Luxembourg is a small landlocked European state that is surrounded by Germany, France, and Belgium. It is one of the world's smallest countries and has a population of around 602,005 people. Luxembourg has one of the highest population growth rates in the world with expatriates accounting for over 50% of its population. It is the founding member of NATO, UN, EU, Benelux, and the OECD.
Its capital city (Luxembourg City) is one of EU's three-official capitals (together with Strasbourg and Brussels). The city of Luxembourg is the seat of the EU's Court of Justice. It is a developed nation with one of the highest GDPs per capita on the planet and an advanced economy. Luxembourg's economy is dependent on the banking, steel, and industrial sectors.
The Largest Industries In Luxembourg
The banking sector is the biggest industry in Luxembourg. Luxembourg was ranked as the third most-competitive financial center in the continent right after Zurich and London and the world's eighteenth most-competitive by the 2017 Global-Financial Centers Index. The country has specialized in international fund-administration business. Since its domestic market is small, Luxembourg's financial center is international. Luxembourg had 152 banks in 2009 which had employed about 27,000 employees. Cross-border financial expertise, political stability, skilled staff, and excellent communication skills have contributed to their success in the financial industry.
The steel industry is still one of the largest sectors in Luxembourg even after the numerous industrial-reforms that have transpired in various parts of the world since the 1960s. The introduction of the metallurgy in 1876 was a significant event in the history of Luxembourg's economy. The refining process resulted in the creation of a steel industry in the country and the formation of the ARBED firm. The national steel industry sustained Luxembourg's economy during the second-half of the nineteenth century. Steel production grew from 145,313 tons (1900) to 1,115,004 tons in 1913. ARBED was the main iron and steel producing company in Luxembourg that was formed after the merging of three steel-producing firms.
Luxembourg has a well-developed ICT sector with the country being home to SES (one of the leading satellite operators in the world). SES was established in 1986 to operate and install a satellite-communication system for transmitting television programs on the continent. Their first satellite the SES Astra satellite was launched in 1988 by Ariane Rocket. Some of the leading ICT activities being carried out in the country include online payment services, cloud services, online sales platform, and management and archiving of digital data among others. The government launched the Digital-Letzebuerg initiative in 2014 to promote e-government and the digital economy. Luxembourg ranked ninth in the Global IT report of 2015 that the World Economic Forum published.
The tourism industry is a crucial part of the economy of Luxembourg that employs over 25,000 people. The tourism sector contributed to 8.3% of Luxembourg's GDP in 2009. Luxembourg receives more than 900,000 tourists annually who spend at least two and a half days in hostels, camping sites or hotels. Business travels represent over 44% of the overnight stays in Luxembourg.
In the last few decades, over 200 financial institutions have contributed to the fast transformation of Luxembourg's economy from an agrarian economy to a service sector. The number of farms in the region reduced from 1970 (7,600 farms) to 2,600 farms in 2011. Over 126,000 hectares of land in Luxembourg is still used for agriculture. Dairy farming plays a vital role in the country's agricultural sector with several farms having over 50 dairy cows in 60 hectares of land.