations that a company can exploit commercially, and they create a win-win situation. At our company, this means new products for customers and new sources of revenue for Swisscom. We now make 70 percent of our turnover with products that didn’t exist ten years ago. At Swisscom, we manage this innovation process centrally. It is closely aligned with our strategy. This lets us keep an eye on potential innovation initiatives, make targeted investments, and organize ourselves effectively.

How does Swisscom embed innovation in its work? When do you innovate in house, and when do you work with external partners?

A company culture that promotes continual growth creates fertile ground for innovation. We have a long history of this at Swisscom. We invented the prepaid card, were one of the first to introduce roaming, and our Mobile Connect product was the very first data card for mobile communications on laptops. These are innovations that came from inside Swisscom. Our Kickbox intrapre­neurship program, for example, is a key source of momentum. It gives all employees the opportunity to contribute and evolve their ideas. And we do work with selected partners in some cases, or bring in additional skills or new points of market access. This makes sense especially when getting started in a new business field. Switzerland’s size is still a big challenge for us. International tech companies innovate for global markets, but we are largely restricted to the Swiss market. That’s why we need to focus on innovative opportunities that are interest­ing for us.

Swisscom founded the Swisscom Digital Lab on the campus of EPFL Lausanne in 2016. What projects have emerged from your partnership with EPFL? How is the collaboration between Swisscom and the university organized?

Students at EPFL worked with the Swisscom Digital Lab on over 130 master’s theses. They examined how to optimize network facilities, how AI can support customer service, and how to improve personalized recommendation systems. Our customers experience the results of this partnership most directly in their communication with our dig­ital assistant Sam via phone, chat, email, or letter. But the impacts of other projects affect us only indirectly. For example, city planners can plan playground locations more effectively thanks to anonymized and aggregated mobility data. Alternatively, combining these data with data on air quality provides a basis for better decisions on environmental policies. There are also projects like the first Hyperloop test track in Europe, which EPFL and Swisscom are researching together. It will be a long time until this type of project can enable fast, climate-friendly travel. One thing all the projects have in common is that master’s and PhD students get support from their EPFL professors and from teams at Swisscom. There is a lively exchange of ideas in both directions, so innovative solutions can be rapidly implemented.

Swisscom identified seven fields of innovation. Which one are you focusing on right now? Which innovations will you be moving forward with in the next few years?

Right now, we are placing a strong focus on artificial intelligence. This technology will be extremely important for various topics and links into other fields of innovation. For example, we are seeing significantly more AI-based cyber attacks, which has an impact on our cyber security services. Which brings us to another big topic: digital trust. Artificial intelligence is becoming more and more influential and can also create astonishingly real avatars, for example. So the question of whom users can trust and how to deter­mine what is authentic and valid in the digital world is coming up more and more. Analog methods are often still used to carry out identity and age checks. These also involve switching between different media. We see a big opportunity here to make innovation available in a trustworthy way.

“For every franc that Israel spends on research and development, it spends nearly one and a half times this amount on selling the marketable solution. In Switzerland, this figure is 14 centimes.”

– Roger Wüthrich-Hasenböhler

ChatGPT has just revolutionized AI. Now companies need to make this technology usable and find applications for it. What application scenarios do you foresee?

Let’s take a look at generative AI algorithms such as ChatGPT from OpenAI or Bard from Google from Swisscom’s perspective. An intelligent algorithm could make it possible to identify the cause when we receive a support query via our chatbot. And an algorithm could quickly recommend so­lutions, where this would otherwise require manual effort and clarification each time. Intelligent algorithms could propose a solution directly and maybe even solve the problem before the customer notices it. This is a good example of the disruptive effects of AI: A newcomer does business in a completely different way, with a better customer experience, and at a fraction of the costs. This is a huge challenge for a successful existing business. We have to quickly gain experience so we can see the opportunities that systems like these offer — but also carefully assess the dangers and risks. Competence is key in this area. Our private and business customers expect us to be able to assist them with these matters.

The amount of data you have is crucial if you want to be innovative in the field of AI and big data. Swisscom is the market leader in various segments. Does that give you a big advantage?

It’s true that we are the market leader in various segments in Switzerland. But the driving forces behind AI and big data work with volumes of data that are immensely vaster. Plus, while the amount of data in our networks and data centers might be rela­t­ively large, there are clear regulations and restrictions on the use of these data — and rightly so.

You were chief digital officer for seven years. What innovative projects did you press ahead with and implement at Swisscom?

Seven years ago, the digital transformation was the big topic. Companies recognized the impact that new technologies were having. They created disruptive business models, and new possibilities emerged that hadn’t existed before. Let’s take blockchain: for many years, infrastructure was a crucial aspect. And then suddenly a decentralized technology came along that digitalizes real values, trades and stores them, and creates new currencies. How can you transfer a successful company into this digital world with its completely new possibilities? For the executive boards and boards of directors at many companies, these considerations were central when determining their strategy. It felt like a new start. Companies looked at how they could transform their business and tap into new business segments.

Swisscom is one of the most innovative companies in Switzerland. But it’s also one of the biggest. Is it even possible for smallcompanies to still be innovative? Or does this only work if a company is big enough to employ its own innovation team that is completely dedicated to innovation? Or as small as a startup, so it can move ahead with an idea without any legacy?

Small companies can definitely innovate. There are always innovation niches. You don’t need an innovation team. But you do need experts who enjoy evolving an idea and developing it into a product or service that’s ready for the market. In terms of research and development, Switzerland is one of the most innovative countries in the world. Many of these results can be used on the market—by large companies, but also by hidden champions and smaller niche players. The right people are what matters. Because technology and business are shaped by people — today and in the future. We have to look at other innovation leaders like Israel and Singapore. These countries are bolder about investing in ways of commercializing innovations. For every franc that Israel spends on research and development, for example, it spends nearly one and a half times this amount on selling the marketable solution. In Switzerland, this figure is 14 centimes. I see this as a huge opportunity for Switzerland. Because we have the people, the innovations, and actually the financial means, too. That’s why, in the next phase of my career, I want to help establish Switzerland as a deep tech nation at the international level. I want to promote innovations, and how to commercialize them. So we can still be one of the most innovative coun­tries in 2030, maintain our competitive edge, offer attractive jobs, and also help secure our prosperity.

This was an article from the ti&m special “Innovation”

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