Creative Industries Luxembourg: A Growing Hub of Innovation and Talent

Global Development Luxembourg at Red Yellow Blue (RYB)

Luxembourg, a small but dynamic European nation, is making significant strides in its creative industries. Known for its strategic location, multilingual population, and robust economy, Luxembourg is leveraging its resources to foster a thriving creative sector. From design and film to gaming and performing arts, the country is becoming a hotspot for innovation and cultural expression.

Flag of Luxembourg

Economic Contribution

The creative industries in Luxembourg contribute approximately 6% to the nation’s GDP, highlighting their importance to the economy. These industries employ thousands of individuals, with many initiatives focusing on nurturing local talent and attracting international professionals.

Creative Industries Luxembourg

Key Sectors

  • Film and Audiovisual Production
    Luxembourg has gained international recognition for its flourishing film industry. With strong government support and incentives, such as the Film Fund Luxembourg, the country has co-produced award-winning films like Colonia and Two of Us. The Luxembourg City Film Festival further showcases the nation’s commitment to cinema, attracting global audiences and filmmakers.
  • Design and Fashion
    Luxembourg’s design sector is characterized by innovation and sustainability. Designers in fashion, product design, and architecture are creating unique works that blend functionality with aesthetics. The Design Friends association promotes local and international designers through exhibitions and talks, fostering a culture of creativity and collaboration.
  • Gaming and Digital Media
    The gaming industry in Luxembourg is emerging as a vibrant sector, supported by advanced digital infrastructure and a tech-savvy workforce. Companies like Virtual Rangers are developing innovative gaming solutions, while events such as Game of Code hackathons provide a platform for talent and innovation.
  • Music and Performing Arts
    Luxembourg boasts a rich music scene, spanning classical, jazz, and contemporary genres. Venues like the Philharmonie Luxembourg and events such as the Esch-sur-Alzette European Capital of Culture 2022 highlight the country’s commitment to cultural enrichment. The Rockhal, a leading concert venue, supports both local and international artists, enhancing Luxembourg’s reputation as a cultural hub.
  • Publishing and Media
    With its multilingual population, Luxembourg is a natural center for publishing and media. The country produces content in multiple languages, catering to diverse audiences. Initiatives like the Luxembourg Creative Writing Award encourage literary talent, while local media outlets play a key role in promoting cultural discourse.
  • Visual Arts and Crafts
    Luxembourg’s visual arts scene is thriving, with galleries, museums, and art fairs showcasing both traditional and contemporary works. Institutions like the MUDAM (Museum of Modern Art) and the National Museum of History and Art are central to the cultural landscape, providing platforms for artists and creators.

Government Support and Infrastructure

Luxembourg’s government actively supports the creative industries through initiatives like the Creative Industries Cluster, managed by Luxinnovation, which aims to connect and promote businesses in the sector. Tax incentives, grants, and funding programs further encourage innovation and growth.

Trends and Global Impact

Luxembourg’s creative industries are embracing global trends such as sustainability, digital transformation, and cultural diversity. The nation’s commitment to eco-friendly practices and technological advancement aligns with international demands, enhancing its competitiveness on the global stage.

Challenges and Opportunities

While Luxembourg’s creative industries are growing, challenges such as limited market size and competition from larger neighboring countries persist. However, the nation’s strategic location, multilingual workforce, and strong support systems provide a solid foundation for continued development.

Luxembourg’s creative industries reflect a blend of innovation, cultural heritage, and global outlook. As the country continues to invest in its creative sectors, it is poised to strengthen its role as a vibrant hub for culture, innovation, and economic growth in Europe.

Luxembourg Creative Industries Cluster

Managed by Luxinnovation, the Luxembourg Creative Industries Cluster brings together various interconnected players in order to increase their visibility and enhance their innovation potential. All this while the sector is constantly growing while at the same time undergoing numerous technological changes.

Cluster members represent 12 industries that are very active in Luxembourg: architecture (engineering/town planning); crafts and manufacturing; visual arts; films and audiovisual; design; fashion design; gaming; marketing and communication; literature; digital media and publishing; performing arts and music.
> luxinnovation.lu/cluster/luxembourg-creative-industries-cluster/

Economy

high-income, EU-member European economy; global financial and information storage leader; high government spending; one of highest GDP per capita countries; unique audit accountancy based on company sizing; aging labor force; hit by COVID-19

This small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. Luxembourg, the only Grand Duchy in the world, is a landlocked country in northwestern Europe surrounded by Belgium, France, and Germany. Despite its small landmass and small population, Luxembourg is the fifth-wealthiest country in the world when measured on a gross domestic product (PPP) per capita basis. Luxembourg has one of the highest current account surpluses as a share of GDP in the euro zone, and it maintains a healthy budgetary position, with a 2017 surplus of 0.5% of GDP, and the lowest public debt level in the region.

Since 2002, Luxembourg’s government has proactively implemented policies and programs to support economic diversification and to attract foreign direct investment. The government focused on key innovative industries that showed promise for supporting economic growth: logistics, information and communications technology (ICT); health technologies, including biotechnology and biomedical research; clean energy technologies, and more recently, space technology and financial services technologies. The economy has evolved and flourished, posting strong GDP growth of 3.4% in 2017, far outpacing the European average of 1.8%.

Luxembourg remains a financial powerhouse – the financial sector accounts for more than 35% of GDP – because of the exponential growth of the investment fund sector through the launch and development of cross-border funds (UCITS) in the 1990s. Luxembourg is the world’s second-largest investment fund asset domicile, after the US, with $4 trillion of assets in custody in financial institutions.

Luxembourg has lost some of its advantage as a favorable tax location because of OECD and EU pressure, as well as the “LuxLeaks” scandal, which revealed advantageous tax treatments offered to foreign corporations. In 2015, the government’s compliance with EU requirements to implement automatic exchange of tax information on savings accounts – thus ending banking secrecy – has constricted banking activity. Likewise, changes to the way EU members collect taxes from e-commerce has cut Luxembourg’s sales tax revenues, requiring the government to raise additional levies and to reduce some direct social benefits as part of the tax reform package of 2017. The tax reform package also included reductions in the corporate tax rate and increases in deductions for families, both intended to increase purchasing power and increase competitiveness.