By Agnieszka Zajac
June 6, 2016

Written by: Agnieszka Zajac
Senior Consultant
Marlière & Gerstlauer Executive Search

When asked the question of “What are the largest centers for innovation and growth across the globe” the usual responses and cities that quickly come to mind are often Silicon Valley, Bangalore, Dublin and New York. But what can be said for the future hubs for innovation? In some situations it is easy to identify rising stars within an industry or sector, but when it comes to the rapidly evolving industry of innovation and research, pinpointing the next Silicon Valley can be quite an unpredictable and virtually impossible task. The age of the Internet revolutionized the way global business was conducted since its inception nearly 20 years ago. It served as a huge disruptor by dismantling corporate giants, shrinking economies and unleashing unrestricted access to intellectual property. We now find ourselves confidently able to navigate this mechanism and have entered into a new era, The Age of Innovation.

The Innovation Union Scoreboard, conducted by the Maastricht Economic and Social Research Institute on Innovation and Technology for the European Commission, identifies countries in Europe emerging as new centers for innovation and research. The study found Luxembourg was an “Innovation Follower” alongside Ireland, and identified Luxembourg as a rising center within the research and innovation industry. The study also found that Luxembourg was the leading country in improving its performance within innovation and research compared to the rest of the European Union.

Nestled in the heart of the European Union and surrounded by large international economic players, France, Belgium and Germany, Luxembourg has become a uniquely central keystone in the future of research, development and innovation. The Luxembourg government is striving to enact laws to promote, foster and drive innovation including the highly favorable IP tax law. A number of international industrial groups, such as ArcelorMittal, Tarkett, Ampacet and SES, have already established their research and development operations in “The Grand Duchy,” to take full advantage of Luxembourg's public research sector. Many other large corporations are also seriously considering relocating their global research and development centers to Luxembourg to capitalize on these opportunities.

The Luxembourg government's objectives include promoting economic diversification, enhancing competition between businesses and building a knowledge centric society. The budget dedicated to research in Luxembourg increased over ten fold from €28 million to €326 million between 2000 and 2014. As a result, Luxembourg is now home to numerous companies and industries developing new innovative solutions, products and services.

Automotive Components Industry

Currently home to more than 30 key automotive components companies, Luxembourg has taken an active foothold in the European automotive components space. Luxembourg has become a key destination for first and second tier automotive suppliers that employ nearly 10,000 workers across 30 sites and generate over €1.5 billion in annual turnover. Many companies, such as IEE, CEBI, CARLEX, Goodyear and Delphi have established a presence in Luxembourg for its highly competitive business environment and close proximity to auto manufacturers in Germany, France and the United Kingdom.

Products and technologies produced by Luxembourg-based companies include:

  • Active and passive safety systems (including ADAS)
  • Engine management systems
  • Process automation equipment
  • Testing equipment
  • Electro-mobility, hybrid & hydrogen technology
  • Automotive connectivity, infotainment and HMI
  • Composite applications
  • Various sensor systems

Life Sciences

Health sciences and biotech companies in Luxembourg have seen strong development over the last few years especially within the personalized medicine, diagnostics, bio-informatics and Health IT sectors. These companies are often small and medium-sized enterprises (SMEs) or start-ups and are actively innovating new products including biomedical analysis, dental and orthopedic implants, health-related applications and laboratory and hospital equipment. Development of the Life Sciences sector is supported by an ambitious national action plan, aimed to position Luxembourg as a leader in molecular diagnostics, the primary foundation of personalised medicine. In order to further grow the sector and promote Luxembourg’s capabilities at a global level, the “Bio-Health Cluster” was established. This Cluster brings together companies and research laboratories to collaborate and identify new opportunities. The Cluster works to support potential international investors with establishing a presence in Luxembourg and facilitates cooperation among Luxembourg entities and regulation.

Information and Communication Technologies

Luxembourg has positioned itself as a global hub for information and communication technologies (ICT) and strives to become the leader in cyber-security and data protection. The ICT sector has seen high rates of economic growth and job creation, and has become a primary driver of Luxembourg’s economy. As a "big data" hub, Luxembourg has built an environment conducive to the globalisation and expansion of ICT companies. Two native European giants, RTL Group and SES, pioneered the country’s standing within the global ICT sector. Today’s leading tech giants such as, PayPal, eBay, Innova, iTunes, Nexon, Rakuten, Skype and Vodafone have selected Luxembourg as their base for launching a global market entry strategy.

Luxembourg as the Future of Research & Innovation

Three key aspects of Luxembourg society position the country to emerge as a dominant world leader in innovation and research. These are reliability, dynamism and openness. Luxembourg has experienced a significant period of political stability and evolved from an economy steeped in the production of agriculture and steel to an international business and finance capital. Luxembourg’s multicultural society welcomes the import of new talent and new ideas into its growing research and innovation centric culture. With these committed investments to research, development and innovation, Luxembourg is quickly gaining momentum to lead the global economy into the Age of Innovation.

About the author: Agnieszka Zajac is a Senior Consultant at Marlière & Gerstlauer Executive Search located in Luxembourg. Agnieszka has a dual degree in languages and economics from the Adam Mickiewicz University and the Poznan Economic Academy in Poland. She has an MBA in Human Resources and Marketing and specialises in placing high-level executives within the industrial sector. Agnieszka is fluent in Polish, French and English.

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