International benchmarks

With the aim of evaluating Luxembourg's competitive position, the Observatory for Competitiveness (ODC) closely follows a multitude of international benchmarks covering different areas within the subject including territorial attractiveness and competitiveness, the business environment, innovation and digitalisation, skills and talents or even prosperity and quality of life.

In Luxembourg, as elsewhere, the debate on competitiveness is relaunched regularly when the countries' benchmarks and international rankings are published. Even if they show certain methodological flaws and limitations that could invite criticism, the benchmarks constitute a useful grading of performances that is worth following. These are tools that encourage political debate and enable the authorities to evaluate their policies by comparing them to best practices. Due to their strong media coverage, the benchmarks also have a considerable impact on a country's brand image and can thus influence the perception among potential investors.

Benchmarks are generally based on composite indices that combine multiple sets of information and data into a single score. By synthesising a variety of characteristics, these indices produce a compact and instant snapshot of what is often a complex topic, but which nonetheless remains an approximative summary.

In general, the benchmarks reflect an economic situation that is much harder to grasp than the apparent simplicity that the rankings would suggest. Consequently, a detailed and rigorous analysis is required in order to identify the potential action points that could strengthen the country's competitiveness. The choice of actions in favour of competitiveness is therefore always a compromise that must take into account the country's economic, social and environmental needs.

The Observatory for Competitiveness (ODC) primarily undertakes three tasks within the area of international benchmarks:

• The ODC maintains an up-to-date inventory that comprises the benchmarks relevant to the different domains and determinants of competitiveness.
• The ODC assesses Luxembourg's performance in the benchmarks selected in order to identify the country's strengths and weaknesses, as well as the challenges it faces in that respect. On the one hand, the ODC summarises the results published by the editors of the respective benchmarks and, on the other, the ODC makes its own specific analyses.
• The ODC is responsible for the targeted dissemination of information within the government administration.