As part of Europe 2020, Luxembourg must double its R&D investment ratio from 1.3% of GDP (recorded in 2016) to between 2.24% and 2.6%.

In a report published on Wednesday, the Fondation Idea (idea foundation) suggested the creation of innovation cheques, to finance research and development in the areas of energy efficiency, sustainable mobility, circular economy and creative economy.

Dubbed “Chèques InnoLux TIR”, the mechanism would invite SMEs to propose solutions by offering €5,000 to cover the costs of a first session with a consultant. The firms would be helped in finding the right partners and solutions by Luxinnovation and its various clusters. “These cheques would further raise awareness among companies on the subject of innovation, demystifying its complexity,” the think tank wrote, adding: “Furthermore, it would create opportunities for public-private partnerships and help forge intersectoral relationships between cluster members.”

Innovation SME champions database

Fondation Idea also suggested creating a database on innovation measures taken by Luxembourg companies, along the lines of the Danish Innovation Denmark database, a tax credit for companies investing in R&D and better targeting of government R&D aid to projects which support national priorities, among others.

According to the Fondation Idea, 55% of investments in R&D are executed by companies in Luxembourg, compared with 63% in the EU and only 17% of Luxembourg R&D activities are financed by companies, compared to 55% in the EU. Luxembourg bucks the trend when it comes to R&D activities financed from abroad, which make up a third of the activities, compared to a tenth in the EU.