Luxembourg’s progress in becoming one of the wealthiest regions in Europe was initially based on its strong steel industry, followed more recently by a boom in financial services. Nevertheless, Luxembourg needs to diversify its economy and the healthcare sector. Life sciences especially represent an interesting opportunity for the region but the healthcare system of Luxembourg is expensive and has really only been concerned with a reactive approach to the treatment of illnesses. Now, the region aims to put in place a more personalised and integrated approach to healthcare and this transformation is expected to trigger the development of health-related services and businesses.
The areas to be promoted through service innovation
The key focus is on the healthcare sector because Luxembourg sees service innovation as the means to transform its expensive, and not particularly effective, health system. This new approach relies on personalised medicine and an individual’s interest in his/her own health. Several business opportunities have been identified that can be combined with the goal of improving health. For example, a person willing to invest in his/her well-being might take up jogging or running. The distance covered can be measured and linked to a smart phone or other device that, in turn, can communicate with the customer database of a sports company. The company can use this information to provide customised sports gear, targeted marketing offers, discounts or services to the person involved, who would then be more likely to buy or use them. In the long run, however, the key objective is to have an impact on the healthcare system. This can be renewed and improved if the service providers including the doctors and hospitals, are willing to become involved in, and contribute to, such changes.
Strengths and weaknesses in Luxembourg’s innovation system
Lessons being learned that might be reflected in future policies
Changing the healthcare system is not a simple task. Involvement and inputs are required from different stakeholders ranging from politicians and the civil servants responsible to healthcare professionals and service providers. In addition, it is crucial to engage the key ministries from the very beginning by providing them with convincing evidence of the potential of service innovation.
There is an increasing awareness of the potential role of service innovation in Luxembourg. However, just as in every other region, this is not reflected in the policy mix which currently does not support service innovation to the fullest extent. Thus, the ESIC team suggested that more attention needs to be paid to ensuring that innovation support measures reflect the specific characteristics of service innovation including its intangible, multi-disciplinary and non-technological aspects.
Additionally, the ESIC team identified the need for a greater focus on generating new services and the living labs concept might be used to redress this deficit.
Practices that have the potential for transfer
A number of changes have been made in Luxembourg in order to support entrepreneurial activities. One of the benefits includes the fact that only a low level of bureaucracy is associated with the process of starting a business. The objective of the current policy and practice is to enable anyone to establish a business within ten days, assuming the applicant fulfils the basic conditions. Overall the business environment is SME friendly.
It also seems that communication between the various public and private stakeholders is quite open and interactive. This is combined with a rather decentralised and bottom-up approach to regional development. Such open, transparent and inclusive decision-making has been regarded as being favourable to the process.
Most, if not all, European regions are affected by an ageing population and the increasing costs of their healthcare systems. The proactive approach to healthcare and the intention to transform the whole system could have a significant impact on the effectiveness and costs of the operating environment. The overall healthcare system should be driven towards the next paradigm of healthcare - a continuous, preventive and patient-friendly system. If successful, Luxembourg can become the benchmark for all regions in Europe.