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Luxembourg towards a smart nation Providing the keys to unlock our country’s potential Brochure / report title goes here | Section title goes here
Key message 03 State of play 05 The building blocks of a smart nation 08 Technology and infrastructure 10 Data 14 Skills and competencies 16 Innovation culture 20 Attractiveness 22 Public-private ecosystem 24 Vision for Luxembourg’s future 26 A center for digital clinical trials 28 *UHHQȴQDQFH Conclusion 32
02 Luxembourg towards a smart nation | Key message
Key message
Luxembourg is facing a series of challenges While Luxembourg is well prepared in a through the globalized economy, increasing majority of these areas, the coordination levels of international regulation leading and connection of these building blocks to a reduced margin of manoeuvre, not are in need of strengthening to address key to mention the technological and societal aspects designed to reinvent Luxembourg’s disruption through digitalization. This business model. A truly smart nation is whitepaper highlights the current state of ȴUVWDQGIRUHPRVWGHȴQHGE\DVWURQJ play in Luxembourg in relation to the six cooperation between all stakeholders core building blocks of a smart nation: and an alignment of interests from the government, the companies and society. 01. Technology and infrastructure 02. Data 03. Skills and competencies 04. Innovation culture 05. Attractiveness 06. Public-private ecosystem
03 Luxembourg towards a smart nation | State of play
04 Luxembourg towards a smart nation | State of play
State of play Words like “technological disruption” and “Big Data” are dominating today’s headlines. They represent a trend that is changing the way we live and do business.
Advancements in computing, communication of Luxemburg underwent a fundamental technologies, and data processing are change. The collapse of the steel industry generating disruptive breakthroughs in many DQGWKHULVHRIWKHEDQNLQJDQGȴQDQFLDO industries. Data is at the core of a revolution services industry since the 80s have both had that has vast implications for nearly all widespread consequences whose impact on sectors of the economy. Not only private society and the economy are still evident. The companies, but also entire nations are emergence of new industries have always feeling the pressure to adapt to this changing been preceded by the decline of former environment. Technologies are challenging ones, usually resulting in social and economic today’s social climate, while simultaneously shifts. In Luxembourg’s case, the country so RHULQJPDQ\QHZRSSRUWXQLWLHVWR far has been forward thinking in its approach, governments, businesses, and citizens. By enough so to spot trends early, giving way to developing innovative approaches designed early groundwork for substantial economic WRXWLOL]HWHFKQRORJ\IRUVRFLHWDOEHQHȴWV growth and social welfare. nations can meet the challenges of the future. :KLOHWKHȴUVWDQGVHFRQGLQGXVWULDO revolution started the transition from trade Luxembourg always faced a unique set of based economies to industrial societies, FKDOOHQJHVWKDWLQȵXHQFHGLWVVRFLHW\DQG the often-cited “third industrial revolution”, economy: its small size, its lack of certain based on digital technologies and new natural resources, and its landlocked manufacturing methods, promises similar geographical location. Nevertheless, over transformative changes to businesses and the last century, Luxembourg was able to societies. Digitalization is all-pervading and redesign its economic model twice. The steel is changing our way of working and living industry took root in the second half of the on a daily basis. Today, we pay our bills by 19th century. However, it was only due to bank transfer from our home computer, or the construction of large-scale integrated we call a taxi via an app on our smartphone, steelworks in the 20s and 30s that enabled EXWVRIDUWKHHHFWRQRXUFRXQWU\DQGLWV the success of this particular economic governance has been limited. Despite many sector as well as the country as a whole.1 promising projects, the expected positive Since the 1970s, the economic structure outcomes have not yet materialized.
05 Luxembourg towards a smart nation | State of play
If Luxembourg maintains Technology is an important element Luxembourg has reached a point, where of globalization and competition is vital sectors of its economy—especially the its support of economic increasingly shaped by the deployment banking industry—are undergoing core concepts that are and use of these technologies.2 Developing transformations. For example, digitalization nations are leap-frogging traditional LQȵXHQFHVWKHUHOHYDQFHRIIXQGLQGXVWU\ highly susceptible to development steps by using relatively EDFNRɝFHWDVNVPDNLQJWKHPSRWHQWLDOO\ disruption and fading cheap technologies such as mobile redundant in a few years. A counterexample internet to compensate disadvantages to the banking industry is the manufacturing business models, it will in the cost of capital and labour.3,4 LQGXVWU\7KLVLQGXVWU\LVODUJHO\DHFWHGE\ most probably face an Technological advances are set to further WKHHPHUJHQFHRIDUWLȴFLDOLQWHOOLJHQFH $Ζ drive competition between nations and AI is being used to bring down labour costs, unforgiving future. could be the cause for social and economic reduce product defects, shorten unplanned upheavals, similar to those of the last downtimes, improve transition times, and industrial revolution. To meet the goals increase production speed.6 This process is of their economies and societies, some likely to continue in the coming years with leading nations have adopted a “smart” drastic consequences for Luxembourg’s strategy such as Singapore, Switzerland, economic model. It is thus reasonable to and Estonia as depicted below. argue that Luxembourg, as a nation, might be facing considerable obstruction in terms of future growth.
SingaporeSingaporeSingapore SwitzerlandSwitzerlandSwitzerland EstoniaEstoniaEstonia LuxembourgLuxembourgLuxembourg
“Singapore“Singapore“Singapore for forexample example for example “Zug,“Zug, a wealthy “Zug,a wealthy a communitywealthy community community in in in “Estonia“Estonia “Estoniaseized seized the seized themoment moment the moment “In “Inorder order“In to ordersustain to sustain to its sustain currentits current its current alreadyalready expressedalready expressed expressed its wishits wish its wish SwitzerlandSwitzerlandSwitzerland is becoming is becoming is becoming afterafter independence afterindependence independence in 1991 in 1991 in 1991 livingliving standards,living standards, standards, Luxembourg Luxembourg Luxembourg to buildto build ato smart builda smart nationa smart nation nation attractiveattractiveattractive to investors to investors to investors and and and andand created createdand thecreated thefoundation foundation the foundation willwill need needwill to competeneedto compete to compete with with with withwith initiatives initiativeswith initiatives such such as thesuchas the as the start-upsstart-upsstart-ups by adoptingby adopting by adopting the the the for fora technologically a fortechnologically a technologically advanced advanced advanced otherother nationsother nations bynations developingby developing by developing nationalnational nationaldigital digital identity, digital identity, identity, latestlatest technologieslatest technologies technologies to create to create to create andand smart smartand society smart society by society investingby investing by investing its capabilitiesits capabilitiesits capabilities in several in several in key several key key e-payment,e-payment,e-payment, or smartor smart or smart an ecosysteman ecosysteman ecosystem that that fosters fostersthat fosters in digitalin digitalin infrastructure digital infrastructure infrastructure in in in areasareas andareas and leveraging leveraging and leveraging on digitalon digital on digital urbanurban mobility.”urban mobility.” mobility.”5 5 5 innovativeinnovativeinnovative companies.” companies.” companies.” the the1990s.” 1990s.”the 1990s.” competencies.”competencies.”competencies.”
