By Cesare Riillo
Despite global uncertainty and economic headwinds, Luxembourg’s entrepreneurial spirit is thriving. Entrepreneurial intentions in Luxembourg hit a record high in 2024, with 20.8% of adults expressing plans to start a business. In addition, the country ranks first among GEM countries for AI’s importance in early-stage entrepreneurship. These are among the findings from the latest Global Entrepreneurship Monitor (GEM) Luxembourg 2024/2025 National Report.
According to the report, Total Early-stage Entrepreneurial Activity (TEA) rose to 9.9%, up from 9.7% in 2023, and remains above the European average of 9.4%. Fear of failure dropped to 41.4% in 2024 – the lowest ever recorded in Luxembourg. The country’s National Entrepreneurial Context Index (NECI) score remained stable at 4.6, close to the cross-country average. Entrepreneurs continue to report that starting a business is easy, with 61% agreeing in 2024, well above the European average of 50.2%.
These upward trends reflect a sustained recovery from the COVID-19 pandemic and positions Luxembourg as a leader in entrepreneurial ambition.
Innovation, Sustainability and AI Awareness Lead the Way
Luxembourg’s entrepreneurs are increasingly opportunity-driven, with fewer starting businesses out of necessity. The country ranks fourth in Europe for product innovation, with 39% of early-stage entrepreneurs introducing novel products or services.
Sustainability is another standout theme. In 2024, 61% of early-stage entrepreneurs aimed to minimise environmental impact, and 57% focused on maximising social impact, placing Luxembourg at the top of the European rankings.
AI awareness is also surging. Among TEA entrepreneurs, 34% consider AI very important for their business, compared to a cross-country average of 22.3%. While 68% see AI as a productivity booster, 58% express concerns about data security and privacy, reflecting a nuanced view of emerging technologies.
Economic Concerns Temper Growth Expectations
While entrepreneurial enthusiasm is high, growth expectations are more subdued. In 2024, 44% of entrepreneurs reported lower growth expectations, the highest share among all GEM countries. Perceived business opportunities remained stable at 48%, slightly below 2023 levels, mirroring a decline in business sentiment reported by STATEC, the National Institute of statistics and economic studies of the Grand Duchy of Luxembourg.
This contrast between rising entrepreneurial activity and cautious growth outlook underscores the importance of targeted policy support to sustain momentum.
Persistent Gaps and Barriers
Despite progress, challenges remain. The gender gap in entrepreneurship widened in 2024, with women reporting lower intentions and higher fear of failure. Immigrants, however, are more likely to engage in entrepreneurship, with a TEA rate of 11.7% compared to 7% for natives.
Barriers such as access to office space, funding, and skilled labour continue to hinder growth.
Looking Ahead
The GEM Luxembourg 2024/2025 Report paints a picture of a resilient and forward-looking entrepreneurial community. With strong innovation, sustainability, and AI engagement, Luxembourg is well-positioned to navigate future challenges.Continued investment in ecosystem support and inclusive policies will be key to unlocking the full potential of the country’s entrepreneurs.
Cesare Riillo is the Team Leader of GEM Luxembourg and a Senior Economist at STATEC Research, Luxembourg. The GEM Luxembourg 2024/2025 National Report is published by STATEC, the National Institute of Statistics and Economic Studies of Luxembourg. The GEM project in Luxembourg is sponsored by the Ministry of the Economy and the Chamber of Commerce of Luxembourg and the House of Entrepreneurship. Their work contributes to GEM’s global mission of advancing entrepreneurship research and informing evidence-based policymaking.
