3FOOD

Third Industrial Revolution Consulting Group
At the same time, the key driver of the Luxembourg expansion in the last 15 years appears
more to be the influx of inhabitants and workers rather than the significant increase in overall
productivity. 372 And whereas standard economic projections suggest a continuing 3.0 percent
annual growth through 2050 (the last year explored in the TIR Innovation Scenario time
horizon), there are other forecasts and indications which suggest the possibility of a weaker and
less robust level of economic activity—perhaps lowering Luxembourg’s GDP to 2.0 percent or
lower. This appears to be the case for the OECD region as a whole (OECD Long-Term Projections
2014).
Admittedly this last projection is a bit dated, but it is consistent with other indicators all of
which point to a lagging rate in the more productive use of capital, energy and other resources.
This, in turn, may hamper a more vigorous future economic activity. And if we also fold in the
many steps that need to be taken to address climate change and other environmental
concerns, one can quickly imagine that failure to explore these possible outcomes may leave
Luxembourg, the OECD as a whole, and all of the developing nations, at risk. In this context, the
Third Industrial Revolution Master Plan can be thought of in two different ways. First, “TIR-like
thinking” can become an insurance plan which can enable Luxembourg to maintain a healthy
economy; and second, the TIR Innovation Scenario can provide insights into the kind of new
economic platform which can ensure both a resilient and sustainable economy over a longer
period of time.
Notwithstanding some early warning signs of a weaker second industrial revolution economy,
the Grand Duchy of Luxembourg has a number of promising opportunities that can point the
way to the more productive use of its many resources; and to do so in ways that build a more
robust, resilient, and sustainable economy. As described in the previous sections of the master
plan, the hundreds of different opportunities range from changes in transportation land-use
patterns to large-scale improvements in Luxembourg’s commercial and industrial enterprises.
underscore the need to encourage a greater and more productive investment in TIR-related infrastructure as well
as both social and economic capital.
372 In general, the growth of an economy can be thought of as the growth in the resident population or an
expansion of the workforce times the productivity of that population or workforce. For example, if the number of
inhabitants grew by 1 percent per year as it did between 2000 and 2015, and if the productivity of the population
similarly grew by 1.8 percent annually, then the economy can be said to have expanded by about 2.8 percent over
those years (which it did). We can also do a similar calculation comparing the increase of the labor market times
the productivity of those workers and it would show a similar result. But the larger productivity of the
Luxembourg economy is also a function of the quality and quality of the capital invested, the skills of the labor
force, and we also suggest, the efficient use of resources—whether materials, production assets, and especially
energy. In many ways it is this focus on energy and resource productivity that underpins the ideas of the Third
Industrial Revolution Innovation Scenario.
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