06 Luxembourg towards a smart nation | State of play
6LQFHȴQDQFLDOVHUYLFHVUHSUHVHQW Aside from Digital Lëtzebuerg, a Ministry 24.7 percent of GDP and 11.7 percent of State initiative, the government has Singapore of employment,Switzerland large disruptions to launchedEstonia other ventures such as the Third Luxembourg WKLVVHFWRUZRXOGGUDVWLFDOO\DHFWWKH ΖQGXVWULDO5HYROXWLRQ 7Ζ5 VWUDWHJ\VWXG\ economy.7 If Luxembourg maintains its DQGWKH+LJK3HUIRUPDQFH&RPSXWLQJ +3& support of economic concepts that are initiative, both of which are encouraged highly susceptible to disruption and fading through the Ministry of Economy. The TIR business models, and continues to rely “aims to make the existing economic model heavily on industries that are in decline more sustainable and interconnected globally, it will most probably face an for future generations by working with unforgiving future. Without a strategic ICT, energy, and transport as part of an “Singapore for example repositioning,“Zug, a wealthy socially community and economically,in intelligent“Estonia network”. seized the9 HPC moment on the other “In order to sustain its current already expressed its wish Switzerland is becoming after independence in 1991 living standards, Luxembourg Luxembourg will struggle to defend its hand aspires to accelerate the research to build a smart nation attractive to investors and and created the foundation will need to compete with with initiatives such as the positonstart-ups as leader by adopting of the the pack. performedfor a technologically in intensive computingadvanced and other nations by developing national digital identity, latest technologies to create ODUJHVFDOHand smartGDWD societyDQDO\WLFV by investing %LJ'DWD 10 its capabilities in several key e-payment, or smart Acknowledgingan ecosystem thatthese fosters developments, Many initiativesin digital infrastructure in the digital in sphere have areas and leveraging on digital urban mobility.” 5 Luxembourginnovative companies.” is already a breeding been launchedthe 1990s.” over recent years and competencies.” ground for many local initiatives that VLJQLȴFDQWO\FRQWULEXWHWRWKHDGYDQFHPHQW aspire to contribute to the digitalization of Luxembourg’s future digitalization. of the country. One of those initiatives is Digital Lëtzebuerg, whose mission In order to sustain its current living is to harness digitalization as a tool for standards, Luxembourg will need to positive transformation. More precisely, compete with other nations by developing it is developing Luxembourg into a digital its capabilities in several key areas KXEȴWIRUWKHIXWXUHE\IRFXVLQJRQ and leverage on digital competencies. PRGHUQL]LQJDQGIXWXUHSURRȴQJȴYH Consequently, it is important to understand key areas: government, skills, policy, the dimensions involved in building and infrastructure and ecosystem.8 implementing a successful “smart” nation.
Technology is an important element of globalization and competition is increasingly shaped by the deployment and use of these technologies.
07 Luxembourg towards a smart nation | The building blocks of a smart nation
strategy supported by all stakeholders and government contributions is indispensable. Fortunately, Luxembourg has realized The building the necessity of taking action. In order to continue being able to compete on a global scale in the future, Luxembourg has already started investing in multiple blocks of a projects and initiatives. Smart nation framework Each nation has a unique set of competitive advantages and social structures that GHȴQHLW+DYLQJDFOHDUHFRQRPLFVRFLDO smart nation and environmental vision allows a nation to focus its energy and resources on what brings the most value and long-term By constantly developing its competences and abilities EHQHȴWV$VPDUWQDWLRQKDUQHVVHVWKH power of technology and social innovation as an innovative economy and creator of prosperity, to increase existing strengths, to solve as well as responding to the trends and shifts on a persistent challenges, and to create success through the leveraging of new global level, Luxembourg may still be able to retain its opportunities.11 However, success is competitive position. dependent on recognizing the individual circumstances faced by a nation and how So far, the nation’s inherent nature to best to utilize technology in conjunction innovate and adapt to global trends has with these challenges. made it successful. Losing this spirit would no doubt lead to dire economic and social (YHQWKRXJKWKHUHLVQRȊRQHVL]HȴWVLWDOOȋ consequences, risking to undermine the approach due to individual growth patterns success established over the last decades. and regional trends, the below smart Digitalization forces each country to QDWLRQIUDPHZRUNLVDQHHFWLYHVWUXFWXUH reinvent its business model. Hence, the for creating value and sustainable growth 12 debate is no longer about if a country in a country. should become a smart nation, but rather how to become a smart nation — and The following pages will describe in thus a leader of the 21st century. A piece- detail each of the six buildings blocks; by-piece approach is not enough to meet technology and infrastructure, data, today’s challenges, to position Luxembourg skills and competencies, innovation to compete with the frontrunners. In culture, attractiveness, and public-private RUGHUWREHFRPHDVPDUWQDWLRQDXQLȴHG ecosystem.
08 Luxembourg towards a smart nation | The building blocks of a smart nation
Smart Nation Capability Framework Strategy & Vision
Technology and 01 infrastructure 02 Data
Skills and 03 competencies
Innovation 04 culture 05 Attractiveness
Public-private 06 ecosystem
Source: Smart Cities, how rapid advances in technology are reshaping our economy–Deloitte 2015
09 Luxembourg towards a smart nation | The building blocks of a smart nation
01
100% Technology and infrastructure
Technology, digitalization, and innovation are not only causing waves of change, but have also become some of the driving forces for a country’s economy.
Indeed, technology is rapidly becoming as Figure 1: Data center locations essential as the three traditional utilities of in Luxembourg water, gas, and electricity. Similar to a well- maintained power grid, “a nation without DQΖ&7 LQIRUPDWLRQDQGFRPPXQLFDWLRQ WHFKQRORJ\ PDVWHUSODQLVVLPSO\QRW relevant anymore.”13 The challenge for many developed countries is to maintain and build on legacy infrastructure systems that they cannot simply abandon due to many reasons such as costs and space. In his famous “law”, Gordon Moore emphasizes this by stating that computing power doubles every two years and decreases in relative costs since 1970 making all infrastructure outdated pretty fast.
The availability of modern and open Source: Datacenters-in-Europe15 networks is the foundation to all infrastructures of smart nations and key for digital connectivity.14 Networks for digital connectivity are required in three 25 percent of all European GLHUHQWIRUPV Tier IV Uptime Institute 01. Fixed broadband network FHUWLȴHGGDWDFHQWHUVDUH 02. 4G and 5G networks 16 03. Internet of Things network (IoT) located in Luxembourg.
10 Luxembourg towards a smart nation | The building blocks of a smart nation
Over a decade ago, Luxembourg began ΖQVWLWXWH 18 Subsequently, Luxembourg has time.20 This type of computer is typically laying the foundations for a digital economy Europe’s most modern data centre park. used for solving advanced problems and E\LPSOHPHQWLQJȴEUHDQGEURDGEDQG performing research activities through deployment as a priority. Having achieved As can be concluded from above, modelling, simulation, and analysis.21 For LWVLQLWLDOJRDORIEHFRPLQJWKHȴUVW Luxembourg has long been committed to example, in the healthcare sector HPC are country with 100 percent nationwide top-notch digital infrastructure and will XVHGWRVLPXODWHHHFWVRIQHZGUXJV7KH ȴ[HGEURDGEDQGFRYHUDJH/X[HPERXUJLV continue to invest with the intention of EU Council of Ministers quickly understood nowadays known for its Tier IV and multi- remaining a competitive contender in the the urgency of having such powerful HPC tier data centres. A Tier IV data centre is future. LQIUDVWUXFWXUHVΖQDQHRUWWRIRUWLI\WKH built to be completely fault tolerant and has digital competitiveness of Europe, in March redundancy for every component.17 In late 2015, Luxembourg presented the 2017 the government signed—together ΖQIDFW/X[HPERXUJRHUVQROHVVWKDQ idea of a pan-European approach on High with six other countries—a European GDWDFHQWUHV )LJXUH RIZKLFK 3HUIRUPDQFH&RPSXWLQJ +3& WRWKH(8 high-performance computer cooperation 30 percent are Tier IV Uptime Institute Council of Ministers as it has realized that GHFODUDWLRQ )LJXUH 6LQFHWKHQDIXUWKHU FHUWLȴHGUDQNLQJWKHFRXQWU\LQȴUVW Europe has been lagging behind in this eight countries have also signed.22 place in terms of Tier IV density in Europe ȴHOG19 A High Performance Computer SURYLGLQJWKHXOWLPDWHOHYHORIUHGXQGDQF\ is a computer with the ability to analyse DQGUHOLDELOLW\DVFHUWLȴHGE\WKH8SWLPH ELOOLRQVRISLHFHVRIGDWDLQ QHDU UHDO
Figure 2: Signatory countries of the European high-performance computer cooperation declaration
Seven countries – France, Germany, Italy, Luxembourg, Netherlands, Portugal and Spain – signed the declaration in March 2017. Since then, another eight countries – Belgium, Slovenia, Bulgaria, Switzerland, Greece, Croation, Czech Republic and Cyprus – have also signed.
