The keys to tomorrow's entrepreneurship

How is Luxembourg entrepreneurship faring?

Above all, how can we strengthen an ecosystem whose external environment presents many challenges that can nonetheless be transformed into opportunities, and support it over the coming years?

Gérard Thein is President of the Fédération des Jeunes Dirigeants (FJD). Sven Baltes is CEO of Jonk Entrepreneuren (JEL). Jean-Luc Bermes is Deputy Head of Corporate Banking at Spuerkeess.

Bryan Ferrari: Let's talk about entrepreneurship. Gérard, you are the Chairman of the FJD. Can you tell us exactly what the FJD is?

Gérard Thein: The FJD was founded in 1977 by a group of entrepreneurs. Next year, we will be celebrating our 50th anniversary. Today, we have over 600 members. Of these, 300 are young managers, i.e., under the age of 45. These are the active members. The other half, basically, remain members, but in a more passive way. We cover the whole of the Luxembourg economy: from companies with three to five employees to major industrial groups, consultancies, and banks. From Clervaux to Esch and from Steinfort to Grevenmacher.

Bryan: On the other hand, there's something called Jonk Entrepreneuren. Sven, can you tell us more about it? What are the differences?

Sven Baltes: Jonk Entrepreneuren was probably founded, or at least initiated, at the time by the same group of people. It's an association whose origins, at least in terms of projects, also date back to the 1980s. The same people got together and decided that they needed to support entrepreneurs, the entrepreneurial spirit, and businesses in general. This is done, on the one hand, through tools, subsidies, and a whole range of mechanisms. On the other hand, by providing companies with people who bring a certain state of mind, an entrepreneurial spirit in their veins. At the time, we observed what was being done in Belgium, Germany, and France, and the first activities were piloted in Luxembourg. In particular, this little story called "Boule et Bill créent une entreprise", which provided the first stimuli in primary education, involved volunteers. On this basis, as it worked very well, the association was formalised in 2005. Since then, as Jonk Entrepreneuren Lëtzebuerg ASBL, with 13 programmes, we have become firmly rooted in the Luxembourg school landscape. Our target audience is young people aged 9 to 25. We support them with entrepreneurial programmes that always revolve around three pillars. Financial education, work readiness, and, of course, entrepreneurship. The idea is to show young people the way, to work a little on life readiness, a little on work readiness, and, for those who want it, to support them in their first entrepreneurial project.

Thein: Boule et Bill was created at the FJD. That's where Jonk Entrepreneuren was born. Today, we still support the JEL, as jury members or mentors. The FJD's priority is entrepreneurship, including among young people, and then on the ground, helping to solve everyday problems, exchanging and further strengthening small networks in Luxembourg, and bringing them together.

Jean-Luc Bermes: As a former member, I can confirm that. I'm still a member, but I'm over 45. Exchanges need to take place, for entrepreneurs to have ideas on how they can help each other.

Thein: What differentiates an FJD from a traditional federation, such as the Chambre des Métiers or the Chambre de Commerce, is that it's young people who get together, stay together, but in a cross-sectoral way, across all sectors. Not directly like an official federation that takes a frontal political stance. We tend to take a back seat and try to look forward positively.

Bryan: For the FJD, the main aspect is networking. For the Jonk Entrepreneuren, it's the educational aspect. Is that it?

Baltes: Exactly, it's skills development. The theme of talent is central. How can we make sure that young people here in Luxembourg are ready for tomorrow, ready to manage or run a company, or ready to act as intrapreneurs in existing companies? Basically, it's about providing a set of skills capable of supporting the growth and development of Luxembourg businesses, no matter where you come from, no matter what your background. And in this context, the FJD, like our private partners, is extremely important, because we are a bridge between the worlds of education and business.

Thein: With us, there's something else that adds to the networking. During the first two years as a new member, you take part in a kind of workshop where you have to develop a project and present it. It's by the members, for the members. We take economic problems and societal issues, we put them together, and we operate a bit like an ideas laboratory. We come up with ideas, we discuss them, and then we can take them back to the federations and chambers for wider discussion.

Bermes: Then there are also conferences organised for members, sometimes with guests from politics or particular sectors, who bring something to the FJD and its members.

Bryan: We've talked about the raison d'être of these organisations, but how is entrepreneurship on the ground?

