Luxembourg – navigating the transition to the knowledge economy. A historical perspective

Luxembourg is a multicultural, multilingual and cross-border area par excellence that has always sought to maintain an openness to its neighbours, both for reasons of security and to give itself access to larger markets. Despite its small geographical area, limited workforce and lack of natural resources, Luxembourg is currently first out of 196 countries worldwide in terms of GDP/capita (with 114 370 €/capita, representing 260% of the EU average).Thanks to a long-term strategic vision, political and institutional innovation and structural changes implemented in economy throughout the 20th century, the once bipolar agricultural/industrial society has become a competitive society based largely on knowledge-intensive services and centred on the financial sector, characterised by high-performing human capital, political stability, prosperity and a strong welfare system.Taking this observation as a starting point, adopting a comparative and interdisciplinary perspective and drawing on a wide range of European and international archive and institutional sources, the paper sets out to address the following research questions: what are the factors of change and the major challenges facing Luxembourg in the digital transition? What institutions and governance is it using to tackle these challenges? What are the risks, benefits and opportunities of this transformation over the long term? What are the country’s strengths in terms of competitiveness, and what are the weaknesses that might jeopardise its comparative advantages? What is the impact of digitalisation on the public sector and on the government’s links with business and the public at large?