11 Luxembourg towards a smart nation | The building blocks of a smart nation
01
such infrastructure will be made available 5G will bring with it a sharp DFURVV(XURSHIRUVFLHQWLȴFFRPPXQLWLHV as well as public and private partners.26 It reduction in latency and is of utmost importance to create such an ecosystem as this helps to collectively push a smart nation’s agenda—this aspect will increased bandwidth, critical be discussed in detail in the building block public-private ecosystem. As soon as the for future breakthroughs, HPC is operational, it will be put into practice, taking on large-scale, pan-European projects LQPXOWLSOHȴHOGVVXFKDVVPDUWVSDFHVPDUW such as autonomous vehicles. manufacturing, smart energy, smart mobility, SHUVRQDOL]HGPHGLFLQH)LQ7HFKDUWLȴFLDO The aim of this project is to have one of the intelligence, and many more. Luxembourg three most powerful HPC infrastructures demonstrated once more that it was able in the world.237KLVGHFODUDWLRQIRUWLȴHVWKH to identify a crucial gap and to invest in the Europe 2020 Strategy by helping secure infrastructure needed to remain competitive. the computing capabilities needed for EU’s competitiveness as a digital economy.24 The mobile broadband networks 4G and the soon available 5G provide ubiquitous Luxembourg will acquire internet access to people using mobile devices. Even though Luxembourg does a High Performance not appear in the top-performer group Computer with the power in terms of network coverage, it is ranked in sixth place in terms of performance RIRQHSHWDȵRSSHU worldwide, with an average 4G speed of second, which corresponds 36.56 Mbps.27 to 1,000,000,000,000,000 In order to prepare for the future, a 5G RQHWKRXVDQGWULOOLRQ taskforce has already been established to ensure that Luxembourg remains at 25 calculations per second. the forefront of connectivity. 5G will bring with it a sharp reduction in latency and Luxembourg has adopted a lead role in the LQFUHDVHGEDQGZLGWK PRUHWKDQ*ELWV Important Project of Common European FRPSDUHGWR0ELWVIRU* FULWLFDOIRU ΖQWHUHVW Ζ3&(Ζ RQ+3&DQG%LJ'DWD future breakthroughs, such as autonomous enabled applications. As part of this project, vehicles.28 Furthermore, the networks will Luxembourg will soon acquire its very own pave the way for the long-awaited Internet HPC. The signed declaration foresees that of Things.
12 Luxembourg towards a smart nation | The building blocks of a smart nation
Smartness will be driven and enabled by One practical example highlighting this fashion to support practical applications. the emergence of the Internet of Things point is the smart waste management High-performance computing will help to ΖR7 WHFKQRORJ\%HLQJDWWKHIRUHIURQW solution of Helsinki in Finland, which has facilitate the analysis of remote sensing data of technological development, it will cut the cost of waste management by half. for various applications.32 transform the current internet into a The city uses sensors to track the optimal network of interconnected objects. With ‘full’ level of their bins, allowing the city With regards to the latest technologies, the help of sensors, billions of devices will to optimize routes for garbage collection Luxembourg has been well positioned in be permanently connected to the internet. trucks.31 the past and should be cautious not to lose However, the need of a mature IoT platform this strategic position now. Luxembourg is still the necessary cornerstone to manage Recent progress in remote sensors with should strive to use data and new and process data gathered by these KLJKHUUHVROXWLRQVKDYHVLJQLȴFDQWO\ technology to improve everyday life and sensors.29 The development of program increased data volumes, which in turn boost the Luxembourg economy. interfaces will enable smart usage of this KDVOHGWRDVLJQLȴFDQWFKDOOHQJHZKHQLW data. IoT ecosystems are thus key in order comes to processing and analysing the to grow the digital economy.30 massive volume of collected data in a timely
13 Luxembourg towards a smart nation | The building blocks of a smart nation
02
Data
Everyday 2.5 quintillion bytes of data are created, with a staggering 90 percent of data in the world gathered in the last two years alone.
*OREDOFRQVXPHUΖ3WUDɝFZLOODOPRVWWULSOH These approaches are: IURPWR )LJXUH 7KLVGDWDLV necessary and crucial for a smart nation 01. A networked approach that combines to emerge. Better, smarter, data-based node connections via low cost decisions can be derived when data is communications combined from multiple sources that have 02. A managed approach that analyses city traditionally not been used in combination. and nationwide systems in real time 03. An integrated approach across cities If there is one ingredient 04. A smart approach where Software as a Service based services, applications, that makes a nation smart, and management tools are delivered33 it is data. Although Luxembourg is globally known for having the world’s highest GDP per capita, Data gathering is however still in its early it is dwarfed by the world’s most renowned phases. Several nations have begun technology companies. Some of the GAFAs deploying pervasive sensor networks to *RRJOH$SSOH)DFHERRN$PD]RQ DQG gather data that deliver simple but isolated %$7;V %$Ζ'8$OLEDED7HQFHQW;LDRPL VROXWLRQV)RUH[DPSOHWUDȴFRPFRQQHFWV companies have a market capitalization much DQGFRPSDUHVGLHUHQWPRELOLW\RSWLRQV higher than the Luxembourgish GDP, all within cities and shows them in real time. built-up by the data people provide to them Thus, by jointly using four approaches, freely. Consequently, China and the USA have true value is delivered to citizens and a huge advantage as they host multinational businesses. private companies collecting data. A smart nation should allow individual
14 Luxembourg towards a smart nation | The building blocks of a smart nation
A smart nation should allow individual Indeed, freely delivering data to citizens, increasingly rely on complex infrastructures entrepreneurs and companies access to companies, and organizations creates value not fully within their control. Similarly, data that can unleash tremendous value. not solely for the data owner, but for the JRYHUQPHQWHRUWVWRHQJDJHFLWL]HQV Luxembourg’s government has already whole community. and employees through social media LGHQWLȴHGRSHQGDWDDVDNH\VXFFHVV will introduce gaps and opportunities of factor of the 21st century. As cited by However, private or personal data should which attackers will unquestionably try Luxembourg’s Digital Lëtzebuerg initiative not be mistaken for public data. As the to exploit.38 Security teams try to reduce “open data fuels economic growth and volume of data expands, so does the risk. the risk as well as data loss by making innovation by multiplying the applications Contrary to public data, which should be companies, citizens, and governments and value of information.”35 Besides free and available to all, sensitive data aware of the looming menace. constantly working on policies enabling must remain protected. As applications open data and transparency, it also become more virtualized and adaptive, Local competences in data analytics launched the data.public.lu platform. This new cybersecurity gaps may appear, have been growing over the past few platform is a Luxembourgish open data making the prevention of data breaches years, on one hand in the private website whose vision is to “strengthen LQFUHDVLQJO\GLɝFXOW37 As agencies extend sector, but also through substantial democracy and head towards an open their capabilities through cloud computing, investments over recent years in the society willing to trust its institutions”.36 IT outsourcing, and partnerships, they University of Luxembourg, particularly in the Luxembourg Centre for Systems %LRPHGLFLQH /&6% WKHΖQWHUGLVFLSOLQDU\ Centre for Security, Reliability and Trust )LJXUH 'DWDYROXPHRIJOREDOFRQVXPHUΖ3WUDɝFIURPWR 6Q7 DQGWKHSXEOLFUHVHDUFKFHQWUHV (in petabytes per month) Fortunately, Luxembourg has positioned 250000 security and trust at the core of its ICT development strategy. Thanks to our country’s advanced infrastructure as 200000 seen in the section before, as well as its steadfast security, Luxembourg will KRVWWKHZRUOGȇVȴUVWGDWDHPEDVV\39 150000 Indeed, Estonia agreed to store sensitive government information in Luxembourg’s 100000 data centres.