Bermes: We're all aware that we're living in special times. We've had several crises. Businesses are clearly not having an easy time of it at the moment. We see it every day. Everything is increasingly regulated, including in the banks. This means that, to obtain financing, we have to ask for a lot more documents. In large companies, it's often easier because they're better structured and more used to it. Unfortunately, this isn't always the case with smaller companies. And so it takes time to put together the documentation that the regulator is now imposing on us. Before, we used to look mainly at guarantees. Today, the guarantee is one element, but it's crucial to look at the cash flow as well. Overall, we can say that this over-regulation is sometimes too much, but it can also be beneficial. Sometimes you have to tell the politicians that they're exaggerating, but regulation is still important. In part, it also sets us apart from other continents.

Thein: On the question of banks, I can clearly say that Luxembourg banks have advantages over outside banks, simply because the B2C contact is closer. They understand us. Then, in Luxembourg and in Europe, I don't understand why, when it comes to public contracts, we simply look at the lowest economic price. By doing that, we put ourselves at a disadvantage when it comes to anything local. That's a huge problem. A small local SME is at a disadvantage against those who offer a low price.

Baltes: In Luxembourg, there's an action plan to strengthen the start-up ecosystem. But we mustn't forget the most important thing… Traditional SMEs must continue to operate. They employ a lot of people, and they create value and wealth for the country. They must not be ignored. However, many support structures today are very focused on innovation, software, software-as-a-service… We have to make sure that the more traditional businesses, which have contributed to the development of the country's wealth, are not relegated to the background.

Bryan: It seems clear that business isn't doing very well. As far as education is concerned, how can we continue to motivate young people? Because if I ask my children's friends what they want to be when they grow up, the answer is often either Lionel Messi or a YouTuber…

Baltes: A YouTuber will probably be independent, an entrepreneur. But you make a good point. Young people know what their father does, what their mother does, maybe what a cousin does… but they don't know what's out there. That's where we need to take action. In schools, we need to start earlier. The JEL has been around for some time, but we need to step up its presence and make young people understand that there are other paths than a career as a civil servant, or in banking or insurance. We don't have much of this here, but in Chile, for example, entrepreneurs go into schools very early on to sow the first seeds. So we need to inject some pragmatism into schools, show what exists, and remind them that everything is complementary.

Bermes: That's why I'm such a fan of the JEL's Job Shadow Day. It's a day when young people go into companies. It's a great opportunity to spend a day with the boss of a company, to see what can happen after school… and to understand that not everyone can become a YouTuber or Lionel Messi.

Thein: Internships are the most important thing. It's there that you can make your choice, and also realise what you don't want to do. I've realised that, when you're young, there are jobs you don't want to get up for in the morning, and others you do want to wake up for. What's striking is that our system doesn't give you a direction until very late. The classical system pushes you in one direction very early on, as does the technical system; from the sixth year onwards, you're oriented, and then it's very difficult to move from one stream to another. And yet we don't need 100% civil servants or 100% consultants. In Luxembourg today, many people go to university and enter the labour market at around 27. But when you look at our pensions and our working hours, we don't all need a BAC+5 to end up doing something else. We need to rediscover the desire to work earlier. Working is part of life. That's why we talk about work-life balance, not life-life balance.

Baltes: There are so many options out there, you have to start early.

Thein: From primary school. Going to see a kitchen, going to a carpenter's with the class… It's just as much fun as going to the Eifelpark. Do simple outings like visiting a beekeeper or pressing apples. It has to be fun. Then, the Jonk Entrepreneuren are already there, and they also bring a technical touch. Because everyone has a talent. Nobody is incapable of anything. One person is better at one thing, another at another. You have to point them in the right direction early on and not let everyone go through the same system so that no one advances.

Bryan: As entrepreneurs, you also have some support in the form of various measures to encourage people to get started.

Baltes: Yes, there are more and more support initiatives. In recent years, we've seen the arrival of the "Aide à la Primo-Création" scheme, which allows new founders to obtain up to €12,000 to take their first risk, without having to carry it all on their own. At the same time, measures have been put in place to make investments by business angels and venture capital funds more attractive, notably through tax mechanisms. So a lot is happening. But measures are measures. Where things sometimes still get stuck is in terms of culture.

Thein: At the moment, we also have a problem with land, offices and sales areas for businesses. Anyone who wants to start up has the same problem. Rental costs are skyrocketing. If you're self-employed, you can't get a loan; you can't provide guarantees, and you're stuck with your own private accommodation. These are points that need to be addressed. We have the "Fit 4 Start", but we also need a "Fit 4 Land" or a "Fit 4 Housing". With the companies in Esch, I have drawn up the Handwierkerhaff project, managed by the State or the local authorities. Like 1535 in Differdange, new businesses could be set up here, so that they can go through their first stage of life with less risk.

