Articles Published  08.03.2017


« A new economic order is under way »

©Arnaud de Villenfagne

  Source: PwC Luxembourg

Decentralised, open and shared: a preview of the company of the future at the 11th edition of the Journée de l’Economie in Luxembourg.

The 2017 edition of the Journée de l’Economie was marked by the concept of trust. Although not all geopolitical indicators are green, the 11th edition of this national conference organised by the Ministry of Economy, the Chamber of Commerce of the Grand Duchy of Luxembourg and the FEDIL - The Voice of Luxembourg's Industry - , in close collaboration with PwC Luxembourg, showed that public and private economic players are determined to ride the wave of change brought by the all-round digitalisation of our society and our economy, as well as its transformative effects on companies and their business models.

In his opening remarks to the 250 participants, Carlo Thelen, leader of the Chamber of Commerce, pointed out that this was the best time to plan on how to meet the challenges of tomorrow’s economy. He also recalled that Luxembourg had already reinvented itself to emerge from several major crises in the past. These revivals were possible on the one hand thanks to the trust-based relationship between the public and private sectors and, on the other hand, to a fertile entrepreneurial soil. Thelen highlighted the key role of businesses, the ones actually creating the value of the future and harnessing the talents of a new generation, able to understand and tackle the current disruptions associated with digitalisation. Luxembourg can thus trust itself to become a platform for international innovation and turn the challenges outlined in the Third Industrial Revolution report into opportunities.

A radical paradigm shift

Patrice Geoffron, professor of economics at Paris-Dauphine University and a member of the Cercle des économistes, spoke on the need for a new macroeconomic model. His starting point was the fact that global GDP has multiplied by 100 in a record time, but CO2 emissions have also increased exponentially. In an energy-intensive society, where resources are dwindling, climate change is accelerating and global population is increasingly concentrated in cities, we are suffering from a sort of generalised myopia, reflected in divergent and changing strategies from year to year, although the COP21 has laid down the general framework.

This regulatory uncertainty affects the global economy and business. In order to meet the challenges of the future economy, we must first of all think of disruption as the new norm and then accept that technology, considered the source of growth for the future, has opened the door to a new economic model powered by a crowd-based capitalism. Last but not least, we must understand that smart cities will become reference ecosystems and thus impose new ways of working.

Luxembourg embraces the idea of “smart cities” in its project led by Jeremy Rifkin, following the lead of other ambitious municipalities in Europe – such as Barcelona, Amsterdam or even Lyon. According to Patrice Geoffron, the perks would be many for Luxembourg, a country ranked 10th in the world in terms of - developing projects related to information and communication technologies and renowned for its political and regulatory stability. A perfect place to be for businesses.

Martin Guerin, CEO of nyuko, analysed the concept of “open innovation”. In the next twenty years there will be more changes than in the past two centuries, a trend that will lay the groundwork for a radical paradigm shift: with all the technological transformations and advances in robotics, artificial intelligence and big data, we have a responsibility to the environment, but also to society. As Martin Guérin puts it, we have no choice but to work together and share our knowledge. The time for isolated innovation, generated in-house, is over and a new era of openness to peers, competitors and partnerships begins, allowing for fresh perspectives and ways to diversify business when necessary. Open innovation is rooted in synergies between large companies, start-ups and innovators, in a global manner.

PwC Luxembourg’s CEO John Parkhouse focused on how world leaders have embraced the uncertainty of a risk-filled world as the new standard and shared with the audience key findings of the 20th CEO Survey showing an increase of confidence in the economy. Despite this renewed optimism, leaders remain aware of the challenges ahead and three of them, in particular, are high on the agenda: striking the balance between human resources and technologies to build up a workforce ready for new digital challenges; preserving public trust at a time when their companies’ role in wealth creation is under scrutiny; making sure that globalisation benefits everyone through a fairer distribution of revenues.

What company and what economy tomorrow?

How does digitalisation change the way we interact with each other? How has it changed the individuals’ capacity to trust and the nature of their relationship with business? And how will it influence public policy? Based on various examples of crowd-based businesses such as Uber, Airbnb or Youtube, the international economist Arun Sundararajan, Professor and the Robert L. and Dale Atkins Rosen Faculty Fellow, New York University's Leonard N. Stern School of Business has drawn the fundamental differences between the centralised production, typical to the functioning of traditional companies, and the on-demand economy of digital platforms fuelled by users who provide content or services.

The sharing economy blurs the lines between personal and professional life. The emergence of crowd-based capitalism, even if at an experimental stage, paves the way for a new manner of organising economic and labour activities. It will gradually redefine the social contract, shaping a new relationship between the individual and companies. For policy makers, one of the greatest challenges will be to make sure that workers currently benefitting from a fair social contract will continue to do so in the future, even if they will no longer work for traditional businesses, but mainly for collaborative platforms.

This is a vision of the economy of tomorrow that Luxembourg embraces completely, as Etienne Schneider has told the audience. He outlined the main orientations and the implementation timeline of the report on the Third Industrial Revolution led by Jeremy Rifkin at the end of 2016. A digitalised economy should, according to the Luxembourg Minister of Economy, go one step further, towards a sustainable one.

The Journée de l’Economie carried on with workshops that allowed participants to work on concrete initiatives around tomorrow's business: smart offices that create a professional environment to satisfy the digital generation of employees, who aspire more than ever to equal wellbeing at work and performance; reskilling a part of the human resources whose jobs will change in the next years; the current industrial model reshuffled by robotics and connected objects; or the security of companies faced with increasingly sophisticated cyberattacks.

All the ideas shared throughout the Journée de l’Economie have allowed the participants to become aware of what the future might reserve for Luxembourg and enhance their confidence in the economy and business landscape. Becoming an international innovation platform and tackling the challenges outlined in the report on the Third Industrial Revolution seem to be key goals for Luxembourg in the coming months.

The participation fee of 70 euros will be fully donated to the Jonk Entrepreneuren Luxembourg association, an educational programme aimed at developing entrepreneurial skills for the younger generation.

The Journée de l’Economie has once more fulfilled its catalyst of ideas and exchanges role and we’re looking forward to its 2018 edition.

The author of this article is solely responsible for the content published.

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