Today, ICT and the related innovative practices are the pillars of any sustainable economic growth in industrialized countries, in particular in Luxembourg. This phenomenon, called knowledge society, is the result of the economic, political and societal changes that are currently taking place. ICT competencies and knowledge capacity are viewed as the main sources for competitiveness in the long run.

Its firm commitment to the knowledge economy put Luxembourg among the most competitive world economies in the 2009 IMD ranking published by the Institute for Management Development in Lausanne (Switzerland). The country certainly contributed its share to the ambitious goals set by the European Union at the Lisbon economic and social summit in 2000 “to become the most competitive and dynamic knowledge economy, capable of sustainable economic growth accompanied by qualitative and quantitative improvement in employment and social cohesion.”

Luxembourg's efforts will not stop here. Its national reform programme has already shown very promising results. The main focus lies on education and training, support for research and innovation and investment in ICT.

Luxembourg’s progress towards the knowledge economy

The Competitiveness Observatory is a department within the Ministry for Economy and Foreign Trade with a mandate to implement the Lisbon strategy as regards business in Luxembourg and to carry out studies on competitiveness and related indicators. Its publications show the Luxembourg's progress towards the knowledge economy using 14 indicators on the dashboard for Luxembourg’s competitiveness. The indicators are linked to research and development, new technologies and innovation (in particular patents).

In the October 2008 report An Increased Competitiveness for a Greater Purchasing Power, several indicators showed an upward trend on the national level. For instance, the percentage of households with internet access has increased, as has broadband access which has grown from 63% in 2006 to 77% in 2007; the number of secure web servers per 100,000 inhabitants has gone up from 44 in 2005 to 55 in 2006, meaning that, when it comes to network security,  Luxembourg is near the top in Europe. As for the use of broadband connections by companies, it has risen from 81% in 2006 to 86% in 2007.

Despite these promising intermediate results, the various stakeholders, including researchers, decision and policy makers in the private and public sector, continue to be very active. The symposium En Route to Lisbon which was held in December 2008 signaled a lot of dynamism. The Henri Tudor Public Research Centre, the national statistical institute Statec and the Competitiveness Observatory organized this event to analyze the current challenges and to draw the necessary conclusions from the Lisbon strategy.

The seminar drew some 200 participants to discuss more than 70 scientific presentations related to important topics such as research and development, innovation, productivity, organizational changes, the evaluation of public politics, knowledge management and education and training.

Luxembourg Research & Development

Having made the necessary financial investments to boost national scientific publications as part of its strategy to create a coherent system of innovation and research, Luxembourg R&D has taken major leaps forward. The creation of the National Research Fund in 1999, the establishment of the University of Luxembourg in 2003 and the Cité des Sciences (which is still under construction) had a tremendous impact on the public recognition of Luxembourg R&D. According to the Organization for Economic Co-operation and Development (OECD) the number of scientific publications per million inhabitants almost doubled between 1995 and 2005. Results are similarly impressive in terms of patent applications and innovation, mainly thanks to countless international collaborations. In comparison to the rest of Europe, R&D endeavors are a significant part of the Luxembourg landscape.

Luxembourg Business innovation

If you are looking to set up a business based in R&D, Luxembourg is an attractive consideration. When it comes to the spirit of enterprise and innovation in business, Luxembourg is particularly well developed, according to the European Innovation Scoreboard. One of the initiatives is the web portal www.entreprises.public.lu providing comprehensive information on all the formalities and forms required to set up a business in Luxembourg.

In addition, the site www.innovation.public.lu, which is linked to the national agency for innovation and research Luxinnovation, includes a section dedicated to setting up an innovative business and highlights the range of subsidies and other forms of support available in this context. Other features of the site are a description of the hosting facilities at Technoport Schlassgoart in Esch-sur-Alzette, the competitions and prizes linked to innovative companies, such as the 1, 2, 3, GO contest, the networks established to encourage start-ups, and information on intellectual property and the protection of inventions.

Education and life-long learning

Adapting the educational system to meet the Luxembourg business market requirements is of great importance to Luxembourg, as the establishment of the Luxembourg School of Finance (LSF) demonstrates. The main objective of this faculty of the University of Luxembourg is to generate and pass on knowledge in the field of banking and finance.

The knowledge economy inevitably requires easy access to education and professional training for everyone, as well as the chance to improve skills and competencies throughout one’s life and career. Luxembourg has a vast range of subjects on offer in this context.

Promoting life-long learning is one of the tasks of the national institute for the development of continuous vocational training INFPC since its inauguration in 1992. Today, the share of companies taking part in the process of life-long learning is constantly on the rise, passing from 60% in 1993 to 72% in 2005.

Part and parcel to Luxembourg e-business is e-learning, which creates a convenient way to access training. While it currently remains largely the privilege of big companies to provide e-courses, in the future we will see many more end users. This is particularly due to the advance of the Rapid Learning concept and the increased number of training sessions available, according to a 2007 survey carried out among Luxembourg companies.

An observatory for continuous professional training is being set up. It will make it easier for private actors to choose their training and to promote compliance with existing regulations. This initiative is one more step towards strengthening Luxembourg’s position in the age of the knowledge economy. There is no doubt, it will encourage companies and people to invest in Luxembourg even more.