The event is split into two half-day conferences, focusing on different aspects of the economy. “We soon noticed that there were two very different sets of problems if you look at the non-finance sector,” says Luc Henzig, partner PricewaterhouseCoopers. “You have the local and regional small and medium-sized companies who have their own particular issues. Secondly there is the international business development in Luxembourg and the Greater Region.” Which is why both the Ministry of the Economy and the Ministry of the Middle Classes are organising the event, together with the Chambre de Commerce and FEDIL and the partnership of PwC. A host of prestigious guest speakers will attend the conference, including Minister for the Middle Classes Fernand Boden and director of the Chamber of Commerce Pierre Gramegna.

Day one of this year’s event, led by Henzig, will focus specifically on retail, which he says is still one of the backbones of the Luxembourg economy. The theme coincides neatly with the recent publication by PricewaterhouseCoopers, together with Editions Binsfeld, of a new edition of (Re)parlons commerce!, Norbert Friob’s comprehensive book on the subject of the retail trade in Luxembourg and the Greater Region. One aspect of the conference will be to examine exactly what constitutes the retail trade. As Henzig explains, it is not simply about shops located on the high street but also includes services to the finance industry, such as print shops, for example. But the conference will also look at the future trends for retail, guided by the presentation of a Statec study on the average shopping behaviour of typical Luxembourg families. “We will address topics such as new sales channels like the Internet, the balance of retail outlets in towns, new models for delivering goods – all aimed at adapting retail business to new economic and environmental patterns as well as the behaviour of the population,” Henzig says. “You would never buy a fridge in the middle of the Grand Rue, for example.”

The role of cities

The concluding part of the first day will focus on the role of cities in the broader economic development of the Greater Region. “Towns or larger agglomerations are beginning to play an increasingly important role in economic development,” says Henzig.  Invitees, including mayor of Luxembourg Paul Helminger and mayor of Esch-Alzette Lydia Mutsch as well as the mayor and city manager of Arlon and the deputy mayor in charge of economic development of Metz, will be asked how they can contribute to the economic development in their own cities and how that can be applied in a coordinated way across the greater region. “One obvious problem is finding the balance between retail commercial activity in the towns city centres and the commercial centreslarger malls on the periphery, which many communes are struggling with. There is no real coordination between the towns in the Greater Regionn,.” Henzig explains.

Demographic shifts, such as the changes in population expected when the University of Luxembourg is finally fully established in Esch-Alzette, will also have a significant impact on the relationship not only between the two cities, but also between the administrations and’ commerce. In Metz, for example, the dissolution of the Frescaty military base will also have an impact. Efforts by the national government to attract new residents to the city met with resistance until people actually came to look at Metz, which Henzig says underlines the identity problem faced by many of the cities in the Greater Region. Luxembourg City probably has fewer problems than its neighbouring cities. “It is an economic engine of the region, and we will be unveiling a study, conducted by the Conseil Régional de Lorraine, on how it is perceived within the Greater Region.”

The concluding part of the first day will focus on the role of cities in the development within the Greater Region. Towns or larger aglomeration are plying an important role in economic development. Questions will be raised how they can contribute to the economic development and this in a coordinated way across the greater region.

Finance for businesses is another problem that is particularly topical, as it concerns not only new projects trying to launch onto the market, but even existing businesses looking for extended credit lines to survive cash flow difficulties. Serge Allegrezza, Director of the Observatoire de la Compétitivité, who will lead the second day of the event, explains that a recent Luxembourg Central Bank survey has indicated that banks are less willing to give credit than in the previous quarter. However, Allegrezza points out the results of a 2007 Factors of Business Success study by Statec that reveals that many small businesses do not first approach banks for their start-up capital, but rather request money from family or friends. “Bank loans only made up around 20%, so we should not overvalue this factor in hampering new businesses,” says Allegrezza. But, despite their numerical superiority in terms of number of businesses and employees, Allegrezza says that SMEs only contribute around 45% to value added GDP.

The challenges of diversification

The second day tackles the broader problem of the impact of the current crisis on the real economy. Minister for the Economy Jeannot Krecké will introduce a review of government policy in face of the financial crisis as well as lookingtake a look at the government’s diversification programme. “It is a topic he addresses quite frequently, and we will gain insight into new developments in logistics, life-sciences, IT security, telecommunications and so on.” The importance of the role of research and development in developing the economy, as well as making maximum use of local expertise and examining the legal and regulatory frameworks available to encourage investment are other areas that will be the focus of discussion.

As well as inviting players in the fields of logistics, for example, to bear testimony to the current status of diversification and the challenges they face, the conference organisers are also planning to showcase three examples of entrepreneurs with current projects at different stages. “We have an entrepreneur with a project who is having difficulty getting it off the ground in Luxembourg. Another who wants to diversify in a foreign country, and an international group wanting to come to Luxembourg,” Henzig explains. They will explain the motivation behind their decisions, the problems they faced, or are still facing, and the lessons they have learned. On fFocus will be on innovation and research. – “This is anan important step in developing new activities. We need to provide an incentive to create this innovation in Luxembourg,” says Henzig.– Iinfrastructures and public aid, and what can be done to help those companies coming to Luxembourg, will also fall within this discussions. The also on the problem s of financing activities will be addressed by a banker, who will provide some insight on how business representatives can best approach banks, especially in these troubled times when the word is out that banks are cutting down on corporate loans.projects.

“It is quite an ambitious programmelan, but we want to communicate a positive view of things,” says Henzig. “We want to encourage peer-to-peer discussions and get across the fundamental message that even if there are problems that have to be faced, it is worth tackling them. With a little bit of good will from all sides, it is possible to create quite interesting projects here in Luxembourg and continue to develop the economy.”