Although Luxembourg has been seen to 50000 be taking the initial steps, there is still a long way to go to increase the country’s capacity to collect, merge, and make use of 0 2016 2017 2018 2019 2020 2021 data to the best of the country’s ability and in the interest of its citizens. With this in mind, Luxembourg has a real opportunity 34 Source: Statista to become, in the coming years, a leader in WKLVȴHOG
15 Luxembourg towards a smart nation | The building blocks of a smart nation
03 Skills and competencies
A smart nation requires smart citizens who are able to respond to the needs and challenges that come with the third industrial revolution. With the increased use of disruptive technologies and other innovations, a new set of skills and competencies becomes a requirement for successful application.
The most obvious skills gap can be So, what are the non-negotiable core LGHQWLȴHGLQWKHFRQWH[WRIDQDO\VLQJ competencies required in a smart nation? understanding and processing data. Baseline digital skills, computational Already in 2012, the relatively new job of thinking, and programming skills are just “data scientist” was labelled the sexiest the beginning.41 Mastering soft skills like job of the 21st century, and this does not being agile, adaptable and open to change come as a surprise.40 Data scientists are only bring these skills to blossom. invaluable to a smart nation and many are needed. Data analytics means handling In order to train both these technical and real time data and applying complex behavioural skills, we need to capitalize statistical methods to transform data into on two fundamental elements of our information that can be capitalized on. HGXFDWLRQDOV\VWHP ȴUVWO\DGDSWLQJRXU school curricula to a smart nation’s needs At the same time, being a smart nation DQGVHFRQGO\RHULQJUHOHYDQWOLIHORQJ is much more than just being good at learning opportunities to constantly handling data. It is also essential to support support our citizens to have the required our citizens in coping with the behavioural skills for their upcoming challenges. and societal changes that are linked to the increased use of data and technology.
16 Luxembourg towards a smart nation | The building blocks of a smart nation
From a policy perspective, digital skills and competencies can only emerge in the right Already in 2012, the relatively environment. As an example, if citizens and institutions have access to open data and know-how to use it to their advantage, new job of “data scientist” was it will increase engagement and therefore instigate skills development.42 Creating labelled the sexiest job of the the right environment within and beyond traditional learning institutions should therefore be the focus of a policy, to further 21st century, and this does develop the skills and competencies necessary to meet the demands of a not come as a surprise. smart nation.
As aforementioned, it is vital to have the Luxembourg’s Ministry of Education, in the country, identifying these schools QHFHVVDU\GLJLWDOLQIUDVWUXFWXUH HJGDWD Children and Youth launched the Digital as competence and training hubs for new FHQWUHV+3&ΖR7Ȑ DVZHOODVVRIWZDUHWKDW (GXFDWLRQLQLWLDWLYHLQDLPHGDW technologies, focusing particularly on supports the structuring of available data, developing the know-how and skills that computer science.45 Simultaneously, these so that it can be used as information. A are crucial for the 21st century, and more same schools have launched a new section nation that understands the value of data VSHFLȴFDOO\WRSUHSDUHVWXGHQWVIRUWKH for computer science and communication, still however needs talent that understands rapidly changing professional landscape.43 preparing students to continue university the results in order for solutions to be VWXGLHVLQWKRVHȴHOGV46 These ongoing implemented. Data sitting on servers As part of this initiative, the Bee Creative HRUWVZLOOKRSHIXOO\IXUWKHULPSURYH KDVQRYDOXHZLWKRXWSHRSOH RUDUWLȴFLDO program’s purpose is to improve the digital Luxembourg’s ranking in The Global LQWHOOLJHQFH XVLQJLW+HQFHGDWDVFLHQWLVWV skills of Luxembourg’s youth. Through Information Technology Report 2016, and other emerging technology and big data available material, workshops, and coaches where it currently only ranks 23rd for the related jobs become key in order to cope in the so-called “makerspaces”, young quality of the education system and 32nd with the technological development and to people are invited to learn and experience for the quality of mathematics and science interpret and leverage the collected data. A aspects of digitalization that suit their education respectively.47 smart nation needs to identify the talent gap interests—examples are learning how to and build an education system that teaches code or using 3D-printers.44 data related skills, or alternatively attract the relevant experts from abroad—an aspect More targeted towards secondary that will be discussed in the ‘Attractiveness’ education, the new label “Future Hub” building block. has been awarded to three high schools
17 Luxembourg towards a smart nation | The building blocks of a smart nation
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In 2016, a Eurostat survey revealed that 61 percent of companies polled in Luxembourg KDYHHQFRXQWHUHGGLɝFXOWLHVLQ hiring specialized ICT roles, the third highest percentage in the European Union.
As much as the country invests in upskilling GLɝFXOWLHVLQKLULQJVSHFLDOL]HGΖ&7 its future workforce, one could argue that roles, the third highest percentage these initiatives mainly target young people in the European Union.49 In line with with prior interest in ICT, as most of these this apparent skills gap, “skills” is listed opportunities are seized by those already as one of the priorities of the Digital looking for them. In order to expose every Lëtzebuerg initiative, with a dedicated child from a young age to these new focus on ongoing ICT development for skills, one approach could be to introduce the labour force.50 Similarly, companies programming through applications are investing in training and employee such as Scratch and teaching coding like development according to The Global a language that kids learn at primary Information Technology Report 2016, school.48 Moreover, a Big Data Analytics where Luxembourg is ranked second after bachelor or master’s study program could 6ZLW]HUODQGLQWKHH[WHQWRIVWDWUDLQLQJ EHRHUHGDWWKH8QLYHUVLW\RI/X[HPERXUJ In addition, in 2018 Luxembourg launched By integrating programing and data a new project allowing companies to apply analysis into the school’s curriculum, IRUȴQDQFLDOVXSSRUWIURPWKHJRYHUQPHQW from pre-school up to higher education, to reskill or upskill their employees Luxembourg would be able to coach its according to their individual gap analysis. very own talent—talent that the country will need in the close future. Regarding the workforce, it is key not to neglect those who need most support: Luxembourg’s labour market is currently VPDOODQGPHGLXPHQWHUSULVHV 60(V working on overcoming the present lower-skilled workers, and older workers. gap in the market when it comes to ΖQ2(&'FRXQWULHV60(VRHURQO\KDOIRI digital skills. In 2016, a Eurostat survey the training activities to their employees in revealed that 61 percent of companies FRPSDULVRQWRODUJHUȴUPV51 polled in Luxembourg have encountered
18 Luxembourg towards a smart nation | The building blocks of a smart nation
Overall, it is crucial to develop a culture In summary, to develop the skills and of lifelong learning that starts at an competences of a smart nation, the early age and introduces a certain diverse learning needs of citizens at all personal ownership over one’s learning education levels, at all digital literacy by empowering citizens via accessible levels, and in every age group need to be resources. One example where such addressed by a holistic approach to lifelong concepts are recognized, are the UNESCO learning.53 An inclusive ecosystem that Lifelong Learning Cities. In 2015 and 2016, reskills the workforce of today, together Gelsenkirchen in Germany and Bristol in with a reviewed curriculum in schools, is the United Kingdom were awarded by the necessary to develop all the data scientists UNESCO for taking a proactive approach and other new jobs of the 21st century to promoting inclusive access to learning required in Luxembourg. And what we for all levels of education through not should above all not forget: moving only education itself, but also families, towards a smart nation does not only communities, and the workplace. require teaching our children, students, or employees the hard skills – we also In Gelsenkirchen, the city’s vision for the need to build an ecosystem that supports IXWXUH Ȋ=XNXQIWVVWDGWȋ LVEDVHGRQ its citizens in coping with its societal and education and participation. The city, in behavioural evolution to avoid an increase collaboration with 110 organizations and in psychological stress and an associated institutions, has issued a joint declaration decreasing motivation and engagement of establishing Gelsenkirchen as a learning its workforce. city, proclaiming their commitment to sustainable education and lifelong learning measures to promote the skills needed to shape the future of the city.52
19 Luxembourg towards a smart nation | The building blocks of a smart nation
04
Innovation culture
Building a smart nation requires the creation of an innovation culture that is open to new ideas, willing to experiment, and ready to take risks.
