The Luxembourg Chamber of Commerce represents the interests of its member companies. How does it perform this role?
We support the creation, development and international expansion of companies based in the Grand Duchy of Luxembourg. We also defend our members’ interests as their official, independent representative. Today we represent no fewer than 90,000 affiliated companies, accounting for 75% of total salaried employment and 80% of GDP in Luxembourg.
In our actions, initiatives and positions, we always aim to serve our members’ collective interest, only representing sectoral interests if they are not detrimental to the whole. For example, we have a role in the legislative process, giving our opinion on all relevant draft laws. We carry out economic analyses and structural studies and seek to lead the socio-economic debate.
We have also created a group of structures which provide a wide range of services to meet various needs. The House of Training offers tailored courses to thousands of people in a variety of fields, our House of Entrepreneurship is a single point of contact for existing and new entrepreneurs. It offers them a wide range of services to help the creation and development of their businesses. And there is also the House of Startups (HoST), which gathers under one roof innovation clusters, incubators, business accelerators, business startup consulting services, and so on. And of course, in an increasingly globalised economy, conquering new markets and seeking reliable partners are among the main challenges facing businesses. That’s why our support is directed both at businesses that are new to exporting and to more seasoned businesses looking for new markets or seeking new investors.
These are only a few examples of how we offer practical services to specific businesses and the economy more generally.
How would you characterise the Luxembourg economy?
Our economy is open, dynamic and reliable. We have a small domestic market, so businesses here tend to serve international clients from our reliable yet innovative environment. This strategy is helped by around two-thirds of our workforce coming from abroad, with people drawn from dozens of different countries. All of this makes Luxembourg one of the world’s most open economies.
Luxembourg is also remarkable for our high standard of living. We were ranked 18th out of 231 countries in Mercer Quality of Living Survey 2019, and in the Global Liveability Index 2018, Luxembourg was the 24th most desirable place to live and work. This is due to the country being family friendly, having a rich cultural life, an attractive natural environment, being one of the safest places in the world, and many other important intangible features.
To these factors can be added Luxembourg’s economic and political stability and reliability, plus its location in the heart of Europe. This makes the country an ideal entry point to a market of over 510 million consumers, where goods, services, people and capital circulate freely. This shapes Luxembourg’s very-business friendly environment where companies and investors thrive.
What are the key economic sectors?
Our financial sector accounts for about quarter of output and a tenth of our workforce. This is thanks to the range of innovative service prov ders offering world class expertise in niches such as investment funds, insurance and wealth management. Successive governments have also been keen to maintain a diverse economy, which has led research-driven manufacturing and technology businesses in particular to thrive. For example, the ICT sector and the digital economy have grown in importance in recent years, expanding by more than a quarter over the last decade.
Our international, open nature coupled with excellent infrastructure and central location also makes us an ideal logistics hub to serve European and global markets. We also go further, with Luxembourg being a pioneer in space business. Since the 1980s, we are host to SES, a world-leading satellite operator, and numerous other businesses have grown to form a cluster of expertise in this context. Most recently, the government has backed a strategy, which will seek to mine rare resources in space. As well as investment in research and development, the government works to create an ideal legal environment for this innovative activity.
Many people of Portuguese origin make their homes in Luxembourg. In which business sectors are Portuguese people active?
Indeed, according to recent numbers, Portuguese nationals represent 16% of the total population of Luxembourg. In the 1960s, the influx of Portuguese people to Luxembourg provided the solution to two major problems for our country, namely the demographic deficit and the increased need for workers in the construction sector. Today, in addition to the construction sector, the financial centre also attracts an increasing number of qualified Portuguese expats. As well, various European institutions with headquarters in Luxembourg also employ numerous Portuguese nationals.
How has the economic relationship between Portugal and Luxembourg evolved in recent years?
The bilateral relationship is excellent. I would say that a long lasting friendship connects Portugal with Luxembourg. Above all, our two countries have a mutual interest in diversifying our economies and the trading relationship. I am very pleased with our yearly national participation at the WebSummit in Lisbon, as ICT seems to have become a key area of focus for both Luxembourg and Portugal.
The Luxembourg Chamber of Commerce plans to maintain its participation in the coming years with a reinforced & increased presence. As part of the state visit their Royal Highnesses the Grand Duke and Grand Duchess in Portugal in 2010, the Chamber of Commerce led an economic delegation to Lisbon. 32 Luxembourgish companies took part in this mission. In 2014, we led a trade mission to Portugal in the logistics sector. In 2016, we received a large delegation of Portuguese companies from the ICT sector. Those missions were all organised by the Luxembourg Chamber of Commerce in collaboration with the AICEP (the public agency for the promotion of trade and investment in Portugal). We are looking into further collaborations of this kind in the years to come.
Covid-19 has changed so much for so many businesses. How has the Luxembourg Chamber of Commerce supported its members and partners, particularly those who have suffered the most?
We acted very pragmatically and effectively, taking swift action right at the beginning, because we realised immediately that this health crisis would become an economic crisis. On March 13, only a couple of days before the lockdown in Luxembourg, we and the General Directorate for Small and Medium-Sized Entreprises at the Ministry of the Economy presented a support package for companies impacted by the pandemic.
A first measure offered help to businesses facing immediate financial difficulties, particularly regarding their cash-flow problems. This saw the establishment of a specific bond in the form of a guarantee to companies that need credit or a bank loan. We also created a new helpline to provide businesses with real-time information and to answer questions on a variety of topics, such as the national furlough scheme and other aids offered by the state and ourselves. We created a dedicated Covid-19 website to provide quick answers to key questions. Another important project was our #ReAct programme, launched in April 2020, seeking to enable businesses to deal as effectively as possible with the economic downturn and to help them define and implement their recovery strategies.
Finally, we acted as lobbyists, advising the government on what help was needed by our companies, and outlining our ideas for a sustainable post-crisis recovery package which would benefit all businesses. We obviously hope that the economy will recover as soon as possible, but for this to happen, targetted and pro-active steps must also be taken.
How do you see future developments in the economy and society at large?
A key lesson from this crisis is that through innovation, flexibility, agility and above all solidarity, even extreme situations can be managed. Of course there has been a downturn in growth, and unemployment and bankruptcies are likely to be frequent in the coming months. During the recovery, companies will have to learn and relearn lessons about innovation as their business models adapt to the new environment.
Anything is possible. Changes of habit have occurred in just a few months, whereas they would have taken years under normal circumstances.
Working to deal with constraints can sometimes be the spark for important innovations and future growth in a sustainable fashion.