We can say without doubt, that planning the future is a matter that does concern all of us. Running a company bears the immense responsibility of assessing the risks in an environment where the future state of the corporate world is very difficult to predict. However, the norm in many companies – and this counts for large and small entities – is that we are often very busy with the daily business, putting out little fires here and there, leaving us with little time to reflect. New ventures – such as developing new products, adapting new business models, tapping into new markets – happen sometime by chance, often in response to external events that seem often beyond our control.
We are all aware of the fact that change is the only constant, everything else is in constant change. And getting through these major shifts that might affect the way of doing business, means that we need to earmark ample time to systematically analyze and carefully assess our decisions.
Especially in times like these, “thinking ahead” will be a critical exercise in order to overcome the current disruptive trends such as digital transformation, resource shortages, decarbonisation or the proliferation of new business models. As a small export oriented economy that is constantly challenged by the global headwinds, Luxembourg has no other choice than becoming a world class leading adopter and a leading innovator in its areas of expertise. In order to succeed, we need the companies on board. They are indeed the key architects of the economy of tomorrow and their dynamic and innovative spirit will be a crucial piece to the puzzle of our success. Indeed the companies who are constantly adapting and reinventing themselves in order to remain competitive in the future are as well those which are creating the value of tomorrow. They are the roots of tomorrow’s growth, they will be employing the new generations of workforce – Y, Z, you name it – , and they will contribute to the funding of our world-class welfare model.
Meeting the challenge of disruptive change
The challenges that today’s companies have to face could be easily described as a multifaceted phenomenon that impacts our way of doing things on several levels and is unique in terms of scope and complexity. The ongoing digital transformation, and the closely related emanations such as the sharing economy, paired with new expectations in the ecosystem for more sustainable and resource efficient solutions have proven their influence in the last years and showed off their ability to push boundaries beyond new frontiers, pushing entire sectors into a new state of urgency through newer and faster innovation cycles. But the megatrends go deeper than merely creating something new. They also question our existing culture and way of thinking, and thus management models that we have embraced over the last decades.
The impact of technology requires organizations to change, but how do we do that? What type of management culture do we need in order to change? How do we attract and retain talent? How do we ‘manage’ insecurity? How should we proceed to offer the right solutions on the right time to meet the expectations of a demanding customer base?
Those are the questions with which we are confronted on a daily basis. In a fast-paced and technologically driven environment, companies cannot function with the old “ingredients”. A new economic paradigm means a new corporate paradigm as well: the way companies work and operate will be deeply challenged and requires to remain open towards change in order to remain competitive on an international playing field.
We are currently in a quite privileged economic situation. It is probably the best moment to embrace those new challenges. But it is important to remember that we have not always been in such a privileged situation. Be it in the context of the first industrial revolution during which Luxembourg climbed the ladder of economic and social success in a time where poverty and emigration conditioned our daily lives or during the oil and steel crises when Luxembourg was severely affected in economic and social terms. Nonetheless, despite those adverse headwinds, each time the country managed to reinvent itself. This would not have been possible without the creation of sound and trustworthy bonds between private and public stakeholders.
“A reliable, dynamic, and open” country: those are the words chosen for our nation branding strategy, and I do believe that those words are very well chosen and reflect the Luxembourg “raison d’être” in every possible way and how it helped the country in the past to move forward. Currently we have the unique opportunity to evolve in a socially and politically stable environment, with top-notch infrastructure especially in digital terms (data centres & connectivity), an international workforce, and being an open economy and society. We should build on those strengths while addressing our weaknesses in the context of creating a viable and thriving ecosystem for our companies.
Here some of the priorities we need to work on:
We have to provide more efforts in bridging the digital divide that arises in every aspect of the economy and the society. It is mainly characterised by the rising gap in terms of access and usage of information and communication technologies. Whilst 93 % of Luxembourg residents are active Internet users and 78% shop online and 78% of shops in Luxembourg have an Internet presence, only 7% of the country’s SMEs actively sell online, with the EU average being at 14%. Other major challenges are observed regarding the usage of cloud activities, e-security, the management of big data or the provision of e-public services.