Fostering an innovation culture in the the digital age means developing a culture minds of citizens is highly important, that is willing to accept failure. By launching in order to drive public opinion in a initiatives such as the “Third industrial consistent and positive direction. On one Revolution”, which should be the trigger hand, innovation hovers steadily around for a series of innovative projects or by technology, keeping abreast of relevant setting priority topics such as space mining, trends. On the other hand, innovation is for Luxembourg is encouraging controlled risk a large majority of the country a challenge. WDNLQJLQVSHFLȴFDUHDV7KHULJKWLQQRYDWLRQ It is commonly understood that in general, is the one that aspires for greatness and the bigger or the older a company is, the is in line with a time and risk balanced harder it is to innovate. In the same sense, portfolio of the country. for countries, it is easier to optimize how they operate rather than reinventing As described in the previous building block, themselves. Innovation starts with education has an important role to play in culture. It needs to be encouraged in all the process of changing a culture. Schools departments and followed up on a regular and universities have to educate people in basis. It is a constantly evolving state. such a way that they are willing to explore QHZȴHOGVH[SHULPHQWDQGWDNHULVNV7KH\ Through these experiments, governments need to be willing to advance by iteration, will develop an understanding of what accept failure as part of the process, and works and what does not. This includes be able to learn from it. Citizens of a smart looking for partnerships beyond traditional nation have to be ready to challenge the and established stakeholders to drive status quo. In addition to those “soft skills”, experiments. Taking risks, however also people also need to be equipped with means there will be failure, which is an the right technical skills in order to best essential ingredient to the advancement harness creative and innovative ideas. of knowledge. An innovation culture for
20 Luxembourg towards a smart nation | The building blocks of a smart nation
Innovation is about collaboration within whilst also gaining international A good smart and across domains. A smart nation recognition. In the 2017 Young University can encourage this in many ways. As an UDQNLQJE\7LPHV+LJKHU(GXFDWLRQWKH nation regulatory example, Luxembourg has developed University of Luxembourg was ranked sector clusters bringing individuals 11th. 56 Beyond academic research the environment together around common sector topics government is encouraging private sector to exchange know-how and stimulate research, in particular the collaboration will provide the new developments. By 2020, the between private companies and public Luxembourg cluster initiative has the research institutions. protection that objective to contribute to the creation of 3,000 new jobs.54 A topic that receives less attention is companies need innovation within governmental services Innovation also requires the right themselves. Whereas innovation is seen while being regulatory approach. Exponential change as necessary to the survival of private in technologies and resulting innovation sector organizations, this is much less adaptable enough presents regulators with unique the case within public institutions. challenges; when do you start regulating Disruptive innovation can help public to allow for the ZLWKRXWVWLȵLQJLQQRYDWLRQ"+RZGR\RX organizations reduce costs or improve encourage experimentation and risk the quality of their services just in the risk-taking and taking in terms of new technologies, ZD\DVIRUSULYDWHFRPSDQLHV+RZHYHU whilst protecting consumers at the same in a public institution this might be trial-and-error WLPH"$VWKHSDFHRIWHFKQRORJLFDOFKDQJH more challenging, public actors have to accelerates, governments will have to GHȴQHWKHLUUROHVZLWKLQWKHLQQRYDWLRQ that innovation learn how to strike the right regulatory ecosystem.57 balance between an environment requires.59 that fosters and rewards—as well as In the 2017 WEF innovation index, appropriately regulates—innovation. Luxembourg is ranked number 12, Enabling rather than limiting is a vital step showing that the country is on track with for smart nations. developing an environment that favours innovation.58 We are well positioned In recent years, Luxembourg has in terms of infrastructure and political consistently invested in strengthening its environment, not to mention, innovation research infrastructure and capabilities. linkages are highlighted as one of the The State’s budget dedicated to R&D and FRXQWU\ȇVVWUHQJWKV+RZHYHUZHVFRUH innovation has continuously increased low in terms of human capital and with the aim of reaching 2.6 percent research. The initiatives mentioned of GDP in 2020.55 The establishment above show that this has been recognized of a university was a big step forward. DQGHRUWVDUHEHLQJWDNHQWRHQVXUH Since its creation, the University of progress is made. Luxembourg has made a lot of progress,
21 Luxembourg towards a smart nation | The building blocks of a smart nation
05
Attractiveness
Building a smart nation means enabling attractive HFRV\VWHPVWKDWIDFLOLWDWHWKHFRQVWDQWUHQHZDO LH WHFKQRORJ\UHJXODWLRQHWF UHTXLUHGIRUVXFFHVVLQ a digital world.
