City Focus: Could the trailblazing capital of Luxembourg be the ideal location for European business?
Famed for its robust economy, a highly-skilled workforce and a technology footprint that is, quite literally, out of this world, Luxembourg has placed itself firmly on the map as a pioneering capital – but could it be your next European business hub?
Luxembourg may be one the smallest nations in Europe, but it’s trailblazing capital more than makes up for its stature. Located at the heart of the continent, the burgeoning capital of Luxembourg, officially referred to as the Grand Duchy of Luxembourg, is the ideal gateway to the European market, with a consumer base of over 500mn consumers. Hailed for its attractive tax climate, its political and social stability, as well as a highly-skilled and multilingual workforce, this small yet mighty capital is proving to be a force to be reckoned with on a global stage as Business Chief found out…
Bordered by Germany, Belgium, France, Luxembourg ranks as the world’s second-richest country per capita, according to Fortune magazine. The country is set to uphold this positive economic outlook, standing as one of few countries to have received a triple-A credit rating from three main agencies S&P, Fitch and Moody’s and the DBRS – the top rating a country can receive. A multicultural nation, Luxembourg had an estimated population of around 592,000 in 2018, whilst its capital has an estimated 116,000 inhabitants by the end of 2017. More than 170 different nationalities call the capital home and, as such, it has adopted a linguistic system based on the use of three languages – Luxembourgish, the national language, as well as French and German. According to the Luxembourg Trade and Invest, the nation speaks the most languages in the EU on average by population and it’s also the number one country in the world or high skilled employment. Additionally, the Organisation for Economic Cooperation and Development (OECD), has also reported that Luxembourg has once again topped the leaderboard as the most productive nation in the world.
A rising star in aerospace
Like many European nations, Luxembourg has galvanised its digital infrastructure and today it boasts 28 international fibre routes to main European hubs as well as 23 data centres. The European nation has established itself as a hub for tech startups and entrepreneurs but it is also taking this innovation to the next level – outer space. In the 1980s, this tiny nation also came out of nowhere to become a leader in the satellite communications industry, with the creation of SES Astra. This provided the stimulus for the capital’s thriving aerospace industry which is currently comprised of 30 companies with an average turnover of around EU€2bn (USD$2.3bn), according to data from Trade and Invest Luxembourg. The country has a high concentration of cutting-edge aerospace companies including Euro-Composites, Gradel, Hitec Luxembourg, LuxSpace to name but a few and around 700 employees work in the aerospace sector in Luxembourg in research and development, manufacturing and operation.
Undoubtedly, it seems the capital has put its weight behind this space adventure – and its wallet too. The Grand Duchy channels 0.03% of its GDP to the ESA and, in doing so, it ranks fourth amongst European countries in terms of space investment. The Luxembourgish capital Is keen to play its part to contribute to the peaceful exploration and sustainable utilisation of pace resources and as such, it is providing R&D investment and financial backing for cutting-edge space technologies. For instance, in September 2018, Luxembourg created an EU€100mn (USD$) fund to invest in space-technology startups and it also officially launched of the grand duchy’s space agency which will zero in on “developing business activities in space”.
A month earlier, Luxembourg also made ripples in the aerospace sector when it became the first European country to officially allow space resources to be “appropriated” by commercial groups based in the country. By providing the legal framework for companies to exploit resources in Space, Luxembourg underscored its intentions to become a global pioneer for extra-terrestrial mining. Speaking to BizClik Media’s mining publication, Mining Global, Meagan Crawford of Deep Space Industries highlighted how the technology and space exploration firm is preparing to make its mark in space thanks to a partnership with the Luxembourg Government’s spacereousrces.lu initiative and Société Nationale de Credit et d’Investissement (SCNI, the national banking institution in Luxembourg. “With this partnership with Luxembourg, it has really allowed us to actually start implementing the technology that we have been working on for some time now,” she said. “There’s a possibility that we could actually replace mining on earth with space mining one day.”
Luxembourg has quickly established itself as a prime business location and, as such, industry behemoths such as ArcelorMittal and RTL Group have chosen the capital as their European business hub.
Formed in 2006 following the takeover and merger of Arcelor by Indian-owned Mittal Steel, ArcelorMittal is one of the world’s leading steel and mining companies. The Luxembourg-headquartered firm has a presence in more than 60 countries and an industrial footprint in 18 countries. The company has an annual achievable production capacity of approximately 113mn tonnes of crude steel in 2016. ArcelorMittal says it is as the “forefront of steel production research and development (R&D) and, as such, it has 12 research centres worldwide and spend USD$239mn on R&D in 2016. Lakshmi Mittal is currently the firm’s CEO. In 2017, ArcelorMittal reported sales revenues of USD$68.67bn.
RTL Group is a leading media company with business spanning across broadcast, content and digital. Headquartered in Luxembourg, the company is involved in 61 television channels and 30 radio stations, as well as content and digital video production. It also owns stakes in TV channels and radio stations across Europe in countries such as Germany, Belgium, the Netherlands, Luxembourg, Spain, Hungary and Croatia. On top of this, it also owns the video ad serving platform, SpotX. Bert Habets has been RTL Group’s CEO since 2017.
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