3FOOD

Third Industrial Revolution Consulting Group
profitable roles in the new digital global economy. Already a world leader in digital adoption,
Luxembourg has a competitive advantage when it comes to the build out and scale up of a
Third Industrial Revolution digital infrastructure.
Not surprisingly, the objectives set out in the Luxembourg national strategy far exceed those
set by the Digital Agenda for Europe. “The national plan aims for networks with ultra-highspeed
rates, more precisely 1 Gbps for 100% of the population in 2020. 85% of the population
may already be connected at rates of 30 Mbps or higher.” 286 This leads to the question how
Luxembourg can scale and monetize this competitive advantage beyond its established core
ICT business.
On the other hand, we believe that shortcomings as recently listed in the EU Commission’s
Country Report on Luxembourg 287 and also the World Economic Forum Networked Readiness
Index 288 especially in targeted Public and Business R&D Investment (despite positive
investments and reforms at the University of Luxembourg and LIST), suggest that the overall
Business Environment is still lacking an Entrepreneurial Ecosystem (despite the introduction of
new seed funding structures and the Fit4start program). Moreover, Luxembourg has relatively
high regulatory barriers in the service sector (notably in business services and retail), is
experiencing negative productivity growth, relatively high unit labor costs, below EU-average
PISA students’ performance, especially in mathematics and science (not to mention the
universal bottleneck in computer science education), risky reliance on diminishing tax revenues
from a legacy financial sector, and relatively high youth unemployment.
If properly addressed, these positives and negatives can spur a sense of urgency on the part of
the Government of Luxembourg and other key stakeholders to act beyond previous initiatives
and diversify Luxembourg’s economy towards a truly sustainable and scalable Third Industrial
Revolution. To quickly advance the new economic paradigm, Luxembourg will need to draw
upon its prior success in the ICT sector and begin a rapid build out of a digitalized Renewable
Energy Internet and digitalized Mobility Internet alongside its already developed
Communication Internet connected by an Internet of Things platform.
Based on lessons learned from comparable second mover (in comparison to Silicon Valley)
smart economy hubs such as Tel Aviv, Singapore, London, Barcelona and Zurich, we strongly
believe that strength in only one aspect of a digital/smart economy (namely Luxembourg’s
286 See: https://ec.europa.eu/digital-single-market/en/country-information-luxembourg#summary-of-broadbanddevelopment-in-luxembourg
287 Commission Staff Working Group Document: Country Report Luxembourg 2016, European Commission,
February 2016.
288 The Global Information Technology Report 2015: ICTs for Inclusive Growth, WEF, Cornell University, INSEAD,
2015.
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