In terms of attracting businesses, on the strong infrastructure foundations The emergence /X[HPERXUJLVSXWWLQJPXFKHRUWLQWR and the accessibility of its institutions, attracting tech companies. As described Luxembourg can build a leading advantage. of strong in the previous section, one main goal is Over the last few years, Luxembourg to develop Luxembourg into an innovation KDVPDGHPDQ\HRUWVWRSURPRWH hub with a large mix of ICT related entrepreneurship. Numerous incubators ecosystems is services.60 In doing this, setting the right and support programs have emerged regulatory framework plays an important with the country managing to attract new dependent on role. An attractive regulatory environment innovative companies. Initiatives such as VKRXOGEHGULYHQE\SROLFLHVWKDWEHQHȴWD Luxembourg House of Financial Technology wide variety of stakeholders. Indeed, public /+2)7 KDVSXW/X[HPERXUJRQWKH a smart nation’s opinion around given policies depends on international map of entrepreneurship.62 KRZWKHSROLFLHVDHFWWKHOLIHRIFLWL]HQV According to the WEF networked readiness ability to attract and companies.61 Largely this means index, Luxembourg ranked number 1 eliminating unnecessary regulations to help in 2016 for political and regulatory pave the way for new smart solutions that environment.63 the right types create a climate in which innovation can ȵRXULVK&KDQJHVWROHJLVODWLRQRQΖ&7GDWD The disruptive potential of technology of talents and and privacy are being made to enable new and data allows for the introduction of strains of business. This in turn attracts further innovation in the regulatory space. innovative technology companies that will Data driven societal analysis, greater businesses. ensure Luxembourg’s attractiveness by transparency, and competition combined enabling new types of business and fuel with new types of digital democracy and development in existing sectors. co-creation can lead to outcomes that bring governments closer to citizens and foster a Technology based approaches can be feeling of inclusion. Innovative methods of applied to further aspects of government regulation are open access, relying on data WRLQFUHDVHUHJXODWRU\HɝFLHQF\:HDUH to ensure accountability while traditional seeing an increasing number of “RegTech” regulation is based on limited availability companies establishing themselves in of data, low accountability, and therefore Luxembourg. This is an area, where based restricted access.64
22 Luxembourg towards a smart nation | The building blocks of a smart nation
Technological change and digital disruption further talent; it is thus a prime objective strengths throughout the last decades was DUHFKDQJLQJWKHWDOHQWSURȴOHVWKDWZLOOEH to become a hotspot for entrepreneurs, LWVHɝFLHQWVRFLDOVHFXULW\V\VWHP:LWKRXW required to create successful ecosystems creatives and technology experts among a doubt, a well-functioning social security in the years to come. Indeed, talent is often others – residents and visitors alike. These system is an important selling point. referred to as the engine of competitiveness are the people that will act as catalysts for Therefore, it is of utmost importance that and innovation for today’s globally connected the renewal processes through creative Luxembourg is also able to guarantee the mobile economy.65 Therefore, it is necessary destruction and creation that we want to social security of its citizens in the future. to educate locals and attract talents with see in a smart nation. Recognizing and the needed skills for Luxembourg to hold its understanding these dynamics around Many factors contribute to the competitive position. the attractiveness of a nation is key.66 This attractiveness of a nation. Smart nations requires a holistic approach, taking into will leverage on digital technologies to Due to automation and robotics, existing account all factors to create a climate of improve their positioning. As an open jobs will vanish or will undergo major cultural diversity, including reputable country, experienced in integrating transformations. Unfortunately, it is a knowledge institution, access to capital, people from a large variety of cultural matter of fact that many of the skill-sets and stimulation of start-ups. backgrounds, Luxembourg has good required for the future are not taught foundations to build on. today in Luxembourg. As it will take time to As technology continues to substantially change the education system accordingly, it change today’s environment, a major is therefore critical to be able to attract the challenge for smart nations will be to required talent from abroad for both the manage this transition while addressing the public and private sectors. social dilemmas associated with change. Ensuring social cohesion and inclusiveness Resources and attention should be for all citizens of a society experiencing IRFXVHGRQWKHW\SHRIWDOHQWWKDWȴWV rapid change requires particular attention. with the country’s vision. Talent attracts Moreover, one of Luxembourg’s key
Entrepreneurs
Technology experts
Creatives
23 Luxembourg towards a smart nation | The building blocks of a smart nation
06 Public-private ecosystem
Co-creation is crucial to the success of a smart nation. Solutions to prepare for and adapt to changing environments, withstand, and recover from disruptions cannot be devised by individuals on their own.
Collaboration among all parts of civil city agencies, businesses, academia, society across any domains of expertise research organizations, and citizens to is necessary. We will see governmental GHȴQHDQGSURWRW\SHLGHDV7KHUHVXOWV organizations and businesses working of these workshops produced projects together with community groups, on renewable energy for electric vehicle DFDGHPLFVDQGQRQSURȴWRUJDQL]DWLRQV charging and innovative budgeting support towards these common goals. for the poor.67
Already today, we see progressive cities As demonstrated by the above example, building on the combined power of IRUFRFUHDWLRQHRUWVWREHHHFWLYHWKH ecosystems to identify innovative solutions role of the government is ideally to identify to their priority topics. For some of its VWUDWHJLFȴHOGVRIDFWLRQWKDWODFNVXɝFLHQW PRVWFRPSOLFDWHGFKDOOHQJHVLQWKHȴHOGV novel initiatives and act as a catalyst by of mobility and poverty reduction, the city bringing together relevant parties. The of Amsterdam in the Netherlands initiated LHoFT is a good example of a successful a series of workshops with experts across 333 3XEOLF3ULYDWH3DUWQHUVKLS 7KH/+R)7 a broad range of stakeholders including was cofounded by 13 leading private sector institutions who share the board with representatives of the Luxembourg In a digital government survey, Government. The LHoFT is very successful in fostering FinTech organizations and 73 percent indicated that their attracting start-ups to Luxembourg. It has been, and still is instrumental in organization’s digital capabilities establishing Luxembourg as a major )LQ7HFKKXEDFHQWUHZKHUHȴQDQFHDQG were lagging behind those of technology interact to foster innovation and develop solutions to shape the future private sector organizations. RIȴQDQFLDOVHUYLFHV68
24 Luxembourg towards a smart nation | The building blocks of a smart nation
A large part of a smart nation’s processes DQGVHUYLFHVZLOOEHQHȴWIURPFRRSHUDWLRQ A well-functioning public-private across traditional domains. Today’s consumers have come to appreciate seamless user experiences that they are ecosystem has the power to familiar with from many parts of their private lives. When confronted with deliver innovative new solutions governmental administrations however, FLWL]HQVPRVWRIWHQȴQGWKHPVHOYHVGHDOLQJ with disappointing user journeys. In a that neither of the parties could digital government survey, 73 percent, out of 1,200 representatives from 70 countries, have realized on its own. indicated that their organization’s digital capabilities were lagging behind those of private sector organizations. To a large aspects will be crucial to the success of Industrial Revolution, initiated by the extent, the skills and knowledge of the smart nation projects. Whereas private government in collaboration with Jeremy digital world can be found within young companies engaging in such initiatives Rifkin, was set-up to include and involve private companies. Cooperation between FDQSURȴWIURPEURDGHUDSSOLFDWLRQȴHOGV all elements of civil society. Moreover, public institutions and start-ups could public sector organizations will initially /X[HPERXUJLVRIWHQSUDLVHGIRUKRZ LH be one way of bridging this skill gap. PDLQO\EHQHȴWIURPFORVHUFROODERUDWLRQ RSHQDQGSUDJPDWLF DGPLQLVWUDWLRQVDQG Beyond technical capabilities, this also with digital companies in terms of skill businesses work together. This sets a solid includes ways of working and execution of transfer. foundation for ecosystems in a digital age. methodologies. Luxembourg is ideally positioned to :HEHOLHYHWKDWFRFUHDWLRQHRUWV develop well-functioning ecosystems with between the private and public sector public, private, and community initiatives. deserve more emphasis and should Over the last year, the country has gained be revisited for the digital age. Those experience in one such project. The Third
25 Luxembourg towards a smart nation | Vision for Luxembourg’s future
Vision for Luxembourg’s future To be successful, a nation must provide its citizens with a stable and sustainable living environment, a strong economy, security, education and mobility, as well as show a strong commitment to its citizens.69
These pillars represent the basis for GHGLFDWHGQDWLRQDOVWUDWHJ\WKDWXQLȴHV Luxembourg’s current and future success. and connects individual projects. The As the previous section highlights, result should take the form of a vision for Luxembourg has already moved toward a smart nation rather than a dispersed the direction of becoming a smart nation set of initiatives in the country. The as it has launched multiple initiatives in separate dimensions can exceed in this various areas that have reached a level of way the value their individual parts have. advancement that gives our country a good Luxembourg, with its short decision- starting position. making routes, inclusive social model, good infrastructure, historic sensibility toward However, the attractiveness of the above- current trends, and unique position in the mentioned building blocks on their own global economy is best suited to apply such should not be over-emphasized. To meet a vision and become one of the world’s the challenges of the future, it is necessary leading smart nations. to apply a structured framework and a
26 Luxembourg towards a smart nation | Vision for Luxembourg’s future
7KHUHDOEHQHȴWRIDVPDUWQDWLRQLVQRW reached through individual solutions, but through the creation of a holistic system where all solutions work together.
