3.

What roles has the Centre Suisse d'Electronique et de Microtechnique (CSEM)

played in the competitiveness of the affected Swiss industries? How have CSEM's
roles evolved? Is it effective?

CSEM was established in year 1984 as an international research organisation with aim to
develop new technology and invest money in R and D and therefore promote the growth of
Swiss electronic and microtechnology industries - one of the most important parts being
the watch industry. CSEM was established through the merger of 3 different Swiss
organisations - Laboratoire Suisse de Recherches Horlogères, Centre Electronique Horloger
and Fondation Suisse pour Recherches en Microtechniques. Later the organisation shifted
its interest into other industrial areas too. CSEM starting developing non-watch products
such as sensors and extended their research on microsurgical apparatus and instruments,
micromotors, plastic and machined components, altimeters, printheads, electrical
connectors, and microplugs.

In a year 1997 a spin-off strategy was initiated by Thomas Hinderling, with its first spin-off
being a company called Xemics - a manufacturer of integrated circuits and
semiconductors. Thanks to CSEM and its success at creating more and more spin-offs and
start-ups, Switzerland became well known for its optical components.

CSEM used to suffer from underfinancing but starting in the 70s and later peaking in 90s,
the organisation became more commercialised and profit oriented and it managed to
decrease the government financing and became an important player in couple of
industries.

4. What strategic recommendations would you make to CSEM leadership in early 2002?
As the case shows, CSEM has gone through the times when it had financial problems, then
has gone through development, expansion and building up the commercial potential of the
organisation and finally in the 90s became successful and profitable and generated
constantly rising profits. Looking at the numbers, CSEM should definitely follow this
strategy and also keep up with the ever changing economy - whether it is market shift to
cheaper production (China) or digitalization and automatization and prospectively start a
new branch inside of the organisation.

According to Exhibit one - Industrial Income per Country, CSEM seem to have a very little
income coming from the USA, reaching only 5%. There certainly is a potential for a rise
and to increase cooperation with the US companies and industry sector.

CSEM decreased its funding from the Swiss government down to 30% however they would
be able to expand their cooperation with EU government and get access to more
government funding.