Agefi Luxembourg - avril 2025

AGEFI Luxembourg 4 Avril 2025 Economie / Fiscalité T he 18th Journée de l’Economie took place on 24March 2025 at the Luxem- bourgChamber of Commerce. In the presence of LexDelles,Minister of the Eco- nomy, andwithkeynote speeches byNadia Calviño, Prof. PhilippeAghion, Dr Luc Julia, an exceptional number of over 250 partici- pants discussed the theme “IsAI simply overhyped, an essential driver of progress, or a real opportunity for transformative change?”. One live interviewand twopanel discussions enriched the programme and al- lowed the visitors to raise their questions. While last year’s editionof the Journéede l’Economie was focused on Luxembourg’s current competitive- ness,identifyingthecriticalsuccessfactorsfromrecent years and defining their role in shaping the Grand Duchy’s trajectory for the future, this year’sdominat- ing topicswere related to the impact ofAI across var- ious sectorswith a particular emphasis on the role of governments. ThediscussionalsoendeavouredtoexplorehowLux- embourg and Europe can achieve their digital ambi- tions,examiningthebenefitsandchallengesofAIand emergingtechnologiesonbusinesses,aswellasonen- ergy and digital transition, and sharing insights on how these new technologies can transform the eco- nomic landscape. TheparticipantswerewelcomedbyVincentHein,Di- rector of the think tank IDEA.MrHein raised the fol- lowingquestionsregardingAItechs:“Areweputting toomuch faith in somethingwe barely know?Or on the contrary, is it an imperative?Arewe standingat a crossroadofwhere our actions todaywill answer the questions ofwhetherwe are going to be sitting at the tableorbeingputonthemenulater?(...)Howcanwe ensure that we are actively shaping the future of AI rather than merely reacting to it?” Those were the questions to be answered during the conference throughout the discussionswith high level scientists, policymakersandentrepreneurs.MrHeinreminded theaudiencethattheultimategoalistodeterminethe actions needed to address the current challenges. Theconferencewasopenedby CarloThelen ,Director General of the LuxembourgChamber of Commerce, whofirstreferredtothelatesteconomicbarometerby the Luxembourg Chamber of Commerce, highlight- ing that 63% of Luxembourg businesses, which be- lieve that their business model will be impacted by emergingtechnologies,planoninvestinginAIwithin three years. Mr Thelen emphasised that: “It is key for the public administrations to prioritise national and European solutions to support the development of the local ecosystemandtosafeguardoursovereignty.Theup- coming announcement of a newnationalAI strategy as well as the launch of the AI factory are important milestones on this journey”.Mr Thelen continuedby stressing four priorities from a macroeconomic per- spective: (1) theneed to increase anddiversify invest- ment sources, (2) the implementationof theAIAct to promoteinnovation,(3)theneedtoleverageonexist- ing and upcoming infrastructures and finally (4) the adoptionofacommunicationstrategyfocusedones- tablishingLuxembourg as anAIHub. LexDelles ,theMinisterofEconomy,laidoutthatitis one of the priorities of the Luxembourg government togiveallthecompaniesinLuxembourgaccesstoAI, from the smallest to the biggest entities. As such, he mentioned the introduction of the SMEs package to providetheSMEswiththenecessarytoolsfortheim- plementation ofAI aswell as for the cybersecurity as both go hand in hand. He added that it is also a key priority for the government to have the right infras- tructures. As such, Mr Delles referred to an amount of EUR 120m to be invested in Luxembourg for MeluXina-AI,i.e.thesupercomputerbasedonAI,half financedbytheEuropeanCommissionandtheother half by the Luxembourg state. According toMr Delles, “AI is no longer amyth, but a reality” and he asserted that in the past we used to saythat“abusinessthatisnotdigitalisedtodaycould no longer exist tomorrow.” He explained that the sameappliesforthoseignoringAIduetotheproduc- tivity gains achievedby their competitors usingAI. President of the European Investment Bank Group, Nadia Calviño first stressed that “AI is an incredible opportunity from a business point of view”. She shared her insights on three issues: (1) the benefits of AI, (2) Europe’s position as a competitor in the race and (3) “what we need to do to make it a European success”. Regarding the benefits of AI, Ms Calviño pointed to the significant gains of AI technologies, highlighting that “it is a booster for our competitive- ness. There are industries in Europe that are already designingmachinery thatwill thenbe used as proto- types to develop the new techniques frommedical machinery to coffee machines, products that last longer, cost less and this is just the beginning”. Shecarriedon:“AIcanreallybenefitandimproveour way of life if it is properly funded, adequately har- nessed and efficiently integrated”. Then, Ms Calviño reminded the audience that Eu- rope has the advantage of “racing as a team” in this fierce competition. As such, she emphasised the im- portance of having a European regulatory frame- workwhich allows to have a “risk-based