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Can Luxembourg become a future mobility tech hub?

With access to key European markets and a cross-border test bed for automated and connected vehicles, Luxembourg aims to become the ‘digital heart’ of Europe. By Freddie Holmes

The concept of future mobility is a step change for the incumbent automotive industry, and has led to a wave of investments and partnerships between existing players and new entrants. Technology innovation continues at a rapid pace, and the pressure is on to secure a workforce that can help shape a future of connected, autonomous, shared and electric (CASE) mobility.

All of this may well require players to look outside of the box and expand into new territory. Luxinnovation, the national innovation agency of Luxembourg, believes the country is well placed to serve the wave of new mobility start-ups cropping up across Europe, and act as a useful testing ground for CASE technologies.

In partnership with the Luxembourg Ministry of Economy and the Chamber of Commerce, Luxinnovation’s aim is to not only encourage start-ups and entrepreneurs to set up shop in the city-state, but also to secure foreign investment from established players. The non-profit agency works with a wide range of industries, from clean tech and finance to logistics and maritime. In 2018, 220 companies received tailor-made and individualised support as a result of Luxinnovation’s work, and led to the launch of more than 50 R&D projects.

Moving forward, the organisation is making a concerted push to become a tech hub for the mobility sector.

Europe’s next tech hub?

Luxembourg may not be the most obvious location for a mobility tech hub, but it has a number of key attributes in its favour. It is well served with graduates in software and computer science from the universities of Luxembourg and nearby Saarbrücken, and boasts close ties with surrounding regions of France and Germany to allow for cross-border testing of 5G and autonomous driving. “We are particularly looking at the companies that fill the gaps of innovation in Europe,” explained Joost Ortjens, Head of International Business Development—Automotive at Luxinnovation.

Players should not necessarily come for Luxembourg’s internal market, but there are business opportunities in Europe that can be well served from Luxembourg

Given Luxembourg’s diminutive size—home to around 600,000 people—the agency is not necessarily encouraging automakers to set up manufacturing hubs, however. Instead, it could house R&D headquarters or technical support facilities to serve European customers. “Players should not necessarily come for Luxembourg’s internal market,” said Ortjens. Typical locations for such facilities would be the Netherlands, Belgium, Germany or France, but Luxinnovation believes Luxembourg should also be on that list. “It is very small, but there are business opportunities in Europe that can be well served from Luxembourg.”

One of the areas on which the agency intends to focus is software-based technology that is relevant to autonomous driving. It may come as a surprise, given the number of big name suppliers present in Germany and France, such as Continental, ZF and Valeo, not to mention the premium automakers.

Indeed, Ortjens is quick to point out that “autonomous driving in general is not considered to be a weakness in Europe,” but conceded that software development, artificial intelligence (AI) and testing and accreditation appear to be slightly stronger in the US. The Bay Area of California is particularly flush with talent, but that’s not to say Europe cannot catch up. “On the software side, there is a lot of potential for us to bring many of these US-based companies from the Bay Area into Europe via Luxembourg,” Ortjens affirmed. “Luxembourg can become a tech hub for software fields related to autonomous driving and connectivity.”

5G and AVs

Luxembourg is part of Europe’s largest cross-border automotive network that is made up of more than 500 companies, and spans across six regions. Geographically, Luxembourg sits at the centre of this hub between Belgium, France and Germany. In Luxinnovation’s words, it acts as ‘the digital heart of Europe’, and is looking to further strengthen that position.

Luxembourg can become a tech hub for software fields related to autonomous driving and connectivity

Given its location, the country provides access to a cross-border test bed for autonomous and connected driving. A highway network of more than 130 miles of public roads means that drivers can easily pass through France, Germany and Luxembourg in a triangle. The highway is being outfitted with 5G antennas through a partnership between Deutsche Telekom in Germany, Orange in France and POST Luxembourg, the country’s national telecoms provider. The 5GCroCo trial—in which numerous players including PSA, Renault, Volkswagen and Volvo Cars are taking part—began in 2018 and will run to the end of 2021.

This cross-border highway allows developers to test how 5G connectivity fluctuates when passing through different countries, which is highly common for European drivers. “If your connection drops out when crossing a border, it is annoying, but nothing more than that,” said Ortjens. “But if an autonomous vehicle is using data from outside of the vehicle that relates to safety applications, it is vital that the data stream is reliable and uninterrupted.”

Thanks to this ‘digital highway’, developers can also attain permits to test autonomous vehicles in all three countries. Then there is the Mobility Innovation Campus, a dedicated site for R&D facilities that already hosts a number of global Tier 1s.

On the software side, there is a lot of potential for us to bring many of these US-based companies into Europe via Luxembourg

Every little counts

There are also practical reasons to establish a presence in Luxembourg; its natives speak German, French and English, which makes networking with companies in the surrounding area more straightforward. “It’s easy for a company to build up an organisation with German and French expertise,” explained Otjens.

Then there is the country’s favourable taxation policy which may prove attractive for larger companies, “especially when making a strategic decision about where to be located in Europe,” Ortjens added. “As Luxinnovation, we bring in the knowledge of innovative businesses in Luxembourg and Europe, and can leverage the position that our companies play in the fields of research and development for the future mobility space.”

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