Francine Closener is Secretary of State for the Economy and notably in charge of issues related to the digital economy. Digital is changing the face of a country rooted in strong industrial and financial traditions. Luxembourg is renowned both for its effective implementation of regulatory policies and capacity to take action. However, the digital revolution is reshuffling the cards. The country is becoming a major player in many sectors, including health, mobility, space and FinTech, to name just a few. (Featured Image: Francine Closener expects to position Luxembourg front and center in the European digital arena / Image Credit: Olivier Minaire)
Mrs. Closener, how does digital relate to your work?
Digital cuts across all sectors and is therefore found in many of my lines of thought. At the Ministry of Economy, I am principally in charge of SMEs, entrepreneurship, tourism and also the department of research and innovation. This branch, headed by Mario Grotz, particularly focuses on the ICT sector and issues related to digitization.
For me, a startup is any small company, not just an ICT startup. We have many SMEs in Luxembourg that deserve to be supported. It is inconceivable that we limit our efforts to a specific sector. However, we should consider the digitization of SMEs and industrial enterprises as a whole. Moving in this direction is one of my hobby horses.
Luxembourgish are the kings of online consumption. However, only seven percent of businesses in Luxembourg sell online!
Do you think digital could become a pillar of the Luxembourg economy, as well as finance?
Today, digital impacts, without exception, all business sectors. It has particularly impacted finance, but it also has hit the trade, craft and industrial sectors. However, digital, in and of itself, is not really a pillar or a sector. Rather it is a lever for growth and innovation across all sectors. If you take the case of environmental technologies, for example, they cannot evolve with the digital development. In other sectors such as trade, there is also a challenge. Luxembourg is in the top three in Europe regarding the household mobile and tablet rate—Luxembourgish are the kings of online consumption. However, only seven percent of businesses in Luxembourg sell online! The difference is abysmal and it’s one of the reasons why we signed a trade pact. The section on digitization is one of the most important sections of the pact, as it shows the way forward.
The digitalization of business further enhances our investment in communications infrastructure of the highest quality and excellent connectivity with all of the major digital centers in Europe. This is a strategic issue if we want to position Luxembourg front and center in the European digital arena.
What do you think of the initiatives for the development of startups in Luxembourg?
I believe we’re on the right track. Both the public and private initiatives are multiplying; more programs, tools, mentorships and incubators have recently become available. As examples, I can cite nyuko, Lux Future Lab, InCub and InnoHub. It is important that the private sector take similar initiatives because the state cannot do everything. There is also more and more activity with our Fit for Start program, which looks very promising. At the last call for projects in March, 100 nominations were received; 80% coming from the Greater Region, with the remainder coming from countries farther away, such as England, Switzerland, Turkey and India. The number of international applications confirms the growing reputation of Luxembourg as a true “Startup Nation.”
We also just reorganized our promotion efforts of the Luxembourg economy and of Luxembourg as a top choice for doing business in accordance with the Digital Lëtzebuerg strategy, which will henceforth be under the name “Luxembourg for Business and Innovation.”
What actions are you taking to make Luxembourg a Startup Nation?
I think we have already taken many initiatives over the last two years with the Fit for Start program, the Luxembourg Future Fund and the Digital Tech Fund. All these projects are part of the Ministry of Economy’s “innovation support” initiatives. The Fit for Start program significantly improves the starting conditions for young innovative enterprises operating in the ICT sector. The companies selected to participate in the program receive support of €50,000, collaborative workspaces at the premises of an incubator and coaching adapted to their needs. We decided to grant additional aid of €100,000 to each startup that graduates from the program, provided that the startup raises at least €50,000 from private funding sources. I dare say that our ecosystem is very competitive and dynamic. We also just reorganized our promotion efforts of the Luxembourg economy and of Luxembourg as a top choice for doing business in accordance with the Digital Lëtzebuerg strategy, which will henceforth be under the name “Luxembourg for Business and Innovation.” Foreign trade and promotional activities will be even more focused on innovative technology and particularly on startups.
I would add that startups reflect and illustrate our values that were highlighted during the reflection process on nation branding.
What place do startups have in your nation branding strategy?
To say that entrepreneurs and founders of startups are great commuters is an understatement, as they increasingly participate in conferences all over Europe—and the world—to pitch their projects, meet investors and commercially develop internationally. And this is especially true in Luxembourg, where the internal market does not offer a sufficient critical mass of consumers to startups that are hoping to conquer the world. These entrepreneurs are true ambassadors who defend not only their ideas, but also their origin and their country of establishment! They might originally be from New Zealand, Colombia, Belgium or France, but they have one thing in common: they are Luxembourg startups. Consequently, they are listed as such wherever they go and are the best defenders of the Grand Duchy’s startup ecosystem and present serious arguments to critics.
By launching a prototype we need a system and a country with reliable structures that are sustainable and secure. We can offer all of this to startups.