approach” to scaleupandenable companies to “really compete at a global level”. Finally, she asserted the three drivers for Europe competitiveness: (1) integration throughtheEuropeancapitalmarketintegrationand the need to integrate AI capabilities into existing companies, (2) investment by mobilising the neces- sary investments from the private sector and finally (3) simplification of the rules and procedures. Shouldwe fearAI? The audiencewas then shown apre-recordedvideo from Prof. Philippe Aghion , Economist, Professor at the Collège de France, INSEAD, and at the Lon- don School of Economics. Inhis video, Prof.Aghion strengthened that the AI revolution affects all do- mains of activity, and the emergence of generative AI represents an unprecedented acceleration in this revolution. Prof. Aghion stressed that AI’s high growth potential may be hampered by an inappro- priate competition policy. As such, he referred to the risk of monopolies with, for instance, the cloud service sector being domi- nated by three superstar firms, i.e.Amazon, Google andMicrosoft. Therefore, heemphasised theneed to reformcompetitionpolicy toharness thegrowthpo- tential ofAI and tohave theDigitalMarketsAct that applies to thewhole value chain ofAI. Prof.Aghion underlined the need to get away from the “winner takes all” mindset and to create a more inclusive market with diverse players. GenAI:mythor reality? DrLucJulia ,ChiefScientificOfficeratRenaultGroup addressedtheprovocativequestion“GenAI:mythor reality?”DrJuliadrewtheaudience’sattentiononthe fact that “AI technologies are just a bunchof tools. (...) They are very useful but for very specific tasks”. He carriedonby explaining thatAI startedcenturies ago in1642withtheinventionofPascaline,i.e.thefirstcal- culator. Therefore, Dr Julia stressed the need to put things into perspective regarding the new“wave” of AI. As such, according to him, it is more accurate to talk about an “evolution” rather than a “revolution”. He explained that it is an evolutionof themathemat- ical way to train the new algorithms with trillions of datapointsavailable.However,heunderlinedthatthe revolutionliesintheusageofAIthankstotheprompt that anyone canusewithout anyprior training. Dr Julia also stressed the fact that “generativeAI” is not “creative AI”. “AI does not invent anything, AI doesnot create anything,wedo!”Dr Juliaaddressed many key issues related to generativeAI in his eye- opening speech such as accuracy and intellectual property. Finally, he raised the audience’s aware- ness on the impacts that the use ofAI has on the en- vironment.He reminded that, although the impacts of data centres on energy arewell-known, their im- pacts on the other resources are less recognised, es- pecially for water. He asserted that: “A bunch of queries of Chat GPT consumes 1.5 litres of water”, representing a major issue. As for the solutions, Dr Julia mentioned fine tuning and Retrieval-Augmented Generation (RAG) that should be focused on. Besides, he rec- ommended to use Open-Source models, which allowtousemore frugal andmore specialisedmod- els. He stressed that the current generation of “gen- erative AIs are dead today for the actual science part”. Therefore, Dr Julia’s final insightwas that hy- bridAIs should come up. Time for Luxembourg&Europe to realise their digital ambitions! Before the break, therewas a panel of three keynote speakers, i.e. Gérard Hoffmann , Chief Executive Officer, Proximus Luxembourg, Ananda Kautz , Member of the management board - Innovation, Payments and Sustainability, ABBL and Jacques Thill , Digital Economy and Data Policy Coordina- tor, LuxembourgMinistry of the Economy, moder- ated by Gérard Cops , Industry & Services Leader, PwC Luxembourg. The speakers shared their insights on the following questions: What are the risks and opportunities of AI for Luxembourg? How can Luxembourg and Europe close thedigital gap?What roledogovern- ments play in driving digital transformation? Ms Kautz highlighted that the digital transforma- tion is necessary in her perspective given the new customer expectations, the increasing regulations to be compliant with and the pressure on the opera- tional costs currently encountered. She added that generative AI is a “game changer” for financial in- stitutions, reminding that, according tomany inter- national studies, it is the financial sector that could potentially enjoy the most efficiency gains with the useofAI, due to theproportionof data in this sector. As raised before, Ms Kautz underlined the risk for players not embracing the technology to be left be- hind.Sheaddedtheimportancetohave“stronglead- ershiptotaketherightdecisions”andtoremainfocus inorder tokeepupwith thepaceof the technologies. Mr Hoffmann and Mr Thill both concurred on the fact that if Luxembourgwants to secure its economic model and its productivity growth, innovation is key. As such, “AI is a great instrument to gain pro- ductivityand tomakeour industries andeconomies more competitive” according toMr Thill. Moreover, on the question regarding thedigital gap between the EU, US and Asia, Ms Kautz asserted that Luxembourgwill never be