The Startup Ecosystem of Luxembourg

Luxembourg is one of Europe’s most successful economies and is known as a strong traditional finance capital. Several EU institutions are located in Luxembourg, and the population is both multilingual and internationally diverse. These factors may explain why many international companies have their European headquarters in Luxembourg (e.g. Amazon and PayPal). However, a high cost of living and a small local market size are hurdles for national ecosystem growth.
The public sector is taking an increasingly active approach in fostering positive change with projects like Digital Luxembourg, a collaborative government initiative that strengthens the country’s digital efforts while mentoring and guiding startups. Initiatives cover a wide variety of fields, from hands-on advice regarding practical business knowledge provided by the House of Entrepreneurship to an eased business registration procedure with 1-1-1 law (also known as SARL-S). Moreover, the public sector is coaching startups and offers them seed funding through the acceleration program Fit 4 Start, managed by Luxinnovation, to assist with reaching international markets. As we mention expanding international markets, OCSiAI is Luxembourg’s first unicorn that now operates globally with several offices in Europe and the United States. It is impressive to see that the country is not shy about targeting deep tech industries such as Space innovation, with organizations such as ESRIC and others leading the way.
Luxembourg has an established vision to advance its spacetech industry. In fact, it is the first country in Europe that introduced a legal framework for the space industry, And these efforts have produced numerous spacetech startups, such as Kleo Space. Yet this is not the only innovation field Luxembourg excels in. Data-driven innovation is another activity that contributes to the development of the local innovation scene. The country’s digital infrastructure, which is already outstanding in terms of connectivity, cybersecurity expertise, and secure data storage capacities, is further boosted by the business-oriented high performance computer (HPC) MeluXina that launched in spring of 2021.
To sum up, Luxembourg’s startup ecosystem has a bright future. With its multilingual talent, robust economy, and cutting-edge digital infrastructure, Luxembourg is an attractive destination for startups seeking to grow in Western Europe. However, the country’s small size limits its potential to become a top-ranked regional hub. Therefore, the success of the startup ecosystem hinges on creative government initiatives to make the ecosystem more global.