I would add that startups reflect and illustrate our values that were highlighted during the reflection process on nation branding. Take the value of dynamism first. This value matches very well with the startup spirit. Then we can examine our value of being an open country. If we are not an open country, we will not attract the startups that want to be successful on a global basis and we will also not be able to attract highly skilled workers from around the world. Finally, take reliability. By launching a prototype we need a system and a country with reliable structures that are sustainable and secure. We can offer all of this to startups. So our values and objectives are coincidentally in line with the needs of startups.
Lastly, on the topic of nation branding, we are currently developing our new website with a “toolbox.” It will give startups that do not yet know much about our country an overview of what we have to offer. The toolbox will contain statistics, videos and information about Luxembourg.
Do you hope to have a certain set number of startups and innovative SMEs in Luxembourg over the short term and medium term?
No. However, one certainty today is that the numbers are increasing in all sectors. In particular, the ICT sector, at large, already comprises just over 2,000 companies and 20,000 employees in Luxembourg.
What are the target areas in which you want to strategically position Luxembourg?
There are great opportunities regarding Luxembourg’s position in the field of Smart Mobility. Recently, the Government Council adopted a strategy to position Luxembourg as a test market for all that is “autonomous driving.” We will thus see if we need to adapt the rules of the road. There are still many questions to resolve and challenges, but the infrastructure is already there. The Ministry of Economy continues to develop and consolidate promising sectors in Luxembourg; the space sector with the SpaceResources.lu initiative is undoubtedly one example of this. By means of this initiative, the Grand Duchy is gradually implementing a strategy to explore and commercially term use of space resources. While futuristic, the project is based on solid foundations, as evidenced by the technological progress already made in this field in Europe and worldwide. The establishment of an appropriate legal and regulatory framework guarantees to private companies and investors the right to acquire the resources collected in outer space, in accordance with international law. The arrival of famous American entrepreneurs such as Deep Space Industries and Planetary Resources Luxembourg already illustrates the relevance of the initiative, which focuses on attracting space research activities and technological capacity to create jobs.
Luxembourg is one of only five European countries to have publicly voiced concerns about the social impact of digitization. We have a pioneering role with regard to digitization and actions in the context of Digital Lëtzebuerg.
Actively participating in the development and deployment by 2020 of a trans-European HPC network gives Luxembourg a unique opportunity in the field of ICT. Facing increasing global competition with high-performance computing capabilities, it was necessary to react in order to maintain or even enhance the competitiveness of European research and industry, which is sorely lacking such capabilities. Accordingly, six months ago, the Ministry of Economy worked in coordination with France, Italy and Spain to initiate and run the project in close collaboration with the European Commission. Our goal is clearly to invest in our own HPC infrastructure, while contributing to the initiative at the European level. This is a logical result of investments as well as significant efforts in recent years to position the country in the field of ICT and to diversify our economy.
In September 2015, the Ministry of Economy, the Chamber of Commerce and IMS Luxembourg jointly launched “The Third Industrial Revolution Strategy” study, in close collaboration with Jeremy Rifkin and his team of international experts. The third industrial revolution is a process that is characterized by the transition to a new business model defined by the specific coupling of information technology, renewable energy and intelligent transport systems. I recently attended a conference at the Chamber of Employees about it and clearly we shouldn’t neglect the creation of jobs as the economy is digitalized. How will working conditions and contracts evolve? While skeptical about possible developments, the speaker emphasized that Luxembourg is one of only five European countries to have publicly voiced concerns about the social impact of digitization. We have a pioneering role with regard to digitization and actions in the context of Digital Lëtzebuerg.
What do you think of the future simplified company status? Do you think it will increase the number of startups?
It is a good decision. In terms of international competitiveness, it is important to consider that many other countries already make it possible to form such a company. It is a piece of the puzzle. This could certainly increase the number of startups for some areas. I do not think that artisans are particularly concerned about the new status. But for other sectors, such as trade, I am convinced that there are opportunities to be seized.
Our friends from abroad living in Luxembourg tend to appreciate all of the tools and services offered by the government more than the natives. But no man is a prophet in his own country.
What do you think of the entrepreneurial spirit in Luxembourg?
I feel that it’s unfortunate that there are many people in Luxembourg who are not realizing the momentum and dynamism that we have developed during the past decade. I wish that Luxembourgish people, the youth, in particular, would take advantage of all of the tools and mentoring programs in place. I also wish there was more of an awareness about starting up businesses on the part of the Luxembourg population, which tends to turn to more traditional jobs. A good example of an organization that is promoting entrepreneurship to young people is the Jonk Entrepreneuren association. We must tell the youth to stay in Luxembourg and launch businesses here. Luxembourg offers coaching and is a very conducive environment for launching a startup. We need to develop the entrepreneurial spirit, which can begin at an early age in schools and continue through university where entrepreneurship should be promoted in all areas of study. Our friends from abroad living in Luxembourg tend to appreciate all of the tools and services offered by the government more than the natives. But no man is a prophet in his own country. Luxembourg is also an ideal platform from which to expand internationally, starting with the Benelux region. We have over 170 nationalities for just over half a million inhabitants. This is unique in Europe.
This article was first published in SILICON