3FOOD

Third Industrial Revolution Consulting Group
Despite its small size, the country has a diverse number of industrial sectors. The steel industry
enjoys a long tradition in Luxembourg and is still one of the main players in the country’s
economy. In addition to the steel industry, Luxembourg boasts several other related industries
including the processing of metals and the manufacturing of metal articles. The chemical
industry is another important sector, with its main activities evolving around processing
chemical products. Luxembourg also hosts companies involved in the production of nonmetallic
mineral products, glass, lumber, and raw materials used in the construction sector. The
food industry and the manufacturing of beverages and tobacco are also important historic
players in Luxembourg.
Employment in industry remained quite stable over the last 20 years in Luxembourg (1960:
35,000 vs. 2015: 36,600). 181 Interestingly, several structural changes occurred within the
Luxembourg industry. The steel industry, which heavily dominated the economy in the 1970s,
scaled back over the last several decades (1974: 25,000; 1985: 13,000; 2010: 6,000). 182
Meanwhile, the other manufacturing industries gained in market share (1960: 11,200; 2010:
23,900). In comparison to its neighboring countries, Luxembourg performed quite well. In
Belgium, for example, industrial employment declined during the same period by 50%, in
France by 36% and in Germany by 22%. In Italy and the Netherlands, industrial employment
remained stable.
The manufacturing industry made up 44% of the value added generated in the entire economy
in 1970. Today, the contribution of manufacturing has fallen to approximately 5%. This heavy
loss in “relative terms” is closely linked to the staggering growth of the services sector during
the 80s, 90s and 2000s. However, the stagnation and the decline of certain industrial activities
also contributed to this evolution, especially in the aftermath of the Great Recession.
Remaining competitive on the international level is one of the key challenges faced by
Luxembourg’s industrial sectors. Not surprisingly, given the small size of the Luxembourg
economy, international trade constitutes the main driver of Luxembourg’s economic
development. Luxembourg’s industrial sector exports about 85% of its production and, in some
sectors, exports account for nearly 90% of production. Luxembourg’s main trading partners are
its neighboring countries: 28% of the production is exported towards Germany, 15% to France,
and 12% to Belgium. On the whole, 81% of the exported goods are flowing into an EU country,
5.2% to the Americas and 5.6% to Asia (2012).
The very notion of what constitutes an industry is evolving with the introduction of a digitalized
Third Industrial Revolution paradigm. As the Industry Working Group has pointed out, the shift
181 Source: Les autres industries manufacturière. STATEC
182 Source : L’industrie sidérurgique depuis les années 60. STATEC
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