27 Luxembourg towards a smart nation | Vision for Luxembourg’s future
Vision A center for digital clinical trials
Today, there are more than 30,000 clinical By using its current assets to their full dropout rates. Conversely, such an app studies recruiting patients in Europe alone, potential, Luxembourg could become the would need to be combined with a data with some requiring the recruitment of European hub for digital clinical trials under management system that would allow thousands of participants, all of whom the leadership of the Luxembourg Centre pharmaceutical companies and research QHHGWRIXOȴOSUHFLVHFULWHULDWRMRLQ0RVW of Systems biomedicine of the University of centers to monitor collected data in clinical trials currently rely on antiquated, Luxembourg and the Luxembourg Institute real-time and automate data analysis paper-based data collection and require of Health. in a secure environment. their registered participants to regularly visit trial sites in hospitals or research Healthcare start-ups, pharmaceutical The development of such a digital clinical centers.70 From participant recruitment companies, and research centers could trial center would require a large amount to data collection to adherence, the EHQHȴWIURP/X[HPERXUJȇVWRSQRWFK RIKLJKO\TXDOLȴHGSHRSOHZLWKH[SHULHQFH early stages of clinical trials is full of infrastructure in terms of network and IoT in the latest technologies and healthcare ORJLVWLFDOFKDOOHQJHVDQGLQHɝFLHQFLHV connectivity as well as computing power to be trained at the University or research causing delays in most of these trials and in the future HPC centers, setting thus the centers and recruited from abroad. In leading to billions of euros and countless ideal testing ground for digital clinical trials. the favorable Luxembourg setting, such KRXUVRIKXPDQHRUWVSHQWHDFK\HDU a center could attract a wide diversity of validating new drugs, devices, and medical Data is at the core of clinical trials, even start-ups, companies, big pharmaceutical interventions. more so when digitalized. Luxembourg organizations, and research centers that based initiatives like Infrachain, could be would either contribute with their own Recent technological advances in software fundamental building blocks of developing innovative solutions to the services of and hardware would allow to streamline Smart Contract enabled clinical trials this center or make use of the center’s and accelerate the above process and that provide patients with the full control capacities to test their new drugs or provide patients with the ability to over who uses their data and for what devices. In its early stages, such a participate in a trail from the comfort of purpose. The security of the healthcare center would need to rely on a strong their own home, additionally allowing for data generated through those trials will public-private partnership between the a more diverse trial population. While need to be assured through appropriate Luxembourg government, universities, some large pharmaceutical companies measures, competent people, regulation, and research centers as well as healthcare OLNH6DQRȴDQG3ȴ]HUH[SHULPHQWE\ and government controls. companies in order to boost the level of using connected devices and technology activities. disruptions, healthcare has so far been While classic clinical trials require slow to incorporate these advances in its SDWLHQWVWRȴOORXWH[FHVVLYHSDSHUZRUNRU By joining forces and building on our clinical trials. journals while regularly traveling to and unique set of assets, Luxembourg could from a clinical site for check-ins, digital become the enabling factor for disrupting clinical trials would be built around an classical clinical trials and providing innovative patient-centric app combined SDWLHQWVZLWKHɝFLHQWDFFHVVWRWKHODWHVW with wearable devices that would greatly drug developments at a lower cost. improve the quality of trial data and reduce
28 Luxembourg towards a smart nation | Vision for Luxembourg’s future
By applying a structured approach using the synergies gained from the building blocks, a truly new and smart business case can ensure that Luxembourg sustains its economic model, thus enabling it to maintain its competitive leading position.
29 Luxembourg towards a smart nation | Vision for Luxembourg’s future
Vision *UHHQȴQDQFH
After signing the Paris Agreement on *UHHQȴQDQFHLVFHQWUDOQRWRQO\WR FOLPDWHFKDQJH 'HFHPEHUȂ the world’s development, but also to 195 countries71 DQGDGKHULQJWRWKH Luxembourg’s quest to persist as a world- 6XVWDLQDEOH'HYHORSPHQW*RDOV 6'*V OHDGLQJȴQDQFLDOVHUYLFHVFHQWUHZLWKKDOI many developed nations see the urgent the world’s green bonds already listed need for investment to limit climate change. in Luxembourg.75 While initially focused This shift in the global mind-set implies that RQPLFURȴQDQFHRYHUWKHODVW\HDUV many developing countries have to rethink Luxembourg has developed into Europe’s their current economic development path. current leading domicile for responsible 'HFLVLRQPDNHUV SXEOLFDQGSULYDWH DUH investment funds, as well as the leading forced to consider sustainability issues centre for listing green securities. In 2007, more deeply and frequently. the Luxembourg Stock Exchange has OLVWHGWKHZRUOGȇVȴUVWJUHHQERQGZLWKWKH 6LJQLȴFDQWPRPHQWXPKDVEHHQJDLQHG (XURSHDQΖQYHVWPHQW%DQN (Ζ% 76 As of around the world, and until 2030, US$90 today, the Luxembourg Finance Labelling trillion are being triggered in order to reach $JHQF\ /X[)/$* ODEHOVPRUHWKDQ(6* the SDGs.72 Furthermore, over the last (QYLURQPHQWDO6RFLDO*RYHUQDQFH IXQGV 13 years, investment into green energy and 8 Environment Investment Vehicles.77 and sustainable solutions has grown exponentially to around US$335 billion Leveraging on the established asset in 2017.73 This shows undeniably that the management industry and its generally VXVWDLQDEOHȴQDQFHVHFWRULVJURZLQJDQG strong ICT infrastructure, Luxembourg will continue to grow further in the future. should continue to invest in relevant From a European Union perspective, initiatives like the recently established recommendations have already been International Climate Finance Accelerator.78 made to place sustainability at the heart of Furthermore, in terms of innovation, (XURSHȇVȴQDQFLDOV\VWHP$SODQWREXLOG Luxembourg should reinforce its role as a LQWHUQDWLRQDOFRRSHUDWLRQDPRQJȴQDQFLDO FinTech hub attracting top-notch start-ups centres on climate action and sustainable from across the world while nurturing development has been agreed on by the local actors. They will provide access to the international network of Financial Centres latest digital technologies that will support IRU6XVWDLQDELOLW\ )&6 74 the transition of the incumbents into the Green Finance market.
30 Luxembourg towards a smart nation | Vision for Luxembourg’s future
*UHHQȴQDQFHLVFHQWUDOQRWRQO\WR the world’s development, but also to Luxembourg’s quest to persist as a ZRUOGOHDGLQJȴQDQFLDOVHUYLFHVFHQWHU
However, a lack of consistent data is a :KLOHWKH/X[HPERXUJȴQDQFLDOSODFH EDUULHUWRUHDFKLQJIXUWKHUJUHHQȴQDQFH KRVWVKLJKO\TXDOLȴHGHPSOR\HHVWKLV opportunities as it prevents investors from development would require to attract managing risks and analysing business and train specialists that would be able to models. It might even be the biggest assess the impact of individual investments FKDOOHQJHIDFHGE\WKHVXVWDLQDEOHȴQDQFH on the SDGs. space, as accurate information is the key element for investment decisions. For a Luxembourg currently holds a favourable long time, environmental externalities have SRVLWLRQLQWKHJOREDOJUHHQȴQDQFH been considered lightly, in the management market.79 Coordination between public and of risks, in valuations and in business private is key though, should Luxembourg decisions. The impact of externalities is well want to build on its role as an international known and big data analysis is key in order FHQWUHIRUFOLPDWHȴQDQFHDQGVXUSDVV to be prepared in the best possible way. London as the preferred listing venue for Therefore, further research and innovation JUHHQȴQDQFLDOLQVWUXPHQWV80 are necessary to develop adapted assessment methodologies and indicators. &RQWLQXLQJLWVJUHHQȴQDQFHVWUDWHJ\ based on the six pillars of a smart nation %\FRPPLWWLQJWRJUHHQȴQDQFHDQG would give Luxembourg the necessary an adapted regulatory framework, edge to stay on top of its competition and Luxembourg would attract new specialized to become established as a go-to partner companies and FinTechs that have climate when investing in green growth. change at the heart of their organizations.
31 Luxembourg towards a smart nation | Conclusion
Conclusion To achieve its goals, meet its challenges, and become a smart nation, it requires a vision and an alignment of the building blocks.