Bermes: Apart from that, there's state aid if you want to build your business, your walls. Depending on the size of your business, you can get up to 20%, which is a huge amount. Before, it was a bonus, not essential in a financing plan. Today, we have to take it into account, because everything has become extremely expensive. What I can also confirm is that more and more large companies are buying residences to rent out to their employees, to make Luxembourg more attractive.

Bryan: If these are macro issues, there are also sustainability issues… and AI. Do you see this as an obstacle for Luxembourg businesses and entrepreneurs, or an opportunity?

Thein: In the construction sector today, we need to decarbonise. We have to become more sustainable, recycle, and upcycle, especially in the building industry, but also in road construction. Journeys must be reduced. When it comes to ESG, we need to talk to people on the ground. We can't change everything overnight. If we just set a brutal limit, we'll hit the wall. You need elasticity, a margin, so that you can keep moving.

Baltes: The keyword is clean implementation plan. Greater sustainability is essential. Artificial intelligence is very useful out there and can help enormously. But it doesn't have to happen overnight, and not within artificial frameworks. At the end of the day, businesses need to stay in the driving seat and co-determine how to implement this. We can't let sustainability kill growth.

Bermes: That's also part of what makes Luxembourg so attractive. We're small, so we can talk to politicians. Sustainability is important for all of us, and for me too. I want to promote it on a daily basis in my work with the customers I support. We can't escape AI. If we want to stay competitive, we need it. I think it's important that we can use it right from the start, including at school.

Baltes: What's important is to bring these technologies back to people. We want a society in Luxembourg that works, both in terms of housing and life, but also in terms of work. So we need to use these things in a way that serves people. We need to ensure that people can live well, enjoy their lives, and also enjoy their work. Ideally, this should not be a constraint, but should be used in a useful way, with usefulness at the forefront, and people should naturally want to get involved. That's what we're pushing for.

Thein: How to use AI… Today, companies are focused on the day-to-day. I also think that these tools need to be taught from a very early age. Nobody taught us how to write emails. Using Windows… we've barely learned that, apart from word processing. At university, you often have to learn on your own. Excel is the same thing. Beyond that, schools are also lacking in other everyday things like healthy cooking and life skills. These things used to exist, with housework classes. For me, AI should be part of that. We always talk about ChatGPT, but there are already thousands of AIs. We're focusing on a tiny handful of them.

Bryan: There's no question about it. AI can make you extremely fast and productive. For small businesses, it can act as an assistant to help them get started quickly. It can give people the courage to get started, can't it?

Baltes: Yes, exactly. You have to see it as an enabler, not as a replacement. The tool has to support the human being, and can help people to come out of their shell, to take risks, in a more informed way.

Thein: That said, the basis remains essential, otherwise we won't be questioning AI anymore. Digitalisation is an opportunity, but on the other hand, you can't just lie back in a deckchair and think that everything will take care of itself. You have to stay in control of your house, keep your hand in, and set your course.

Bermes: AI helps efficiency. But you can't rely on that alone. You have to check your answers. A result that would have taken you a day to achieve, you get in five seconds or a minute, but you have to reread it and question it.

Bryan: On the podcast two years ago, Misch Strotz said that, in a world where AI is omnipresent, the most important thing is the person you're dealing with. It's all about trust between one person and another, whether it's a company or a bank. So I think that if they value their customer contact, companies don't have too much to worry about.

Thein: That's right, you have to be contactable. In the office, I always say that when you get an email asking for a request, you have to make a phone call straight away so that the person feels that you've received, and understood it. Physically, humanely. If a real person replies, it's reassuring. When you're on WhatsApp with an airline, and you come across an AI that keeps sending you back… You end up picking up the phone and throwing it against a wall, because you feel you can't get out of the system.

Bermes: Human contact is crucial. That's what makes Luxembourg so attractive. We're close to each other, we all know each other more or less in this economy, we have access to politics, federations, clients, and bankers. That's a great advantage, and we mustn't lose it by relying too heavily on AI.

Baltes: At the end of the day, business is driven by people. If we put a bit of humanity back into our daily lives, if we get to know each other, if we go out a bit, then everything becomes easier, and we can develop better.

Bryan: On that note, maybe entrepreneurship will go back to basics, become more personal again.

Bermes: We hope so!