Franz Fayot, Luxembourg’s finance minister (Photo: Harry Murphy/Collision via Sportsfile)
GUEST BLOG. Last month, the Luxembourg Minister for the Economy, Franz Fayot, traveled to Toronto and Montreal as part of an economic mission organized by the Luxembourg Chamber of Commerce in close collaboration with the Ministry for the Economy. I had the opportunity to meet the Minister at the InterContinental Toronto Center and gain insight into the Grand Duchy’s economic transition towards sustainability.
An economy in transition
With up to a third of its GDP linked to the financial sector, Luxembourg’s economy is largely dominated by the latter. However, the last 20 years have been marked by a diversification of the economy, as well as greater transparency and regulation after the financial crisis, points out Franz Fayot.
“What we are trying to do is diversify [l’économie] even more so in new sectors to make us less dependent on the financial sector and adapt to new circumstances, he says. We are also increasingly developing a green and sustainable financial sector, which is doing very well.”
State eco-responsibility
Minister Fayot, whose guiding principles are a strong welfare state and sustainability, firmly believes that the Government must assume its central role in the transition of the economy towards sustainability, “both in terms of environmental and social sustainability”, he adds. . .
In June 2020, an international consultation was launched to gather ideas for strategic land use planning projects taking into account challenges related to climate and social issues, and to support the country’s ecological transition to a carbon-free territory. by 2050. .
“We have to understand that we have to help companies to innovate and invest in the future,” said the minister.
A booming startup ecosystem
Luxembourg has seen steady growth in the number of startups over the last decade.
Earlier this year, the Ministry of Economy launched a strategic initiative to provide a deep understanding of the startup ecosystem based on data analysis and interviews with key stakeholders.
Luxinnovation, the national agency for innovation, identified more than 500 active startups offering innovative data-driven digital solutions in its latest census.
These assessments will also provide relevant comparisons with international markets and will aim to identify the next steps needed for development opportunities in the years to come.
“Our innovation agency is there to guide start-ups, but also more established ones, to have access to subsidies, explains Franz Fayot. We have a state aid framework in Europe that we need to comply with, but the main message is that there is a clear need to co-finance innovation, especially at a time when we are in this transition to a greener economy.
Exceed the limits of the territory
Surrounded by Belgium, France, and Germany, Luxembourg is one of the smallest countries in the world, slightly smaller than the state of Rhode Island. However, despite its dependence on energy supply from its neighbors, it is making constant efforts to increase its share in renewable energy by also investing in projects beyond its borders, according to the minister.
“We don’t have much sun in Luxembourg and we don’t have unlimited space to generate wind power,” he says. It’s a bit of a limiting factor, but that shouldn’t excuse anything.”
“We invest a lot in energy efficiency,” he adds. We try to bring people closer to electric mobility and encourage heating and geothermal energy in new construction.”
A growing space sector
Luxembourg may not be the first that comes to mind when you think of space, but the country has one of the world’s leading satellite operators and is increasing its investment in space resources.
“SpaceResources.lu is an initiative that we started about six years ago and is very focused on the space resources segment of the space industry,” he says. We do not launch anything into space from Luxembourg, but we focus on services such as space traffic management.”
As part of the economic mission, a group of space companies participated in a distinctive program established by the Luxembourg Space Agency in collaboration with the Canadian Space Agency. This program includes on-site company visits, workshops, and opportunities for business-to-business exchanges that led to the signing of a memorandum of understanding between the two national space agencies.
Karl Moore and Stephanie Ricci. Karl is an Associate Professor in the Desautels School of Management at McGill University. Stéphanie has a bachelor’s degree in journalism and sociology from Concordia University.
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