Luxembourg in the New Economy
Luxembourg has a tremendous business-potential due to its central location, its multilingual population, and its willingness to attract new opportunities (i.e. banks & film industry).
It could become one of the centres for the new economy, with new companies in sectors ranging from e-commerce to Tele-marketing.
However some serious recruitment issues face the economy today. Problems:
- Small country ? limited
?natural' supply of staff,
- No university and research
centre by international
- Increased job rotation,
- Low unemployment rate,
- Lack of competitiveness,
- Age gap problem, age
Luxembourg is limited in its natural supply of staff. We have to continue on the "grande-région concept? and even develop this system by working closer with the regional universities. Do we know what the situation in Luxembourg's schooling system is today? What percentage of students has access to a PC / Internet? Are we aware of the programs offered by the universities around us? For example the University Kaiserslautern's e-commerce venture-program, Cologne or Trier university programs, Metz with its diploma in e-commerce and the Internet, a potential MIS program offered by Sacred Heart University Luxembourg.
Traditionally Luxembourg's working population has not changed jobs too often, and its mentality for stability has always favored the ?job for life concept?. Furthermore the main employment sectors, such as the steel industry and financial sector have contributed to this development. Nevertheless, the new economy seems to function differently. Based on our information, a much higher level of job rotation of personnel prevails with a turnover of around 20-25% employees per year.
Luxembourg's housing market is not necessarily cheap. In addition it just does not offer the good weather of Sophia-Antipolis, Tel Aviv or Silicon Valley or the cultural diversity of London, Berlin Paris Silicon-Sentier.
Luxembourg has problems on remuneration in comparison with most of the above-mentioned centres, and does not lead the pack when it comes to stock options, performance related bonus schemes, health schemes, gym memberships or computer training. Where is this country on flexitime, alternative work styles, telecommuting?
Luxembourg's managers must learn to think and act differently if their companies are to compete effectively for the best human capital. Luxembourg has to improve its competitive environment. It should have the possibility to create an environment where the government thinks like a company competing in an international environment. Luxembourg is thought of as a banking centre, not a potential harbour of the new economy.
Let us just for reasons of comparison have a brief look at what Germany's Chancellor just announced: "starten nicht warten': According to him 750,000 new additional IT jobs can be expected by the end of the decade. By the end of next year all schools will be PC-equipped and will have internet access.
All public libraries will have a free internet access, sponsoring of PCs in schools or other education centres will be supported. By October all unemployed will have the possibility of acquiring a free "Internet driver's license? i.e. make good use of this media.
The current generation of pupils will not experience a "cyberphobia? problem, but what will be done to bridge the gap of the next five to ten years until they enter the labour market' A wider issue which is not only typical for Luxembourg, is the declining share of mid-thirty / mid-forty year olds (15%less between 2000 and 2015). Women have established themselves in the workforce; they no longer represent a significant new supply source. Executives are not prolonging their careers, as they tend to take early retirement whenever they can.
Are we prepared to adapt a German or US-style visa solution' A limited solution to satisfy the market needs. Why would somebody with the highest qualifications from India or Israel choose to work in Luxembourg? Wouldn't he/she prefer the USA or the UK where there are no language barriers? How will the individual manager incite that person to work for his company?
Politicians are of course always afraid of the populist argument of ?jobs taken away by the foreigner? although it would only mean extra jobs created from additional investment for the sake of an improved competitive situation.
As a conclusion to the above mentioned problems, it would be advisable to see more efforts directed towards education, increased cooperation in the "grande-région', a favourable legislation towards compensation issues, and, if anything, a limited visa policy to help Luxembourg bridge the next five to ten years of scarcity.
Luxembourg will pass its e-commerce law and will decrease corporate and personal taxation. Great, but not enough. Luxembourg's business community cannot keep pace with the global new economy nor establish a competitive position if it does not have the right talent pool. The labour market is tight every-
where and this country cannot allow itself to miss out.