“We have to reinvent ourselves on a permanent basis”
The House of Start-ups initiative established by the Luxembourg Chamber of Commerce and its partners aims to create synergies within the country’s entrepreneurial ecosystem and help raise its international profile, according to CEO Karin Schintgen. Innovation, she says, is a quality deeply engrained in the national psyche.
Synergies and dynamic interaction between young, innovative companies in fields ranging from financial technology to social entrepreneurship, all developing under one roof. That’s the goal of the House of Start-ups, due to open early next year in Luxembourg City, according to CEO Karin Schintgen.
The project has been launched by the Luxembourg Chamber of Commerce in collaboration with the municipality of Luxembourg, whose Luxembourg City Incubator will move into the complex, along with the Luxembourg House of Financial Technology, which will transfer as well from its current premises on the Kirchberg.
Says Schintgen: “Our aim was to bring together various initiatives for the start-up sector in a single, highly visible location, in the same way as the clusters that exist in cities such as San Francisco or New York. When innovative people from very different areas come together, there are a lot of things they can share.”
The House of Start-ups will also host nyuko, a public-private consultancy and accelerator partnership specialising in helping entrepreneurs through advice, coaching and other services. Schintgen, who has been CEO of Lux Future Lab, one of the country’s earliest start-up incubators since it was established by BGL BNP Paribas in 2010, is also taking over the chair of nyuko, which will provide a team to assist start-ups, as well as another team for later-stage businesses.
Offering in-house advice and services
She says the House of Start-ups, which will be located in the Dome building near the capital’s railway station, will also co-host basic courses in start-up launch and development from the House of Training – another Chamber of Commerce initiative – and subsequently offer mentoring, and lend expertise in fundraising.
The roster of partners could well grow. Schintgen says: “We could welcome other incubators, because there is further space available in the premises, and we envisage offering dedicated space for partners such as law firms, accountants, tax advisers, marketing and real estate experts to enable start-ups to obtain some of the services and advice that they need in-house.”
The House of Start-Ups will work closely with other organisations in the grand duchy active in touting innovation and entrepreneurship. “We have already started discussions with Luxinnovation regarding activities such as coaching young start-ups, and we have joined a Digital Luxembourg working group for the promotion of the Luxembourg start-up ecosystem,” Schintgen says. She notes that the Chamber of Commerce last year established the House of Entrepreneurship to help individuals start companies, as an element of a complete range of services for businesses.
Luxembourg has come a long way as a start-up hub in recent years, she says. “While there have been institutional players such as Technoport, we are now seeing corporate players in Luxembourg entering the field - and not just banks. This is really important in strengthening the ecosystem because start-ups need and want to be connected to the real economy. They want to work with established corporates and see their business case working in reality.”
Schintgen points to the example of the Luxembourg Open Innovation Club, through which corporate groups can issue calls for start-ups across Europe to offer solutions to their innovation challenges: “Having initiatives coming from the corporate world is a very big asset in start-ups’ development.”
Leveraging its traditional virtues
As a start-up hub, Luxembourg is competing with major European capitals such as Berlin and London, but Schintgen argues that the grand duchy’s traditional virtues, those that have underpinned its economic development for the past half-century, remain paramount.
“Luxembourg’s biggest asset, which has been attracting companies for 50 years or more, is its ideal location in the heart of Europe. Second, more and more people are looking for an international environment where people speak their language. Third, we have a government and administrative system that can take decisions at short notice.
Importantly, Schintgen adds, the grand duchy offers pragmatism and stability. “Start-ups dread political upheavals and dramatic changes. Luxembourg has a tradition of political consensus and continuity, whatever government is in place – something that it shares with Switzerland, which perhaps not coincidentally, also has an active start-up environment.”
She believes Luxembourg’s political and economic decision-makers recognise the challenge of a digital transformation that will touch everyone’s lives – witness the Digital Luxembourg initiative or the embrace of Jeremy Rifkin’s ideas and his concept of a Third Industrial Revolution.
While Luxinnovation has a mission to support early-stage companies and the government has joined private-sector partners in establishing a Digital Tech Fund to make seed investments in innovative start-ups, Schintgen believes the authorities should consider emulating France’s system of “fonds d’amorçage” that provides capital to young companies at regional as well as national level.
She also argues that tax measures could encourage the growth of Luxembourg’s business-angel sector: “Tax incentives for investment in the start-up economy would make people more open to innovation and think entrepreneurially, rather than just about safe assets like Luxembourg real estate. It would also help get more young people involved.”
Innovation in the DNA
However, Schintgen does not believe that an innovative and entrepreneurial outlook is something new for Luxembourg – she’s convinced it’s an intrinsic part of the national DNA. “The country has always been innovative,” she says. “It has always been aware of its extremely small size, its almost total absence of natural resources, and nearly total reliance on powerful neighbours.
“Over the past 100 years we have always tried to manage what resources we have in an open and innovative way – such as the award of terrestrial broadcasting frequencies to RTL while our neighbours created state-owned monopolies, or the breakthrough of SES-Astra co-positioning satellites at orbital broadcasting slots when nobody believed it possible. In financial services, there has been the creation of an international fund industry and Luxembourg’s emergence as the world leader in microfinance.”
This approach is essentially driven by pragmatism and necessity, Schintgen suggests. “It’s not necessarily out of sheer adventure but a conservative viewpoint: in order to stay as we are, to maintain the standard of living and quality of life that we cherish, we have to reinvent ourselves on a permanent basis. Luxembourg’s greatest resource is our capacity to adapt and innovate.”
(Picture Source: Journal.lu)