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In 2001, a working group of specialists studied the impact of new Information Technologies on businesses on behalf of FEDIL, the Federation of Industrialists in Luxembourg. The working group included researchers from the Information and Communications Technology (ICT), industrial, and public sectors, and also, venture capitalists.

The working group identified that the New Economy is not a concept, but a new approach to business and communications that is constantly changing. The New Economy is created by the appearance of new Information and Communications Technologies (NICT), more specifically of the World Wide Web. The New Economy is a networked economy that has transformed national and regional markets into a global marketplace and has modified the value chain within companies.

This New Economy has developed fastest in countries that are innovative producers of products and services related to new ICT. In these countries traditional industries have quickly used and integrated these new technologies in their production and distribution. In addition, in parallel with these investments these companies have restructured their organization and have developed new business strategies.

The report also discusses the place of Luxembourg in the New Economy using statistics comparing Luxembourg with other OECD countries.

According to a study by Eurobarometer dated end of 2000, the penetration of Internet in Luxembourg amounted to 34 percent of the population, which places Luxembourg among the average in Europe, far behind the Scandinavian countries which have a notable advance in this key domain to the development of e-commerce. In 1999, Luxembourg had only a penetration rate of 30 percent as far as IT equipment is concerned, well below the European average. In statistics published by the OECD, Luxembourg counts a large amount of secured servers compared to a number of Internet hosts that is lower than the average in the industrialized countries. As is the case for Switzerland, this paradox can be explained by the important role of the financial sector in online transactions. Another important element to determine the development of e-commerce is the availability of computers to the population. In this field, with a 30 percent rate, Luxembourg positions itself just behind its neighbors. According to the ILReS market research dated November 2000; this rate passed to 51 percent in the first half of 2000, which shows a very positive evolution.

The introduction of UMTS, the third generation of mobile communications, will make high speed Internet available through mobile phones. At the end of 2000, some 62 percent of the Luxembourg population, or 356,000 people, had a mobile phone, which is above the European average. This constitutes an enormous potential for the development of e-commerce in Luxembourg. Competition between two mobile operators in Luxembourg has had a positive effect on the development of this market. The report concludes that saturation has apparently not yet been reached.

The report lists several possible information sources to find the degree of Internet penetration in companies and the development of e-commerce in Luxembourg. According to a 2001 survey by Eurochambers, 60.6 percent of Luxembourg companies do not think that they are affected by e-commerce. Some 10.7 percent of the interviewed companies made online sales and 16.4 percent are currently developing a strategy to incorporate Internet in their sales. A survey by Heliview reveals that 72 percent of Luxembourg companies employing between 6 to 200 people, are connected to the Internet since 1999, a rate that corresponds with the European average. However, the 1999 Enterprise survey by ENSR (European Network for SME Research) shows that the number of SMEs using Internet forthe distribution of their products or services is very low in Europe in general, with Luxembourg situated below the European average with 6 percent. The Chamber of Commerce of the Grand Duchy of Luxembourg in cooperation with the Center for Public Research CRP Gabriel Lippmann has published more recent figures on e-commerce in Luxembourg. Their results lead to the conclusion that there are currently 6,500 Internet sites associated to Luxembourg companies. These websites are principally aimed at providing more visibility whereas websites offering online sales are still marginal. This survey also confirms the Eurochambers survey results, which state that approximately 10 percent of the surveyed companies’ book online sales. The fact that about 30 percent of the surveyed companies are planning to be active in e-commerce within 3 years is considered as a very encouraging phenomenon by FEDIL.

FEDIL advises all Luxembourg companies, whatever their size and activity, to become fully aware of the impact of the Internet on their business. The Internet technology with its development of digital formats and de facto standards for networks, is at the basis of quasi daily innovations that create value and efficiency gains for companies whatever their size or activity. In order to remain competitive, FEDIL recommends that companies revise and adapt their business strategy to the commercial and technical reality of electronic commerce and globalization.

The FEDIL report refers to the European action program “e-Europe” and the “e-Luxembourg” program of the Luxembourg government, both intended to prepare European and Luxembourg citizens to the Information Society. However, it notes that the systematic resort to new ICT by public administrations, businesses, and citizens is still not sufficient.

In order to take full advantage of the opportunities for growth and reduction of cost, FEDIL recommends to Luxembourg companies not only to put up company websites for online sales but also to redefine in parallel their internal and external operating structures.

In its recommendations to the public authorities FEDIL encourages the government to implement its e-Luxembourg action plan without further delay in order to reverse the situation of Luxembourg as an average player in the Information Society in Europe to become a leader in Europe.

Internet users 100,000
Internet Users Rank 96
Internet Users Date of Information 2001
 Telephones - mobile cellular 215,741
Cell Phone Rank 77
Cell Phone Date of Information 2000
 Telephones - main lines in use 314,700
Telephone Rank 100
Telephones Date of Information 1999
GDP - real growth rate(%) 2.3
Growth Rank 9
Growth Date of Information  2002 est.
GDP - per capita $44,000
GDP/pc Rank 1
GDP/pc Date of Information  2002 est.
GDP $20,000,000,000
GDP Rank 102
GDP Date of Information  2002 est.
Population 454,157
Pop Rank 169
Pop Date of Information  July 2003 est.

Aboard a Mosel river cruise boat @ the European Thunderbird Reunion in Luxembourg

 

This site was last updated 29 June, 2009

 

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