Innovation has been Luxembourg’s mission for well over two decades, and this push has gathered pace in recent years. Specific areas have been targeted for development and the government has invested substantial financial and organisational resources. A real public-private partnership, the work is designed to build on existing expertise in the country but with an open-minded focus on results.

State aid packages for research and development have been reviewed and improved, with a greater focus on innovation across business, including services sectors. Support can come in the form of direct grants or loans from the National Credit and Investment Company (Société Nationale de Crédit et d’Investissement, SNCI). Innovative start-ups can be incubated, hosted and coached in publicly owned facilities to ease their early development and access to state services and support.

A reform of these measures in June 2009 has taken this to a new level, with increased focus on innovative managerial and production processes in all types of firms. So as well as aiding the creation of new technologies and products, experienced advisors can be called upon to create increased efficiency.

Private research and development is about 1.3% of GDP; a strong effort but with most in the hands of a few large players. The aim is to broaden the effort from more traditional sectors such as steel and automotive components into information and communication technology, logistics, health technologies, energy and the environment. Government sponsored “cluster” organisations have been created to facilitate intra-sector cooperation.

This goes hand in hand with the drive to create the City of Sciences science park in the early part of the new decade. Located on a brownfield site in Esch-Belval, the centrepiece will be the research-based University and the three public research centres. The aim is to create a centre of excellence though which private and public innovation investment can be targeted.