A recent study by Luxinnovation and FEDIL shows that AI is increasingly used by Luxembourg companies, but that challenges related to data maturity, skills and governance remain.
In the beginning of 2025, Luxinnovation and FEDIL joined forces with the L-DIH (Luxembourg Digital Innovation Hub) to survey 114 companies across sectors such as manufacturing, ICT, construction, transport & logistics, etc., about their adoption and use of artificial intelligence (AI).
This study sought to provide critical insights into the current landscape of AI and Generative AI utilisation from key stakeholders, the existing levels of adoption, the barriers and opportunities encountered, and the essential training, upskilling, and funding requirements needed to enhance competitiveness and drive innovation. The survey aims to build a foundational understanding of how AI is shaping our industry, inform strategic advocacy, guide policy recommendations, and support the development of tailored resources for accelerated AI adoption in Luxembourg.
The findings show strong momentum in AI and generative AI adoption, coupled with a realistic view of the ongoing challenges. This mirrors the broader view on AI as shared by global consultancy Bain & Company.
The findings provide useful input for Luxembourg’s next phase of fostering digital innovation and industrial competitiveness.
AI is mainly being deployed in IT, sales & marketing and customer support, often in the form of chatbots, marketing automation or internal tools. In contrast, uptake in manufacturing, supply chain and legal functions remains comparatively limited, suggesting a clear opportunity to expand AI use in core industrial operations.
Figure 1 (in %): Corporate functions adopting AI
Source of data: "Perspectives on AI and Generative AI in industry" survey by Luxinnovation and FEDIL, 2025.
An impressive 63% of companies say that they have reached advanced stages of AI maturity, with applications spanning from production use cases to organisation-wide implementation. However, the manufacturing sector appears to be trailing slightly behind other industries.
AI is broadly viewed as a tool for optimising process, cutting costs, improving quality, and supporting better decision‑making. This is particularly true in manufacturing, where 80% firms expect clear efficiency gains. These expectations are also reflected across Europe, as shown by an EUROSTAT study highlighting that companies across Europe have similar views on AI's potential to boost performance and competitiveness.
Figure 2 (in %): Assessment of the potential benefits by adopting AI technology
Source of data: "Perspectives on AI and Generative AI in industry" survey by Luxinnovation and FEDIL, 2025.
While AI adoption is on the rise, few companies see it as a solution to structural issues such as labour shortages or environmental sustainability. Only a minority of respondents expect AI to ease recruitment difficulties or compensate for a shrinking workforce – despite its clear potential for automating tasks and improving operational efficiency. Even fewer firms view AI as a means to advance sustainability goals, such as reducing emissions or optimising energy consumption.
This cautious outlook may reflect a lack of awareness of AI’s wider potential or challenges in pinpointing practical applications in these areas. It also highlights the need for stronger alignment between AI strategies and policy objectives, particularly those related to the green transition and industrial resilience at national and EU levels.
Many companies continue to face structural barriers to AI adoption. Among firms with lower AI maturity, only 24% of have fully operational data collection systems, while 62% lack even basic data readiness. A shortage of in‑house expertise and difficulty identifying high‑impact use cases further slow down progress, especially in manufacturing, construction and transport, where collecting data can be physically challenging.
This lack of data maturity is echoed by French public sector investment bank BPI France in its White Paper 2025, which notes that most of its SME clients have limited data maturity and had never launched AI projects before engaging with BPI's support schemes.
Figure 3 (in %): Assessment of data availability and readiness for AI adoption
Source of data: "Perspectives on AI and Generative AI in industry" survey by Luxinnovation and FEDIL, 2025.
AI is reshaping the skillsets that organisations require, driving demand for new technical and analytical abilities in fields such as data analytics and machine learning. However, for many companies, especially smaller ones, building these skills in-house remains a major challenge. As a result, many are turning to external partners, hybrid models or specialised consultants to bridge the gap.
A McKinsey survey also suggests that "reskilling" existing staff may become increasingly important as AI adoption grows.
On a more positive note, less than 20% of respondents cited a lack of executive support as a barrier. This points to a strong strategic alignment and leadership commitment across Luxembourg’s industrial sector – a sign that AI is now firmly on the boardroom agenda, rather than being seen as a niche IT initiative.
Figure 4 (in %): Top challenges to be overcome for adopting AI
Source of data: "Perspectives on AI and Generative AI in industry" survey by Luxinnovation and FEDIL, 2025.
Over 56% of companies have now introduced formal data and AI governance policies – a clear indication that issues such as data integrity, compliance and risk management are gaining traction. However, nearly 45% still lack structured governance frameworks, highlighting a critical gap in responsible AI adoption.
Deloitte’s recent “Governance of AI: A Critical Imperative for Today’s Boards”, covering companies across 57 countries, reveals similar concerns. Nearly 45 % of surveyed board representatives report that AI does not yet appear on their agenda, and only 14 % of boards discuss AI at every meeting.
Another area of concern is data sovereignty. Only a minority of companies have decided to host data locally. This raises questions around security, especially in sectors handling private or sensitive data. Meanwhile, many employees admit to using public GenAI tools for work-related tasks, even within companies that have governance policies in place.
Figure 5 (in %): Data and AI governance policy
Source of data: "Perspectives on AI and Generative AI in industry" survey by Luxinnovation and FEDIL, 2025.
While awareness of government support mechanisms remains low, these initiatives represent valuable opportunities to build AI capabilities.
The L-DIH and AI Factory help organisations navigate digital transformation. Moreover, FEDIL organises its AI Excellence Awards. The aim of this initiative is to encourage creativity, innovation and research in companies, and to honour innovative enterprises, whose contributions benefit the whole Luxembourg economy.
Greater engagement could help close skill gaps and make AI adoption more inclusive across all sectors.
