The law of 17th May 2017 relating to the promotion of research, development and innovation – a tool aimed at all types of businesses looking to innovate – came into force nearly nine months ago.
The law relating to the promotion of research, development and innovation was published on 17th May 2017, the corresponding text notably offering a thorough review of the aid schemes available to businesses of all sizes and across all sectors.
Nearly nine months after it came into force, the Ministry of the Economy and the Chamber of Commerce organised an event with the aim of presenting a detailed insight into the intricacies of this new law, one of the main objectives of which is to encourage businesses to actively support their R&D and innovation projects.
“In an increasingly competitive environment it is often essential to innovate in order to survive”, Director of the Chamber of Commerce Carlo Thelen explained in his introduction to the session held on 20th February. “Small businesses need to be aware that this aid is available to them, but their mechanisms have to be simple and transparent”.
A budget of €200 milllion
The country aims to devote between 2.3 and 2.6% of its GDP to R&D initiatives by 2020, which, in relation to the current 1.3%, “is a very ambitious aim, and one that this new law has been designed to help achieve”, Carlo Thelen points out. “It is important that we persevere with regards to the efforts the government is making to simplify administrative procedures and improve training, digitalisation and even the promotion of the country. No aid scheme can reach its true potential without an environment that is conducive to economic development and the creation of value”.
Pointing out that “support for innovation is a key part of our strategy for maintaining and developing a framework that is favourable to companies”, Secretary of State for the Economy Francine Closener, for her part, was keen to emphasise that “this reform of the aid scheme really broadens the range of businesses targeted as much as possible. There is huge potential with regards to opportunities for R&D initiatives in the sectors that are driving economic diversification, as well as the commercial, arts & crafts and even hospitality sectors, where there is also a need for innovation”.
A budget of €200m is to be allocated to implementing this new legislation. Indeed, the previous law resulted in the awarding of aid amounting to over €375m between 2009 and 2017, allowing for over a billion euros’ worth of investment in R&D. “The Ministry of the Economy is doing its best to create a favorable environment. Now, it’s up to you!” Francine Closener concluded her address to those businesses in attendance.
Financial and logistical support
Businesses rightly got the opportunity to express themselves as part of the round table that followed the presentations and was moderated by Luxinnovation’s Start-up Support & SME Performance Director Jean-Michel Ludwig.
Robert Glaesener, CEO of former start-up Talkwalker, for example, openly attributed part of his business’s success to “both financial and logistical aid and support received from the State, such as the provision of a premises at the Technoport when we started out in 2009”, he explained. “The main support came in the form of aid for innovative new businesses, as a result of which we received two sizeable chunks of funding, the first of which enabled us to increase our workforce from two to a dozen individuals and the second up to thirty or so. This was vital to really getting us off the ground, when all we had to begin with was a prototype and a single client in Germany who was bringing in €2,000-3,000 a month”.
The company, which specialises in protecting and promoting brands and their reputations on social networks and in optimising their presence on these networks, now has nearly 180 employees, including 140 in Luxembourg, with the remainder spread between its offices in Frankfurt, New York and San Francisco. It aims to increase this figure to 250 employees by the end of the year.
Trustworthy players and quality infrastructures
Georges Thielen, Manager of Governmental Relations and R&D Partnerships at Goodyear and President of the Luxembourg Materials & Manufacturing Cluster, for his part, is delighted to see PPP (public-private partnership)-type initiatives being rolled out at national level. “10 years ago, all major manufacturers tended to join forces with foreign players”, he explains. “This is no longer the case, with greater trust now being placed in national partners and infrastructures of an excellent quality, not to mention the various visionary and complementary tools that the government has developed. This new law is excellent news for industry and will rightly encourage direct collaboration between national manufacturers and public research”.
Goodyear didn’t wait for the law to be passed before entering into a partnership worth nearly 50 million euros with the Luxembourg Institute of Science and Technology (List) that was only made possible thanks to the synergies between the RDI law and the tools developed by the Luxembourg National Research Fund (FNR). “If we’d had to fund the project ourselves we couldn’t have done it”, Georges Thielen explains. “This is the largest partnership of its kind that Goodyear has ever entered into”. It also brought with it 40 additional full-time jobs between the two partners, along with 30 doctoral and post-doctoral scientific researchers who were also recruited with the help of the FNR.
The notion of ‘open innovation’ that this new aid scheme focuses on is also reflected in the implementation of various major infrastructural projects such as the National Composite Centre Luxembourg (NCCL) and the future HPC (High Performance Computing) supercalculator. “There was still a certain reluctance to want to collaborate, particularly with regards to protecting intellectual property”, Georges Thielen explains. “These fears have now been dispelled, making way for healthy and open collaborations with the public research sector, with all players concerned now truly prepared to join forces with others”.
For big and small alike
The principle of active collaboration is another one that active stakeholder the Federation of Luxembourg Industrialists (FEDIL), for example, fervently upheld in creating the NCCL. “We are also currently working on producing a strategic document for the creation of a Digital Innovation Hub”, FEDIL CEO René Winkin explains. “This would enable us to offer technology suppliers a platform for interacting with the companies concerned themselves, at a time when the challenges associated with digitalisation are affecting everyone”.
Carole Wammer (of the Ministry of the Economy’s Department of Research, Intellectual Property and New Technologies) sees this digitalisation as a “source of major opportunities, not only for reaching new markets but also for developing new business models. But we also know that SMEs and very small businesses don’t always have the time or sufficient knowledge to get involved in this sort of thing. This new law should help them in this respect”.
Whilst very small, small and medium-sized enterprises may be the first to be targeted by the new legislative provisions, larger organisations have obviously not been forgotten, either. “They can now take their efforts further and are being encouraged to set up public-private collaborations”, Carole Wammer points out. “Applied research is still a very important field where the Luxembourg economy is concerned”.
At the end of the day, as Bob Feidt (head of State aid at the Ministry of the Economy’s Department of Industry, Logistics and Infrastructure) reminds us, “we have different tools for different scenarios, tools that not only reflect the size of the business in question but also favour a sector-specific approach”.
Luxinnovation – the entry point
As a general rule, the first point of contact for any company interested in adopting such an innovative approach is Luxinnovation, and as far as Luxinnovation’s Head of National Funding Pascal Fabing is concerned there is no wrong time to get in touch. “The main thing is not to feel restricted”, he explains, with regards to businesses that might be thinking of getting involved. “Whilst innovation may not yet be part of your day-to-day operations, we are simply bathing in the stuff, which gives us a certain perspective on the best way to implement all of these sorts of approaches in complete confidentiality”.
This results in two types of added value, one financial, through the ability to quickly establish what type of aid is appropriate and how much of it might be achievable, the other in terms of partnerships. “We are in a position to understand your business and your plans, help you to give them some sort of structure, identify potential research collaborations and specifically determine the best economic model on which to base your aid application. We can generally achieve great things together”.
For more information or any additional questions please contact:
Head of National Funding
(Photo: Chamber of Commerce)