inaposition to com- pete with the US or China, but “the main asset of Luxembourg is to develop and take benefit of the European AI ecosystem”. Mr Thill pointed out the emergence ofOpen-Sourcemodels as apositivede- velopment. Yet, given the limited size of Luxem- bourg, he emphasised the need to specialise to “build smaller more targetedmodels (...) and build our strength”. With regards to funding, Mr Hoffmann stressed that it has to be seen in relation to talents as talent retention in Europe will be enabled by providing the same typeof funding thatUShas. In that regard, Luxembourg can contribute to close this gap, con- sidering its role in the financial industry inEurope. Energy transition&digitalisation:making distribution and consumption smarter Afterthebreak,theaudiencewasfullyimmersedina live interview, conducted by Amanda Roberts , FounderLUXWMN&Professor(MiamiUniversity) with DrGrégoryNain ,Co-founder&HeadofOper- ations, DataThings and Laurence Zenner , Chief Ex- ecutiveOfficer,CREOS.Duringtheliveinterview,the conversationcoveredarangeofinsightfultopics,pro- viding valuable perspectives on the role of digitalisa- tion andAI, helping to optimise energy distribution and consumption. MsZennerfirstremindedtheaudienceoftheincrease of the energy needs and she explained the valuable help of AI to simulate grid scenarios and to forecast the demandand the production inorder to “guaran- tee cost-efficient grid planning”. She added that AI can be used to detect congestion on the grids. As for thechallengesintheimplementationofAI,MsZenner stressedthatthepositiveaspectisthatdataisavailable through the smart metres but the data is sensitive. Therefore, security data protection is very important, according toher. Further to a questionon the emerg- ingAI trends which should have the biggest impact on energymanagement in the next 5 to 10 years, Mr Nain emphasised thatmachine learning andAIswill help into getting amore dedicated and precise plan- ning on the energymanagement to keep the balance within the ecosystem. Asafinaltakeawayfromthisengagingliveinterview, MsZenner highlighted thatAIwill play aprominent role in the energy sector for predictions to reinforce the grids and to avoid overinvestment in the future. As for Mr Nain, his advice was to fully embrace AI andtorediscover“ourpioneeringspiritinourindus- tries and particularly in Luxembourg where we can make it happen”. PwC’sAnnualGlobal CEOSurvey “Reinventionon the edge of tomorrow” Cécile Liégeois , Clients and Markets Leader, PwC Luxembourg, provided the audiencewith a preview onsomekeyaspectsofthePwC’sannualglobalCEO surveybeforethereleaseoftheLuxembourgfindings on 02April 2025. MsLiégeoisoutlinedthepositivetrendscomparedto the previous two years, globally and locally, with the confidence of the CEOs in the short-term and the medium-termregardingrevenuesgrowth.Regarding how AI is defining CEO’s landscape, Ms Liégeois mentioned that CEOs remain optimistic about GenAI’s impact on profitability, with 56%noting in- creased efficiencies - echoed by 63% of respondents inPwC’sGlobalWorkforceHopes andFears Survey and 32%in theGlobal Investor Survey. From a Luxembourg perspective, 61% of Luxem- bourgCEOsperceivethatGenAIcurrentlyhasalarge positive impact on their own efficiency and 57% on their employees’. She concluded that in terms of the next step regardingAI deployment, it is important to beabletospecialiseand“tobeabletomeasuretheim- pact on the profitability”. IsAI really transformingbusinesses? The final discussion of the day was moderated by Gaston Trauffler , Head of Industrial Policy, FEDIL. Hewas joinedby MaximeAllard , Co-founder, Heli- cal, Véronique Martin-Lang , Chief engineer AI and Advanced Analytics, The Goodyear Tire & Rubber Company, Marie-HélèneMassard , DeputyGeneral Director, FoyerGroupand StefanoPerego , VP Inter- national Operations & Global Ops Services, AMA- ZON for a vivid discussion on howAI technologies are reshaping industries at an unprecedented pace, shedding light aswell on the challenges and risks be- hind theAI revolution. The panel was asked to address the following key questions: AreAI technologies genuinely poised to revolutionise our economy and businesses? How mature and affordable are key technologies? How canAI increase productivity? What are the risks? MsMassardremindedtheaudienceofthehighlyreg- ulatednatureoftheinsurancesector.Despitethis,she pointed out how Foyer integratedAI across various key elements of Foyer’s value chain, including risk management,compliance,claimsmanagement,fraud detectionandprevention,supportingservicingatcall centres and sales support amongst others. She ex- plained how AI is an opportunity to enhance cus- tomer service and support her people by enabling them to dedicate more of their time on value added services. She reminded though that this is “not aone- day journey but a never-ending journey”. Onbehalf of all theorganisers, ahuge thankyou to all the participants and panellists of the conference for their valuable contribution. Key takeaways from this year’s Journée de l’Economie AI Technologies: Overhyped, imperative or real opportunity? ©PwC