Another key factor for future companies is the availability of workers with the right skills. Beside attracting and retaining talents from the greater region and further away, we need to focus as well on growing more talents on our territory. Especially regarding STEM graduates (Science, technology, engineering and mathematics): Currently we count a mere 3,6 STEM graduates for 1.000 individuals which is largely below the European average. Beside those profiles, multidisciplinary backgrounds are becoming more and more important for the companies of tomorrow.
Furthermore, research, development and innovation have always been key competitiveness drivers and will be even more important in the future. According to the latest country report of the European commission, the sharp decrease in business expenditure on research and development is a matter of particular concern. Public R&D intensity increased fivefold between 2005 and 2015, but business R&D intensity dropped in the same period from 1.4 % of GDP to 0.7 %. This points to a weakness in the framework conditions for cooperation between public and private research and stresses the need to align the national sectoral and research priorities with those of the business sector. This concern was also clearly stressed out in the “Third Industrial Revolution” strategy study.
Moreover there is the key topic of change management, which has been identified as a critical success factor by major organizations. It is indeed a key tool to transition individuals, teams and organizations from the current state to the future state and to handle the challenges related to digitalization or corporate responsibility on a people level.
The Chamber of Commerce of the future as a reliable partner for the company of the future
Last year in November, we presented the results of the „Third Industrial Revolution“ strategy, with the ambition to transform the country into a highly connected and fully sustainable nation state. It is a great example of a private public partnership based on the open innovation paradigm, in which more than 300 stakeholders, amongst which many companies, participated in order to create a common vision and to find solutions how to deal with the major trends, how to embrace them, and how to leverage them to transform them into opportunities. The high-level strategy is now written and the most exciting and challenging part is still to come: implementing the ideas and measures that are proposed in the strategy.
In the context of the TIR strategy, the declared ambition of the Chamber of Commerce follows the goal to help businesses with their efforts at digitalization, energy transition and the adaptation of new business models. First of all, we would like to help the national companies in facing the new challenges. Secondly, we would like to support promising start-ups in seizing the new opportunities that might be offered by the transition towards a more sustainable and interconnected economy. And thirdly, the Chamber of Commerce aims to play an active role in the follow-up of the strategic study.
In the order to get the most out of companies and to better reflect the needs of the “company of the future”, we constantly adapt our services.
The Chamber of Commerce and its partners work hard to meet the training and qualification needs of companies, a pillar well anchored in the missions of the Chamber of Commerce. It engages in a continuous process of upgrading and improving the knowledge and skills of employees through initial training and apprenticeship, vocational training through the “House of Training” and tertiary training, offered by the “Higher Institute of Economics” (ISEC). For younger people, the winwin.lu initiative was set up last year to inform and raise public and stakeholder awareness of the benefits of initial vocational training and to improve the perception of this pathway to the public. In addition, the Chamber of Commerce presented a tool with the “TalentCheck” to improve the orientation of future trainees. Moreover, we are engaged in awareness raising efforts such as the “Hello Future” campaign which is a public-private initiative promoting the industry and technologies in Luxembourg for pupils and students.
Moreover, on the 22nd of March a major conference will take place on the topic “What skills for what jobs in the digital age?” organized by the Chamber of Commerce in cooperation with the Ministry of Work and Employment and the “Chambre des Salariés”.
Another important goal is to support the entrepreneurs who are willing to seize the opportunities of tomorrow. With the launch of the “House of Entrepreneurship”, we now have a true “one stop shop” that finally allows to simplify all the administrative procedures of a company and promote the entrepreneurial spirit. It locates all the major partners involved in the entrepreneurial ecosystem such as the Luxembourg House of FinTech, the Luxembourg Business Angel Network, Business Mentoring activities, or the co-working and social business platform Nyuko. Moreover, the “1-Euro Company” was introduced into Luxembourg legislation and is ideal for those who wish to set up a company while enjoying a secure legal framework. This is a particularly interesting tool for activities in the field of ICT.
The future is out there. Up to us to embrace it.