Luxembourg: from steel to the knowledge economy and beyond

Despite its small size in terms of geography (2,586km2) and population (626,100 people on 1 January 2020), Luxembourg has an open, dynamic, innovative economy that is one of the most successful at international level – in 2019 its GDP per capita was 261% the European average and its growth rate was the third highest of the EU’s then 28 Member States – and also one of the least affected by the COVID-19 crisis. This can be explained by its sector-based structure, in which activities and services related to the financial centre, together with information and communication technologies, transport and non-market services, play a key role; by the existence of a highly qualified, multilingual, mobile (cross-border) workforce; and also by the proactive economic policy pursued by the country’s authorities throughout its history. Looking back, we can see that Luxembourg has gone through several transitions and dealt with a number of serious crises. Following on from the predominantly rural economy of the 19th century, the first half of the 20th century was characterised by an industrial economy based on the iron and steel industry and the latter part of the century by a service-based economy centred around the financial centre, ultimately leading to the emergence of an information and knowledge economy which is gradually taking shape in the 21st century. References. 1)STATEC (2021), “Luxembourg in figures, 2020”. Source: https://statistiques.public.lu/catalogue-publications/luxembourg-en-chiffres/2020/luxembourg-figures.pdf; 2). To find out more about the historical development of the Luxembourg economy, see Gérard Trausch (2012), “Les mutations économiques et sociales de la société luxembourgeoise depuis la révolution française