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Innovation competitivenessIn the latest edition of its Global Competitiveness Report covering the year 2018, published mid-October, the World Economic Forum (WEF) ranked Luxembourg 19th out of 140 countries in terms of its ability to innovate. The country therefore enters the Top 20 (it occupied 22nd place in 2017), but in a ranking established using a new methodology, making it, in fact, difficult to make a direct comparison.

Nevertheless: as the WEF recalls, this “ability to innovate” remains the strong point of the economies considered to be the most competitive. Moreover, it is also in 19th place that Luxembourg ranks in the “global” ranking of the most competitive economies.

This good news for the national innovation ecosystem is in line with another international ranking published at the beginning of the summer: in the 2018 edition of its Innovation scoreboard, the European Commission promoted Luxembourg to the upper division, moving it from the group of “Strong Innovators” to that of “Innovation Leaders”. The country is moving above Germany and joining the best-performing European economies in Sweden, Denmark, Finland, the Netherlands and the United Kingdom.

A pillar

Luxembourg has a global innovation index 21% higher than the EU average, improving its performance compared to the EU average by 6.6 percentage points between 2010 and 2017. The country notably stands out in terms of the attractiveness of its research system, which is 98% higher than the EU average. The ranking for intellectual assets (patent applications, trademarks and designs) is 53% higher than the EU average.

As part of the Rifkin strategic process to implement the Third Industrial Revolution, Luxembourg’s public and private economic players have clearly identified the “innovation economy” as one of the pillars requiring action to ensure the country’s transition to a sustainable model.

Economic diversification is clearly based primarily on innovation. This is characterised, on the ground, by the establishment of an efficient R & D ecosystem (also recognised by the European Commission as one of the strong points of the country), the development of higher education, sectoral diversification (in particular in ICT, health technologies and the space industry) or even an increase in the availability of digital training.

Innovate, innovate, there will always be something left

Contrary to popular belief, the notion of innovation is not necessarily – and absolutely not exclusively – linked to that of (high) technology. The Luxembourg legislator defines it as “any new thing in the form of product, service, process, method or organisation resulting from the application of new ideas or research and development efforts”.

It therefore concerns both “organisational innovation” (via the implementation of a new organisational method in business practices, workplace organisation or the company’s external relations), that “process innovation” (linked to the implementation of a new or substantially improved production or distribution method, which implies significant changes of a technical, material or software nature).

The legal framework is firmly in place: the recent law of June 2017 on aid schemes for research, development and innovation (RDI), encourages private companies to boost their efforts in this area. The ceiling for aid granted to young innovative companies has been raised to 800,000 euros, while the maximum rates applicable for the process and organisational innovation projects carried out by SMEs are now 50%.

This law of 2017 now also provides for the possibility of granting aid in the form of equity contributions for young innovative companies. For them, from now on, to be part of such an approach from which they will always benefit, at whatever level.

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