From 2010 to today, a decade of transformation and stagnation for Luxembourg's competitiveness

Eco News Flash

The last decade has been a turbulent one in economic terms, both internationally and in Luxembourg. Technological, economic, societal and geopolitical developments have accelerated and, in so doing, the vehicles for competitiveness have been transformed to some extent. The current economic recovery is a crucial moment for implementing the foundations of future competitiveness. An analysis of the evolution of Luxembourg's competitiveness from 2010 to the present shows a certain stability despite all these developments. This is both satisfying, as Luxembourg has maintained a solid performance on certain aspects of competitiveness in general and the national competitive model in particular, and disappointing, as Luxembourg's stakeholders are clearly determined to be at the forefront of global economic change.

Eco News Flash N°4, published by the Economic Affairs Department of the Chamber of Commerce, analyses in more detail the evolution over time of the finance sector, in terms of competitiveness, the high-tech sectors, largely absent in the past decade, and the possible emergence of a startup nation. This look at the recent past encourages the stakeholders in the field of competitiveness to match the resources invested in the transformation of the Luxembourg economic model more closely to the stated ambitions, or else risk being relegated to the back of the line of competitive countries.

Key trends in Luxembourg's competitiveness over the last decade

1. An overall stable performance and key strengths and weaknesses are noted, despite ambitions to diversify the economy and develop the competitive model.
2. The competitive position as a financial centre is stable, with a slight delay in terms of fintechs.
3. The low technological specialisation aspect of the Luxembourg economy has worsened.
4. A startup ecosystem is being established, although Luxembourg is still far from being able to call itself a startup nation.
5. The public finances, a stable business environment, economic dynamism and openness to the world have constituted the solid foundation of Luxembourg's competitiveness to date.
6. The talent shortage has escalated to become a major challenge for companies.
7. The environment is increasingly present in the competitiveness rankings but Luxembourg is poorly placed in the rankings.