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Luxembourg Towards a Smart Nation Providing the Keys to Unlock Our Country's Potential

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Luxembourg Towards a Smart Nation Providing the Keys to Unlock Our Country's Potential 100% Luxembourg towards a smart nation Providing the keys to unlock our country’s potential Brochure / report title goes here | Section title goes here Key message 03 State of play 05 The building blocks of a smart nation 08 Technology and infrastructure 10 Data 14 Skills and competencies 16 Innovation culture 20 Attractiveness 22 Public-private ecosystem 24 Vision for Luxembourg’s future 26 A center for digital clinical trials 28 *UHHQȴQDQFH Conclusion 32 02 Luxembourg towards a smart nation | Key message Key message Luxembourg is facing a series of challenges While Luxembourg is well prepared in a through the globalized economy, increasing majority of these areas, the coordination levels of international regulation leading and connection of these building blocks to a reduced margin of manoeuvre, not are in need of strengthening to address key to mention the technological and societal aspects designed to reinvent Luxembourg’s disruption through digitalization. This business model. A truly smart nation is whitepaper highlights the current state of ȴUVWDQGIRUHPRVWGHȴQHGE\DVWURQJ play in Luxembourg in relation to the six cooperation between all stakeholders core building blocks of a smart nation: and an alignment of interests from the government, the companies and society. 01. Technology and infrastructure 02. Data 03. Skills and competencies 04. Innovation culture 05. Attractiveness 06. Public-private ecosystem 03 Luxembourg towards a smart nation | State of play 04 Luxembourg towards a smart nation | State of play State of play Words like “technological disruption” and “Big Data” are dominating today’s headlines. They represent a trend that is changing the way we live and do business. Advancements in computing, communication of Luxemburg underwent a fundamental technologies, and data processing are change. The collapse of the steel industry generating disruptive breakthroughs in many DQGWKHULVHRIWKHEDQNLQJDQGȴQDQFLDO industries. Data is at the core of a revolution services industry since the 80s have both had that has vast implications for nearly all widespread consequences whose impact on sectors of the economy. Not only private society and the economy are still evident. The companies, but also entire nations are emergence of new industries have always feeling the pressure to adapt to this changing been preceded by the decline of former environment. Technologies are challenging ones, usually resulting in social and economic today’s social climate, while simultaneously shifts. In Luxembourg’s case, the country so R΍HULQJPDQ\QHZRSSRUWXQLWLHVWR far has been forward thinking in its approach, governments, businesses, and citizens. By enough so to spot trends early, giving way to developing innovative approaches designed early groundwork for substantial economic WRXWLOL]HWHFKQRORJ\IRUVRFLHWDOEHQHȴWV growth and social welfare. nations can meet the challenges of the future. :KLOHWKHȴUVWDQGVHFRQGLQGXVWULDO revolution started the transition from trade Luxembourg always faced a unique set of based economies to industrial societies, FKDOOHQJHVWKDWLQȵXHQFHGLWVVRFLHW\DQG the often-cited “third industrial revolution”, economy: its small size, its lack of certain based on digital technologies and new natural resources, and its landlocked manufacturing methods, promises similar geographical location. Nevertheless, over transformative changes to businesses and the last century, Luxembourg was able to societies. Digitalization is all-pervading and redesign its economic model twice. The steel is changing our way of working and living industry took root in the second half of the on a daily basis. Today, we pay our bills by 19th century. However, it was only due to bank transfer from our home computer, or the construction of large-scale integrated we call a taxi via an app on our smartphone, steelworks in the 20s and 30s that enabled EXWVRIDUWKHH΍HFWRQRXUFRXQWU\DQGLWV the success of this particular economic governance has been limited. Despite many sector as well as the country as a whole.1 promising projects, the expected positive Since the 1970s, the economic structure outcomes have not yet materialized. 