Following on from its top-level participation at last year’s Open Innovations forum at the Skolkovo Technopark, Luxembourg will once again play a key role in this year’s event on October 15-17, sending a trade delegation of 40 companies. Ahead of the delegation’s arrival, Luxembourg’s ambassador to Russia, Jean-Claude Knebeler, sat down with Sk.ru to talk asteroid mining, data embassies and how and why such a small country manages to stay competitive in the breakneck-paced world of innovations.
Jean-Claude Knebeler, ambassador of the Grand-Duchy of Luxembourg in Russia, pictured at Skolkovo. Photo: Sk.ru.
The large trade delegation attending the Open Innovations forum next week, led by Luxembourg’s Chamber of Commerce, does not consist solely of innovative tech companies, but also includes a lot of service providers, says Knebeler. They all have one thing in common, however: they are all interested in understanding what is going on in Russia.
“Many people in Europe and even more so in the U.S. have no idea what is going on,” says the ambassador, whose previous posting was in New York.
“There’s this idea that Russia is just a big gas station. They do not see that Moscow is a metropolis on a par with many others in the world,” said Knebeler, adding that he hoped the Open Innovations forum would introduce Luxembourg representatives to companies from all across Russia.
“I think it’s a great opportunity to show Russia what Luxembourg is about, and to show our Luxembourgers what Russia is about today,” he said.
What little Luxembourg is about today is innovation, and not only in its traditional stronghold of banking. Surrounded by France, Germany and Belgium, Luxembourg has had to reinvent itself repeatedly to remain competitive, says Knebeler.
“Nowadays we are a mostly service-driven economy, and we service big European markets: Benelux, Germany and France,” he said.
To create services that Luxembourg’s mighty neighbours, France and Germany, will choose over domestic solutions, “you have to invest in brains to come up with better and more innovative solutions than they can offer themselves, to always be a step ahead,” explains the ambassador.
One of the areas in which Luxembourg is several steps ahead of most other countries is in space. Last year, the country passed a law permitting companies to perform mining operations on asteroids and to keep and profit from the resources they find there. More than a dozen space mining companies have taken Luxembourg up on its offer and become legally domiciled there since the law was announced in 2016.
Luxembourg's deputy prime minister Etienne Schneider (second from right), who took part in a session on asteroid mining at last year's Open Innovations, at the launch of the Luxembourg Space Agency in September. Photo: Luxembourg Space Agency.
“That is a big idea,” says Knebeler. “It makes people pause and wonder, ‘what does little Luxembourg want?’ We know mining in space is something that will happen not tomorrow, not next year, maybe not in 10 years, but the steps to get there, the technical improvement and innovation we need to eventually get there, they are happening right now, so that’s what we’re interested in.”
Late last month, the newly formed Luxembourg space agency announced that three more U.S. space companies – Made in Space, Hydrosat and CubeRover – would be opening offices in the Grand-Duchy, in addition to those that have already set up shop there, such as Planetary Resources, in which the Luxembourg government is a shareholder. Even if not all of these projects succeed – “that is startup life,” reflects Knebeler – the equity investments are money well spent and the decision to position itself as a space mining hub was the right thing to do, the ambassador is convinced.
“With this visibility we have attracted a lot of other companies that do research and create an ecosystem locally,” he says, adding that the government aims to facilitate “cross fertilisation within the tech community.”
“We’ve seen companies coming from Japan, from different European countries, from Russia. Russia is a source of very interesting technology,” said Knebeler.
“We are hoping we can formalise cooperation with Russia through an MOU with [Russia’s federal space corporation] Roscosmos,” he said, adding that discussions on that were underway.
“We don’t want Russian companies to move out of Russia, but we are very happy to have them in Luxembourg to commercialise their services in the EU with our help in the European space agency.”
Luxembourg hasn’t always had this attitude to innovations, however. Knebeler sees parallels between Russia and Luxembourg, despite the difference in their size and availability of natural resources.
“Russia has natural resources, which can be a problem to drive innovation, because it’s easy to rest on your money from oil and gas. Luxembourg has a similar issue. When I left Luxembourg in 2012 there was hardly any startup scene. There was a business angel network, but it was quite dormant,” he recalled.
Luxembourg may be known for its medieval city, but the tiny country has set its sights firmly on the future. Photo: Vitaly Shustikov/Sk.ru.
The reason was the tiny, landlocked country’s thriving real estate market.
“Any individual with a bit of money [thought], why would I invest in a startup that may or may not succeed, when I have a guaranteed return of at least 10 percent a year – probably more – by putting it in real estate? That’s what most people did: buy an apartment and rent it out,” explained the diplomat.
The drastic change in mentality towards tech innovation and startups is thanks to a handful of people, said Knebeler.
“There was really an effort by some very driven people to bring innovation and the startup spirit and the culture of business angel investing, to make it more visible,” he said, adding that in this respect, Luxembourg’s size is an advantage.
“We’re a small society, so it’s easy to reach out and make a change. If you want to see policy or behavioural changes, you can achieve that.”
Thinking across borders
Another inherent attribute of Luxembourgers is an international mindset, due the country’s size and location, and this was indirectly a factor in its hosting of a data embassy containing back-up copies of all the secure data of the Estonian government, which has faced numerous hacking attacks in recent years.
Luxembourg had invested heavily in data centres and storage infrastructure, since regulations require banks to store data within national borders and since several large international IT companies are active in the country, making it a natural choice for Estonia when the country was looking for secure server infrastructure outside of the Baltics, said Knebeler.
Luxembourg Prime Minister Xavier Bettel speaking at last year's Open Innovations forum. Photo: Sk.ru.
“There was no big lightbulb moment,” he said.
“We live and evolve in this European context, and sometimes we just have a different perspective than our neighbours because we are so small, and at the centre of Europe,” he said, noting that from the centre of Luxembourg, it is impossible to drive for more than an hour in any direction without crossing the border.
“The international dimension is always there,” said Knebeler.
“If you’re the president, prime minister or a minister in the French government, or chancellor or a minister in the German government, you have your hands full with your own country, and you look at things from a very French or German perspective. If you are even interior minister in Luxembourg, you think across the border.
“You look at what is happening in the world and think, ‘how can we take something and develop it into something else that could actually bring us some kind of advantage?’”
Delegations aside, Knebeler is a regular visitor to the Skolkovo innovation city, most recently attending a workshop targeting startups looking to open an office in Luxembourg (some Skolkovo startups have already successfully done just that.)
Ambassador Knebeler at the Skolkovo Technopark. Photo: Sk.ru.
“There’s so much going on in Skolkovo,” says the ambassador.
“I have to say, I’m amazed by what Skolkovo has become,” he said.
“I have to admit, at the beginning, I did not believe at all in the project. I’m sorry to say I thought, this is a Russian government top-down initiative, somebody takes a few billion of oil money and throws it into a development project, and you cannot just launch innovation by decree. You cannot just say, ‘Go forth and be innovative!’ – it doesn’t work.”
Visiting Skolkovo and meeting the foundation’s startups have, however, convinced him otherwise.
“I think the people involved in Skolkovo have managed to create a spirit where great and innovative minds gather together, and it’s that that creates new ideas: free discussion, trying things, failing, retrying, and I see that happening when I talk to the people that work in and around Skolkovo,” he said.
“There is potential there, and I hope it can be replicated, because if you look at the space available in Russia – the resources of a population of nearly 150 million people, the traditions of R&D – there should be more, and not only around Moscow. There needs to be more, and they should be better connected and see more exchange of information.”
The Open Innovations forum is taking place at the Skolkovo innovation centre on Oct. 15-17. For more details, visit the event’s website.