On September 26, the Luxembourg National Innovation Agency will come to the Technopark to meet with technology startups. What are the business opportunities in the Grand Duchy, and why do companies from Russia need to look at the window on the single European market in our interview with the business development director of Luxinnovation agency Jean-Michel Ludwig.
What areas of innovation are already present in Luxembourg today?
Luxembourg has a long tradition of industrial research and development in fields such as advanced materials, automotive components and the glass industry. This culture of innovation originates from the indigenous steel industry, home-grown media and communication giants such as RTL and SES, and large international groups that have established R&D centres here. Since the late 1980s, the services sector plays a dominant role in the economy, not least due to Luxembourg’s status as the Eurozone’s leading financial centre and the second largest centre for investment funds in the world. Innovation in information and communication technologies (ICT) is now driving the country’s transformation into a digital economy and is applied in fields such as fintech and space, for example.
And what areas are you primarily looking for at this point?
The progress of digitalisation is crucial for the development of today’s economy and revolutionises our way to do business. The Luxembourg government has therefore recently published a strategy for stimulating data-driven innovation with the aim to boost productivity and sustainability across the whole economy. The country has a first-rate digital infrastructure including ultra-low-latency connectivity, massive data storage and processing capacities and outstanding cybersecurity expertise. A petascale high performance computer, available for private sector use, is being set up and will be operational in 2020. The strategy places a particular focus on the Industry 4.0, eco-technologies (including smart mobility and circularity), health technologies, logistics, space and financial services sectors, with ICT as a cross-sector enabler. These are all areas where Luxembourg has much potential for the future.
Are companies that have a potential to relocate to Luxembourg (IT, fintech) in any way a priority?
Luxembourg is home to a growing community of innovative start-ups that are created here and develop successfully alongside already established companies. However, the size of the country means that we will never be able to develop all technologies and skills that are needed to be competitive at the international level on our own. We are therefore more than willing to attract and welcome the best technologies and talents. Luxembourg can offer them a favourable business climate and an attractive base for developing, testing and marketing new solutions for the European market. Luxinnovation, the national innovation agency, works closely with the Ministry of the Economy and the Chamber of Commerce to support international companies that want to explore the advantages of setting up an office in Luxembourg.
According to a Eurocommision affiliated forecast, by the end of 2020, innovative enterprises will comprise 3% of the EU’s GDP; what’s their current share in Luxembourg’s economy and what are your forecasts?
Industry has always accounted for the lion’s share of R&D expenditure in Luxembourg. However, over the past decades, the state has also invested very heavily in first-rate public research centres and in R&D infrastructure available for use by companies as well as research institutes. In addition, the government provides substantial support to companies investing in R&D programmes and projects in order to carry part of the technological risk. The total national R&D expenditure is not yet at the level of 3%, but this should be seen in the light of Luxembourg’s flourishing economy with the highest GDP per capita rates in the world.
Will Europe have its own Silicon Valley? Or does it need one at all? If it does what, are the obstacles in creating it?
Silicon Valley is, and will remain, a unique phenomenon that cannot be copied elsewhere. In my opinion, the development of new innovation ecosystems is conditioned by their specific environment and players. The European market is also quite fragmented with a number of leading start-up and technology hubs such as Berlin, Paris, London or Amsterdam. The main challenge for nascent centres is to set up the best possible connections with such hubs. Luxembourg’s start-up ecosystem may not be able to equal these centres in terms of size, but international cooperation is deeply ingrained into our DNA. The size of our domestic market encourages our start-ups to go for international expansion from a very early stage, and we are there to help them succeed.
What is Russian companies’ contribution to Europe’s innovation industry? In which areas can Russian share be greater than it is today?
Russia has always been perceived as a centre of scientific and academic excellence, and our collaboration with the Skolkovo Foundation has clearly shown us the country’s successful track record of transferring this expertise from the research to the business sector. The synergies between our two countries are obvious. As an example, Luxembourg hosts Skolkovo companies such as Anisoprint, which has its European headquarters here, and ExoAtlet. On the other hand, all-in-one cloud services provide G-Core Labs, which is headquartered in Luxembourg, has joined the Skolkovo start-up community to develop its business activities in Russia and the CIS countries and get access to the huge pool of IT talent. European industry could clearly benefit from further collaboration with Russian companies in fields such as Industry 4.0-related technologies, artificial intelligence or cyber secruity. Luxembourg can also offer an attractive market to companies active in the fintech sector.
What do you expect from the F91 Dudelange in the UEFA Europa League group stage?
Taking into account that Luxembourg has a total population of just over 600,000, I think it is amazing that we have a team that is part of the competition at this stage! It would have been great to be in the same group as CSKA Moscow in order for our countries to meet on the sports field, but unfortunately, the draw worked out differently. I wish our team all the best, and am sure that the atmosphere during their next games will be electric.