05 Luxembourg towards a smart nation | State of play If Luxembourg maintains Technology is an important element Luxembourg has reached a point, where of globalization and competition is vital sectors of its economy—especially the its support of economic increasingly shaped by the deployment banking industry—are undergoing core concepts that are and use of these technologies.2 Developing transformations. For example, digitalization nations are leap-frogging traditional LQȵXHQFHVWKHUHOHYDQFHRIIXQGLQGXVWU\ highly susceptible to development steps by using relatively EDFNRɝFHWDVNVPDNLQJWKHPSRWHQWLDOO\ disruption and fading cheap technologies such as mobile redundant in a few years. A counterexample internet to compensate disadvantages to the banking industry is the manufacturing business models, it will in the cost of capital and labour.3,4 LQGXVWU\7KLVLQGXVWU\LVODUJHO\D΍HFWHGE\ most probably face an Technological advances are set to further WKHHPHUJHQFHRIDUWLȴFLDOLQWHOOLJHQFH $Ζ drive competition between nations and AI is being used to bring down labour costs, unforgiving future. could be the cause for social and economic reduce product defects, shorten unplanned upheavals, similar to those of the last downtimes, improve transition times, and industrial revolution. To meet the goals increase production speed.6 This process is of their economies and societies, some likely to continue in the coming years with leading nations have adopted a “smart” drastic consequences for Luxembourg’s strategy such as Singapore, Switzerland, economic model. It is thus reasonable to and Estonia as depicted below. argue that Luxembourg, as a nation, might be facing considerable obstruction in terms of future growth. SingaporeSingaporeSingapore SwitzerlandSwitzerlandSwitzerland EstoniaEstoniaEstonia LuxembourgLuxembourgLuxembourg “Singapore“Singapore“Singapore for forexample example for example “Zug,“Zug, a wealthy “Zug,a wealthy a communitywealthy community community in in in “Estonia“Estonia “Estoniaseized seized the seized themoment moment the moment “In “Inorder order“In to ordersustain to sustain to its sustain currentits current its current alreadyalready expressedalready expressed expressed its wishits wish its wish SwitzerlandSwitzerlandSwitzerland is becoming is becoming is becoming afterafter independence afterindependence independence in 1991 in 1991 in 1991 livingliving standards,living standards, standards, Luxembourg Luxembourg Luxembourg to buildto build ato smart builda smart nationa smart nation nation attractiveattractiveattractive to investors to investors to investors and and and andand created createdand thecreated thefoundation foundation the foundation willwill need needwill to competeneedto compete to compete with with with withwith initiatives initiativeswith initiatives such such as thesuchas the as the start-upsstart-upsstart-ups by adoptingby adopting by adopting the the the for fora technologically a fortechnologically a technologically advanced advanced advanced otherother nationsother nations bynations developingby developing by developing nationalnational nationaldigital digital identity, digital identity, identity, latestlatest technologieslatest technologies technologies to create to create to create andand smart smartand society smart society by society investingby investing by investing its capabilitiesits capabilitiesits capabilities in several in several in key several key key e-payment,e-payment,e-payment, or smartor smart or smart an ecosysteman ecosysteman ecosystem that that fosters fostersthat fosters in digitalin digitalin infrastructure digital infrastructure infrastructure in in in areasareas andareas and leveraging leveraging and leveraging on digitalon digital on digital urbanurban mobility.”urban mobility.” mobility.”5 5 5 innovativeinnovativeinnovative companies.” companies.” companies.” the the1990s.” 1990s.”the 1990s.” competencies.”competencies.”competencies.” 06 Luxembourg towards a smart nation | State of play 6LQFHȴQDQFLDOVHUYLFHVUHSUHVHQW Aside from Digital Lëtzebuerg, a Ministry 24.7 percent of GDP and 11.7 percent of State initiative, the government has Singapore of employment,Switzerland large disruptions to launchedEstonia other ventures such as the Third Luxembourg WKLVVHFWRUZRXOGGUDVWLFDOO\D΍HFWWKH ΖQGXVWULDO5HYROXWLRQ 7Ζ5 VWUDWHJ\VWXG\ economy.7 If Luxembourg maintains its DQGWKH+LJK3HUIRUPDQFH&RPSXWLQJ +3& support of economic concepts that are initiative, both of which are encouraged highly susceptible to disruption and fading through the Ministry of Economy. The TIR business models, and continues to rely “aims to make the existing economic model heavily on industries that are in decline more sustainable and interconnected globally, it will most probably face an for future generations by working with unforgiving future. Without a strategic ICT, energy, and transport as part of an “Singapore for example repositioning,“Zug, a wealthy socially community and economically,in intelligent“Estonia network”. seized the9 HPC moment on the other “In order to sustain its current already expressed its wish Switzerland is becoming after independence in 1991 living standards, Luxembourg Luxembourg will struggle to defend its hand aspires to accelerate the research to build a smart nation attractive to investors and and created the foundation will need to compete with with initiatives such as the positonstart-ups
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