49th St. Gallen Symposium "Capital for Purpose": 8–10 May 2019


The diversity of capital

Capital is more accessible.
When one speaks of capital, one quickly speaks of globally active companies that see entrepreneurship as an end in itself rather than a meaningful undertaking. It comes to the mind of Thomas Piketty with his book "Capital". It fails to recognize that the absorption and accumulation of capital has never been as accessible as it is today: the Internet allows sections of the population to disseminate their ideas and obtain capital that a few years ago was at risk of poverty. Who you are is becoming less and less important in favour of the idea you have. That's a good thing.

Capital engages.
The easier access to capital and the social trend towards more transparency increases the obligation that goes hand in hand with the use of capital. "Do good and talk about it," said Georg-Volkmar Graf Zedtwitz-Arnim in 1961. This once controversial quote is now taken for granted: anyone who commits himself with capital - be it as a public authority, a private enterprise or a non-profit organisation - is now obliged to account.

Do good and talk about it.

Capital is diverse.
Accountability is based on the fact that capital can serve as an enabler for various purposes. Without capital, good ideas will not be sustainable. And good ideas require good human capital. Whereas capital used to be associated primarily with monetary efforts, nowadays the term is used in a variety of ways. For example, a real estate company can support a start-up by providing empty office spaces and thereby participate in the development of the start-up. The flexibility of economic participation knows no bounds. Capital-like services also increasingly take place within the framework of the exchange of knowledge or the use of intangible assets.

Capital is the future.
The diversity of the investment of capital, but in particular the use of capital in general, determines the direction of a society's future development. There are various challenges that need to be considered. From my own experience, I can tell you about some of the challenges.

- As an asset manager, I am convinced that an efficient and, above all, effective allocation of capital will become increasingly important in the future. In the past, the task of the industry was to pool client money as cheaply as possible in order to participate in the performance of stock markets (keyword: indexation), but now investors are more sensitive to what happens to their money. Investments should be more impact-oriented and also meet ecological, social and governance requirements. This is one reason why investments in illiquid investment opportunities are gaining in importance.

- As the founder of an SME, I am familiar with the typical Swiss risk aversion that goes hand in hand with entrepreneurial commitment. This is not further reprehensible, since it helps to minimize the damage caused by mistakes. But a simpler, less complicated access to capital can contribute to a healthy risk awareness of the young entrepreneurs here. This would be more than welcome, because foreign companies, which were also in their infancy a few years ago, often outstrip us because of their courageous approach.

- As a member of the city parliament, I am increasingly sensitive to the fact that subsidies are not simply awarded "a fonds perdu", but that contributions are made to social entrepreneurship in order to ensure the long-term impact of the taxpayers' money used.

- As President of the Young Freedom Party, it is important to me that investment in education and research continues to increase. A tax system that favours such investments creates the necessary basis for this.

The use of capital in general determines the direction of a society's future development.

Capital is an opportunity.
As a society, we must therefore succeed in not moralizing capital and its assets (any more), but in conducting a broad discourse about a meaningful use of capital. Functioning proprietary rights are indispensable. They enable capital to be tied to innovative and courageous projects in the long-term.

Andri Silberschmidt, President of the Young Freedom Party (Jungfreisinnige) and Co-Founder of kaisin. GmbH
Find the German version "Capital for Purpose"