Luxembourg is, per capita, the wealthiest management of digital initiatives in a single country in the European Union and SODFHZLWKVXɝFLHQWȊȴUHSRZHUȋ6XFKD its citizens enjoy a high standard of place may be a future digital ministry that living. With a fading business model, will lead the government’s digital policy. A Luxembourg is on the verge of missing digital ministry will not only ensure that the out on opportunities presented by the building blocks are working together in a digitalized world. Luxembourg has to stay homogenous way, but it will also create an economically competitive, sustainable, environment that further facilitates the use and further increase its citizen’s quality of of ICT as well as the development of smart life. By leveraging on and interconnecting ideas and solutions within the government the before mentioned building blocks, itself as well as at national level. a superior level of prosperity and Competences could encompass at least sustainability can be achieved. the following three areas: cybersecurity to make sure the country is well prepared However, it is clear that these building to face future digital threats, regulation blocks will not start working together to develop a regulatory framework that from one day to another; a certain level fosters innovation as well as economic of guidance is required. It might thus be competitiveness while protecting citizens, interesting to consider centralizing the consumers, and society at large, and last but not least, the ministry should ensure the smooth operation of the government’s To meet the challenges of the future, IT activities.
it is necessary to apply a structured If we want to become a truly smart nation, we will need to be able to reinvent the framework and a dedicated national business model of Luxembourg through a series of major initiatives that combine the VWUDWHJ\WKDWXQLȴHVDQGFRQQHFWV six building blocks described above in an intelligent way. The conditio sine qua non individual projects where all LVWKDWDOOVWDNHKROGHUV FRPSDQLHVSXEOLF HQWLWLHVVRFLHW\DQGFLWL]HQV MRLQIRUFHVDQG stakeholders work together. act in the common interest of the country.
32 Luxembourg towards a smart nation | Conclusion
33 Luxembourg towards a smart nation | Endnotes
Endnotes
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2. 'DKOPDQ& 7HFKQRORJ\JOREDOL]DWLRQDQGLQWHUQDWLRQDO 24. 'LJLWDO/X[HPERXUJ+3&6HHPRUH KWWSV ELWO\-&0*%Y FRPSHWLWLYHQHVV &KDOOHQJHVIRUGHYHORSLQJFRXQWULHV6HHDOVR KWWSV ELW O\[\HG 25. 7KHRɝFLDOSRUWDORIWKH*UDQG'XFK\RI/X[HPERXUJ /X[HPERXUJ DWWKHFHQWUHRID(XURSHDQVXSHUFRPSXWHUQHWZRUN6HHPRUH KWWSV ELW 3. 7KH(FRQRPLVW 7KHOHDSIURJPRGHOȂ:KDWWHFKQRORJ\FDQGRIRU O\-%4ΖW+ $IULFD6HHDOVR KWWSV HFRQVW-='-U 26. (XURSHDQ&RPPLVVLRQ 7KH(XURSHDQGHFODUDWLRQRQ+LJK 4. 6FKDFKW:+ ΖQGXVWULDO&RPSHWLWLYHQHVVDQG7HFKQRORJLFDO 3HUIRUPDQFH&RPSXWLQJ6HHPRUH KWWSV ELWO\Q9)UD $GYDQFHPHQW 'HEDWH2YHU*RYHUQPHQW3ROLF\6HHDOVR KWWSV ELW O\V9G8- 27. 2SHQ6LJQDO 7KH6WDWHRI/7(6HHPRUH KWWSV ELWO\O))Z+
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7. /X[HPERXUJ&KDPEHURI&RPPHUFH /X[HPERXUJHFRQRP\Ȃ2SHQ 30. 6LOLFRQ/X[HPERXUJ /X[HPERXUJWRDFFHOHUDWHGLJLWL]DWLRQZLWK&LVFR '\QDPLF5HOLDEOH6HHDOVR KWWSV ELWO\/3ZG;D 6HHPRUH KWWSV ELWO\V8946
8. 'LJLWDO/X[HPERXUJ 3RZHULQJSRVLWLYHGLJLWDOL]DWLRQ6HHDOVR KWWSV 31. +6< QG 2QH&ROOHFW6HHPRUH KWWSV ELWO\-(LUW9 ELWO\0S+ΖSD 32. 5R\36%HKHUD0' 6ULYDVWDY6. 6DWHOOLWH5HPRWH6HQVLQJ 9. Ζ06/X[HPERXUJ 7KH7KLUGΖQGXVWULDO5HYROXWLRQLQ/X[HPERXUJ6HH 6HQVRUV$SSOLFDWLRQVDQG7HFKQLTXHV6HHPRUH KWWSV ELWO\/82* DOVR KWWSV ELWO\W L2%R 33. ΖQWHUQDWLRQDO(OHFWURWHFKQLFDO&RPPLVVLRQ 2UFKHVWUDWLQJ 10. 8QLYHUVLW«GX/X[HPERXUJ +LJK3HUIRUPDQFH&RPSXWLQJ6HHDOVR LQIUDVWUXFWXUHIRUVXVWDLQDEOH6PDUW&LWLHV6HHPRUH KWWSV ELWO\.-1KZ KWWSV ELWO\O$05G 34. 6WDWLVWDȂ7KH6WDWLVWLFV3RUWDO 'DWDYROXPHRIJOREDOFRQVXPHUΖ3 11. 'HORLWWH 6PDUW&LWLHVȂ+RZUDSLGDGYDQFHVLQWHFKQRORJ\DUH WUDɝFIURPWR LQSHWDE\WHVSHUPRQWK 6HHPRUH KWWSV ELW UHVKDSLQJRXUHFRQRP\DQGVRFLHW\6HHDOVR KWWSV ELWO\F99TKP O\-3:[&
12. ΖQWHUQDWLRQDO(OHFWURWHFKQLFDO&RPLVVLRQ 2UFKHVWUDWLQJ 35. 'LJLWDO/X[HPERXUJ2SHQ'DWD6HHPRUH KWWSV ELWO\-Ζ8KXJ LQIUDVWUXFWXUHIRUVXVWDLQDEOH6PDUW&LWLHV6HHDOVR KWWSV ELWO\-6J30R 36. GDWDSXEOLFOX QG /X[HPERXUJȇV2SHQ'DWD6WUDWHJ\6HHPRUH KWWSV 13. (OIULQN: 7KH6PDUW&LW\6ROXWLRQ6HHDOVR KWWSV PFNFRV878 ELWO\OEOΖO
14. 'HORLWWH 6PDUW&LWLHVȂ+RZUDSLGDGYDQFHVLQWHFKQRORJ\DUH 37. 'HORLWWH&\EHU5LVN6HUYLFHV6HHPRUH KWWSV ELWO\\J%/M UHVKDSLQJRXUHFRQRP\DQGVRFLHW\6HHDOVR KWWSV ELWO\F99TKP 38. 'HORLWWHΖQVLJKWV *RYHUQPHQWȇVF\EHUFKDOOHQJH 3URWHFWLQJVHQVLWLYH 15. 'DWDFHQWHUVLQ(XURSH6HHPRUH KWWSV ELWO\0S7.F GDWDIRUWKHSXEOLFJRRG6HHPRUH KWWSV ELWO\/3(Ζ
16. ibid 39. 'LJLWDO/X[HPERXUJ'DWD(PEDVV\6HHPRUHKWWSV ELWO\-*3IP
17. +HZOHWW3DFNDUG(QWUHSULVH QG :KDWDUH'DWD&HQWUH7LHUV"6HHPRUH 40. 'DYHQSRUW7+ 3DWLO'- 'DWD6FLHQWLVW 7KHVH[LHVWMRERIWKHVW KWWSV ELWO\0S$ FHQWXU\6HHPRUH KWWSV ELWO\)3N7R
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34 Luxembourg towards a smart nation | Endnotes
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