Since the beginning of the 1960s, the Luxembourg government has been implementing a vigorous economic development policy which has made it possible to successfully reshape the country’s economic structure. From a steel-based economy, Luxembourg has developed into a world-renowned international financial centre and prime business location.
More recently, the government has put emphasis on developing new sectors such as ICT, e-commerce and media, automotive components, materials and plastics, logistics, health and environmental technologies.
Home to major global players
Today, the results of this policy are clear: Luxembourg is home to best-in-class companies playing on a global level. ArcelorMittal in steel, Cargolux in air freight, SES in satellites, and RTL Group in media are today leaders in their fields and are headquartered and/or come from Luxembourg origins.
Foreign investors have, over the last decades, also continued to choose Luxembourg as a base for their European operations: Goodyear, Delphi, Dupont de Nemours from the United States, Fanuc from Japan, Mittal (Ispat) and Tata from India as well as Sam Hwa Steel and Hyosung from Korea – are only some examples of major multinational companies that have become mainstays of the Luxembourg economy.
Recently, the Grand-Duchy has become home to the ‘stars’ of the ICT sector: AOL, Amazon, eBay, Skype, PayPal, Digital River, Napster and iTunes are household names that elected Luxembourg as European headquarters.
Export nation
The modest dimensions of the Luxembourg economy are the key to explaining its historic openness to larger markets. With a population of only 460,000, foreign trade and investment is the main vector for economic growth. More than 80% of the goods produced in the Grand-Duchy are exported, almost entirely to the European Market.
Nevertheless, the Grand-Duchy will persevere in its efforts to extend its presence on markets outside the EU in order to reduce its vulnerability to external shocks but also to contribute to development through trade.
Therefore, Luxembourg is leading an active policy to diversify its trade on an international level. In this context, the Asia-Pacific region is of major interest to our companies who are eager to find new business partners. Presently trade has been growing with this region in line with the concerned countries’ growth, but overall it’s certainly not yet up to its full potential.
