Minister of the Economy, Franz Fayot, discusses the recent startup roadmap “From Seed to Scale” designed to support the ecosystem’s continuous expansion as it navigates a new phase of maturity.
The From Seed to Scale roadmap reflects the Luxembourg government’s strategic vision for fostering a thriving and dynamic startup ecosystem. This comprehensive plan specifically outlines a series of targeted actions designed to propel startups on their journey to becoming successful scaleups.
Minister of the Economy, Franz Fayot, introduced the roadmap at the Vivatech international trade fair in Paris. During this interview, he elaborated on the reasons behind its implementation and shared insights into other existing initiatives geared towards empowering startups and enabling them to reach their full potential.
What motivated the conception of the startup ecosystem roadmap and why is it important for the Luxembourg economy at this time?
The government has been supporting the development of the startup ecosystem in Luxembourg for ten years. In a decade of growth and steady progress, we have been able to build an attractive startup ecosystem comprising more than 550 startups and some 15 public and private incubators. Building on this success, the startup ecosystem is now aiming to reach its next stage of maturity.
We felt it was now time to take stock of the situation and organise a wide-ranging consultation with all the players in the ecosystem as to identify concrete measures to put in place for the coming years, in order to ensure the continued successful development of the ecosystem.
This roadmap lays out actions that will increase Luxembourg's competitiveness by creating a comprehensive, attractive and inclusive startup ecosystem. It guides innovation and Luxembourg's future support of the start-up ecosystem.
The roadmap presents five priorities. What motivated this choice?
In fact, these 5 priorities reflect the 5 key development areas that clearly emerged from the inventory that was done and the workshops organised to consult all the players in the Luxembourg startup ecosystem. The roadmap includes a series of measures tailored specifically to the Luxembourg ecosystem, based around these 5 main areas.
This roadmap lays out actions that will increase Luxembourg's competitiveness.
The Startup Directory reflects the strong growth of the ecosystem. What actions are planned to strengthen cohesion between the many players in the ecosystem as it grows?
The need to strengthen and increase links between members of the startup community was clearly identified as one of the areas for improvement, as well as the need to further improve the entrepreneurial environment in Luxembourg as a whole. The new national platform, developed with Dealroom and available under the URL http://directory.startupluxembourg.com, lists all the startups present in the ecosystem.
It includes real-time data on startup activity and venture capital trends in Luxembourg and aims to facilitate connections, to improve transparency and to increase the visibility of the Luxembourg ecosystem, both locally and internationally. In this way, it meets the needs not only of young entrepreneurs but also of investors.
In addition to this new platform, we also plan to set up "Keystone Teams" bringing together key people from the public and private sectors like entrepreneurs, investors, support organisations, and so on.
These teams will act horizontally across all the pillars of the ecosystem. Their collective intelligence will help to strengthen the community identity of the local fabric and its interconnections. We also plan to create a group of “entrepreneurs in residence” to make the ecosystem more sustainable and inclusive, by giving to as many people as possible the opportunity to become entrepreneurs.
The roadmap foresees the introduction of a new support programme dedicated to scale-ups.
A crucial element of the strategy is the transformation of startups into scale-ups. Why is there an emphasis on scale-ups? What is often the missing link that impedes this transition for startups?
When we took stock of the situation, we realised that the needs of early stage startups, who are still at the beginning of their entrepreneurial journey, are well covered in Luxembourg, whether in terms of support, accommodation or financing. The Fit 4 Start acceleration programme has proved to be a great success and one of our strengths in this context. However, the situation is different when it comes to scale-ups.
The transition from startup to scale-up is a critical stage, taking place at an accelerated pace in the technology sector. This stage of development generally has a major socio-economic impact for startups: they have to deal with increased staffing and funding requirements and their business model has to be agile.
This is why the roadmap foresees the introduction of a new support programme dedicated to scale-ups.
It also plans to ease access to greater funding and strengthen the international visibility for Luxembourg scale-ups, for example through participation in economic missions and international fairs dedicated to innovation and startups. There are also plans to accelerate open innovation for scale-ups, which involves putting them in touch with major international groups.
Attracting talents for startups and scale-ups is a priority area for Luxembourg. What, in your opinion, makes Luxembourg unique in Europe as an attractive location for top talents/startups?
Compared with other ecosystems, Luxembourg’s salary levels help to attract talent, as do our social benefits and pension system, which are advantageous. We are also successful in attracting top researchers, thanks in to the university and to our research institutes, which are at the cutting edge in certain fields, and even world pioneers.
The challenge posed by access to talent for startups and scale-ups is considerable, both in Luxembourg and in the European Union. Recruiting technical and commercial profiles is particularly difficult for startups, as we are facing a general shortage of talent. An interministerial working group addressing the subject has been set up.
The startup ecosystem is now aiming to reach its next stage of maturity.
The strategy cites ambitions to strengthen Startup Luxembourg, a public initiative supported by the Ministry of the Economy. What is the role of this initiative in the ecosystem?
Launched in 2019, Startup Luxembourg is the branding of the startup ecosystem in Luxembourg. It aims, through its web platform and social networks, to promote our ecosystem internationally and to facilitate networking and business opportunities.
It is a public initiative, supported by the Ministry of the Economy and managed by Luxinnovation, the national innovation agency, which serves all players in the ecosystem (startups, incubators, research institutes, public organisations,....).
At international events dedicated to young innovative companies, Luxembourg is represented under the Startup Luxembourg brand. We also launched it in an effort to promote the ecosystem beyond the borders of the Grand-Duchy.
Since the launch of programmes such as Fit 4 Start, international startups have taken part. How does the programme fit in with the “From Seed to Scale” vision?
Since its launch in 2015, the Fit 4 Start acceleration programme has proven effectiveness for startups in the early stages, with coaching and funding tailored to their needs. Fit 4 Start is indeed an important visibility tool because it is open to foreign entrepreneurs who can apply to the programme.
In 2022, Luxinnovation, which manages the programme, has received 304 applications from 42 countries. So, when we took stock of the ecosystem, it was clear that we should maintain the programme, which is a success story. The first priority of the roadmap is to "continue to support startups from the moment they are launched". The Fit 4 Start programme has great results in this context.