• Financial Center

The Advantage of Competition

Background 03 Aug 2021

The Advantage of Competition

In the animal kingdom, there’s the constant fight for survival. In sports, we dig deep for that extra push. And for companies like SIX and for the Swiss stock exchange, it’s competition that drives the business.

Charles Darwin long ago recognized how essential competition is to the survival of a species. Economist John Maurice Clark viewed competition as a prerequisite to economic growth and technological advancement. Competition doesn’t just vitalize business, but also spurs athletes to ever greater heights of achievement. Three different perspectives show that the principle of competition is fundamentally unrivalled.

The Ape Whisperer

Zurich Zoo curator Dr. Pascal Marty is an expert on wild animals and how to care for them properly in captivity. The biologist, specialized in primatology, has headed the zoo’s Public Relations department for about a year now.

“In the animal kingdom, competition is synonymous with struggling to produce the most offspring. Those animals that excel at finding food and mating partners, both scarce resources, are the ones that prevail. This natural selection is a defining principle of evolution. At the zoo, we can deliberately eliminate competition for resources by providing all of the animals with sufficient nourishment. To avert conflicts over mating partners, we often keep only one male per species. For some species, we simulate natural selection with the help of international studbooks. This means that only certain particularly suitable animals are allowed to procreate. There is also competition between species. For example, in our Lewa Savanna compound with its seven different animal species, we have to make sure that there are many different feeding sites. Otherwise, the rhinoceroses would monopolize the food. In nature, numerous animal species have found their ecological niche after millions of years. Koalas, for instance, don’t have to fear much competition for eucalyptus leaves.”

The Olympian

Sport climber Petra Klingler won the 2016 World Championship in bouldering, i.e. climbing without ropes. At the 2021 Olympic Games in Tokyo, she’ll represent Switzerland in a newly instated discipline that combines bouldering, lead climbing, and speed climbing.

“As a sport climber, I pit myself against others. Competition makes me better because I can learn from defeats. Afterward I ask myself how my opponent outdid me. Back when I was a kickboxer, I tried to exploit my opponents’ weaknesses. In the sport of climbing, I try to benefit from my opponents’ strengths because essentially we all have the same adversary: the wall. It even goes so far that we view the route together and give each other tips before the final of a bouldering competition. During the competition, though, we have to go to an isolation area. I don’t get to see how my opponent climbed until I study it on video at home. It’s different in speed climbing on identical routes set side by side, where I sprint up the wall in a matter of seconds. Spying my opponent out of the corner of my eye gives me an extra boost in speed climbs. The duel already begins beforehand. By psyching myself up and striking a self-confident pose, I build up body tension that enables me to summon my full power reserves when the starting gun sounds.”

The Market Leader

Christian Reuss has been with SIX for 12 years and has headed SIX Swiss Exchange since October 2020. In this role, he prepared SIX for the return of competition to Swiss equity trading, which had been suspended since 1 July 2019 for political reasons, causing almost all trading volume to shift to Switzerland’s domestic exchange.

“The Markets in Financial Instruments Directive, in force since 2007, aimed to stimulate stock-market trading in Europe by fostering competition. This consistently worked, with one exception: Trading in Swiss stocks between July 2019 and January 2021 took place almost exclusively on the Swiss stock exchange as a result of political disagreements between the Swiss Confederation and the European Union. So, it seems almost logical that another political decision – Brexit – led to a resumption of competition on 3 February 2021. But during the intervening period, it felt as though the Swiss stock exchange never stopped striving to prove itself in the competitive arena. We offered our clients new functionalities and showed market participants the merits of concentrating liquidity in a single trading venue: It results in greater efficiency, larger trading volumes at the best price, and stronger resistance to external shocks such as the COVID-19 crisis. And now we’re looking forward to starting to promote the Swiss market again together with our competitors.”

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